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Vision
20(2) 135–138
Strategic Value Contribution Role of HR © 2016 MDI
SAGE Publications
sagepub.in/home.nav
DOI: 10.1177/0972262916637274
http://vision.sagepub.com

Humaira Naznin1
Md. Ashfaq Hussain2

Abstract
This article aims to challenge the perceived lack of a strategic value of human resource (HR) function and seeks to focus on the
devolution of HR from its transactional role to strategic effectiveness. Utilizing a range of secondary resources, this article aims to
critically analyze the shift of HR from transactional to a strategic role and its value contribution role in business. HR needs to over-
come conventional resistance and act as the driver of an organizational strategy through aligning the HR strategy to the business
strategy, adopting workforce planning and measuring an organization’s competencies. The paper contributes to the evaluation of HR
management from viewpoint perspective and offers help to HR practitioners in understanding the changing role of HR.

Key Words
HR Function, Business strategy, Devolution, HR Integration

Introduction managers better understanding of their responsibility in


specific HR issues, such as absence control, team develop-
In today’s competitive and complex business environment, ment, discipline, induction, health and safety, recruitment
the role of human resource (HR) is constantly changing. policy and performance management, HR aims to enhance
With its increasing alignment to core business and inte- employee engagement and open communication between
gration to the bottom line, HR is a reflection of the cons- line managers and employees. These, indeed, lead to low
tant changing nature of its functions. Being responsive turnover and high morale—keys to organizational perfor-
to globalization, demographic and technological changes, mance and competitive success. In this regard, by replac-
and turbulent, competitive and complex environment of ing the traditional supervisory role of line managers and
business, HR itself has been changing dramatically. A empowering them to act as ‘leader, enabler and facilitator’
transformational journey from the conventional role of (IRS Employment Review, 2003), HR is playing the strate-
‘administrative expert’ (Ulrich, 1997 cited in Reilly, 2006, gic role of an ‘objective adviser’ (IRS Employment Review,
p. 8) to the evolving and fostering function of strategic 2003). This devolving HR function to change management
HR partner critically describes the value contribution directs itself to be more aligned to business.
of HR function. More precisely, HR goes strategic and Although this shared partnership of HR with line man-
becomes more business integrated. This intended reorien- agers aims to have them (line managers) greater ownership
tation would help HR not only to play a critical role in the and create a teamwork environment, this devolution of HR
overall strategic planning of the business, but also to act as responsibility often appears inappropriate to line manag-
a messenger to clarify and direct employees about the ers. Research suggests that many line managers lack people
desired goal of the organization. management skills, often complaint about the burden of
workloads and many of them are unwilling to consider this
Devolution of HR Function: devolved people management tasks as a part of their job
role (Reilly & Williams, 2006, p. 17). Such reluctance
Shared Partnership with Line Managers
could have an impact upon the operational level of the
A recent major change in HR function is its building a business and could raise the level of conflict between HR
shared partnership with line managers. By providing line and line managers. In this regard, the role of HR should be

1 Senior Lecturer, BRAC Business School, BRAC University, Dhaka, Bangladesh.


2 Assistant Secretary, Ministry of Foreign Affairs, Government of the People’s Republic of Bangladesh, Segun Bagicha, Dhaka, Bangladesh.

Corresponding author:
Humaira Naznin, Senior Lecturer, BRAC Business School, Room # UB20505, Building 2, 66 Mohakhali, Dhaka 1212, Bangladesh.
E-mail: humaira.naznin@bracu.ac.bd
136 Vision 20(2)

