Human Resource Function in the Current Economic Context - Essay Example

Human Resource Function in the Current Economic Context Introduction An innovative approach for the human resource function has developed in theory and practice over the recent decade. Several companies have trimmed down costs and enhanced the quality and value of operational services by setting up in-house centres to provide joint services or contracting with providers for services (Tyson 2006). Such reorganising has been sustained by new, more sophisticated information technologies and online information access for employees and managers (Tyson 2006). Simultaneously, business organisations have invested in capacities to improve business performance, organising focused human resource knowledge, through networks or centres, and leaders or experts within business divisions (Kamoche 2001). The experiences of top firms such as DuPont, Johnson & Johnson, United Technologies, Hewlett-Packard, and IBM have been studied and revealed in various reports and studies. What were previously ingenious practices are currently described as contemporary practices and developments in the strategic repositioning and restructuring of the human resource function (Tyson 2006). Business organisations that are unsuccessful in restructuring their human resource function with the changing economic climate end up with disjointed strategies for human management. They are incapable of developing and implementing innovative human-management approaches that acquire competitive leverage (Kraut, Korman & London 1999). They incur greater costs for offering human resource services. Several companies declare they adopt the latest human resource strategy but are not up till now ‘walking the talk’ (Kraut et al. 1999: 62). The Current Economic Climate and the Changing Business Environment Reforms in human resources are motivated by the necessities of the changing economic climate. IBM, which is considered as the creator of the ‘new approach’, had as its main goal a decrease in the total costs of offering human resource services by roughly $40 million per annum (Tyson 2006). Otis Elevator, component of United Technologies, looked for means to reinforce its international business strategy and thus cutback costs and drive growth. Sun Microsystems looked for means to improve recruitment, selection and retention of highly skilled employees vital for business expansion (Tyson 2006). Companies are dealing with a challenging and multifaceted variety of stimuli for change in order to predict and maximise opportunities in the competitive economy. Their responses are reconceptualising the framework for human resources management (Sisson & Storey 2000). Companies consider these responses as essential to attaining and maintaining market control and, consequently, generating a profit adequate to reach the next stage of growth and development (Sisson & Storey 2000). It is the effective, prompt implementation of business strategies that differentiates current economic leaders. Human Resources Management The nature of the human resource function has changed over the past several years since it initially became known as a welfare and administrative function in the 1920s. It has successfully adjusted to the emerging requirements of each generation, including the 1940’s and 1950’s labour relations, the 1960’s and 1970’s societal transformations and government compliance, and the 1980’s and 1990’s company streamlining and evolving workforce demographics (Kamoche 2001). At present, and in the near future, the emphasis of the function, and its key value added, is the growth of organisational capacities necessary to implement business plans (Drucker 2004). Business leaders acknowledge that positioning of strategy with work design and organisational plan, learning and development, recruiting and selection, performance and incentives is essential for success. Such positioning is not consistently expressed in terms of human resource but nonetheless is recognised to be vital to the implementation of strategy (Tyson 2006). Therefore, human resource managers on each management group serve a primary function in realising this strategic alignment dealing with opportunities or inconsistencies that will affect business performance, favourably or unfavourably (Kraut et al. 1999). They direct the evaluation of human-related concerns and forming of human-related policies to address business obligations. They strongly influence business judgment and response, with the intention of developing skills, systems and processes that could furnish the organisation a competitive leverage (Kraut et al. 1999). Human resource managers are anticipated to escort quantum business transformation successfully. They assist in defining the organisational case for change, share an idea of the aimed future position, develop a well-thought out implementation scheme and follow through to attain sustainable outcomes (Tyson 2006). More than in any previous period, human resource leaders are anticipated to be effective leaders of change, functioning in the core of each enterprise, not at the periphery of the action. This implies they should have the business wisdom and capability, applicable human resource knowledge and skills in strengthening the process of change (Tyson 2006). Since human resource managers work as component of a management group, they share responsibility for realising aimed business goals, including human-related goals (Sisson & Storey 2000). Peter Drucker previously claimed the “end of the personnel department, (Drucker 2004: 138)” expecting that “staff will become line by assuming responsibility for business results (Drucker 2004: 138)”. Focused HR Knowledge The human resource function is recognised as the key source of capability and knowledge in the human-related domains of strategy implementation: ‘organisation and work design, strategic staffing, learning and development, performance management and rewards, employee relations and change management itself’ (Kamoche 2001: 39). It is now insufficient for human resource professionals to guide and help managers on a broad array of human resource issues; instead, thorough, expert skills should be obtainable when and where they are necessary (Tyson 2006). To deal with crucial issues successfully, managers require innovative, useful solutions that develop both internal and external optimal practices (Drucker 2004). More essential, when HR professionals can create novel practices, there is the possibility of gaining a competitive advantage— setting apart the organisation from others through definite unique human resource practices that furnish the organisation leverage in business performance (Drucker 2004). Human resource professionals could exist anywhere in an organisation. They could be positioned with business divisions as component of a team. Technical or sales training or expert staffing is usually coordinated with businesses (Tyson 2006). They could be borrowed as specialists working with business divisions on assignments when their knowledge is needed. They could also be shared in other organisational domains, such as quality assurance or legal affairs function (Tyson 2006). They could be outside the organisation, through expert service and consulting companies available as component of a resource network. Business divisions or sites normally can no longer explain the cost of their own staff of human resource professionals (Kamoche 2001). The recourse is sharing; dependence on experts as necessary demands thorough description of the jobs and appropriating skills to them. This is specifically difficult as organisations share specialist on a more expansive geographic, even worldwide, centre (Drucker 2004). Conclusions The established human resource function was adapted to a hierarchical organisation, with clear-cut delineation of staff and line tasks. Human resource employees were supposed to be attentive and accommodating, however, line managers were accountable for actions and consequences. Innovations and policies were usually built up centrally and afterwards communicated to organisational levels and divisions. Local human resource employees were typically specialists assigned to implementation and were considered for their brilliance in providing required human resource services in an excellent, receptive way. The current human resource function is an effective organisation. At present, human resource functions invest resources and operations in domains where they will have the favourable business outcome. Concepts of centralisation and decentralisation are dying. Innovations and strategies are more and more expanded within the different business divisions, within the business environment; core services concentrate on providing quality services and assistance. The function, as a collective endeavour, encompasses all resources furnishing services that are human-related, whether within different divisions, or provided by outside vendors or partners, or within the human resource organisation itself. The greatest challenge confronting human resource employees is getting cognisant with functioning as an effective organisation in the current economic climate. Human resource specialists have been hesitant to depend on shared services or external providers. Once at ease with control and resources, they find it challenging to depend on influence, teamwork, trust and collective accountability. The faster tempo, elevated uncertainty and complexity intrinsic in operating in this new economic context are difficult to adopt. Numerous will fail the change process. References Drucker, P. (2004) Management: Tasks, Responsibilities, Practices, Woburn, MA: Butterworth-Heinemann. Kamoche, K. N. (2001) Understanding Human Resource Management, Buckingham: Open University Press. Kraut, A.I., Korman, A.K. & London, M. (1999) Evolving Practices in Human Resource Management: Responses to a Changing World of Work, San Francisco: Jossey-Bass. Sisson, K. & Storey, J. (2000) The Realities of Human Resource Management: Managing the Employment Relationship, Philadelphia: Open University Press. Tyson, S. (2006) Essentials of Human Resource Management, Oxford, England: Butterworth-Heinemann. Read More