Are the HR Practices of Effective Firms Distinctly Different from Those of Poorly Performing Ones - Literature review Example

To what extent is HR a distinctive discipline? and Introduction In an article d, are the human resource practices of effective firms distinctly different from those of poorly performing ones? Huang (2000) examines the role of various HR practices in an organization. According to Huang (2000) HR practices such as planning, staffing, appraisal, compensation, training and development put organizations in a position to better manage their resources. The importance of HR in attaining competitive advantage is again revisited by Pearce and Robinson (Robinson, 2009). According to the two researchers, talent management in an organization is associated with enhanced performance and productivity (Pearce and Robinson, 2009). Pearce and Robinson (2009) further suggest that human resource capabilities are positively associated with organizational performance and are a strong predictor of sustainable competitive advantage. Despite the benefits associated with HR, some of the critics argue that it is not a clear discipline. This paper examines some of the reasons why HR is a distinct discipline. Background The available literature identifies the importance of human resource management in the attainment of the competitive advantage. According to Hwang (2003), HR is an effective tool for converting material assets into products and services. Unlike technology and other tangible assets, human resources are unique and are difficult to replicate. In addition, human resource management provides business entities with an internal capacity to adapt to the competitive environments by aligning HRM policies and practices. In a bid to better utilize the human resources, a number of models have been developed. One such model- the Harvard model- concentrates on the soft aspect of the HRM by proposing increased employees’ commitment. The Michigan model on the other hand, focuses on the hard approach and argues that people should be managed like other resources. Maintain tight control of the employees and other processes such as selection, appraisal, development and the reward system ultimately lead to better organizational performance. Another key model is the Guest model which suggests that using an integrated approach will result in superior individuals and higher organizational performance. The approach is rather different from the one suggested by Warwick. According to the pioneers of the Warwick model, Henry and Pettigrew, an analytical approach to HR management can lead to positive outcomes including increased productivity and enhanced performance. Common capabilities that managers possess There are a number of functions that all managers should be able to do and they include: planning, organizing, staffing, leading and controlling. Their responsibilities are HR-related, which begs the question; is HR really necessary in an organization. Planning involves establishing goals and standards to be observed by the employees. Organizing on the other hand, entails allocating various roles to the employees and establishing channels of authorities and communication. Staffing, is another critical area, and all managers should develop the capability to hire, recruit, select employees, set performance standards, compensate and evaluate employees’ performance, counsel, train and develop the employees. Needless to say, all managers are leaders and are expected to motivate their subordinates to ensure they complete the assigned tasks within the required time. In order to ensure all assignments are completed within the required time, the managers are also expected to set standards and check how the actual performance compares to these standards. The departmental heads have the line authority to carry out activities such as hiring and firing the employees. There is no doubt that managers have a role to play when it comes to managing the employees. In this regard, you find that first line managers conduct basic HR practices such as directing the subordinates, starting new employees in their duties, training them, improving workers’ job performance, reducing labour costs, motivating the workers, improving the working conditions, and developing the employees. However, in an organizational level, human employee management is a very complicated process, hence the need for competent personnel. In the next sections we examine, elements which make HR distinct. To what extent is HR a distinctive discipline Compliance requires professional expertise In any workplace, there are a number of regulations which govern employment relationships and which managers should keep at heart in order to avoid costly fines and other penalties. They are many regulations which touch on the employee-employer relationship and which have a potential of destroying the organization’s reputation. According to Christine, Cecilie and David (2008) HR compliance entail defining individual and group behaviour in order to ensure the applicable laws and policies are adhered to. Maintaining policies and procedures ensures a proper working environment is maintained at all times. Compliance in an organization also relates to hiring the right talent and setting the right compensation, employee benefits, and complying with the legal requirements. However, the managers may lack specific information regarding legal compliance, hence the need for engaging the help of HR specialists. According to Porter, Smith and Fagg (2006) compliance can be achieved through proper training. The employees are required to remain aware of the changing legal environment and this is an HR function. It is also quite common for the organizations to create a handbook which articulates the organization’s policies and procedures. However, in the world today, the legal framework is constantly changing hence the need to employ HR specialists who will be able to keep the executives to speed on potential HR compliance risks and recommends the necessary steps. What makes the HR practice very distinct as far as compliance is concerned is because, not all managers are aware of the employment laws. The HR rules and regulations are constantly changing hence the need to have competent members of staff who can advise the company on matters related to payroll, benefits, risk and safety, hiring, employee relations and termination (Peters & Waterman, 1982). Already, employee litigation is on the rise, which means that organizations should strive to comply with the human resource and employment laws, rules and regulations. Unfortunately, first line managers cannot handle this role effectively, hence the need to have HR specialists in an organization. From administrative to strategic role The HR’s role in an organization is changing from that of personnel management. For long, line managers were entrusted with the role of crafting the company’s long-term plan. However, strategic planning is now the role of the HR, and according to Paul (2012) strategic planning directs many activities including recruiting and training. As Mayo (2001) suggests HR is no longer an administrative