Transforming HR Management to a More Strategic

¶ … Transforming HR Management to a More Strategic Partner

Importance of HR Management Transformation:

Throughout the years, human resource management has continued to be an important aspect in many organizations because of its impact on productivity. As a crucial department in the effective functioning of an organization, human resource management has mainly been used as a synonym for personnel management. In order to improve an organization's productivity, human resource management has primarily been centered on administrative and operational functions. However, the concept has been changed to a more strategic partner with the emergence of the transformation of HR management. The transformation of HR management into a more strategic partner has been carried out because of its huge importance to organizations.

Background of HR History:

The term human resources management has been widely used as a synonym to personnel management in the United States from early 1950s. Unlike human resources management, personnel management has been in existence for a long period of time i.e. during the Industrial Revolution and beyond. While the origin of contemporary personnel management is mainly attributed to Industrial Revolution, the management of people has existed for as long as they have worked (Rudman, 2010). This is largely because the revolution contributed to the emergence of new employment patterns, increased employment opportunities, and the development of a more organized working life.

In addition to industrial revolution, the other main sources of personnel management are scientific management, human relations movement, industrial welfare movement, trade unions, collective bargaining, and employment law. Human Resources Management emerged as a specific managerial approach or philosophy from mid-1980s. This managerial approach was founded on the basis of goal-directed leadership and management by integration. While the goal-directed leadership was regarded as the most suitable approach for modern organizations, management by integration is the best strategy for leading people in the whole organization.

The other contributing factor to the development of human resource management as the best managerial approach is the emergence of strategic management thinking. The concept of strategic management has forced managers and shareholders to reorganize organizational structure and operations. Managers and shareholders have also been compelled to establish measures towards increasing globalization, global competition, technological advancements, far-reaching workforce changes, and growth of organizations' size and complexity. Such measures have resulted in the adoption of a more integrated approach towards the management of people. HR Transformation into a Strategic Partner:

Since its inception, human resources management has been an attractive approach to managers, especially those facing the need to change radically and rapidly. HR management has actually been described as an attractive solution to managers who are controlled by market pressures are they seek constant innovation, improved flexibility, and enhanced quality. The administrative and operational aspects of human resource management are mainly linked to an organization's interests through its strategies and practices.

According to the findings of research, approximately more than half of organizations across the world have been or are currently involved in the process of transforming their human resources function ("Global HR Transformation Underway," 2007). The transformation to a more strategic partner basically involves shifting from the improvement of internal operations to capitalizing on the contribution of human resources to business performance. As a result, the impact of human resources on organizations is increasing while the operational excellence within its functions is decreasing. As compared to the period before HR transformation, the administrative and operational excellence of its functions is regardless as less crucial and less of a priority in today's human resources.

As human resources influence within various organizations is increasing, the leaders of these departments have been viewed as strategic partners who are actively involved in strategic planning. However, approximately 70% of the function of human resources is consumed by the traditional activities like compliance and record keeping though people are spending more time on strategic partnering. The HR transition to a more strategic partner within the organization has focused on enhancing technology and service delivery. The focus has now shifted to the realization of human capital strategies based on the improvement of profitability and competitiveness.

Importance of HR as a Strategic Partner:

While the process of transforming human resources management requires organizations to implement a talent strategy, its benefit to the organization cannot be underestimated. It's important for human resources management to transform from being basically administrative and operational to a strategic partner because of the following reasons

Increased Productivity:

One of the reasons for the importance of HRM as a strategic partner is that it increases the productivity of the workforce and organizational profitability. As a strategic partner, human resource management helps in the development and implementation of a strategy, structure, and services that are linked and support the business strategy ("HR as Strategic Partner?" 2002). The ability of a company to become productive is dependent on the capability of its human resource department to support organizational functions. HR management based on the administrative and operational approach is not responsive to the ongoing rate of change. Through a strategic partnership approach, human resource management contributes to increased productivity and profitability because of its impact on human capital.

Impact of Globalization on Today's Working Environment:

Globalization has resulted in numerous changes to today's working environment that requires organizations to reposition and restructure themselves in order to achieve their business goals. With the huge changes in the working environment, it's important for HR management to transform to strategic partnership to cope with the rapid changes. The new competitive realities that organizations experience because of the changes require new and divergent capabilities. As a result, various organizations across the globe are involved in attempts to adopt a new HR management approach i.e. As a strategic partner. For instance, the effect of globalization on the working environment has resulted in McDonald's Corporation adopting international HRM strategies through the strategic partner HRM approach (Aslam, Ahmed & Pervaiz, n.d.).