Human Resource Manager: Partner or Consultant - Research Paper Example

Compare and contrast the role of the HR Business Partner with that of a consultant. Evaluate its effectiveness v an external consultant. The paper will start with a formal background to contemporary business environment followed by a discussion over the traditional role of HR executives. The researcher will then discuss in detail the role of Human Resource managers as internal consultants to a business organisation. The paper will then demonstrate the roles of external consultants that facilitate an enterprise in identifying its strengths and internal problems such as employee issues, performance factors, marketing research issues and shortcomings in decision-making and problem-solving methods. Finally, the researcher will present a compare and contrast analysis on roles of HR business partner with that of an external consultant. The advent of internet, the globalisation initiative in 1990s and the recent advancements / developments in information technology, communication networks and media have greatly impacted strategic planning and business strategies of profit maximising firms. Indeed, the old workplace rules, regulations, requirements and criteria have been replaced by new workplace standards and roles so that the organisations could flourish in an absolutely uncertain, unpredictable, unclear, unstructured and unexpected business environment. The new workplace demands greater emphasis on open communication, information sharing and team building that, in turn, leads to greater coordination, collaboration and cooperation among employees – employers. Unequivocally, Human Resource Management plays its vital role in goal accomplishment and organisational success because HR managers are solely responsible for recruitment, selection, training and skills development, employee compensation, placement, performance evaluation and retrenchment (Beer, 1997). Nonetheless, the use of information technology and information systems by businesses has increased over the last 2 decades (and information has become an actual business asset) so that they could attain a competitive edge over their rivals in the same industry. HR personnel, therefore, have to upgrade themselves as well as have to equip organisational employees to create best strategic fit for a profit-maximising enterprise. Nonetheless, Human Resource Management has traditionally focused over employee selection / hiring, training, compensation etc. instead of contributing in strategic planning and becoming business partners. However, this notion has now been changing because of increasingly complex external environment, and HR managers have also started playing their role as strategic partners rather simply employee advocates / champions (Caldwell, 2003). HR professional as a Business / Strategic Partner Caldwell (2008) has pointed out that organisations should train its HR managers so that they could understand employee behaviour, their cultural setting and professionalism. Indeed, the training would make HR staff competent and they could be able to build relationships with their employees / subordinates. For instance, HR managers could easily work with workers from diverse backgrounds; thereby, fulfilling their roles as strategic partners. Caldwell (2008, p. 277) emphasised that HR managers should no longer be viewed as simply employee advocates; rather they should be transformed into ‘HR professionals as strategic planners / partners’. Indeed, the new responsibilities of HR managers include management professionals, change management initiators and employee advocates. It is worthwhile to mention that organisations expect HR managers to become business partners and directly facilitate top management (President / Chairman, CEO, Board of Directors and Department Heads etc.) in setting goals, defining strategies to accomplish these goals, organising tasks into departments, analysing and evaluating strategic position. In addition, organisations expect HR partners to facilitate in innovation and amendments in existing business practices, diversification and market development. Basically, organisations want HR partners to provide feasible solutions to current / future issues rather simply defining various alternatives. The mission of HR department should be value creation for customers, building long-term relationships (with all shareholders / stakeholders), and maximisation of shareholders’ wealth. For instance, organisations have huge expectations of HR function because of their deep insights on organisational perspective, their past interactions and know-how of business unit, their ‘understanding of culture, language and symbolic actions’ and finally their knowledge of corporate agenda (Kenton et al, 2003, p.13). Organisations, however, dislike HR managers if they are unaware of field technicalities and other ground realities. For instance, Ulrich (1998) revealed that HR managers usually don’t have sound information on production-related issues, thus they are not viewed as excellent assistants and solution providers to first-line managers. Often, they fail to effectively communicate and build relationships with workers at lower management level because of these deficiencies. In short, owners of manufacturing firms, therefore, have to arrange external consultants for performance evaluation and training / development purposes; rather simply relying on internal HR consultants (Allen & Davis, 1993) ; (Conklin, 2005). Wright (2008) has highlighted that first new role of HR partners is to increase efficiency and