This paper will try to discuss and present evidences that support the idea that
the transformation of the human resources into a valuable asset is a one of the
key issue of strategic management in the service sector. It will also try to
highlight and evaluate the significance of the term strategic human resources
management.
One
evidence that points out to the transformation of the human resources as one of
the key issues of strategic management is due to certain challenges that is
currently facing human resources. Since organizations and business companies
need able and effective pool of employees, human resources must be well suited
and must conform to the structure of the organization. Human resources as
pointed out by Lawler is must be developed in such a way that would enhance the
performance, training, career and selection of old and new employees of a
company in order to step up its advantages. He further stated that there are
five specific aspects that challenge human resources development.
One
challenge is in organizing and achieving high performance. Mohrman believed that
in creating small, flexible, cross functional units and aligning people around
value-added task rather than overhead task, outsourcing and partnering will be
successful if there is a high level of motivation that is present in the
workforce. Concerns regarding the condition of the workforce remaining after
downsizing, reengineering, and cutbacks must also be addressed. Above average
performance is only possible when an organizational form is developed that is
designed to incorporate the nature of the task assigned to the employees an the
qualifications and characteristics of the employee themselves. In this approach,
human resources development personnel must develop a comprehensive understanding
with regards to strategy, goals, and motivations of employees that would provide
the extra boost in the output of the company.
There must also be proper and strategic deployment of employees because workers
tend to move in a series of projects rather that in organized and prearranged
order of jobs and process. The manager must possess an understanding with
regards to the weaknesses and strong points acquired by an employee and how the
company can maximize these talents and traits. It is therefore possible to use
new compensation and rewards system to attract, develop, motivate and retain the
workforce. A proper management of organizational competencies and capabilities
must also be accessed. Lake pointed out that management of human resources
competencies and organizational capabilities are task that are significant in
the survival of the company. Organizations are required to constantly update and
enhance their knowledge base in order to attain a competitive edge in relation
to other competitors.
Organizations nowadays must have skills in group processes and organizational
understanding although there is still an emphasis on leaning intervention and
other approaches to development. Aside from these, organizational knowledge and
learning is also vital. In traditional companies and business organizations,
knowledge and learning is shared by the employees through informal networks and
person to person interaction but this practice will no longer be viable in
today’s world. Companies and business organization must fashion a structural and
highly efficient transfer and development of knowledge and learning. Knowledge
must be dispersed cross functionally and must be exploited across geographical
boundaries. Knowledge sharing and development, distribution of documents and
readily available forms, data and statistics are the primary factors that
contribute to the success of a business venture.
There must also be a psychological employment contract that reflects the beliefs
and term of an employee concerning organizational member’s responsibilities and
expectations from the company. Contract must also cater to different group of
people and must address the need of each group. New norms, rules and regulations
must be implemented while new ways of contracting for work must be devised.
Other writers and researchers meanwhile underlined different evidences that
points to the transformation of human resources. These are: building and
operating an effective customer-responsive organization, gearing up in becoming
an effective global competitor, competing profitably with lost cost production,
transitioning from a profit-through-cost-cutting environment to a revenue-growth
environment, effectively taking advantage of new and efficient means of
technology, attracting, developing and retaining of new and top level talents
and operating internationally without a competitive, pro business industrial
policy matching those of foreign competitors.
Changes and the transformation of human resources is equally affected by the
changing business context, a small alteration in the business context can have a
reciprocating effect on the state of human resources and its development.
Companies are being challenged in to adapt and to modify their human resources
in order to be highly competitive against its competitors. Examples of these
changing business context are the accelerated pace of business change , reduced
cycle time, shifting services while providing total customer solution and total
customer retention and satisfaction. Changing business context can also mean
operating as a flexible, global and virtual organization relying on partnership,
joint ventures and alliances and addressing the needs of service professional
and workers while providing the value that they need.
Human resource function has evolved over the decades since it first emerged in
the 1920’s. Today, the primary focus of human resources is the development of
organizational capabilities required to carry out business strategies. Leaders
must grasp that the correlation of strategy, work design, recruiting and
staffing can be vital factors that will ensure the success of the company.
Because of this, human resource leaders on each management team play a lead role
in achieving this strategic alignment addressing problems or and seizing
opportunities that will impact business performance. Leaders serve as guide in
the assessment of people-related issues and shaping of people-related strategies
to meet business requirements. They directly influence business thinking and
action, with the aim of building talent, processes and systems that may give the
organization a competitive advantage.
Human resource leaders are expected to lead
quantum business change effectively. They help define the business case for
change, communicate a vision of the desired future state, shape a sound
implementation plan and follow through to achieve sustained results. More than
in any past era, HR leaders are expected to be effective change leaders, working
in the center of each business, not at the edge of the action. This means they
need the business knowledge and acumen, relevant human resource expertise and
skills in furthering the change process.
