Use of Centralised Shared Service Centres, Devolution of HR Responsibilities to the Line Managers - Literature review Example

Introduction to Human Resource Management Table of Contents Introduction 3 Discussion 3 Business Partner Model 3 The Use of Centralised Shared Service Centres 5 Devolution of HR Responsibilities to the Line Managers 7 Conclusion 10 References 11 Introduction This paper intends to explain business partner model and it’s internal along with external drivers. Likewise, the paper would also provide a detailed description about the utilisation of centralised shared service centres and the devolution of the human resource (HR) responsibilities to the line managers. Line managers are those personnel who possess limited competencies in the field of HR management due to lack of training which possess by them (Terhalle, 2009).With the above concerned subject matters, it can be stated that the major purpose of this paper is to draw up relevant theories along with models related to Human Resource Management (HRM). Discussion Business Partner Model The business partnership model can be defined as the process wherein the intensity of the business partners in allocating accessible resources is determined towards the accomplishment of organisational targets. Moreover, the model explains the process through which the partners exploit necessary resources in order to develop their respective businesses (Global Public Policy Unit, 2006). It is worth mentioning that it is the HR department which makes active participation in the strategic planning procedure for achieving desired business goals within the context of business partner model. The model looks after the conduct of other business activities such as training along with recruiting of employees and placement of existing and new employees. Specially mentioning, the HR department is able to identify and select appropriate employees who are suitable for performing their respective job tasks with the implementation of business partnership model (McKay, 2013). There are certain factors that drive the business partner model of any organisation such as The SNOW Mountain Hotel. In this regard, a few of the internal along with the external drivers of the model can be apparently observed as the needs of the customers, existing business market competition and broader technological opportunities. It is the needs of the customers which act as a significant driver for the aforesaid hotel. This driver can compel the management team of the hotel to innovate new technologies in order to attain maximum satisfaction level. Moreover, this driver can motivate the HR department of the hotel for selecting appropriate employees, so that much of the attention can be focused on complying with customers’ needs. It can be affirmed that the external driver concerning business market competition can force the management team of the hotel to adopt and implement effective strategies in order to sustain in the respective industry. According to the case study, it can be viewed that the HR Director of the hotel is much keen towards adopting new technologies, which act as an internal driver for the purpose of enhancing the image of the organization and availing other significant benefits (Zakić & et. al., 2008). In the preceding few years, it can be apparently observed that the HR functions are gradually changing and the need for adding greater value to customers has increased. The business partnership model requires strategic orientation for shaping the work and the behaviour of HR department (The OD Center, 2013). In order to determine the value of the model to the business of the hotel, it can be stated that the HR strategy of creating a positive work environment would promote the capability of the existing and the future employees to perform various operational functions. The formation along with the advancement of business partner model would support the hotel to generate greater value to the customers through raising the morale of the employees and also through generating team spirit amid them. There lay certain potential disadvantages of implementing the model of business partner. In this regard, one of the potential disadvantages can be dissimilar viewpoints of the business partners or the officials belonging to the management team of an organisation. This particular factor might result in causing high turnover rate of the employees. According to the case study provided, it can be viewed that a greater problem existed especially in HR departments throughout the SNOW Hotel Group relating to higher employee turnover. The critical factors that contributed in making greater degree of employee turnover include failure to mitigate living along with housing costs, lower satisfaction of the jobs and unrealistic corporate anticipations among others. Thus, the new business model requires the HR managers to be involved in implementing effective organisational activities in order to mitigate the problem concerning higher rate of employee turnover (McKay, 2013). The Use of Centralised Shared Service Centres The shared service centres are solely liable for executing along with handling diverse sorts of operational tasks belonging to an organisation (Institute of Management Accountants, 2013). A shared service centre is regarded as an accounting entity which is assigned to promote specialized services to the business units. This promotion is based on ‘service level agreement’ and ‘transfer price system’. The shared service centre is often viewed to be a cost centre rather than a profit-oriented centre, as it has no contribution in making substantial earnings for companies. The shared service centres mostly perform the activities of HR related services along with transactions and accounting services. In relation to the case of The SNOW Mountain Hotel, the management had decided to employ shared services for performing various HR related activities. Usually, the companies engage in forming a shared service centre in order to minimise the costs and also to enhance the coordination between the HR and the line managers (Strikwerda, 2006). The shared services centres are always driven by certain factors within a particular organization. In this regard, the low business or financial risks can drive the companies to develop effective shared services. The varied needs of the customers motivate the companies for the adoption of shared services (Institute of Management Accountants, 2013). Likewise, in the Snow Mountain Hotel, the HR director concluded by stating that the hotel must develop the system of shared service centres for freeing up the HR managers from immense workload. It can be apparently observed from the case provided that the parent organization of the hotel in the US was thinking whether the shared services must be centralised or not. The management of the hotel had a belief that the implementation of a centralised shared service centre would develop the quality of the HR administration related works of the hotel and the existing staffs could also focus on setting effective strategic directions towards the implementation of a new business model. One of the internal driving factors for developing shared service centres in relation to the Snow Mountain hotel can be viewed as the involvement of HR coordinators and HR managers in performing various sorts of administrative based activities. The implementation of a centralised shared service centre has certain benefits along with drawbacks and need certain factors to be considered for development. One of the benefits of using a