Human resource management's evolving role in competitive advantage

¶ … HRM professional faces in the workplace

The increasing complexity of the business environment to which globalization, workforce demographics, focus on profitability through growth and fast technological advancement forced organizations to gradually consider their human resources (HR) as a set of unique and intangible assets that are a key element to drive competitive advantage.

Nowadays, a HR department, which is focused on administrative activities, rather than being strategically integrated in the organization, is likely to fail to provide the competitive advantage needed for its survival. Instead organizations should integrate this department deeper in their core strategy, thus evolving from a simple HR department to human resource management. This paper argues the roles and competencies or HR professionals and the market trends and opportunities.

The role of the HRM professional in human capital management (HCM)

HRM has become an increasingly important approach to people management worldwide. The term HRM is very broad, having a large number of definitions, leading Watson to conclude (2002: p.369) a "rather messy situation currently exist weather by the terms HRM used in a confusing variety of ways."

HRM is the term used to describe just about any means of managing employees. Boxall & Purcell (2003) described HRM as the set of "all those activities associated with the management of employment relationships in the firm." The role of HRM is to add value to organizational performance. This part of organizational management entails: recruitment & selection, training & development, appraisal, performance management & rewards for appropriate performance, skills & knowledge development to meet business objectives, computerized HR systems, payroll, legal issues, management development, and administrative functions.

Kingsmill (2003) referred to HCM as "a strategic approach to people management that focuses on the issues that are critical to an organization's success," while Edvinsson (1997) described it as "the possession of knowledge, applied experience, organizational technology, customer relationships and professional skills that provides [a company] with a competitive edge in the market." Put in simple words, the HCM's role is to manage the component part of a given company's "intellectual capital," known as human capital, which, along with other components, contributes to the difference between market value and book value of a company (Hartley & Robey, 2005).

The growing body of literature to link the organizational performance with the development of human capital emphasizes the role of human capital management in leveraging the skills and capabilities of the organization's employees by stimulating individual and organizational learning, while fostering an environment in which knowledge can be shared and applied.

Key competencies of the current HRM professional role in human capital management

HR professionals have to demonstrate broader competencies and adjust their roles to the changing organizational and demand changes. A number of studies targeted the competencies of HR professionals, including here the IPMA competency model, the emotional competence framework and the integrative model of HR competencies.

Fig. 1 -- IPMA competency model

Source: International Public Management Association of HR

Fig. 2 -- Emotional competence framework

Set of future competencies an HRM professional

HRM professionals not only have to manage human talent, but also to lead it. They have to be role models for employees. Additionally, they have to possess business acumen and knowledge of HR practice to be able to build a framework and tools that enable human talent to be transformed in competitive advantage for the organization.

HR professionals have to understand the importance of synchronizing the HR policies and structures to the organizational strategies, so that the human capital performance works entirely to achieve organizational goals. They serve as a liaison between results and human resources.

Reference list:

Boxall, P. & Purcell, J. 2003. Strategy and human resource management, London: Palgrave Macmillan.

Edmonson, a. & Moingeon, B. 1998. From organisational learning to the learning organization. Management Learning, vol.29: pp.5-20.

Goleman, D. 2000. Working with Emotional Intelligence. Bantam Books: New York.

Goleman, D. 1995. Emotional Intelligence. Bantam Books: New York.

Hartley, V. & Robey, D. 2005. Reporting on Human Capital Management. Report 423 - Institute for Employment Studies:

http://www.employment-studies.co.uk/pubs/summary.php?id=423

International Public Management Association of HR, accessed Feb 2010; available at: http://www.ipma-hr.org/content.cfm?pageid=194

Kingsmill, D. 2003. Accounting for people: report. London: Task Force on Human Capital Management. Available at:

http://www.berr.gov.uk/whatwedo/businesslaw/financial-reporting/business-reporting/Accounting%20for%20people/page38836.html

Poper, M. & Lipshitz, R. 1998. Organisational learning mechanism: A cultural and structural approach to organisational learning, the Journal of Applied Behavioural Science, vol. 34(2): pp. 161-179.

Stredwick, J. 2005. An introduction to human resource management. 2nd Edition, Butterworth-Heinemann: Oxford.

Watson, T., 2002. Organising and Managing Work. 1st Edition, Harlow: FT Prentice Hall.

The IPMA Competency Model offers a new perspective of the new roles of the HR/Assessment professional.

1. Leader - HR professionals should be positive role models and mentors for peer and junior personnel.

2. Change agent - HR professionals should be flexible to be able to manage the development of strategies, programs, policies, and procedures to that are critical for change management.

3. HR expert -- HR professional should possess both functional and interpersonal competencies that enable them to provide assistance on HR products/services and appropriately address the needs of the employees.

4. Business partner - HR professionals should have a sound understanding of the business processes in the organization (e.g. strategic plan, vision, and mission statement).

The framework was developed based on Daniel Goleman's Emotional Intelligence and Working with Emotional Intelligence studies, by personalizing the emotional intelligence notions to the HR professional's role in an organization. Self-awareness, motivation, empathy, self-regulation and social skills are seen as essential in building personal competence.

Source: Adapted from Daniel Goleman (2000; 1995)

The integrative model for HR competencies is similar to the IPMA competency model, which emphasizes 4 major roles of the HR professionals: leadership, consultation, HR expertise and core competencies.