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For remaining competitive, organizations are required to make necessary adjustments in the processes and people. Change management is on-going function in an organization to improve efficiency and effectiveness to compete in the market place. Bringing about successful changes requires planning, effective communication and employee support. Changes in HR management are required for HR to play major role in organizational goal achieving. (Susan, 2008)
The HR management has to make HR ready for organization to become adaptive, changing direction, resilient and customer-oriented. HR managers have to shape themselves as strategic partners for guaranteeing their viability and contribution to organizational goals. The HR establishes business objectives to attain overall business plan. The tactical HR has to develop design of work systems that facilitate employees to succeed and contribute. This strategic partnership has major impacts on HR services, mainly the design of work positions, hiring procedures, reward system, appraisal systems, career and succession planning and employee development. (Susan, 2009)
During organization level changes, HR management has to make changes in its way of management to deal with employee turmoil and resistance to change. If HR management wants employees to embrace changes, they must communicate management's vision and more importantly, how change is going to benefit the organization. During this process of change, HR management needs to retain best employees at work. Providing an environment of equitable treatment and fairness is of utmost important for morale of the employees. (HR best practices during change, 2008)
While we look into transitions in HR management during closing decade of the last century, a major shift from specialist and traditional areas of HRM to broader concern and strategic role is depicted. A greater focus was seen HR aspect of change in organization. A greater integration of HR management and strategic decision making with a shift away from a pre-occupation with industrial relations and collective bargaining to other areas of HR activity such as communications, human resource development, workplace learning, career management and human capital accumulation.
What appears to be emerging from these and various other developments is an increasing proliferation of HR approaches at enterprise level with no apparent convergence to any single model of HR types. The need for HR's strategic role has been identified. Indeed some went as far as to suggest that HR might become proactive and determine organizational strategy, though it is acknowledged that this HR-Strategy link and the conceptualization and deployment of the strategy notion in the HR field remains problematic with the consequence that the evidence on the emergence and spread of a substantial strategic role is at best mixed. Similarly, in the UK and Ireland, the development of the HR function over recent decades has followed a comparatively clear pattern of historical evolution, characterized by convergence to a prevailing orthodoxy for the HR role. Traditionally, this orthodoxy was based on belief that a key employer concern in workforce management was the establishment and maintenance of stable industrial relations. The main cornerstones of this approach included trade union recognition, collective bargaining and the development of agreed procedures in areas such as disputes, grievance handling and discipline administration. Within this approach, the HR function assumed responsibility for managing relations with the organization's trade unions. While more reactive rather than strategic, this industrial relations role was nonetheless significant: it served to both define what personnel work involved and position the personnel management function as an important aspect of the managerial infrastructure.Â (Morley, et al, 2006)
The move from transactional HR to strategic HR is not a one-off, closed-ended process. HR needs to keep ahead for changes and to always be thinking of new ideas, changing attitudes and to keep pushing forward for goals attainment. (Cagni & Hills, 2008)
Work place diversity is an aspect in HR management changes. Dimensions of workplace diversity include age, ethnicity, physical abilities/qualities, gender, race, sexual orientation, geographical location, income levels, marital status, parental status, religious beliefs, and work experience etc. In order to manage workplace diversity, HR management needs to change from an ethnocentric view to a culturally relative perspective. This shift in philosophy should be ingrained in HR planning, organizing, leading and controlling managerial framework of the organization. Diversity mentoring program can be helpful to overcome problems of diversity ad making it an opportunity for the organization. It encourages people to go beyond their own cultural frame of reference and take advantage of productivity positional of diverse people. The organization who take diversity as an asset rather than a liability, get high achievement from diverse workforce. These needs vary from person to person, so organization must use different motivational tools to increase their productivity.
