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 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 terms 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. They help define the and formulate a desired future state and shaping a sound implementation plan that would result in organizational success. Human Resources leaders are also expected to be effective in working in the center of each business to grasp and understand each and every problem. Because of these, human resources leaders must have the necessary skills and expertise in monitoring the progress and development of the company.
Since human resources leaders work as part of a management team, they share accountability in projecting and achieving objectives and goals set by the company. Peter Drucker once called for the "end of the personnel department," anticipating that "staff will become line by assuming responsibility for business results".
Human resource is also valued as the primary source of knowledge and skill in the people-related areas of strategy implementation such as staffing, learning and development, performance management and rewards. To solve problems effectively, managers need to have creative and effective solutions that would tap both external and internal practices. Human resources specialists can develop innovative practices thus increasing the potential of the company to achieve a competitive advantage. Differentiating the company from its competitors thru unique human resource practices will give the company an edge in the market.
Human resource specialists may reside anywhere in a company. They may be aligned or assigned to specific areas and stages of production to gauge and observe the efficiency. They can also be based in other company areas, such as legal affairs or a quality function or they can be assigend externally through specialized consulting and service firms available on call as part of a resource network. Human resources provides the systems and services structure necessary to enable effective management of people across the company on a direct-access and cost-effective basis. This practise therefore lowers overall cost and improved efficiency and service quality that is offered by the company.
The traditional human resource function was built with a hierarchical business structure with clear goals and distinct differentiation of staff that were expected to provide support and fast response. Local human resource staff were charged with implementation and were regarded for their excellence in providing needed human resource services in a quality and responsive manner. The new human resources meanwhile is a virtual organization. At the onset of the 21st century, human resources concentrate resources, activities and all company support in a partiucular area or field in order to have the desired business impact. Human resources strategies and innovations are increasingly developed within the various business units within the business context and the central services focusing on providing operational services and support.
To further illustrate the concept with regards to an effective resources management, a case study or a comprehensive example must be presented. The University of Nebraska Medical Center (UNMC) was facing a huge problem that must be remedied quickly in order to provide unending and prompt service to its clients. Problems sucha as intense price competition and payment reform in healthcare, reduced state and federal funding for research and education, changing workforce and population demographics, and increased societal demands of healthcare and academic organizations are harrasing the company wasting valuable company resources and manpower.
UNMC, located in Omaha, Nebraska, is a major academic health sciences center and is known internationally for its bone marrow and liver transplantation programs, cancer research and treatments, bio-technology, genetics, and rural health care initiatives. UNMC consists of the colleges of medicine, dentistry, nursing, pharmacy and allied health, University Hospital, Eppley Institute for Cancer Research, Meyer Rehabilitation Institute, and other research academic and administrative units with a total workforce of 6,000 employees, including faculty, physicians, and staff.
A new chancellor, Carol Aschenbrener, M.D., was hired and began a culture change and a series of strategies to prepare the Medical Center to thrive in the face of said challenges. These strategies include total quality management, cultural diversity, value management, and values for excellence. The successful implementation of these strategies depends largely on the effectiveness in addressing people-related issues. The prior human resources organization reported to the business and finance unit and was very traditional and pedestrian, focusing mainly on compliance and administrative activities. In order to reposition human resources as a strategic function engaged in driving organizational change, a new chief human resource officer position was created to report directly to the chancellor. In 1995, a team engaged in a repositioning process, resulting in a human resource strategy that supported UNMC's continued success. The redesign included a new organization structure and many new roles built around the competencies and requirements of implementing the strategy.
The key reason human resources was not effective in the past was the structure, which was hierarchical and functional. Processes were subdivided along functional lines such as employment and compensation when, in fact, the services we delivered to UNMC were not functionally defined. Another deterrent to human resource effectiveness was the lack of collaborative relationships with the business units. Human resources had historically managed from a position of control, so there was hot a real sense of partnership with the units. Furthermore, the predominant activity of human resources was administration, such as handling forms and processing paper. During the analysis, we determined that 70 to 75 percent of the time and resources of the company were spent on administrative activities.
Before a new structure could be developed, the human resources planners needed to determine what specific strategies will be used. The team spent several months conducting focus groups and surveying over 300 managers and staff. It also analyzed all the strategic plans of the various units and worked with key unit leaders to determine the people-related issues and to determine how human resources could be lever-aged strategically to resolve these issues and help the units accomplish their plans. A nine-member design team conducted the analysis, gathered the information, and then developed the strategies. This team included representatives from human resources and from some of the key campus units. A steering committee was then appointed comprised of top leaders from every campus unit. The steering committee was critical in giving the process visibility, unit ownership, and direction, and in reviewing the findings, testing various ideas and alternatives, and monitoring the progress of the design team.
