Chapter 3 The Changing Role of HRM: Achieving Impact through Adding Value

Objectives of Chapter To outline the challenges and opportunities facing HR as a specialist function To critically assess influences affecting HR’s strategic contribution To highlight the role of HR outside strategic integration To critically analyse the knowledge and skills required by HR specialists in a global economy

HR as a Specialist Function The constant worry of all personnel administrators is their inability to prove that they are making a contribution to the enterprise. Their preoccupation is with the search for a ‘gimmick’ that will impress their management associates. Their persistent complaint is that they lack status. Drucker, 1954 It's an exciting time for people management and development professionals. We're making ever- greater contributions to our organisations, our people and to economic performance. And we have the evidence that what we do makes the winning difference. Armstong, 2007

…. which one is right? Is there now more recognition for the HR function than before?

The Context…. Change provides the backdrop for business activity today HR practices are linked with many measures of business performance Employee capability has emerged as a crucial factor This context offers opportunities for visionary HR specialists able to perceive where effective people management will make a difference to their organisations Thus a clear step forward from the situation Drucker describes in the first quote….

Yet … What Do HR Specialists Actually Do? Best practice ideas suggest that HR specialists: Develop and implement HR policy Advise line managers on the interpretation of policy and the legal framework Develop effective job structures Promote employee capability Envisage the future (planning) Enhance employee motivation Demonstrate HR contribution to business effectiveness

Evidence from Employing Organisations…. Job advertisements (in the UK) show that HR professionals fall into two categories –Those performing operational roles: useful and important activities – maybe not influencing higher-level decision-making –Those operating at a strategic level: seeking HR specialists who are ‘passionate about achieving business aims’, ‘creative and innovative’, ‘establishing development plans to support growth strategy Salaries in the UK are about double for the second category (no reason to imagine this would be different in other global contexts)

Types of HR Activity Deviant innovator- business partner, clerk of works, handmaiden etc Legge (1978) suggested that personnel specialists should redefine organisational criteria of success (think of today’s focus on CSR and sustainability…)

Categorisations of HR have highlighted strategic versus operational focus Also, HR’s propensity to engage with people as opposed to processes Ulricht offers an inspiring and sometimes disconcerting vision of the future of HR Each role has the potential to add value, but unless the contribution offered is substantive, HR risks being marginalised

Tensions and Challenges for the Profession Has the HR role expanded to encompass a stronger strategic imperative? What can HR specialists do to enhance their status and contribution?

The Research Evidence Caldwell (2002) –In a study of 500 major UK organisations showed that HR professionals described themselves as Advisors, with 67% of sample also highlighting the Change Agent role Truss et al. (2002) –in a qualitative longitudinal study of two organisations found that both contextual factors (how the HR team was ‘expected’ to behave) and the personal attributes of HR specialists determined the extent of their contribution to strategic decision-making

Wright et al. (2002) found that HR was seen to contribute to service delivery rather than to strategic decision-making. The function was valued for this input, however These findings were also reported by Buyens & De Vos (2001) who found that change management had become a major concern for top management.

There is a range of roles available and enacted, but HR has yet to achieve its full potential There is a gap between normative models of strategic HR and the behavioural reality of HR practice BUT recognition of HR’s role does exist, and where HR plays a strategic role, it is because the HR specialists have been good at marketing their services and capitalising on success

Factors Influencing the Strategic Role HR is constrained by the context within which it is located (Bach & Della Rocca, 2000) This is especially so for public sector organisations: ‘institutional isomorphism’ Contested ownership of the HR agenda Capability and commitment of the senior management team The relationship between HR and other agents within the organisation

Other Roles for HR? Such as employment law advice, welfare initiatives This area has in some cases expanded to reflect: –Trends in the external environment –Demands and expectations of employees Further, some have argued that HR needs to retain its close links with employees Systematising and outsourcing HR tends to remove HR specialists from the people whose needs they have represented traditionally Welfare initiatives are more likely to take root where a business need can be demonstrated

Knowledge Theory, models and techniques for managing performance, learning and development, reward and communication Understanding how to apply knowledge synergistically Knowledge of organisational structures and cultures Developing employees’ interest and enthusiasm for the brand: what HR offers to the business and to the people it employs

Skills Change management skills –Encouraging ownership and recognising differences of opinion Developing future leaders –Being good coaches –Offering feedback Developing strategy, including ‘scenario planning’ Marketing the HR contribution

Developing Knowledge and Skills Update professional and theoretical knowledge The CIPD professional development framework ‘Thinking performers’ Open to opportunities for learning in the workplace Having a mentor in a senior position Secondments, work shadowing and placement opportunities all allow understanding of the HR role and the challenges it faces

In the UK, The CIPD has developed a strong and supportive profile for both strategic and operational roles –Membership 127,000 today –Gained ‘Chartered’ status in 2000 –Increased professionalism of HR (many employers demand CIPD accreditation) –Apparently, more overseas students welcome CIPD accreditation for their home countries –The CIPD is working to develop its international profile

In Conclusion HR has an unprecedented opportunity to influence the strategic agenda, which has not been entirely realised Will HR be the function to take on board this responsibility? –Needs to use its position with an overview of the organisation –Knowledge and skill base of HR is unique The HR function has to go on to convince others of its ability to add value either operationally or strategically