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2 The changing role of HR – from operational to strategic HR Buy this file from

The changing role of HR – from operational to strategic HR

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The role of HR has changed significantly over the past couple of decades and is continuing to change as the HR profession strives to gain acceptance as a strategic business partner. In many organisa- tions HR is performing a very different role to that of twenty to thirty years ago. Its role has evolved from that of payroll clerk and welfare supporter, through corporate policeman and industrial relations expert, to that of a business partner role. A key area of change has been in the label given to those working in the field of Personnel. The Personnel label, other than in public sector organisations, has been largely superseded with that of Human Resources. This change coincided with the decline in the importance associated with industrial relations, both in economic and political terms, and the decline in the membership and influence of trade unions (Guest, 1998). In the 1970s and early 1980s when industrial unrest dominated UK industry many personnel practitioners gained their credibility through negotiat- ing with the Trade Unions about pay and working conditions, on behalf of the organisation. The distinctions between the traditional personnel role and that of HRM (Holbeche, 1999) are summarised in Table 2.1. The HRM agenda according to David Guest (1998) is concerned with: ensuring commitment from employees; creating a focus on values, mission and purpose; developing an environment-based on high trust and building an organisation consisting of flexible roles, flatter structures and where there is autonomy and self- control within the work that individuals do (Guest, 1998).

The changing role of HR – from operational to strategic HR


Table 2.1: Contrasting traditional personnel and HRM

Characteristics of the traditional personnel role

Characteristics of the emerging role of HRM

Reactive Employee advocate Task force Focus on operational issues Qualitative issues Stability Tactical solutions Functional integrity People as an expense

Proactive Business partner Task and enablement focus Focus on strategic issues Quantitative issues Constant change Strategic solutions Multi-functional People as assets

The HR function, according to Dave Ulrich (1998), is crucial

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to organisations achieving excellence. Excellence, according to

Ulrich comes through a focus on learning, quality, teamwork, re- engineering, knowing how things get done within an organisa- tion and also how people get treated; all of which are HR issues and hence achieving organisational excellence requires the work of HR. Ulrich suggests that given the business challenges that organisa- tions face today – globalisation, profitability through growth, technological change, intellectual capital and continuous change – success depends on organisations building core capabilities such as speed, responsiveness, agility, learning capacity and employee competence. Developing these capabilities, in Ulrich’s view, is the mandate for HR. This he suggests requires a focus on four key areas.

Partner in strategy execution

Ulrich doesn’t argue that HR alone should develop the business strategy, this he argues is the joint responsibility of an organisa- tion’s executive, which hopefully HR should be part of. HR’s role in strategy making should be that of guiding the discussion about how the organisation should be organised in order to carry out its strategy. In essence this means HR taking on the role of architect, advising on what organisational systems and processes already support the organisation’s strategic goals and which ones need some attention, and how best to set about changing these.

30 Managing for Knowledge

The Executive Director of group resources at Xerox Europe argues that if HR wants to have an equal seat at the table they have to have things that they can contribute. Part of that contribution means adding directly to the productivity of the business. Ulrich argues that HR also needs to take stock of its own workloads, setting clear priorities, which are aligned with the real operational needs of the business. To become accepted as a business partner, HR may need to acquire new skills and capabilities and may need to acquire new tools for their toolbox. Linda Holbeche, Director of Research at Roffey Park Institute, argues that a strategic agenda for HR is likely to include a number of key areas: recruitment and retention of talent; improving the quality of management; enabling high performance and creating and building organisational climates and culture which supports what the organisation wants to do (Holbeche, 1999).

Administrative expert

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HR has traditionally performed an administrative role within

organisations. However, Ulrich argues that in their new admin- istrative role HR need to shed their traditional image of policeman and instead seek to improve the administrative procedures both within their own function, as well as within the business as a whole. They need to seek out the inefficient processes that get in the way of the organisation excelling and suggest ways in which these processes can be improved. In essence what HR needs to do is identify the bottlenecks in the organisation’s core processes and then work with their business colleagues to find ways of removing these.

Employee champion

Ulrich argues that with the changing psychological contract of employment HR should be made accountable for ensuring that employees are fully motivated and engaged. He argues that it is HR’s role to ensure that line managers understand the critical link between employee motivation and organisational performance and how this link can be sustained. HR also have to play the role of employee champion. This requires delivering development programmes that ensure perso- nal growth, helping employees meet the demands placed on them in the workplace, as well as taking on an advocacy role, i.e. acting as the voice of employees in discussions with management, ensuring that this is heard and understood.

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