An Analysis on how Devolution can Drive Evolution of the Industry
In the last few decades the globalization trend has worked to foster extensive changes how organizations operate. The rapid pace of the business world has created a scenario in which organizations are constantly evolving and organizational change is nearly a perpetual process. The role of technology has also been a contributing factor that has also had profound implications on organizations and how their human resources interact, collaborate, perform task, as well as impacted the organizational context in general. The level of competition has also steadily risen as firms constantly streamline processes and business functions. Organizations now must maintain a close eye on the external environment and adapt as needed to continue to satisfy consumer demands.
It is in this environment that a trend of devolution in the HR business function is predicted to drive the evolution of the industry. The field had to practically reinvent itself to stay relevant in the new organizational environment. This has also been heavily driven by technological changes. Whereas once the role of human resources was heavily based on administrative duties, now many of these processes have become almost completely automated by sophisticated information systems. Therefore the term devolution refers to the workload that has been transferred from top-tier human resource managers and can now be implemented by line-managers effectively with the new systems, controls, and advanced business processes.
Therefore, in the wake of this emerging trend, human resource management has considerably more time to devote to new areas of organizational development. They have moved away from the administrative management of human issues to more of a role that actively tries to create a competitive advantage for organizations in the competitive landscape. Given that much of the economy is now led by knowledge management and knowledge workers, maintaining high quality human resources has reached a new salience in organizational development. From this position a whole field has emerged which is now known as Strategic Human Resource Management (SHRM). This paper will examine the emerging trends within the realm of human resources and speculate as to where it may head in the future.
The notion of line managers being granted an increased role in the involvement of HRM has gained a significant amount of attention in the literature in recent years (Power, Milner and Garavan 2007). Strategic Human Resource management focuses on decentralizing the role of HR in an organization and empowering line management to tackle more of the functionality of human resources. This strategy can intuitively provide organizations greater flexibility in meeting the challenges found in a modern environment. First of all, many teams are spread out geographically and therefore it is difficult for a centralized human resources department to engage with diverse teams. Furthermore, devolution also gives the person who generally has more contact with the employees the power to make decisions regarding HR issues. This is thought to improve the quality of decisions since these individuals are generally more acquainted with the specifics of an employee's situation.
Since the emergence of SHRM there has been an ongoing debate about whether it can actually add value to organizations or if it provides more of a rhetorical ploy (Anderson, Cooper and Zhu 2007). However, recent studies have indicated that financial performance can be correlated with the degree of alignment of HRM with certain business objectives. Furthermore, even though there may be short-term financial advantages to devolution strategies, this may come at a cost of other variables such as employee well-being (Renwick 2003). Much of the results produced by the literature seem to be widely mixed on many fronts. Some studies seem to indicate that organizations can improve performance through devolution however others argue that these performance improvements generally only are gains in the short-term and come at the expense of long-term benefits.
Furthermore the field of study itself is still emerging and it is difficult to identify a consensus as to what the specific term of devolution even encompasses (Cascon-Pereira, Valverde and Ryan 2006). It has been suggested that the term should be further delineated into different dimension of devolution in order to provide a better understanding of the levels involved in such a strategy. More clarity and more comprehensiveness in models may be needed to provide deeper insights and more data for comparison. Early research seemed to indicate that despite the level of ambiguity regarding the concept, that investigation of different hierarchies and responsibilities among line managers in the U.S. Government and found no significant statistical difference between different levels of centralization or decentralization (Mesch, Perry and Wise 1995). However, this research was conducted at a relatively broad level and made no provisions for nuances between the competing HR strategies.
Even with the advantage of more comprehensive models a direct causal link between an organizations performance with any link between that and HRM are elusive and virtually impossible to quantify given the dynamic environment in which such studies are conducted (Roos, Fernstrom and Pike 2004). Furthermore, in some cases the line managers responsible for implementing human resource requirements have been found to lack knowledge of company policies and even those in which are statutory (Bond and Wise 2003). This might suggest that although devolution has many strategic advantages, the quality of HR provided at these levels could be significantly diminished. However, line managers that can perform the effective enactment of HR policies can enhance employees' affective commitment (Gilbert, Winne and Sels 2011).
Human resource development strategies can also arise out of the greater business strategies as well as be dependent on this alignment for its success (Horwitz 1999). However, it has also been shown that domestic culture can have a significant role in determining the level of decentralization of HR functions; even more so than internal policies or goals (Andolsek and Stebe 2007). Yet several other studies have provided some evidence that indicate that line management devolvement, innovative recruitment and selection system, regular training and development of personnel, equity-based compensation system, performance appraisal system, effective career planning system and a robust employee participation in the organizations' decisions and actions are the key strategic HR practices that influence organizational performance (Jimoh and Danlami 2011).
Another study also indicates that an organizations knowledge sharing capabilities can also be enhanced by moving this authority to line managers (MacNeil 2004). However, employees' attitudes were found to be mediated by factors such as perceived investment in employee development (PEID) in another study in a Norwegian telecommunication organization (Kuvaas and Dysvik 2009). Therefore these results would indicate that employees perception of the changes in HR activities have an influence on the organizational outcomes. However, the influence many be different on different levels of inquiry. For example, another study found conflict between unitarism, organizational goals, and employee goals (Van Buren, Greenwood and Sheehan 2011). It was further argued that SHRM detracts from the level of employee focus that can be found in organizations.
One study examined the effect of devolving people-management responsibilities to line managers on HR managers' construed image -- their perceptions of the internal reputation of the HR unit. Results revealed that a devolution strategy had a positive effect on HR managers' perceptions of their unit's reputation among line managers and that this effect was partially mediated by changes in the HR function (Kulik and Perry 2008). Therefore this would suggest that the HR managers' view of the organizational change before the change actually took place might influence their opinion of the results.
A literature review was conducted regarding the devolution of HR tasks to line mangers are found that this trend is heavily contested in regards to its performance at many different levels. On one hand, there seems to be evidence to suggest that transferring HR empowerment to line managers can improve organizational…