After several months of work, the design team identified five key strategies and priorities: strategic staffing, development and learning, performance management, valuing people, and organization effectiveness. Under the new structure, human resources was realigned to support these strategies. A leader role was created to head up each strategy. Several functions were merged and some managerial roles eliminated. The new design put the emphasis on strategic consulting and service-related activities. A shared services organization called a service center was created to handle the administrative activities more efficiently and to determine which activities could be eliminated and outsourced. Within each strategy a vision statement was developed along with a series of action steps to guide its implementation over the next eighteen months.
The first step was the program called strategic staffing where a series of integrated, organization-wide staffing strategies that anticipate and meet changing workforce requirements as applied to faculty, staff, and students. To met the goals of this stage, human resources will partner with each unit and review business plans to determine staffing needs. Position profiles will be developed for each position to articulate the core behavioral and technical competencies required. It will then engage in aggressive recruitment of high caliber talent encompassing diversity objectives as part of the process.
The roles of the recruiter and compensation analyst were also combined and it place an important emphasis on developing new technology that will be used in screening and interviewing candidates, revising pay rates to reflect the market, and enhancing the speed and quality of the selection process. The staffing consultants are assigned to each unit and partner with the units in developing and implementing staffing strategies. With regards to performance management, all faculty and staff are accountable and rewarded for individual and team efforts that have met the standards and objectives of the organization. This program established a performance management process by utilizing existing critical results areas, performance indicators, and developmental plans, and by developing team-based critical results areas. In this program, managers will be equipped to provide coaching and feedback to employees and to address performance problems more effectively and promptly. A total reward strategy will be created to guide the design of appropriate base and incentive pay programs.
Another program initiated by the company leans towards the development and learning processes. All people will be actively engaged in the learning process and personally accountable for their own development. Various unit-based training functions were merged into a single unit to serve the entire campus. This team will define the most critical technical and behavioral competencies and will develop action learning strategies to increase the speed and effectiveness at which employees can gain these competencies and demonstrate improved on-the-job performance. Outcome measures were also incorporated into each training program.
In the area of valuing and respecting people, the comppany presented an image were it can attracte and retain the best available talent in the employment market. This program leans heavily towards the shifting of accountability and employee relation from the human resources to line managers. Employee services such as employee assistance, child care, and wellness will be enhanced and family-friendly work practices expanded. To attain organizational effectiveness , the hospital created an organization that is innovative, flexible, collaborative and dedicated in meeting the needs of its faculty, students and patient. An internal consulting practice is developed leveraging the expertise of key staff around campus. This practice will include work redesign, change management, quality improvement, and other organization development initiatives.
Under the service center category, all administrative functions will be combined. Functions such as benefits, records administration, compliance reporting, job posting, and secretarial support was consolidated to handle all the administrative duties and to streamline processes for all of the HR strategies. The service center will be the clearing house and intake area for handling calls and visits and directing employees to the appropriate resource.
Repositioning of human resources was also reinforce alongside the strengthening a culture change at the organization. This reposition would require all managers, employees, and human resources staff to perform different roles than before. Managers will be accountable for the development of their people and for addressing issues that directly affect individual and team performance and the quality of work life. Employees will be accountable for their personal performance and development and will be more actively involved in achieving needed change as we move from an entitlement to an empowerment culture. Staff in each unit will partner with human resources in developing new systems and processes that would improve the unit's effectiveness.
Once all the strategies were developed and action plans identified, proper implementation must be followed and monitored. The strategies can only be implemented if staff in the new roles possess the right capabilities. A resaffing process is developed by a work group using a template from a consultant. In this process, a position profile was created for each role articulating the behavioral and technical competencies required to perform each role. Behavioral interview questions were developed along with benchmark criteria against which to measure the the candidate's competence.
Each employee in human resources was required to go through the staffing process. This program encompasses the whole campus so that other qualified individuals can also compete for the new human resource roles. The traditional job posting process is suspended while interested employees completed a "preference form for career areas". This form provided the employees to write down their three career interest areas then describe their experiences, education, knowledge and skills and other factors relevant to the career areas that they choose. Once the application deadline passed, a team reviewed all the preference forms and selected candidates to be interviewed based on the skills needed to do the work.
Behavioral interviews were conducted by a three-member panel made up of the leader and two representatives from the steering committee. Selection decisions from the panel were then reviewed by an advisory board which included other members of the steering committee. This group reviewed the process to insure fairness, consistency, and legality. Using this objective process consistently, each position in the department was filled with the best available candidate measured against the job-related competencies. Some positions were not filled internally and were handled through an external search.
To support employees through the transition, a variety of services such as career-counseling, outplacement and team-building activities to address survivor issues. A transition council has been set up to address day-to-day issues such as training, space, service, and other operational issues, while a strategic council comprised of the leaders and the executive director oversee integration and implementation of the strategies.
These processes and programs had a significant impact on the campus and requests are pouring in from all over the campus for support in some of the new strategies and for consulting around redesign issues within the units. Proper implimentation and knowledge of effective human resources management was the key in the success of this organization.