Another very effective change in HR management is gain sharing with employees. The improved organizational performance and gains are shared among employees and organization. These gains are shred according to a pre-defined formula. These plans do not affect company costs as these are shred only in case, gains have been achieved. The effective managers use his idea to motivate employee's behavior and attitude. The targets should be realistic and achievable. ( Chan, 2008)
The HR management also depends on level of technology use in organization. Organizations with low technology require traditional functions of HR while in high technology organization, the role of HR is more strategic and support the organization diverse managerial programs like management by objective and gain sharing. (Sagie & Weisberg, 2001)
The people in the HRM department should understand how HRM is different from older personnel management and how they can support the necessary changes successful integration with organizational goals. Research has shown that HR managers might not be clear about these aspects. Strategic HRM capability and business partner role were lower. HR needs support from other areas of organization as well to meet expectations. It's argued that presence of HRM official in directors or top level decision making committees is necessary for their strategic role. HR manager need to be involved in strategic management level to decisions to create fit between organization and to level management. The level of implementation of strategic HR decisions is directly proportional to the involvement of HR directors in such decisions. Other factors that can influence such decisions are access to CEO and informal relations with senior management. The involvement of line managers is also important for HR's role as strategic partner. But there is still resistance in its implementation. This re-invention of HR will give senior managers and HR personnel a way to move from transactional HR functions to strategic and consultant role. (Butteriss, 2000)
There are contrasting opinions about HR management of outsourcing. Some researchers take outsourcing as an opportunity for the HR department. This is because outsourcing creates an opportunity for HR to focus more on strategic and value creating HR activities. Other researchers, however, portray outsourcing as a threat for the HR department. In this view, outsourcing is seen as a cost-cutting instrument causing "HRM without HR managers". The analyses highlight two main results. First, the results indicate that organizations that have a focus on HR outsourcing for cost-cutting motive do not differ significantly with organizations that have a weaker focus on cost-cutting HR practices. The analysis reveals a direct relationship between level of outsourcing and HR strategic partnership. A second important finding is that HR devolution and HR outsourcing are closely related. However, this does not necessarily mean that the HR department is being eroded. By outsourcing operational HR tasks and delegating people management to line managers, more time and resources can be released for more strategic HR contributions. In other words, HR devolution and HR outsourcing offer the HR function the opportunity to reposition itself and prepare for the role of "strategic business partner".
There are certain implications for HR managers for out sourcing decisions. HR outsourcing has a potential for organizations in attempting to empower their HR function. Outsourcing of transactional and operational HR activities allows HR managers and departments to focus on strategic activities that add more value. Hence, it strengthens HR's potential to make a proactive contribution to business success. Therefore, HR outsourcing cannot be merely considered as a danger for the HR department, undermining HR's power in the organization. Second, the greater part of routine activities of HR can be shifted to line managers instead of outsourcing. Reliance on HR information systems has also increased because of alternative mechanism. HR manager should develop this mechanism carefully. Another implication is that HR management has to deal with complex internal and external HR services partners. Even if the tasks of HR have been spread internally and externally, the responsibility for fulfillment of each task lies on HR management. (Delmotte & Sels, 2008)
Reasons for e-HR adoption
The main reason for e-HR adoption is facilitation of staffing procedure and communication. It is surprising that cost reduction has not been identified as a reason for e-HR adoption. On the other hand, this could mean that e-HR adoption is mostly driven by other considerations, such as quality in recruitment and communication, rather than cost effectiveness. However, concerning the benefits of e-HR use, time and cost savings appear to be much appreciated, along with the minimization of mistakes. E-HR adoption differs by sector type. The sector with technology intensive image will adopt e-HR earlier. As for the role of e-HR in the future of HRM, we would argue that e-HR is a tool that can facilitate the transition from an administrative to a more strategic role for HRM, enabling it to improve the quality of its services. Within this context, e-HR adoption and use can be facilitated through cultivating an organizational culture, which facilitates the integration of technology in organizational processes and functions and promotes the collaboration between different departments such as HR and IT, in order to institutionalize this change. In addition, employees' IT skills and attitudes play a crucial role in the above-mentioned integration. So, HRM needs to invest in supporting people to develop the necessary skills and attitudes in order to actively participate and use the new services. It also needs to invest in communicating the benefits of these services, in order to eliminate any resistance or reluctance to use the new services. (Panayotopoulou, et al, 2007)
Traditional HR has been involved with helping to create or improve the degree of fit between and among the work, the worker, the supervisor, and the organization. HR's efforts focused on changing individuals to improve the fit. In the strategic era, HR broadened its perspective to include macro notions of fit and moved HR closer to management interests, often at the expense of the worker. At the same time, others encouraged HR to bring about more balance by expressing worker interests and treating employees as critical stakeholders.
HR today is still in the strategic positioning era that may constrain its ability to induce significant change suggested a new wave of change for HR is influencing the CEO. Modern strategic positioning elevates HR from prior tactical levels to a more proactive role in change, which requires influencing senior management. However, alignment, power, and legitimacy issues may limit HR's willingness to induce transformative change. Once reformers moved inside the organization in the early days of HR, its focus on change became incremental. Extending this reasoning to the current strategic era, HR is now a partner at the decision table and may be even less willing to take risks or challenge its hard-won position in the hierarchy.
Dissenting viewpoints should be part of daily discourse in organizations. HR could play an important role in today's organizations by bringing historical voices and contemporary interests into conversations about work, people, change, and the future. Having struggled to get to the table, HR executives, comfortable with status and privilege, should consider how less powerful and articulate voices can be heard. By articulating its values, inspiring a shared vision, and adopting a negotiations perspective, HR is in a position not only to facilitate change, but to assume an ethical role on higher ground in organizational change. (Ogilvie & Stork, 2003)Â
The future of the strategic HR business partner lies in his or her ability to understand the business and identify the key measures of performance relevant to the organization. Business insight combined with HR expertise will lead to measurable increases in business performance. Such a focus will enable the HR professional to comfortably take their place as an equal member of the organization's strategic executive team.(Ward, 2008) Â
Several performance models are available to look into how HR can contribute to the re-engineering of the organizational process and goals.
