Sunday, 15 November 2015

HR: the ever-changing function?

The role, scope and to many respects the reputation of HR has considerably evolved during the last decade. Originally exclusively associated with compliance and administration, HR is more recently increasingly regarded by CEOs as business advisor, change agent and ultimately strategic partner, which has clearly contributed to enhance in turn the function reputation.

The growing influence exerted by HR on organizational management can be in part explained by the tremendous significance attached by employers to the resource-based view of a firm. According to this approach, originally developed by Wernerfelt (1984) and Barney (1991, 1995) building on the idea early expressed by Penrose (1959), who defined a firm as a collection of productive resources, organizational success is essentially based on the way the strategic assets of an organization sustain each other (Mueller, 1996). An organization attains competitive edge hence only whether its strategic resources are valuable and effectually used and coordinated.

Human capital is increasingly considered by employers as their most important asset and resource; by extension, the main pillars underpinning the resource-based view of a firm have been used to support the development of HRM models and a resource-based view of HR has been canvassed. The resource-based view of strategic HR stems from the assumption that in order for employers to gain competitive edge these need to recruit and develop talented individuals whose competencies and skills are rare and extremely difficult to imitate and replace.

Inasmuch as human capital, as the most significant resource of a firm, takes centre stage in every initiatives employers implement, HR represents the seminal organizational function in developing people. Employers attach a growing critical importance to HR in that this is the organizational function in charge of taking care of people. It essentially assumes full responsibility for individual performance from the moment every single person joins an organization; it is in fact HR which manages the selection process, develops and implements talent management practices, supports employers in managing succession planning and develops new approaches to employee retention. It clearly transpires that in most respects the present and future, and as such the past, of an organization largely rest in the hands of HR.

In order for HR to effectually play its role it needs to perform a large number of activities and sub-activities. People management, for instance, is concerned with the constant identification of effectual ways to motivate and engage individuals and help these to expand their competencies and skills so that these can increasingly contribute to enhance organizational productivity, ultimately enabling employers to gain competitive advantage over their competitors. To successfully perform this feat, HR needs to develop and implement a fairly complex plan of action, which is habitually approached adopting the bundle methodology, that is, a number of coordinated programmes aiming at enabling employers to produce a synergic, multiplicative effect. The design, development and adoption of innovative and effectual: reward and benefits programmes, recruitment and selections methodologies, employee relations processes, healthy and comfortable workplaces, flexible working arrangements and effective learning and development approaches represent some examples of how complex and interrelated the activities performed by HR practically are.

The pace the exogenous environment changes prompts employers to adapt the organizational context accordingly. Corporate strategy, structure, processes, culture and the way activities are performed within a business are nowadays subject to a virtually constant and incessant process of change, insofar as change management can be nowadays regarded as a typical, no longer exceptional, tremendously significant organizational activity, which needs to be promptly and timely performed by employers when required. The circumstance individuals may resist change can prove to be particularly detrimental for organizations so that its introduction has to be properly and consistently managed. Since change can potentially affect and is basically concerned with individual perception and behaviour, the large and complex undertaking to manage its preparation and implementation is habitually entrusted to HR.

Over the last years, HR has also gained a significant role in supporting employers in the implementation and in part in the development of organizational strategy and corporate culture. Participating in these activities has essentially contributed to give HR new momentum and to further broaden the extent and significance of HR as an organizational adviser and strategic partner.

To meet business leaders’ expectations HR has nowadays to be ready to engage in a wide array of new activities, whether still retaining the ownership of those which it has traditionally performed. This clearly entails in turn that HR professionals need to gain new skills and capabilities, whilst expanding their current knowledge. It is in fact hardly imaginable that HR might attain its ambitious objectives whether HR professionals do not gain an in-depth understanding of, and familiarity with, the new relevant theories, approaches and methodologies.

It is not indeed only a matter of gaining new capabilities, but also of increasing the level of the current knowledge and constantly keeping it up-to-date. Reward management, for instance, can be no longer regarded as a fresh HR task, but the need for HR professionals to come up with new and effective reward practices and programmes definitely persists. A superficial knowledge of the subject and of the relevant theories will never ever put reward managers in a position to come up with new, brilliant ideas helping employers to attract and retain talented individuals, but would very likely lead to these individuals submissively replicating the practices developed, under different circumstances, in different environments and arguably to attain diverse objectives, by different specialists.

The activities performed by HR are sorely overarching and pervasive, insofar as essentially affecting the daily unfolding of the organizational life. The question is whether it can be realistically contended that there is still room for further expanding the role nowadays played by HR. It is indeed hardly imaginable that HR might perform additional tasks, whether these are not directly or indirectly related to people. This does not obviously entail that the Function has reached its full maturity in that this is indeed destined to never occur, but rather that HR has to stick to its traditional mission and relentlessly strive to identify and adopt new, consistent and effectual approaches to attain its main objective, that is to say help employers to pursue their strategy and attain competitive advantage by recruiting, developing, empowering and retaining the most talented individuals.

The way HR has evolved over the years has essentially never changed. Its scope has in fact invariably been that to take care of employees, but in a different fashion and to a different extent according to the changes occurred in the exogenous environment; changes that the endogenous environment can neither ignore nor overlook by any means. Yet, HR has invariably strived to pinpoint the way individuals interpret their psychological contract and establish expectations in order to come up with appropriate ways to meet these, whereas meeting employer wants and expectations.