effectiveness. Strategic planners, including Chairman, President, CEO, Executive and Non-executive Directors, are among those who define organisational goals and objectives as well as the strategies to accomplish those goals. Indeed, the tasks are then assigned by middle management and HR personnel to all departments including Finance, Marketing, Information Technology, Production etc. Finally, the strategic managers would appraise performance and define alternative strategies if previously objectives are not accomplished. Bringing HR managers in this process would enable the top management to discuss core organisational strengths / weaknesses / opportunities and threats with HR executives who may assist in developing rational policies that are economically, operationally and technically feasible for goals accomplishment. In addition, if new skills are required to accomplish those goals then HR partners could develop new personality, educational and technical skills development programmes followed by business management and administrative courses to meet the required criteria before effective implementation of new policies. Consequently, not only top managers can implement their defined strategies but also they can enhance employees’ skills and other attributes. In simple words, the top management, in collaboration with HR partners, can increase employees’ marginal productivity, efficiency and effectiveness (Pritchard, 2010). It should be noted that employees hired by HR managers are then instructed to follow organisational policies and accomplish predefined goals and targets. HR Department, therefore, pays special attention to recruitment and selection because only right workers could bring desired outcomes. Nonetheless, if HR managers become strategic planners / partners, they would be able to communicate corporate agenda with personnel and provide insights in a better manner. Subsequently, this would lead to enhancement in organisational efficiency, effectiveness and performance (Mohrman & Lawler, 2003). Another possible role of HR business partners is providing assistance in Organisational Restructuring / Reengineering and Change Management Process. It is worthwhile to mention that businesses are changing their internal management systems and managerial hierarchy to become competitive and enhance their ability to meet new challenges. The HR strategic partners could play their leading role in entire organisational restructuring or reengineering since they work closely with other employees and are responsible for their on-the-job training and performance evaluation / appraisal (Brown et al, 2009). Most of the enterprises tended to use authoritarian culture in which all decision-making powers were enjoyed by top management and workers at middle and lower management levels were only responsible for their implementation (Collins & Clark, 2003). However, the developments in communication technology and media at one extreme resulted in creating business opportunities because of emergence of global markets, suppliers, customers and a unique global culture; whereas on the other hand, this resulted in stiff competition among firms. In short, today Information about all the above mentioned actors plays a key role in success of any business unit and this information has to be shared with middle and low level managers. HR partners, therefore, could assist restructuring initiatives that aim to change organisational culture (basically a shift from authoritarian to adaptability culture), to adjust managerial hierarchy (from vertical to horizontal / matrix / network approach) and to promote leadership role within an organisational setting (Wright et al, 1998), (Boudreau & Ramstad, 2002). Wright (2008) discussed the importance of Human Resource Information Systems (HRIS) that would certainly facilitate executives in personnel management because of efficient use of information about organisational needs and members. Nevertheless, the systems provide tools and applications that may also assist in recruitment / selection, training, compensation, placement and performance evaluation. Also, there is much debate over outsourcing of some HR roles such as ‘payroll, benefits, administration, background checks, drug testing, recruiting and training’ to external consultants if HR departments incur higher costs in fulfillment of their roles (Madison, 2005, p. 8). Ulrich (1998) highlighted that an HR executive becomes the credible activist when he/she showcases charismatic qualities, bridges communication gap between top management and employees and becomes an opinion leader within an organisation. In other words, HR partner actually plays the role of middlemen who is responsible to maintain confidence and trust factor of employees on their employers. For instance, HR partners should become culture and change stewards by facilitating new change management practices that comply with organisational culture. Indeed, HR partners emphasise on ‘crafting culture’ so that they could provide a clear vision about organisational culture to internal and external stakeholders. Also, they focus on ‘personalizing culture’ to ensure needs fulfilment and to improve employees’ morale, commitment and confidence. Finally, they believe in ‘enacting culture’, which is about designing and implementing an enterprise-wide culture (Farndale & Brewster, 2005). According to Ulrich (1998), an HR partner is expected to become Strategy Architect that refers to shaping organisational mission, vision and strategic initiatives for greater improvement and sustainable development in the external