function, and needs to be aligned with the strategic plans. Aligning the company’s strategy with the HR functions ensures the business strategy is achieved. Unfortunately, according to Gilbert and Ivancevich (2000) organizations spend too much time on the traditional administrative functions while forgetting the HR’s strategic role. Gilbert and Ivancevich (2000) believe that an effective organization should ensure that both administrative and strategic functions are met. In this regard, the HR needs to be integrated with the rest of the organization and its functions need to be aligned with the entire organizational strategy. Shen and Edwards (2006) argue that HR is a strategic asset which organizations can capitalize on to attain competitive advantage. However, in order to reap the strategic benefits of the HR, the management must first all employ professionals and the management needs to adopt a more long-term focus. It is also worth noting that HR departments measure their value to the organization by evaluating the following elements: the number of the hires and performance reviews completed (Johnson, 1987). In order to ensure that HR plays a more strategic role, it becomes increasingly important employ more competent staff. The strategic initiative is implemented by imparting the HR personnel with business knowledge, financial and consulting skills (Bechet, 2000). Another key role of the HR personnel is measuring the benefits of the strategic process. In this regard, the HR personnel should develop the capability to measure the organization’s competencies, leadership culture and other alignment elements (Morrison, 1992). By evaluating such elements, the HR personnel are able to determine its strategic value to the company. Workforce planning requires HR professionals One of the strategic roles of the HR is workforce planning. Sanglin-Grant and Schneider (2000) defines workforce planning as a process of estimating the demand for labour and evaluating the size of the resources which will be required to meet that demand. According to the available literature, workforce planning helps an organization to determine the number of the employees required at a location and at any given time (Loden & Rosener, 1991). Secondly, planning helps an organization to retain highly skilled staff members and knowledge during the implementation of the downsizing programs. It has also become increasingly vital for organizations to identify future leaders and but this task requires participation of the HR personnel. Workforce planning fits well with the organization’s long-term goals and ensures that appropriate replacements are identified in good time (Cox, 1993). In addition, the process helps the management to make realistic staffing projections, and this is a right step towards maximization of the available resources. The traditional view of workforce planning is rather unacceptable as employees are considered to be mere objects. With the changing conditions, it has become increasingly important to maximize employee productivity through better skills utilization and deployment. In the current world, competition has also become intensive, hence the need to come up with an effective approach of recruiting new and competent talent. Organizations are also increasingly planning their own survival; and just to illustrate the importance of the workforce planning here is a perfect example. During the economic crisis, a number of the businesses that was unprepared for the cutbacks and downsizing lost so much to their competitors. Such an event illustrates the need for an organization to protect their core competencies through workforce planning. Already, there are indications that in future, the demand for the highly-skilled workers and the competition talent will increase tremendously. Consequently, it becomes important for organizations to develop the existing talent. By implementing equal opportunity and diversity initiatives, organizations are able to plan for the future and balancing the participation of the available workforce. According to Paul (2012) workforce planning provides businesses with numerous strategic benefits and that is why companies should employ HR specialists. The line managers and the executive cannot make competent staffing decisions, hence the need to engage the services of the HR specialists. The process of determining the current workforce resources, identifying the organization’s strategic requirements and determining the gaps between the current and projected workforce needs is a very daunting (Khatri, 2000). This view supported by many researchers who find that the HR personnel in many organizations do not have the necessary skills to carry out workforce properly. To address this problem, some of the organizations are re-training their HR personnel while others have established a distinct HR department to deal with the work planning process. Based on this information, it is obvious to conclude that workforce planning is distinct with the general day-to-day management. The process is specific in nature and requires one to have the necessary skills for better employee management. At the same time, the workforce planning process requires the HR personnel to monitor the progress of the initiatives implemented by the departments (Mintzberg, 1982). After assessing the situation, they can adjust the plan and make the necessary midway corrections. Line managers and the executive cannot competently handle this task, hence the need to employ more able hands. Workforce planning is increasingly important in the knowledge-based companies where retention of the talent is vital. Consequently, in such companies, it is essential to have HR specialists to ensure the present and future labour demands are met. A distinct HR department allows the management to better manage talent and enhance knowledge retention in the company. Diversity and equality management In the current workplace environment, it has become increasingly important to observe diversity and ensure all persons are equally represented. Diversity management appreciates any individual differences in the workplace, such as religious beliefs, and ethnic background. According to Snape and Redman (2000) strategic deployment of a diverse workforce allows an organization to attain competitive advantage. It is often argued that people from diverse backgrounds are able to generate knowledge and many ideas. A diverse workforce increasingly becomes important when forming functional teams. Having employees from different backgrounds also enhances an organization’s ability to innovate (Pascale, 1991). The available literature concurs that diversity management is very crucial and has a number of attendant benefits. Firstly, the literature concurs that diverse teams perform better than homogenous teams in terms of creativity and innovation. In addition, workforce diversity helps an organization to generate solutions and enhances cooperation among the employees. On the other hand, equality in the workplace helps an organization to attract talent, and retain qualified workforce. Equality is associated with many benefits both at an individual