Factors That Have Affected HR Centrality - Essay Example

Abstract Human resource management can be defined as the effective use of human resources so as to boost up the performance of an organization. This analytical paper analyzes what the central focus for people managers and the HR function should be over the coming 10 years and why and how would this change the nature of HR activity in contemporary organizations. The bibliography appends a number of sources in Harvard format. Outline I. Introduction II. Factors that have effected HR centrality III. Current pressures on the business environment IV. Purpose of human resource management V. Future trends in human resource management VI. Conclusion Introduction ”The whole emphasis on people, as one of the most important competitive advantage a company can create, demands that top management attract, cultivate and keep the best workforce they can possibly find” -- John Bratton The term ‘human resource management’ at times seems to be a very vague and elusive term for a number of people. This is so because it seems to have more than one meaning these days. The human resource of an organization can play a major role in the organizations success or downfall. Human resources can be defined in two ways. Previously, the term human resource was used only for the general staff or the work force of an organization, but now as times have passed the term has evolved and is now used to refer to a completely new department in the organizations. This department is said to be responsible for “recruitment and selection of appropriate staff and management of the employment relationship, which includes contracts, collective bargaining, reward systems and employee involvement, and considers the strategic and operational view of human resource requirements” (Glossary, 2004). This new concept of human resource is more commonly used and understood within organizations and in the general business environment. This analytical paper would basically focus on the department of human resource management whose professionals are said to be people of expertise and ability in fields like, “resourcing, employee relations, reward and training give professional support to business partners, often developing detailed policy for corporate HR and acting as a reference point for shared services agents dealing with complex issues raised by clients. Corporate HR, often a small team, is usually responsible for the strategic direction and governance of the function, with a broad policy overview” (Tamkin, Reilly and Strebler, 2006). . Factors that have affected HR centrality The human resource management of an organization, as stated above, plays an important role in the organizations success. This can be supported by the fact that the Human Resource Management or the HRM of an organization serves a number of purposes. The most important purpose of an HRM is to hire the right people, adequate staffing, then training the recruited staff, make sure the appointed staff performs to the best of its abilities, if they do not perform well enough then dealing with their issues is also the HRMs job, “and ensuring your personnel and management practices conform to various regulations. Activities also include managing your approach to employee benefits and compensation, employee records and personnel policies” (McNamara, 1999). Although the human resource management function plays a major role in an organizations success, there are certain organizations that believe that this is untrue. Organizations here can be divided into two categories, the first being those where human resource is seen as an important function and its working is not decentralized or transferred to other units of the business. The second category would be the organizations where the human resource function is a small corporate center and most of its work is given away to other units of the business. As the staff of an organization is what the organizations success depends on, the hiring of most capable people is extremely important. The department of human resources has gained far more importance in recent years. Research shows that little has changed in the human resource function in the last couple years. Although there is not much evidence that could prove that human resources has any impact on the performance or the outcomes of an organization (Tamkin, Reilly and Strebler, 2006), but yes certain significant changes have occurred and these have affected the centrality of HR in an organization. These changes can include the ever changing, highly spirited business environment, the ever increasing competition between organizations, politics and the capabilities of people etc. The author of a book namely ‘Human Resource Management: Theory and Practice’ states that, “in recent times, human resource management (HRM) has assumed new prominence because of continuing concerns about global competition, the internationalization of technology and the productivity of labor” (Bratton and Gold, 2003). As the business environment is constantly changing, the need of the best staff is extremely important, and as the HR is responsible for hiring hence the pressure is on the HR. Management ideas usually come and go like hairstyle or clothing fashions. But one idea has prevailed since a very long time and that idea is that “the most successful organizations make the most effective use of their people - their human resources” (Price, 1997). Because of the ever changing and ever present demands of the business