world. Nonetheless, Strategic Architect role is affected by two main factors. The first factor is ‘sustaining strategic agility’ that refers to bringing HR practices in-line with strategic, tactical and operational strategies in order to meet corporate agenda (Kenton et al, 2008). Decline in employee turnover rate is, in fact, the most important benefit of aforementioned factor. Also, the motivation and morale of workers increase. The second factor is ‘engaging customers’ that refers to increasing stakeholders’ (consumers) awareness about internal environment and business processes. Customers then provide feedback about internal systems, product and service quality that enable HR partners to overcome organisational shortcomings. Grossman (2007) threw light over role of HR professional as a ‘business ally’. For instance, HR executive should also have strong understanding of operations management, supply chain, distribution channels, cost structure, revenue streams, external and internal customers so that they could effectively contribute in profit-maximisation. This is also known as ‘transactional role’ of HR partners in contemporary business environment. It must be pinpointed that another competence of modern HR partners is known as “Operational Executors”. Nonetheless, the firms now focus on experimentation and risk-taking. This experimentation is encouraged through information sharing and participation among employees. In simple words, the strategic managers empower their employees and permit to make necessary decisions after situational analysis. These HR managers could suggest what changes in management hierarchy would be most feasible, manageable and controllable and how communication (regarding goals, tasks and policies) should take place in new workplace (Mohrman & Lawler, 2003). Indeed, the HR partners could mentally prepare other employees about the structural/managerial changes and could instil new organisational values. They could also use job rotation strategy to deal with any underlying issues, impediments, resistance, retaliation or inter-organisational politics by existing workers. It must not be forgotten that workers tend to resist change because of their fear of losing powers, seniority or authority that they enjoy in an existing work environment (Beatty & Schneier, 1997). In order to become a truly business partner, HR professional must offer a balanced arrangement of ‘monetary or transactional-related services’ and a pool of workers who could help in meeting organisational financial targets and objectives. Furthermore, it is worthwhile to mention the fact that HR must enhance the use of information and communication technology to develop ‘HR Systems’ (Mohrman & Lawler, 2003, p. 13-14) that would enable the HR to formulate and implement HR strategic policies. However, the highly capital intensive organisations (automated processes) do not extensively depend on HR to gain competitive advantage. Instead, businesses that are mostly labour intensive and that rely on productivity, skills and proficiency of their human assets need HR function to be highly organised on firm grounds. In short, these labour intensive firms usually require efficient ‘HR systems’ the most as they solely rely on the strength of their human resources in comparison of capital intensive businesses with economies of large scale operations (Wright, 2008). Role of a Consultant As mentioned earlier, the world has become a global village that triggered phenomenal increase in competition because new business enterprises are constantly joining the business arena. Nevertheless, the business today focus heavily on induction of information technology resources (such as Management Information Systems, communication networks etc.) so that they could automate their business processes and eradicate human errors, inefficiencies, waste of resources and time. However, it is a difficult job to communicate and implement change management practices across entire organisation because employees tend to resist change and other internal shifts. In addition, the organisations are also inclined to change managerial structure so that they could become flexible and adaptable to external changes (cultural, social, economic, technological, legal and political). Although, enterprises do have Human Resource and Personnel Management departments, yet they require the assistance of management consultants who either work independently or associated with any management consultancy group. It should be pinpointed that the organisations sign agreements with management consultants who are viewed as ‘professionals’ that enjoy glib expertise and specialisation in management related tasks. In other words, management consultants are paid service providers that offer ‘a broad range of services’ to facilitate profit – maximising companies in business decision – making, problem – solving, induction of new IT systems and solutions, handling employee – employee, employee – employer and employee – organisational conflicts, developing and implementing cost cutting plans, change management practices, restructuring, reengineering and reorganising. For instance, the purpose of external paid consultants is to resolve all business, economic / financial, managerial, functional, operational and technical worries that are faced by a profit – maximising firm in a challenging external environment. Apart from the above mentioned, the consultants also help in defining and altering business goals and targets followed by amendments in existing policies that are not feasible and beneficial for genuine business growth, success