The learning systems model
This is relatively abstract system that suggests organizational orientation to learning consists of a common culture and a set of core competencies. For example, human resource inputs have an impact on organizational ability, potentially through the creation of flexibility, and thus the maximization of potential capabilities within the global environment. HRM acts as a control system, enhancing this organizational flexibility through the brokering of internal/external human resources.
The learning systems model recognizes three factors that relate to success:
well-developed core competencies that instigate new products and services;
an organizational culture that fosters continuous improvement; and
the ability to exit outmoded lines and enter new ones, i.e. change
This model becomes critical to success when global organizations shift away from a dependency on low-cost labor and seek relationships with countries where there are educated and technically-competent individuals.
The task model
The task model divides organizational tasks into operational and strategic categories. The crust of this approach is that employees are a strategic resource that needs to be developed for either operational or strategic roles within the organization. That is, there needs to be sufficient human resources available to meet the demands of the organization's operating needs, as well as for strategic development. Flexibility is also part of this approach because people have to modify themselves according to organization needs. The people should match with internal as well as external needs.
The capabilities model
This model suggests the concept of core competencies, by creating the fit between an employee and a particular capability. The uniqueness of a capability makes the product and service more difficult to duplicate than, for example, core competencies. The companies that are following this model have been very successful in extending their businesses to new geographical locations and to new businesses. Employees are trained to fit with capabilities. HR serves very important role in communication and assessment process.
The core/flexible ring model
This model is applicable for dealing with contingent workers in uncertain business conditions. There are core employees and flexible ring of employees who are called upon when needed. Flexible workforce is on limited-term contracts. In a global organization, core employees often are process experts or managers. The flexible ring consists of individuals in other countries who can be trained and retained for short-term needs. The selection and training of core employees become very important in this model. It is similar to learning system model; it differentiates between primary and supportive functions.
The behaviour engineering model
Gilbert's (1978) classic behavior engineering model enables the HR professional to organize and to monitor key human resource attributes of the global organization. The model has three cells that correspond to the workplace environment (information, resources, incentives), and three cells that correspond to employee performance factors (knowledge, capacity, motives). When planning for excellent performance, the focus is on employee factors, but general research has shown that when employees are adequately provided with information, resources and incentives, they are able to perform at exemplary levels. (Wright, et al, 2000)
Six sigma re-engineering is also complemented by proper human capital and staffing strategies. (Carey, 2009)
The adaptation of personnel strategy can play a significant role in enhancing HR management and entrepreneurial process by supporting main dimensions of human resource management. The system strategy can be used for adaptation of technology adaptation while organizational strategy is helpful for creating positive culture for high performance. (Wang, 2005)
A good example for role of HR in re-engineering process can be of IBM. IBM was facing significant business losses in early 1990s'. IBM was pushed to review its products and services mix, infrastructure and operations. HR policies were also changed significantly to facilitate the change process. HR was restructured as a separate service business. Then consolidated service centers were created for HR, with its IT requirements organized around service processes with technology-leveraged delivery. Later, the NHRSC was launched in Raleigh, North Carolina, to deliver information to IBM managers, employees and pensioners in the USA, using network technologies. This released HR specialists to provide higher-level HR support and value.
HR service delivery through partnerships
Self-service applications and the consultancy and advisory work of the national HR service center are two channels of IBM's HR service-delivery model. A third is the network of 150 "HR partners", who work with line managers at IBM manufacturing, sales, service and field locations throughout the USA. The responsibilities of these HR partners include:
providing strategic and operational support on HR programs and policies to assigned line managers;
influencing decisions made by senior management;
leading HR program implementation; and
Developing new unit HR programs in support of line management.
Examples of HR partner inputs include training and updating executives in HR programs and policies, helping to implement pension-plan changes, guiding local managers in applying the performance-management system to compensation and helping to build positive employee relations with line managers. Bob Gonzales explains: "They are doers, facilitators, coordinators and leaders for the organizations to which they are attached, who leverage a unit's skills and people resources to best effect to resolve their internal clients' business issues and needs."
On-team HR solutions
In these services, however, a partner will not necessarily have to act alone. A further responsibility is for each to leverage extended HR-team expertise in the delivery of what Bob Gonzales terms "one-team HR solutions" - that is, a combination of HR partners, the service center, program designers and experts, all of whom collaborate to provide line managers and executives with a full complement of HR solutions.
