Human Resources Management - Maintaining a Competitive Edge in the Corporate Marketplace
Change continues to reshape the workplace. Today's HR professional is called upon to help the organization retain its competitive edge in the marketplace. Along with representing the best interests of employees, HR professionals assume the role of strategic partner, administrative expert, and change agent. HR assumes a critical role in promoting the vision and shaping the focus of the company. HR professionals must be skilled and knowledgeable business partners, able to wear many hats while demonstrating their own competencies in communication and decision-making skills. (Aghazadeh, 1999)
Today, HR departments face many challenges. Some are conventional and continuing concerns.
Attract, retain and motivate employees;
Ensure legal and regulatory compliance;
Manage the human side of technological change.
Perhaps, most critically today however, progressive HR departments are charged with adding value to the corporation as they seek to:
Meet the demands for a more strategic HR function, i.e. A shift from the tactical (transaction processing) to the facilitation of strategic planning (Ashbaugh & Miranda, 2002)
Employment contracts that represent long-term job security and predictable career paths are a relic of the past. In some cases, employees are viewed as transitional pawns, replaceable and transferable, giving their time but not really vesting in companies that fail to appreciate them as critical resources. Consequently, employees are losing the sense of loyalty they once exhibited. It becomes the vital role of HR to champion these employees and lead the drive to create an environment where employees feel valued and where they are willing to share ideas, work harder, and successfully interact with the customer. (Aghazadeh, 1999)
Although HR has traditionally not been a profit center, it can still have tremendous impact on the company's bottom line. In terms of the recruiting process, for instance, there are measures that, given the appropriate human capital management systems, will allow a company to gauge the effectiveness of both its internal and its external resources. HR departments can and should measure their efficiency in terms of their ability to understand, attract, retain, and make the most of human capital in realizing the entire organization's goals. (Koven, et al., 2003)
Faced with new challenges, many companies have restructured or revitalized their HR departments by launching a variety of organizational initiatives. These initiatives may take the form of leadership development and balanced scorecard projects, or they may manifest themselves in the creation of new roles like Chief Learning Officer or Chief Knowledge Officer. Typically these mandates also initiate a debate regarding whether the new project or function belongs within HR. In many instances, HR loses. The very initiatives that would contribute to the renewal of HR are structured outside of it. This may be because by placing a key strategic initiative inside HR, its credibility or legitimacy is reduced. (Saint-Onge, 1999)
In order for HR departments to provide comprehensive support for their companies and bolster their viability in the corporation, HR professionals need not only the traditional soft people skills, but they must possess the ability to understand and support the operational requirements of the organization. This new proactive role helps ensure the success of the company and the survival of HR. From an operational perspective, they must understand the processes they support, helping to provide better solutions rather than just the automation of ineffective existing HR systems. They must learn to think "outside the box," setting organizational direction for employee empowerment. Beyond back room support, the top HR professional is called to move to the boardroom, helping to shape the future of the organization through continuous improvement, the building of core competencies, and proactive goal setting. (Aghazadeh, 1999)
The vitality of a world class organization of the new millennium will depend upon the strength of its organizational infrastructure and the strategic vision of its HR professionals.
Evolution of Current HR Technologies
The first round of HR technological innovation focused on administrative functions. As with all significant investments in technology enhancements, HR departments must present cost justifications. The most obvious value of these first generation HR technologies is in the reduction of paperwork, the streamlining of paper-based processes, the elimination of redundancies, and the reduction of errors created through manual processes. HR technologies also help departments create benchmarks of historical performance trends and patterns in turnover, cost per hire and timelines. However the less apparent value of these technologies extends beyond the obvious benchmarks, allowing companies to establish, for example, relevant measures of productivity and operational effectiveness. (Koven, et al., 2003)
In the mid-1990s, HR departments typically expected to invest in IT products with a lifecycle of five years. With the prevalence of Web-based technologies, this expectation has shifted. Now, HR managers need to ensure that their HRIS (human resource information systems) solutions both exploit the capabilities of the Internet and provide a suitable platform for future and near-term growth. Current HRIT (human resource information technology) sales are focused on the hard realities of cost savings and business efficiency. Self-service and performance management software top the list. Today, these products are sufficiently mature enough to garner the attention of the average cost-conscious practitioner. (Rodgers, 2003)
The business case for e-HR is relatively straightforward in organizations where people are the main resource. When employees are the company's primary assets, the investment in them makes good business sense. However, in, for example, mainline industries like manufacturing companies, the recruitment, staffing, training and retention of personnel is much less strategic. (Ball, 2002) In these cases, HR professionals must be even more diligent in their presentation of the business case.
Typically, organizations start with basic functionality, perhaps providing employees with the capability to change their demographic data online or, as an incentive to use the system, display pay advice. Next, this self-service orientation moves beyond HR itself, becoming a vehicle for better knowledge management across the organization, as it provides a platform for collaboration between different departments or even other companies. In the coming year, this functionality is expected to extend at both the employee level and at the managerial level, as manager self-service will begin to accelerate in the mainstream. Applications are set to become richer in capability and more intuitive. Manager self-service will also move into the area of collaboration. (Rodgers, 2003)
In the implementation of first generation transaction-based HRIS, companies can expect the following benefits:
Provides system integration and promotes a common relationship database to gather employee information across the organization;
Eliminates islands of data that may exist, particularly in highly bureaucratic enterprises;
Reduces the risk related to legacy systems;
Eliminates the need for redundant data entry;
Reduces error-prone paper-based manual processes;
Improves staff productivity and allows more effective resource management;
Provides real time transaction data throughout the organization;
Forces standardization of processes and procedures and embeds best practices across the company;
Improves managerial information and reporting;
Allows for expansion to emerging technologies;
Provides Internet and Intranet capabilities;
Allows employees to serve themselves, i.e. provides self-service capabilities. (Ashbaugh & Miranda, 2002)
Many experts believe that this last factor, the increasing acceptance of self-service, as well as the uptake of employee portals will be a major factor in the adoption of the next generation of innovation. This is HRMS (human resource management systems). HRMS, rather than simply providing the ability to capture data, supports managerial decision making with intelligence. Typically, companies look to HRMS to capture the following advantages:
Improve core business processes. HRMS can, of course, automate standard HR processes such as recruiting and hiring. However, the technological capabilities are maximized when the tools are used to improve underlying business processes.
Develop human capital inventory. This includes the tracking of employees from application to retirement and allows organizations to match individual skills, interests, and performance with organizational goals, succession planning and organizational charting.
Manage budget controls. The integration of HR with the financial planning process provides a critical function for line departments and budget staff interested in calculating current and future costs. It includes functionality that supports projections and forecasts based on head count, hours and actual expenditures, and links HR data to the budget planning process.
Facilitate labor/management relations. HRMS can provide comprehensive and accurate analysis for critical labor-management reporting, such as seniority list tracking, disciplinary action, automated bid processing, grievance tracking, and effective management of worker's compensation and long-term disability programs.
Generate business intelligence. Used to refer to the use of advanced analytical tools such as online analytical processing (OLAP), data mining, and Executive Information Systems (EIS), business intelligence provides insight into organizational trends and improves organizational decision-making capabilities. Used in conjunction with HRMS, business intelligence tools can be used to support HR management decisions, analyze turnover, recruitment or training data, and for workforce and salary planning. (Ashbaugh & Miranda, 2002)
Changing Human Resource Role
When Sears, Roebuck and Company found themselves on the tail end of a 10-year business downturn, they knew that change was in order. So in September 1992, Arthur Martinez began his run as head of the merchandising group by making monumental changes…