HR Functions and Model of HR Functions - Essay Example

Introduction The contextualization of HR imperatives has emerged as crucial factor for reconceptualization of HRM within the broader precincts of business strategy. The myriad external and internal imperatives that drive organizational and HR strategies become key linkages for gaining leverage in the market. In the highly competitive business environment, the changing role and responsibilities of HRM are driven by internal and external environmental compulsions. As such, the evolution of traditional HR into strategic HRM is designed to support the dynamic business strategies that would effectively respond to the environmental changes and add considerable value to the firm. The paper would therefore analyse scholars’ assertion that contemporary trend in HR considerably promotes organizational strategic interests over employees interests (Van Buran, Greenwood & Shehan, 2011). History of HRM The post industrialization period saw massive changes in the work paradigm. The Ford model became important scientific approach to labour management resulting in greater mechanized production process. While Taylor had identified skills and training for specific job outcome, Fordism was distinct in its managerial control and incentive driven mass production (Rose, 1975; Benyon, 1973). The model proved to be deficient in addressing the needs and requirements of the workers and was later replaced by human relations that took cognizant of workers’ socio-psychological needs. This was vital shift in the human capital employed within production units and businesses which had identified and used human factor as important ingredient of higher work outcome (Cannel, 2004). In the post war era, the emergence of labour union gave huge impetus to employees’ rights and fair working conditions. The concern for workers led to state legislations and organizational policies vis-à-vis employees work conditions, wages, recognizing their rights etc. In the late 1990s, the technology and transforming socio-economic and political dynamics necessitated reconceptualization of employees and employers’ relationship (Hattam, 1993). The rise of Margaret Thatcher in UK witnessed significant change to individualism from collectivism that introduced the term human resource management which primarily indicated more emphatic role of management in the workers’ welfare and output (Lupton & Shaw, 2001). The HRM was deemed as important facilitator between workers and employers that incorporated various human resources activities like recruitment, performance, change management, administrative goals etc. and helped to align it with the organizational vision, mission and goals. The changing functions of HR are now reflected in the strategic action plans with long-term implications that integrated organizational strategic decision-making and change management within HR strategies (Marchington and Wilkinson, 2008). HR functions and model of HR functions The role and functions of HRM is crucial in creating a diverse workforce whose competencies are judiciously exploited for increasing organizational productivity (Gillham, Wood & Somerville, 2007). HRM refers to the organizational strategies, activities and procedures of developing productive workforce to achieve organizational goals and enhance performance. HR initiatives are vital components of managing change through development of distinctive organizational culture with well-defined and effectively communicated vision, mission and organizational goals across the workforce. Indeed, the people and the existing workforce need to creatively evolve skills and strategic approaches that would respond to the environmental changes for optimizing the intended output, within the parameters of organizational goals and objectives. The shift of HRM to strategic HRM The traditional priorities of HRM have increasingly become inadequate to face the myriad environmental changes that directly and indirectly impact business performance. The transforming socio-economic, legal and political environment have created a more complex system of inter-relating resources that require serious considerations for long term sustainability of resources as well as of the business. The people especially have become central to the issues as they impact business performance. The globalization has brought in pluralistic society and made expansion of business across geographical borders a necessity for survival. Consequently, businesses need to plan their resources, including human resources for long-term sustainability. The businesses therefore have to shift their focus from the traditional HRM and seek a framework that incorporates strategic planning that is more flexible and can exploit human resources for achieving organizational goals (Farmhand, 2010). The strategic HRM has therefore evolved as one of the most critical factors which helps develop a highly indigenous team of human capital that provides the organization with a competitive advantage that is unique. The different models and approaches to HR have evolved to address the changing dynamics of business. The myriad models of HR functions and approaches underpin the principle that HR will optimize its investments by integrating its programs and processes with different aspects of the business (Farmham, 2010). The hard and soft models of HRM operate within the constraints of internal and external contexts of an organization to optimize performance outcome. The hard model tends to adopt flexible techniques of cost cutting through limited investment on the workers’ development (Beardwell & Claydon 2007). Soft model of HRM recognizes human capital as important resources and focuses on high commitment and high involvement HR practices (Guest, 1987; Story, 1992). Guest comparative model primarily believes that integrated HRM practices would be reflected on higher individual and organizational performances (Guest, 