Strategic Elements of HR Management Term Paper

Excerpt from Term Paper :

While emerging evidence, theory and practical demands are increasing the visibility and credibility of human capital as a key to organizational success, the measures used to articulate the impact of human resource management decisions remain misunderstood, unwanted by key constituents or even counter-productive." (1998) Stated as well by Boudreau is the fact that a body of research exists that is growing rapidly suggesting that "the key to competitive advantage lie with the organization's human resources. (Boudreau, 1998) p. 3 Widely suggested as an emerging key to the success of the organization is "intellectual capital." (Boudreau, 1998; p.3) This element is sated to not be: "...effectively reflected in standard accounting and the financial report, and the diminishing correlation between future financial performance and standard accounting measures of value seems to attest the importance of more intangible factors." (Boudreau, 1998; p.3) HR measurement that is effective will be a system that is capable of providing guidance in "rapid and appropriate decisions affecting employees, in language that is understood by all constituents." (Boudreau, 1998) p.4 the work of Boudreau explores "four necessary elements of enhanced HR measurement" as well as making the provision of a framework "for understanding and developing better future measures." (Boudreau, 1998; p.4) Boudreau states that the four components spoken of are:

1) Evidence;

2) Explanation;

3) Purpose; and 4) Method." (Boudreau 1998) p.4

Evidence is necessary in establishing the significance of the effects of human resources for"... meriting intensive measurement and study." (Boudreau, 1998; p.4) 'Explanation' makes the provision of a reasoning of a logical nature in making suggestions in relation to 'why' ad 'how' human resources "creative their significant affects on organizations." (Boudreau, 1998) p.4 Boudreau states that 'purpose' speaks of the 'goals of measurement systems, which extend beyond simply developing and applying new measurement systems, and must consider the effects of measures on key stakeholders within and outside the organization." (Ibid; p.5) Method makes reference to a mode and framework in making provision of development of support for better measures in HR." (Boudreau, 1998; p.5) HR measurement typically takes an approach that is the exact opposite in which "the search for better measurement methods is the first, and often the only step. The work of Boudreau related the 'PeopleVantage Model', which is stated to integrate human resource metrics and strategic human resources management. The following chart labeled Figure 1 illustrates the 'PeopleVantage Model' and how this model integrates HR metrics and Strategic Human Resource.

The PeopleVantage Model

Source: John W. Boudreau and PeopleCOM (1998)

The two arrows in the figure represent the synergy existing between the areas of strategic planning, measurement and execution. According to the work of Boudreau (1998) the development of metrics in planning proceeds downward "from the value proposition to the bundles yet when strategy is executed the causal direction is in an upward direction. Boudreau recalls the example set by Sears, a U.S. retailer whose analysis model "was based on a top-down concept of becoming an attractive investment for shareholders, supported by customers whose behaviors delight the customers...The metrics that Sears developed began with employee attributes and worked upward to measure employee behaviors toward customers, customer reactions, and the impact on revenue." (1998) the work of Kaplan & Norton (1996) drew upon the work of Porter (1985) and as cited in Boudreau (1998) define the value proposition as 'the attributes that supplying companies provide, through their products and services, to create loyalty and satisfaction in targeted customer segments." (Boudreau, 1998 p.5)

Boudreau relates that a problem exists in that goals that are 'company-wide' in nature "are simply too generic and vague to guide specific HR decisions" and simultaneously value is defined too narrowly and the initiative to measure gains in knowledge increases as to products or services without having measured the effects on the organization in terms of the value-creating capacity does not provide enough useful knowledge. Boudreau states that "The PeopleVantage' model may suggest a diagnostic approach to identifying the right level of detail for actionable value proposition." (1998) p.5

Boudreau relates as well that: "Typical HRM measures frequently focus only on HR activities" and give rise to suggestions that these activities "represent the key business processes of HR." (1998) Training metrics are inclusive of the effect of training upon the quality of product, cycle time, cost reduction, and speed of execution." (Boudreau, 1998) p. 5 Typical dependent variables in research of business and economics are value propositions and business processes but the 'moments of truth' have "received relatively less attention." (Boudreau, 1998) the work of Gronroos (1998) and Carolzon (1987) have documents that the 'moments of truth' are representative of "pivotal contact points between employees and customers, whether in providing a service, selling a product, or providing assistance... [and that these]...determine constituent's perceptions of service and product quality." (Boudreau, 1998) p. 5

II. Cultural Change and the Role of the HR Professional

The work of Dean Foster entitled: "The Dynamic Role of IHR in the Millennial Organization" states that: "Human resource departments and professionals represent more than just a particular function at their corporate headquarters" in that in today's work world that is increasingly global the role of the HR professional has expanded rapidly as the HR professional is the individual "most responsible in an organization for driving the kind of change necessary for the organization to succeed in the global environment of the new millennium." (2007) p.1 the statistics relating to global management include the following facts:

60% of all cross-border joint ventures fail" (Foster, 2007)

30% of all expatriates return from assignment abroad prematurely

Approximately 48% of all repatriates leave their company within two years of returning home. (Foster, 2007) p.1

Foster states that these statistics are representative of: "...a gross human resource failure, and the enormous capital investment that is lost as a result." (Foster, 2007; p.1) Furthermore, these statistics shed light onto the failure of organizations in realizing the "impact that culture has on its ability to succeed globally." (Foster, 2007) p.1 Interviews of HR professionals who have been involved in international joint ventures that failed cite the single greatest cause for the failure to be "consistently identified as the inability of both parties involved in the joint venture to recognize that they were approaching the tasks in different and incompatible, ways - that their cultures failed to align toward a common goal." (Foster, 2007) p.1

Foster cites 'soft issues' to be another area that needs focus by the HR professional in that "the inability to consider the 'soft issues' - culture's impact - in all cases, was the primary reason for the failures that represented significant loss of a number of key measures, to the international organization. In organizations that send employees to another country for business operation there are costs that include expenses inclusive of: "...COLA, tax offset, salary increases -- "often to compensate for the lost salary of the accompanying partner -- " housing allowance, actual relocation and education costs." (Foster, 2007) Foster states that returns that are early or premature have the capacity to "double and triple the actual 'million-dollar' investment of the 'successful' assignment." (2007) p.1

Several phases must be included in the plans for employees who have been internationally relocated make adjustment to the everyday living issues that affect not only the employees but their families as well. There is first the tourist phase followed by the adjustment phase and finally the adaptation phase. The entire progression of these phases take up to one year's time. In fact, Foster relates that until the third stage has been entered the employee is unable to "settle in to a pattern of acceptance with their new environment." (2007) it is critical that the organization provide employees and member of the employee's family with "...the 'nuts and bolts' information and services they need to survive, such as schools, medical care, housing..." (Foster, 2007) p.1

Cultural awareness can only be possessed by the individual who has the ability to view from the perspective of a 'cultural being' or someone who "who carries a set of behaviors and values and attitudes particular to their home culture that may be different or similar to those of their new host country." (Foster, 2007) This requires not only self-comprehension but comprehension of cultural differences and the culture of others as well. Foster states that culture:

is about predicting group patterns of behavior and should not be seen as an attempt to prescribe individual behaviors..." (Foster, 2007) Foster likens culture to an "iceberg, where the visible culture, as represented by the visible 1/10 top of the iceberg, is indeed, merely the tip: the significant part of a culture, around 90% of it, is often under the surface, invisible and represents the unseen values, attitudes and traditions that drive the behaviors that are visible." (Ibid) p.1

It is additionally stated by Foster that effectiveness in cultural change requires understanding that: "...both…

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