world, the importance of a human resource management has increased greatly. It is believed that the functioning of a human resource management has increased from being related only to the employees to being a member of the managerial team of an organization. This means that professionals of the human resource management team are now also concerned with business issues such as the profits, the outcomes, the effectiveness and the over all performance of the organization etc. Human resource functions have gained immense centrality also because of the fact that organizations wish to SAVE costs. Human resources has also taken the lead in executing the shared services of an organization and it is said that, “in these circumstances, HR often appears to be arguing for the normative benefits of this particular structure rather than the contingent fit, or perhaps more accurately these organizations are driven by a common desire to save costs” (Tamkin, Reilly and Strebler, 2006). A research study for example showed that nearly seventy percent of the organizations who believe in the centrality of human resource management did so in order to save money (Tamkin, Reilly and Strebler, 2006). Current Pressures on the Business Environment The business environment is constantly going through a number of changes and putting up with these changes puts a lot of pressure on business organizations. These pressures include global concerns, structural changes to the business, changes to the nature of the work force, changes in understanding the meaning of the word business etc. Global concerns have always put a lot of pressure on organizations. Business organizations these days like outsourcing their work to countries with cheap labor. Now, if something goes wrong in that particular part of the world where work has been outsourced, the business of the first organization is in danger which arises global concerns. Global concerns here also include, working with international organizations but then concerns of that organizations performance, financial system, the organizations progress in meeting demands and commitments and the success of its efforts in its particular field. Secondly comes the structural changes within a business organization. In order to put up with the many demands of the growing business environment, companies usually keep restructuring their business functions. In this case also we can take outsourcing as an example. If the human resource function is being outsourced, it brings about changes in the current structure of the organization. Outsourcing and IT are gaining popularity in the business world. Research results show that, “outsourcing is specific to certain activities and limited in extent. Payroll and resourcing of temporary positions were outsourced by about a quarter of respondents and recruitment by only 14%. Analyses of why outsourcing is attractive reveal expected cost saving as heading the reasons.. A third of the respondents outsourced in order to improve the quality of service” (Tamkin, Reilly and Strebler, 2006). The results of the same survey show that training is one of the most common activities of the HR that is being outsourced by more than one third of the organizations and it is done so in order to cut down on expenses and save money. IT has also brought about a number of changes in organizations. In this respect we can take E-HR as an example. In order to lessen the burden on the HR department, a number of organizations have come up with “manager self-service” and “employee self-service” and have applied a number of e-applications such as e-recruitment, e-learning etc. e-HR has cut down the number of HR functions in organizations, but has also helped the organizations and the HR professionals in a number of ways. Research results show that nearly 25% of the time of HR was being spent on administration, which shows that HR has not yet made any specific progress in the reform of the administration. The research also showed that HR professional believe that the amount of time spent on administration was “limiting their ability to be more strategic” (Tamkin, Reilly and Strebler, 2006). These constant changes along with a number of others put a lot of pressure on the working environment. Purpose of human resource management The purposes of human resource management are many. Already the term has two meanings. Every employee in an organization has to be the best person for the job hence the right candidate should be hired. Now this is possible only in small business due to the fact that top executives rarely have any contact with their employees and this is one of the most major roles human resource management plays in an organization. The purposes that human resource management serves today shows that there is a need for people in fields like resourcing, reward and relations with the employees. The breadth of the purposes human resource management serves is ever-expanding. Along with the previously mentioned fields, human resource management also plays an active role in training as well as in the effectiveness of the organization. Providing customer services is yet another function of the human resource management. As it has been mentioned throughout this essay, human resource management plays an active role in the success of an organization. Sources show that these days, a number of organizations have realized that having a human resource management department in their organization is one of the best ways to make sure that the business is