HR, it may be argued by definition, essentially constantly performs a daunting task; disciplines individuals and takes these to court when required, whereas develops programmes aiming at favouring individuals’ growth and providing these career prospects. This indeed recalls the Machiavellian definition of a good prince: a good prince needs to do what it takes to be at the same time loved and feared (according to Machiavelli, in the event a good prince should be unable to do what it takes to be loved, nonetheless, this should, if anything, do whatever this can to be feared).

The burden currently carried by HR is already heavy enough; yet, to properly and effectively play their role HR professionals need to constantly gain new knowledge, capabilities and skills related to both the HR and business domains. It is hence highly unlikely and indeed not functional that HR disperses its energies on different activities with the risk of losing its main focus of interest on people. HR efforts, eagerness and enthusiasm should be concentrated on people and on the countless activities and programmes developed and executed within an organization with the aim of empowering these and enhance organizational success.

Some organizations, with the prime objective of enabling HR professionals to exclusively focus on the strategic side of HR, envisage devolving the daily tasks traditionally performed by HR to line managers. This option, aiming at limiting, rather than expanding the role of HR, offers indeed some advantages, but presents at the same time some challenges.

Devolving part of their tasks to line managers can clearly enable HR professionals to devote most of their time to investigating and developing new HR approaches, reviewing HR policies and practices and spending more quality time with managers when playing their advisory role. Yet, line managers are the closest HR allies in the implementation of HR practices so that their involvement in the daily HR activities might enable these to feel more confident when supporting HR in its practices execution. Line managers on the other hand habitually perceive having to deal with HR tasks as an additional burden and as something potentially hampering them achieving their objectives. Moreover, it is likely that line managers do not have the knowledge, in addition to the willingness, to properly perform these tasks. Lacking of a comprehensive knowledge and understanding of the HR mission and vision, line managers may differently play the role devolved upon them by HR; inconsistencies would soon emerge and seriously risk causing employees harbouring suspicions of line managers’ capability to perform HR activities. Under such circumstances, some problems about the ownership of the tasks devolved to line managers might also emerge: should this rest with HR or should be this fully devolved to line managers?

Still with the intent of reducing the administrative burden so that HR can focus on more strategic aspects of its role, organizations may decide to outsource some HR activities. This approach, notwithstanding, does not invariably prove to be completely appropriate. Organizations try nowadays to foster their employer branding in as many ways as they can; for extremely professional outsourcers might be, it is highly unlikely that these might obtain excellent results in this sense on behalf of their clients. Yet, as it occurs in the case of line managers, outsourcers would certainly lack knowledge of each organization specific HR vision and mission, in addition to not having a sufficient acquaintance with every single organization at large. This approach needs by extension to be carefully investigated before being adopted. Things might work slightly differently in those instances in which employers centralize or share some of their local branches’ HR services.

All in all, the most obvious conclusion which can be drawn is that HR should not aim at expanding its area of intervention and involvement in the business activities; it is in fact already in charge of the most delicate and significant organizational resource. Meet individuals’ wants and expectations, care and plan about their development, ensure that they feel safe and at ease in the workplace, develop an attractive but reasonable value proposition to be offered to individuals, ensure that employees focus their attention on their working activities, take individuals by the hand when these have to undergo a process of change which they fear and do what it takes to prepare employees to go the extra mile definitely represent an extremely difficult feat to perform.

It would definitely be pointless for HR aiming at performing additional tasks: HR has a massive responsibility for organizational success, is relentlessly prompted to find new solutions in terms of human capital management and called to tackle and address people management-related problems virtually on a daily basis. The main concern of HR professionals should rather be that to unrelentingly devote resources and energy to improve, increase and expand their professional knowledge and gain and in-depth understanding of their organization and of its operations. Project management, change management, communication abilities and the capability to make sound, correct decisions and judgements in business (the so-called business acumen) can nowadays be regarded as mandatory capabilities of HR professionals.

The Function should not be concerned with the quantitative aspect of its role, already remarkable, but rather with what it can do to enhance the quality of the results it is expected to yield. The duty of HR is not that to replace the employer, for instance developing business strategies, or to take the place of the other organizational functions, for example making decisions about the launch of the most appropriate advertising campaign for a new product, the role of HR is and should continue to be that to ensure and secure employers the talent, that is to say the key organizational resource, these require to attain competitive edge. Achieving this objective is clearly everything but straightforward in that all the firms essentially aim at obtaining the same result, and requires a constant dedication, in addition to technical and non-technical expertise and skills.

The role of HR is also that of detecting and identifying the developments, changes and future trends occurring in the exogenous environment, which may affect the organization and the way people make their decisions in term of staying or leaving an employer, and reviewing and adapting internal practices accordingly.

Working hard with managers and ensure that these are absolutely prepared to play their role is of course crucially important in that it also contributes to secure consistency and integrity in the workplace. Definitely a difficult feat to perform so that most of the HR efforts have to be concentrated on introducing constant improvements in human capital practices, rather than on focusing on what more, in quantitative terms, HR can do for employers. A few decades ago, it might have not been immediately obvious the importance of change management and of HR in supporting employers in its introduction, but taking on the role of change agent has not actually contributed to expand the HR role; it in fact essentially remains an activity strictly related with human capital. What HR can and should hence strive to incessantly do is to improve the quality of the results it yields, hopefully reducing costs, and being ready to adapt to and possibly anticipate the future trends which may make an impact on all the aspects directly and indirectly related with human capital.

Longo, R., (2015), HR: the ever-changing function?; Milan: HR Professionals, [online].