1997). It addresses the innovative approach in human relationship, quality and cost reduction through HR practices like training, appraisal, reward system, recruitment and selection, job specifications, promotion etc. that would lead to quality, loyalty of employees and flexible approach. The end result would be low turnover and higher satisfaction for organizations. It highlights the individual advancement and satisfaction and fails to indicate the extent of the alignment of HR functions with the wider goals and objectives of the organization. The Bach model, on the other hand is driven by the compulsions of the employer for market leverage (Bach, 2005). It is important model as it incorporates the global perspectives that impact the long-term aspirations of the business. Torrington et al. (2009) assert that the external environmental issues like globalization, addressing the social and emotional needs of the employees, legal compliance and customer-focused approach of the businesses in the current times have shifted the focus to better management of people. It promotes hard model of HRM that promotes organizational effectiveness through managerial control and by marginalising the interests of the stakeholders and employees. David Ulrich (1997) has proposed HR model of functions based on multi-legged model that is resilient and can meet the challenges of dynamic business processes of the time. He believes that an effective HR strategy tends to analyse the various systems of HR processes for future and develops strategic plans to address the higher proficiency of HR functions. Moreover, the competencies of the HR directly impact the effectiveness of the HR functions due to individual’s greater knowledge base, skills and abilities to influence performance outcome. The Ulrich model emphasises the roles and functions of the HR professionals and employees such that it coordinates and integrates various systems within the broader objectives of the organization to deliver the optimal results. Internal and external factors that promote SHRM The internal drivers of HR strategies are focused on the roles and functions of the workforce within a firm that reflects the extent of investment that is needed for exploiting the competencies of individual workers (Grimshaw et al., 2008). The type of skills, knowledge and attributes that are required for optimal organizational performance becomes one of the most important drivers of HR change strategy. Thus organizations tend to adopt varying strategies like retention of employees by employing motivating techniques or adopting retrenchment strategies to cut cost and use temporary skilled workers to meet talent gap. The organizational change is witnessed when the strategic interests of the organizations overshadows the interests of the workers resulting in the restructuring of internal labour market. The external driving factors for changing trend in HR strategies are the transforming socio-economic, political and legal environment that impacts the performance of an organization. The diversity in labour market is also influenced by hordes of issues and compulsions which impact productivity of the organization (Kellerberg, 2003). The supply is influenced by the changing demography, social format, economic conditions and government policies. The labour demand relies on external business environment like change in consumer demand, global competition etc.; internal business compulsions including changes in business process, merger and acquisition, economic restructuring etc. Thus, the impact of globalization has cascading impact on the role and functions of the HRM that are often redefined in terms of changing environmental compulsions for sustained success. Analysis of a model function of HR that is developed to meet environmental challenges The HR framework is vital tool to identify and evaluate HR practices that impact performance and succeed in the highly competitive global business environment (Ulrich & Brockbank, 2005). The various HR functions have wide flexibilities to provide firms with unique capabilities to gain competitive advantage. They facilitate vital insight on the drivers that propel performance and tools which can increase the employee effectiveness. Ulrich model is critically analysed and explored for validating its effectiveness in delivering the strategic goals of HRM within an organization. The Ulrich Model The model decentralizes the HR functions into broad categories of shared services; business partners; centres of expertise; vendor management; and corporate HR (Farmham, 2010). The shared services are outsourced to carry out routine HR work and provide information through trained staff in call centres. Business partners help develop strategies and plans to enhance performance. They are important facilitators for aligning HR strategies with strategic goals of the organization. Centres of expertise act as reference points for outsourcing to deal with more complex issues like people resourcing, employment relations, training, pay and reward etc. Vender management forges linkages with third party services like pension administration. Corporate HR has increasing been seen as vital element of HR functions mainly because it helps to provide market credibility to the firm by upholding high standards of HR practices and corporate values. The various paradigms of Ulrich model encourage critical thinking and innovative solutions to the challenges of the contemporary times, especially globalization, change management, developing organizational capabilities etc. It highlights constant update of skills and knowledge database so as to exploit competencies of the workforce for competitive advantage. The human capital is seen as important resource and consequently firms tend to evolve creative measures to enhance their skills and provide organizations with unique advantage within the industry. The Ulrich model also becomes important because it