To complete this picture of HR teaming, program designers and experts provide: compensation and benefits; staffing; occupational health and safety; management development; skills and learning; employee relations; workforce diversity; executive/technology resources; executive programs; and HR research.
"Objectives are guided by goals and values for the entire HR operations, the latter including personal characteristics such as respect, openness, honesty, adaptability and helping one another. Fundamentally, we require people to work with passion and balance, business commitment, a process and technology focus and, ultimately, a desire for customer satisfaction."
The outcomes of HR teaming are significant. Major policy and program changes delivered include introducing broad-banding, redesigning base pay, enhancing performance evaluation, processing mergers and acquisitions, hiring thousands of new employees and rethinking several aspects of benefits.
The changes were designed, tested, communicated and implemented into all IBM's US locations over two years, and customer satisfaction with the changes is around 90 percent.
Globalizing HR services and delivery
Bob Gonzales stresses that dialog with other HR people and a location executive continues, because continuous process improvement is a founding principle for the "new" HR. Globalizing HR services and delivery is an important issue. The NHRSC concept is being considered for other territories world-wide. The more that transactional services are provided electronically, the greater the opportunities for HR personnel to deliver higher-level business consultancy and advice to line management. Gonzales' target for the latter is to do so with a 1,000: 1 line/HR-partner ratio, which aims to optimize the effectiveness of the partner network in the USA. He realizes, too, that re-skilling HR people will continue to be an issue and that fewer HR staff may be required in future. The ambition of IBM is to achieve a global e-HR capability with one database for all employees world-wide. (Re-engineering HR delivery at IBM, 2002a)
After looking at HR practices such as training, recruitment and appraisal, organizational climate in terms of managerial consistency, employee commitment and customer orientation, and customer satisfaction dimensions of product loyalty and service satisfaction, they found evidence of an indirect relationship between HR practices and customer satisfaction, and significant statistical evidence for the effect of HR practices on organizational climate and for the climate/customer-service relationship. (Anon, 2002b)
High-technology engineering group Sandvik will concentrate its human-resource management efforts on strategic personnel matters like building competence and supporting change, following its ten-year agreement to outsource parts of its HR services to Accenture.
"Sandvik will control services centrally as far as this makes sense, and we will have global service management approaches with consistent service measures in place. Global account leaders will be in place with local account representatives liaising with the local businesses."Sandvik has an ongoing initiative to find a single payroll provider in each of the countries in which it operates, and Accenture HR is also helping the company to manage these searches. This type of agreements will help organizations with national and international businesses become high performers. (Anon, 2005)
In fact, understanding the linkages between HR and the business is a capability issue for both HR itself and a professional's key competencies, which for Fritz involves a constant communication of business information to colleagues. For example, about half the time in her monthly HR meetings is devoted to business issues.Developing this theme - in effect a paradigm shift - she summarizes the new HR role as involvement in the strategic and policy decision-making process within AT&T, so that the HR function can add value for business partners, while championing people issues as employee advocates and understanding the concept of organizational capability.
"The best HR professionals have an intuitive knowledge of what works and what doesn't for moving the business forward and for aligning its people through performance management," she said. "It involves asking questions as much as providing answers or solutions, while trying expertly to manage the new levels of complexity we are experiencing." (Anon, 2002c)
Vacancy management is an effective way to transform the organization incrementally over time during the re-engineering processes. Use the opportunity to change the organization each time an employee leaves through normal attrition or mobility. Analyze carefully each job as it becomes vacant to decide how the resources for that job can best be used towards the new organization. Can it be used to move towards the composition of staff and to provide the skills required in the new organization? If the job is still needed, as is, while undergoing re-engineering then consider a staffing decision which will minimize any future impact on WFA, for instance, hire a term employee.
Organizations that re-engineer successfully don't just set new directions and fill positions. They also identify their core competencies, i.e., the collective learning and skills they have to maintain on a continuing basis. The core competencies need to be protected and further developed during the migration to the new process.
Whenever possible, employees should be deployed and then returned to be the trainers and coaches of other employees to reinforce ease of learning and success. The forces identified by surveys as drivers of HR reengineering efforts are cost reduction, need for higher quality services and cultural change. The increasingly competitive environment has forced HR managers to reduce HR administration costs, deliver higher quality services and to become more effective in employee motivation. (Yeung, 1995)
As a conclusion, business process reengineering principles as stated in literature have full application on management of human resources. HRM supports the reengineering process. There are two exceptions to the literature findings. First, the process based structure change is obvious except matrix style of organization. The team based reward system appeared in minority of cases. Overall, a very clear pattern of human resource management practices can be observed in organizations that have undergone BPR. Reengineering requires a significant support from HRM. (Zucchi & Edwards, 1999)
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