Because HR leaders work as part of a
management team, they share accountability for achieving targeted business
objectives, including people-related objectives. Peter Drucker once called for
the "end of the personnel department," anticipating that "staff will become line
by assuming responsibility for business results."
Specialized HR Expertise
The human resource function is also valued as
the primary source of knowledge and skill in the people-related areas of
strategy implementation - organization and work design, strategic staffing,
learning and development, performance management and rewards, employee relations
and change management itself. It is no longer sufficient for human resource
generalists to counsel and assist managers on a wide range of human resource
topics; rather, in-depth, specialized capabilities must be available when and
where they are needed.
To address critical issues effectively,
managers need creative, effective solutions that tap both external and internal
best practices. More important, when HR specialists can develop innovative
practices, there is the potential to achieve a competitive advantage -
differentiating the company from others through certain extraordinary human
resource practices that give the company an edge in business performance.
Human resource specialists may reside anywhere
in a company. They may be aligned with business units as part of a team (within
HR or not). Sales or technical training or specialized recruiting are often
aligned with businesses. They may be shared as consultants working with business
units on projects when their expertise is required. They may also be based in
other company areas, such as legal affairs or a quality function. They may be
external to the company, through specialized consulting and service firms
available on call as part of a resource network.
Organizational units or locations typically
can no longer cost-justify their own cadre of human resource specialists. The
alternative is sharing. Reliance on specialists as needed requires careful
definition of the tasks and matching skills to them. It also requires a high
degree of trust, collaboration and knowledge sharing. This is particularly
challenging as companies share expertise on a wider geographic, even global,
basis.
Transparent HR Services and Support
The human resource function provides the
systems and services infrastructure necessary to enable the effective management
of people across the company on a direct-access, cost-effective basis. Companies
trade off the customization of policies and practices that do not build
competitive advantage within different business situations in favor of a lower
overall cost and improved efficiency and service quality.
Services are becoming transparent to the
users. Instead of requiring direct personal interaction, they are provided in
new ways, such as through around-the-clock telephone or intranet/Internet
access. As a result, they are often more timely, more reliable, more accurate
and more responsive to needs.
Instead of being the primary work HR performs,
support and services activities (e.g., administration, payroll, benefits,
compensation, relocations, policy interpretation, records, legal compliance and
reporting and routine transactions) are becoming a smaller part of the work
performed in terms of time and resources applied. Many companies report reducing
costs of providing services by 40% or more through this change.
The key is leveraging technology to provide
services at lower cost, more consistently, with an appropriate standard of
quality and with greater speed and efficiency. Typically achieved by leveraging
technology, companies have continuously improved their productivity and service
quality. Whether the services are provided internally or outsourced is merely a
choice. Effective management of operations is the key.
A Community, Not a Department
The traditional human resource function was
aligned with a hierarchical business organization, with clear differentiation of
staff and line functions. Human resource staff were expected to be responsive
and supportive, but line managers were responsible for decisions and outcomes.
Strategies and innovations were typically developed centrally and then "rolled
out" to company business units and levels. Local human resource staff were
commonly generalists charged with implementation and were regarded for their
excellence in providing needed human resource services in a quality, responsive
manner.
The new human resource function is a virtual
organization. Today, and into the 21 st century, human resource functions
concentrate resources and activities where they will have the desired business
impact. Centralization and decentralization are no longer relevant concepts.
Strategies and innovations are increasingly developed within the various
business units, within the business context; central services focus on providing
operational services and support. The function, as a community, embraces all
resources providing people-related services, whether within the human resource
organization, within other units (e.g., sales training, legal counsel, or
payroll) or provided by external partners or vendors.
The function relies more on networking,
temporary project teams spanning functions and business units and external
resources. In several large companies, the corporate HR VP has virtually no
dedicated resources or budget; resources are embedded in business units, and
shared services are funded through business unit allocations and charge-backs.
As a result, the operating plan and budget of the human resource "department"
are less relevant, as are ratios of HR head count to employees and the like.
Instead, the total picture is drawn to address people-related needs across the
business.
The biggest challenge facing human resource
staff is getting accustomed to working as a virtual community. Human resource
professionals have been reluctant to rely on vendors or shared services. Once
comfortable with resources and controls at hand, they find it difficult to rely
instead on influence, collaboration, trust and shared responsibility. The more
rapid pace, increased ambiguity and complexity inherent in working in this new
environment is difficult to embrace. Many will not make the transition.
Implementation
The 21 st century business context requires HR
to become more virtual, more nimble, more efficient in providing operational
services and more effective in building organizational capabilities necessary to
gain and sustain competitive advantage. What has been your experience? What are
your views?