address the environmental dynamics to promote flexibility in approach to dealing new challenges and at the same time, ensure that organizational interests are prioritized. Boninelli (2004) supports Ulrich model for its wide ramifications on the future course of the businesses. She believes that strategic HR goals of Ulrich model are pertinent elements that are aligned to leverage business strategy in the highly competitive business of the current times. The globalization has redefined and restructured labour processes that necessitate innovative mechanisms to address changes within and outside the organization. One of the interesting dimensions of the Ulrich model is that it reveals the changing trends in HR and the changing needs of the employers who are increasingly looking at ways to cut costs by exploiting the skills and knowledge of temporary workers (Houseman et al., 2003; Foote & Folta, 2002). Indeed the model has emerged as a catalyst for ushering an era of strategic HR module that can successfully expedite business goals through human competencies. But Ulrich model is often criticised for lack of empirical evidence that questions its efficacy of business partners in always being best equipped to advise the best course in dealing with the complexity of the issue within HRM (Boselie & Paauwe, 2005). The selection of business partners and development issues becomes pertinent as they are major contributor to the success of Ulrich model of HR. The functional and structural changes suggested within Ulrich model are designed to introduce transactional and transformational changes within organization for higher performance. They, therefore become the delivery channels for introducing changes and not as part of HR function which continues to focus on exploiting the competencies of human capital for higher performance. This is vital element that needs to be addressed as effectiveness of shared services and centres of experts need to be well equipped to face new challenges (Delamare Le Deist & Winterton, 2005; Grazeda, 2005). The criticism of Ulrich model, though justified, nevertheless has evolved as crucial mechanism that encourages firms to be more inventive and forward looking so that they can face new challenges with strategic planning. The model helps to formulate effective HR policies that are witnessed on the improved performance and quality to work and life balance (Dessler, 2003). Tesco is prime example of Ulrich model as it has exploited environmental changes and incorporated them within its business strategy. Tesco’s HR leadership initiatives have adopted flexible approach through joint goals and shared work practices that highlight diversity and technology driven change management (Senior, Barbara & Fleming, 1992). The change paradigm could be easily measured vis-à-vis performance, innovation and customer satisfaction which are few of the critical success factors that have significant impact on the market positioning of the organization. The HR functions and practices empower workforce that thrives on shared learning and collective goals leading to improved performance. The HR leadership of Tesco exploits the Ulrich model to identify and evaluate the drivers of changes and help convert them into new opportunities of improving workplace performance. People-centric policies that address the needs and requirements of diverse populace are key enabling elements of Tesco’s strategic success. It continuously strives to improve on its customer service through in-house training and exploiting cultural competencies of the workforce for improved performance. Its HR initiatives constantly evolve new ways to identify external drivers of change that may impact its performance. The technology and e-business continue to be vital parts of core business activities of Tesco. The model has considerably strengthened its internal and external resources to maintain and gain a niche market position. Tesco has successfully used its widely distributed resources to improve its efficiency and performance outcome (Hawkins, 2006). Its flexible approach helps it to adapt to the transforming values and thereby maintain a competitive edge over its rivals. Tesco HR leadership looks at the workforce as important resource that can be tapped to improve and improvise the performance of the organization in the fiercely competitive business setting. Tesco does not ‘have a culture, it is a culture - a unique system of shared meanings’ (Griffin, 2003:274). Thus, Tesco’s strategic approach to HRM and its alignment to the wider goals and objectives of the organization are key linkages that provide it with cutting edge competitive advantage within the industry. Consequently, it has become the first food chain that has adopted global values in its operation and values. Conclusion The changing socio economic dynamics have created a highly competitive business environment (Rainey, 2006). Within the broader scope of business opportunities, changing trends in HR imperatives are distinct in their transforming corporate culture that can respond to broader agenda of stakeholders leading to higher performance and strategic approach to the management of people. They also emphasize the interests of the business that may overshadow the individual interests of the workers. Indeed, the changing trend ensures that individual agenda and corporate interests are aligned to achieve strategic goals of the business on long-term basis. At the same time, the functions of the HRM also become important tools for organizations to exploit the potential of the workforce and adopt effective HR practices that provide win-win situation to the organizations as well as to the workers. The Ulrich model of HRM function is sustainable because it not only addresses the changing dynamics of business but mainly because it is able to integrate individual and organizational interests for common goals. 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