economically successful. They believe that the human resource department makes a company successful because it does not only help in increasing the self-esteem and the effectiveness of employees, “but also restricts and limits job turnovers as well. Handling people is always difficult and difficult people are always hard to handle, however with the help of a human resource department, employees can work together as a cohesive unit to not only solidify the company but to rake in the profits as well. Human resource personnel understand the psyche of a person so that they can motivate and stimulate employees to work not only more efficiently but more effectively as well” (Purpose of having a human resource department, 2006). Subsequently, the HR professional should be taken by the employee as a function that not only trains him but is also responsible for his payments while making sure that the employee is giving his best to the organization. Future trends in human resource management With the ever changing responsibilities of human resource management, its future is shady. The function is currently going through significant changes and these changes would determine the future of human resource management. As organizations are outsourcing a lot of their HR functions and are making use of e-applications, HR professionals need to work even harder so as to remain in the field and might even need to play unfamiliar roles. Outsourcing some functions can turn out to be helpful for the HR professional’s themselves. According to sources, job titles are constantly changing in this field and the number of HR professionals in an organization would be smaller. Attaining a career in the HR field in the future would perhaps be hard as a number of organizations now believe that in order to be successful in this field a person needs to have more than basic HR knowledge. The increasing usage of e-applications and outsourcing might cut down HR jobs and careers, but the function would still remain extremely important for organizations. Outsourcing might cut down on the jobs that the HR function is trusted to carry out and it might probably leave ‘coaching, enabling, and sharing information which permits people to deal with people issues where people work’ as the only thing left for HR professionals. Although, the future might seem scary for some HR professionals, and it is said that “yes, your organization will become smaller. Yes, you won’t be able to control the quality, cost, timeliness or delivery of many services that traditionally belonged to HR. But, on the plus side, your job will be more fun as you shed the nagging and complaining aspects of your work. No longer the pain in many managers’ work lives, you’ll get to teach, help, and develop service strategy” (Heathfield, 2006). Some research studies even suggests that although right now it seems that the people working in the HR field would lessen in coming years, but it would be the opposite. The study suggests, that only in UK, the HR population, by the year 2014 would increase by 18%, hence the future of human resource management is NOT all that scary (Tamkin, Reilly and Strebler, 2006). Another survey that was conducted throughout the United States in which sixty five HR leaders were asked what the basic functions of HR do they expect to be in the next five years, to which they replied that ‘recruitment, development and retention of talent’ were on top of the list. So in order to put up with the challenges that would be posed to the HR professionals, new generation HR professionals would have to be more determined and would have to understand the core business of their organization. During the survey, several participants agreed on the fact that “future HR leaders will be noted for their mastery of the so-called "soft skills" as well. As one participant put it: An extraordinary HR person can go into executive meetings and mediate the senior team" (HR skills for the future, 2006). As is evident, no matter what happens, the centrality of HR in any ogranization would not be effected. Outsourcing etc just prove that all the organizations realize the importance of HR, which only proves the fact that the future of HR is not hazy at all. Conclusion In the light of the above discussion, we can hereby culminate that human resource management has gone through a little change in recent years and in coming years it would go through some more. But these changes would not affect the centrality of HR in an organization in any way. . Bibliography Bratton, John and Gold, Jeffrey. (2003). Human Resource Management: Theory and Practice. London: Palgrave Macmillan. 3rd edition. Glossary. (2004). Retrieved on November 6, 2006 from: http://wps.pearsoned.co.uk/wps/media/objects/1513/1550326/glossary/glossary.html Heathfield, Susan. (2006). Four trends shaping your future. Retrieved on November 6, 2006 from: http://humanresources.about.com/od/humanresourcesstrategic/l/aahr_trends.htm HR Skills for the Future. (2006). HR Magazine. February, 2006. Pp.1. McNamara, Carter. (1999). Human Resources Management. Authenticity Consulting. 1999. Pp.1. Price, A. (1997). Human Resource Management in a Business Context. Thomson Learning. 1997. Pp.1. Purpose of having a human resource department. (2006). Retrieved on November 6, 2006 from: http://www.smallbusinessbible.org/purpose_having_humanr_department.html Tamkin, Penny and Reilly, Peter and Strebler, Marie. (2006). This Change Agenda. Chartered Institute of Personnel and Development. 2006. Pp.1. Read More