based on shared partnership with line managers, rather than example of this sustaining strategic agility. IBM, with
simply shifting their administrative responsibilities to line more than 350,000 employees, found it almost impossi-
managers. Understanding the rationale of the shift of task ble to have sustainable agility, and hence its HR leadership
and skills of the line managers, HR should take the lead or focused on three tasks. First, the HR leader performed
often play a subordinate role. Moreover, if line managers future need analysis and then made two- to three-year fore-
are linked too much with paper-based people management cast on required skills and people to maintain a competitive
tasks, internal communication between management and performance. Second, playing an active role in defining
employees will fall down. Again, if HR is very much com- and implementing a strategy, rather than just facilitating
mitted to daily people management task, it will lose its strategic planning meetings, the HR leader led the overall
effectiveness in higher value contribution. Therefore, an global transformation of the organization. Third, an inno-
optimum balance between efficiency and effectiveness of vative talent retention strategy helped to maintain very low
both HR and line managers is required. turnover. It was the belief of IBM that when employees
The devolution of HR function leads to its integration know their job well and are confident about their future
into the organizational strategy, and this vertical integra- with the company, they are more able and willing to adjust
tion of HR with other disciplines of business involves HR to change quickly. And, here lies the successful execution
professionals’ direct participation in the strategic plan- of sustaining the strategic agility of IBM.
ning and implementation of organizational mission, values,
culture, strategy and goal. This kind of direct involvement
of the HR leader with core business planning reveals the
Integration of HR and Business Strategy
emergent acceptance of HR as a value contributor in busi- Another changing role of HR function is aligning HR prac-
ness. In this respect, the experience of Mike Okinski, tices to strategy, which means that each investment of the
ex-head of HR at Price Waterhouse Europe, a manage- HR discipline must reflect the strategy and ‘realities of
ment consulting firm, in cultural shift is noteworthy (IRS the customer’ (Ulrich et al., 2009, p. 29). More precisely, in
Employment Review, 1998). The company undertook the today’s organizations, all HR activities, including selection
changed culture programme of creating a completely global and recruitment, training and development, and reward and
business with a common set of values and codes of conduct compensation systems, are designed and practised in such
for all the staff across the country. In this case, the HR an effective way that these must exhibit HR’s align-
function of this firm played the central role in creating, ment with business strategy. An excellent example of such
developing and implementing the firm’s integrated ‘value’ aligned and integrated HR practice is Apple (Ulrich et al.,
programme. Introducing revised career path, new appraisal 2009). Apple’s core strategy is growth through product
and reward system, the HR leader not only established innovation, and in order to align this strategy of innovative
culture change of the organization but also acted as the product, HR practices of recruitment, salary and training
formulator of the strategic decision-making process itself. are designed to meet the requirement of creativity and
This reveals the true contribution of HR function in inte- diverse thinking. Thus, Apple’s successful adoption of inte-
grating and turning strategy into reality. grated HR practices shows the strategic value contribution
role of HR and its greater impact on business performance.
In fact, Dave Ulrich’s model of HR function leads to an
New Competencies of HR emerging change in HR function, and many organizations
adopted this model to align their HR function with business
Sustaining Strategic Agility goal. An example of this is the AA, a car insurance and
A shift from transactional to a more strategic role contri- breakdown coverage firm, which introduced the new role
butes to the re-engineering of HR function. HR does not of business partner not only to align HR structure with
make strategy but has greater contribution to the imple- operational business strategy but also to develop people
mentation of a strategy. The continual change of HR management strategies, as Ulrich defined the role of busi-
function is apparent in Dave Ulrich’s model that catego- ness partner is ‘diagnosing organisation, re-engineering
rizes four roles of HR: strategic partner, functional expert, processes, listening and responding to employees, and man-
employee advocate and HR leader (Ulrich, 2005). Of these, aging cultural transformation’ (Suff, 2008). The three new
the latest role of HR leader has increasingly become senior business partner roles of the AA successfully contri-
critical to business function. Playing an active part in bute to corporate, policy, reward and operational efficiency
understanding the overall strategy and having an in-depth of the organization and establish HR’s contribution to
knowledge about both internal and external business support the operational strategy of the organization.
factors, an HR leader contributes to the integration of
the strategy to HR policies and practices both vertically
Why Does HR Lag Behind?
and horizontally and maintains the organization’s agility.
Ulrich called this ‘sustaining strategic agility’ (Ulrich, Although today HR goes more strategic and has already
Brockbank, & Johnson, 2009, p. 27), and IBM is an established its valued contribution in business, a number of
Naznin and Hussain 137