centralised shared service centre is the transfer of knowledge at the time of when the different managers of the organizations unite together for fulfilling a common objective. The implementation of a centralised shared service centre focuses strongly on complying customers’ needs and enhancing the quality of the services (Institute of Management Accountants, 2013). On the other hand, the execution of a centralised shared service centre possesses certain disadvantages, as it requires a huge amount of capital in its implementation process. The capital is mainly needed for setting up a location and relocating the employees of companies (Institute of Management Accountants, 2013). The parent organization of SNOW Mountain Hotel is thinking to implement a centralised shared service centre in order to ensure that its HR and line managers are full involved in performing their respective operational functions effectively and most significantly to attain its predetermined business targets or organisational objectives. Moreover, with the formation along with the execution of a centralised shared service centre, the hotel can compete with its major business market contenders through complying with the greater needs of the customers. Devolution of HR Responsibilities to the Line Managers The term devolution stands for transfer of duties to various individuals. In this respect, the devolution of HR responsibilities to the line managers of SNOW Mountain Resort will be analyzed upon in a precise manner. Meaning and Aim of Devolution to the Line In relation to the concept of devolution, it broadly refers to the transfer of authority or power to a lower unit in an organization. This process is generally followed by strong authoritative figures that mainly comprise the business leaders and the management team of an organisation. In relation to the aspects associated with devolution to the line in an organization, it can be understood that the main aim for imposing devolution is allocation of proper responsibilities to the management. The priority lies behind the aspect of performing effective management functions through assigning different sorts of roles along with responsibilities to the designated workers. Devolving dissimilar responsibilities to the HR or line managers can be duly considered to have greater significance in the overall context of management. In relation to the case of The SNOW Mountain Hotel, the process of devolution can be followed in terms of allowing greater responsibilities to the overall management officials and also to the line managers belonging to the hotel. Benefits and Drawbacks One of the broad benefits of devolution can be apparently observed as the aspect of responsibility sharing which can provide great aid in making various prospects of growth in a particular organization. Other benefit includes the variable ways through which a change in responsibilities might lead towards better utilization of accessible resources in a formative manner. It can be apparently observed that the devolution of HR responsibilities to the line managers proves much beneficial for an organisation in various significant aspects. These aspects comprise managing along with effectively handling operational costs, incessantly scrutinising work procedures, measuring business performance and smoothly complying with the requirements of the customers or the clients among others (Whittaker & Marchington, 2003). In relation to the drawbacks of this particular measure, it can be stated that huge number activities relating to devolution may give rise to the aspect of cost cutting. Most crucially, the devolution of HR responsibilities to the line managers might result in ineffective performance of the employees, raising conflicts amid the organisational members and inappropriate decision makings among others. It can be affirmed that these drawbacks might hinder the development along with the growth of the organisations at large (Whittaker & Marchington, 2003). Practical Issues to Be Addressed To Ensure HR and Line Managers Are Fully Engaged Employee engagement is often viewed to play a decisive role in enhancing overall organisational performance in terms of performing various operational functions effectively and setting innovative strategic directions towards the accomplishment of organisational objectives. However, there exist certain practical issues that required to be addressed ensuring that HR and line managers are full engaged in attaining organisational targets at large. In this regard, these issues might comprise underdeveloped trust along with confidence amid the HR and the line managers, conflict persisting amid the managers and the pay or the compensation associated issues among others. The address or the mitigation of the aforesaid issues would certainly ensure HR and line managers to become fully engaged in developing organisational performance (CIPD, 2009). In this similar concern, the HR Director of The SNOW Mountain Hotel strongly believed that the resolving the above stated issues would certainly assist in developing its overall performance and most importantly to sustain in this competitive landscape. Conclusion From the above analysis, it can be affirmed that the internal along with the external drivers of the model concerning business partner might impose considerable impact upon the overall performance of The SNOW Mountain Group. Specially mentioning, effective formulation along with execution of this particular model might support the organisation towards generating greater value to the customers in terms of introducing advanced technological advancements and most vitally utilising the accessible resources effectively. Moreover, the proper usage of a centralised shared services centre could also prove much beneficial for The SNOW Mountain Group in ensuring that its HR and line managers are fully engaged in attaining desired organisational targets at large. References CIPD, 2009. An HR Director’s Guide to Employee Engagement. Discussion Paper, pp. 1-9. Global Public Policy Unit, 2006. Partnership Business Models: Mixed Financial Models Require Donor Flexibility. What Business Model Means For Partnership. [Online] Available at: http://www.gppi.net/fileadmin/gppi/Seed_Chap_4.pdf [Accessed November 02, 2013]. Institute of Management Accountants, 2013. Implementing Shared Service Centres. Statements Of Management Accounting. [Online] Available at: http://www.imanet.org/PDFs/Public/Research/SMA/Implementing%20Shared%20Service%20Centers.pdf [Accessed November 02, 2013]. McKay, M., 2013. What Is the HR Business Partner Model? Related Articles. [Online] Available at: http://smallbusiness.chron.com/hr-business-partner-model-3878.html [Accessed November 02, 2013]. Strikwerda, J., 2006. The Shared Service Centre: Change, Governance and Strategy. Abstract, pp.1-25. Terhalle, A., 2009. Line Managers As Implementers Of HRM. The Effect Of Line Managers’ Limitations On Their HRM Implementation Effectiveness, pp. 1-71. The OD Center, 2013. Strategic Business Partner Role: Definition, Knowledge, Skills & Operating Tensions. Abstract. [Online] Available at: http://www.theodcenter.com/strategic-business-partner-role-definition-knowledge-skills-operating-tensions [Accessed November 02, 2013]. Whittaker, S. & Marchington, M., 2003. "Devolving HR Responsibility to the Line: Threat, Opportunity or Partnership?" Employee Relations, Vol. 25. Iss. 3, pp. 245 – 261. Zakić, N. & et. al., 2008. External and Internal Factors Аffеcting the Product and Business Process Innovation. Economics and Organization, Vol. 5, pp. 17-29. Read More