and sustainable development. External consultants could also be viewed as mentors and counselors who provide ‘coaching’ and pertinent advices to workers at top, middle and first – line managerial level. It is justified to argue that management consultants are thriving (despite the presence of HR managers) because they have proficiency in technical, strategic and functional areas whereas most of the HR managers only consider themselves as employee advocates instead of business partners (MCA Report 2, 2010). Lucas (2009) also endorsed the fact that management consultants are not only involved in middle and first – line managerial levels but also they assist strategic planners and policy makers in devising goals and then defining certain strategies to accomplish those jobs and targets. For example, management consultants may provide assistance and training to carpenters, mechanics, operators etc. in any manufacturing firms. Indeed, they could teach new production techniques and train workers / supervisors on machines so that they could use new methods and increase productivity. Similarly, the consultants could teach middle managers about cost cutting procedures to maximise their productive efficiency, effectiveness and performance. Last, they could guide and advise top executives about developing new performance appraisal / evaluation systems followed by importance of matrix, virtual and network managerial structures. It should be noted that these above mentioned managerial systems ensure greater flexibility and adaptability, facilitate formal and informal communication, coordination and collaboration among employees and employers. For instance, consultants could also help developing new reward disbursement systems and compensation plans to reduce employee turnover rate and absenteeism, to attract talented pool of workers and to enhance morale, confidence, trust, motivational level, job satisfaction and commitment (Lucas, 2009). One of the major roles of consultants is to share and transfer their knowledge and expertise with their clients i-e business firms. These consultants are highly educated, specialised and well-trained; therefore, they could easily identify the problematic areas, underlying weaknesses and reasons behind business failure or declining growth rate. For instance, they also have good communication skills so they know the art of conveying their message and explaining what needs to be done for betterment of the firm. Based on their neutral evaluation, they provide solution, suggestions and recommendations to strategic planners, policy - makers or controllers of an entity who later consider the proposed changes and implement accordingly. In some cases, top management does have many alternatives at its disposal but these managers are hesitant in identifying the best option. Therefore, consultants also help conducting the costs – benefits analysis (because of their vast knowledge and industry wide experience) and choosing the best alternative for implementation. In simple words, it should be argues that consultants’ major role is to resolve all business related problems and ‘reduce the uncertainty’ that a company goes through in difficult contradicting, unclear and unstructured scenarios (Kakabadse et al, 2006). Summarising the key roles of an external management consultant, it should be recalled that these ‘managerial therapists’ (Kakabadse et al, 2006) provide all sort of technical, operational, functional, economic and strategic support to their clients that may eradicate their business issues and enhance organisational effectiveness and performance. In addition, the consultants tend to introduce new ‘perspectives’ and angles that are not previously considered and adopted by a firm. The consultants are involved in transfer of knowledge, education, skills and attributes in the money - knowledge exchange process. They identify how to use highly valuable tangible and intangible resources in an efficient and effective manner to ensure survival, growth and sustainability. Moreover, they focus on instilling flexibility and cost leadership. Nevertheless, they communicate the importance of change management practices to reduce resistance from workers who fear job losses, decline of position power, obsolescence or career plateaus if new policies and systems are implemented. Finally, the last role of consultants is to provide feasibility reports about the scope of specific projects followed by their support for completion of existing projects in pipeline (Report 2, 2010). Conclusion Comparing HR business partner to an external consultant, it should be argued that the former may definitely assist top and middle management levels but may not provide relevant and sufficient assistance to lower level employees because he or she lacks certain technical qualifications and specialisation. On the contrary, the latter (however) is advantaged because he or she may provide genuine support to employees at all managerial levels (including first-line). In other words, organisations have to pay additional price to external consultants to benefit from their services, ideas and solutions. Nonetheless, if HR managers would become business partners rather than simply employee advocates, then organisations could save such costs incurred due to external consultation services. HR business partners could definitely work in collaboration with strategic planners; thereby reducing the need of external consultation and assisting their respective organisations largely at middle and top managerial levels. 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