weaknesses in HR function are still apparent. HR practi- programmes, develop criteria for recruitment and
tioners, especially senior HR leaders, often fail to ‘speak promotions, formulate and implement measurements
the language of the board’ (Suff, 2004), and the senior and rewards and structure organizations for business
management struggles to see how the traditional transac- success.
tional role of HR could be reinvented strategically. HR • HR needs to reinvent its strategic function. This reori-
function often becomes the victim of traditional percep- entation means a ‘transition’ (Craig, 2009) from a
tions of senior management. Even HR’s role in strategic strategic server of the business to a proactive and
decision-making and involvement in business planning are trusted adviser inherently related to the workforce
seen as ‘additional’ by senior managers, and they think that planning of the organization. Workforce planning is
HR involvement is likely to be ‘executive’ with some trans- a framework articulating the organization, people
actional ‘reactive’ works (Anonymous, 2002). This view of and operational strategy. In fact, workforce planning
senior management needs to be changed, and it is possible could be the balance sheet of an HR leader and
only when HR function would widely become a key in hold a seat for HR at the strategic planning table.
adding value to competitive advantage of the business. Since today’s business world is all about competitive
Therefore, HR needs to be recognized to reflect both advantage, human capital is the only sustainable
operational and strategic goals and needs. source of gaining competitive advantage. And it is
It may be mentioned that the transactional function of high time for HR to persuade its strategic meaning at
HR is not contradictory to its transformational strategic the top-level meeting using workforce planning as its
role; rather both of these should be focused. To become strategic tool. In this regard, HR professionals need
more strategic, HR does not need to abandon its admini- to be more dynamic and proactive in bringing short-
strative duties. What is more important is to successfully term and long-term objectives together. Besides, in
operate at both transactional and strategic levels. An outline designing a workforce plan, another role of HR func-
about how to strengthen HR function at both of these levels tion is to take account of the external forces, such as
is drawn below: demographic, environmental and behavioural change
of generation Y, in order to satisfy diverse customers,
• The devolution and strategic transformation of HR because getting to know the external customers
needs to be exercised carefully. The devolution of of the business is one of the best ways to broaden
key areas of HR’s responsibility to line managers and strategic perspective and credibility.
also devolution of too much responsibility to line • HR needs to overcome the conventional resistance of
managers can imbalance both operational and strate- being a part of the organizational strategy. Therefore,
gic HR roles. Hence, the efficiency of an HR expert HR has to identify the true strategic value that it can
in some core transactional function should not be contribute to business and should also measure its
replaced or compromised under any circumstance. impact on the bottom line of the organizational strat-
For example, if recruitment of right talents in the egy. To make this happen, HR needs to ‘measure
right place is missed, the organization would fail the organisation’s competencies, leadership’ (Norton,
to create talent pool, and this would ultimately bring 2001), culture, external customers’ needs, alignment
its deficiency in gaining sustainable competitive and learning. These issues must be linked with the
advantage. organizational strategy. After measuring these issues,
• In the devolution of transactional HR functions, line HR can provide a framework explaining the strategic
managers should be given enough assistance in drivers of an organization, and this will allow HR
developing their leadership skills, and aligning their to make its own strategic position with the top
activities to the overall goals and missions of the management.
organization is a core strategic role of HR profession-
als. In this regard, it is essential for HR professionals Thus, the perceived lack of a strategic value of HR func-
to help line managers understand what and where tion is its propensity ‘to come to the game’ late (Craig,
they lack in terms of driving motivation, recognizing 2009). Today, the biggest contribution of HR function is to
the potentials and required development of employ- get to the heart of the business, be an integral part of the
ees, and how they grasp the changes in business business strategy and recognize business levers with a
effectively. wide range of strategic functions. This alignment between
• HR practitioners should get to know more about the HR and business processes can be a source of value crea-
motives, drives and needs of an external customer. In tion for the organization and hence can be used to link
aligning strategy with the customer, they should financial business outcomes (Ulrich, 2000). Finally, if HR
focus more on each system, practice and activity that measures itself from a business perspective and the value
communicates message about present and future that it brings to an organization, the senior management
customer direction and requirements. They should will change their traditional negligence to HR. Instead,
do this while they design and deliver training they will welcome HR to be a core contributor of the
138 Vision 20(2)

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Authors’ bio-sketch
hr-span-span-classhighlightfunction.aspx?searchwords= Humaira Naznin (hnaz357@gmail.com) is currently a
strategic%20HR%20function&print=true Senior Lecturer of Human Resource Management at
———. (2003). Human capital: not just another term for HR? BRAC Business School, BRAC University, Bangladesh.
Employment Review, 768, 13–18. She is primarily engaged in qualitative research and her
Norton, D. P. (2001). Managing the Development of Human research interests include strategic HRM, international
Capital, Part Two. Boston: Harvard Business Review. Retrieved
HRM, gender leadership, migration and labour market.
from http://hbr.org/product/managing-the-development-of-
human-capital-part-two/B0109A-PDF-ENG
Reilly, P. (2006, November 23). HR transformation – pitfalls of Md. Ashfaq Hussain (ashfaq351@gmail.com) is presently
the Ulrich model. People Management, 36. working as an Assistant Secretary to the Ministry of
Reilly, P & Williams, T. (2006). Strategic HR building the capa- Foreign Affairs Bangladesh. He formerly served as a
bility to deliver. London: Gower. lecturer in Human Resource Management at Leading
Suff, R. (2004). Stand and deliver: Can HR do the business? IRS University, Bangladesh. His research interests are Strategic
Employment Review, 791, 8–13. HRM, migration, climate change and leadership.