and organizational level. When workers feel appreciated in an organization, they become more productive and they deliver more compared to unsatisfied employees. The available literature also associates equality in the workplace with many positive outcomes such as enhanced productivity and performance. In order to improve diversity and equality in an organization, it has become necessary for organizations to encourage cooperation. There are also a number of rules and regulations that organizations are required to comply with in order avoid discriminating the workers. In order to promote diversity, inclusion and equality in an organization, it is increasingly becoming important for the HR personnel to be involved in the recruiting, training, rewarding, promotion and development of all the workers. The participation of the HR personnel ensures an acceptable workforce is identified and no one is discriminated against. The issue of the diversity and equality is an important one, especially in the advanced economies where all persons are supposed to be treated equally regardless of race, age and gender. Some people may argue that workplace equality and diversity can be achieved without the presence of the HR personnel. For instance, first line managers can be able to ensure equal treatment of women in the workplace. To protect women workers, the managers may end up firing the offenders, but such a move puts an organization at a disadvantage. This is because the dismissed workers may end up suing the organization, in which case the company will be forced to compensate them. To avoid such outcomes, it becomes necessary to have HR personnel and a distinct department to deal with employment relations. Employee development requires special skills In the today’s working environment, it has become increasingly important to ensure all employees are well trained. Training and development involve several activities which are carried out to help the employees meet their own career needs and the needs of the organization. Employee development is a function of the HR department and is associated with higher performance and improved productivity. When workers are trained, they become more committed to the organizational goals, hence leading to enhanced organizational effectiveness. Another important element in the workplace is interpersonal communication. According to Christine, Cecilie and David (2008) poor communication in large organizations has led to ineffective work practice that potentially waste two out of every five working days. Christine, Cecilie and David (2008) further observe that enhanced communication would increase the effectiveness of business operations. The line managers can develop the employees without the intervention of the HR department. Just to illustrate further, there are many ways through which training and development takes place in an organization. One such tool is coaching and it can be used by the line managers to equip the employees with the necessary skills. However, most of the managers lack adequate interpersonal skills despite their experience and expertise and so they cannot be able to coach the employees in an appropriate manner. The HR department can train the workers who lack these interpersonal communication skills. Employee Motivation through reward systems Motivation is considered an important element in the workplace. In an organizational setting, motivation can be intrinsic or extrinsic. Line managers can motivate the employees through recognition and informal means. However, employees also need to be motivated by receiving monetary gifts. In any given organization, extrinsic rewards are used to increase workers’ productivity and their performance. It has become quite common for the employees to receive perks, bonuses and benefits in their line of work. Despite these initiatives, it has become essential for the executive to be involved in the development of the reward systems. Such systems should be aligned with the company’s strategy and should help an organization achieve its goals. To what extent is HR expertise required of all managers? All the above sections describe some of the HR-related functions that the managers can handle comfortably. For instance, managers require expertise in motivating the employees through reward systems and knowledge on training and developing the employees. Training and development does not have to be formal, and the managers should take time to identify the learning needs in the workforce and then enrol them in various programs. Promoting equality and diversity is equally crucial, but the managers should consult with the HR personnel before taking any action. As suggested above, workforce planning mainly involves the HR professionals, but managers too need to be engaged in order to identify labour demands at the departmental level. Staffing is another common role that managers play in an organization. In this regard, they should have the necessary skills to draw job descriptions and help in the selection of the right candidates. Remember, line managers are in direct contact with the employees, so they are in a better position to assess the labour and skills demand at the departmental level. Equally important, the managers have a role to play in managing the employees and appraising them. From the above analysis, it is apparent that the managers need HR skills for fair treatment of the employees, and should be aware of the employment-related rules and regulations. They should also have good supervisory skills, be transparent, know how to reward the employees, maintain a positive working environment and maintain good relations with the employees. In other words, managers need to skills that will help them to carry their roles appropriately, but do not need specific knowledge related to strategic planning. Conclusion In sum, line managers perform some of the HR functions in an organization. However, they lack the necessary skills and competencies to competently undertake the HR functions. Consequently, it is very important for the organization to employ competent HR professionals to achieve the desired strategic advantage. The HR personnel not only carry out administrative duties, but also play a strategic role in an organization. Lack of compliance may attract litigation and this is another reason why an organization should establish distinct HR departments. Reference list Bechet, T., 2000. Developing Staffing Strategies that Work: Implementing Pragmatic, Non traditional Approaches’,Public Personnel Management, Vol. 29 (4), 45-56 Cox, T.,1993. Cultural Diversity in Organizations: Theory and Research Practices. San Francisco, CA: Berrett-Koehler Publishers. Christine, P., Cecilie, B.and David, S., 2008. Exploring Human Resource Management. New York: McGraw-Hill Education Limited. p4. Gilbert, J. A., and Ivancevich, J. M., 2000. Valuing diversity: A tale of two organizations. The Academy of Management Executive, 14(1), 93-105. Hwang, S. A., 2003. Training strategies in the management of knowledge. Journal of Knowledge Management, Volume 7, 3, 92-104. Huang, T., 2011. 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