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This report aims to provide a perspective into the topic of 'when does HR devolution lead to HR evolution?'
In order for HR evolution to happen, this report aims to define what strategic Human Resource Management (HRM) is; and provide an understanding on the need and the importance of it. It also describes the value that HR creates for the organization and the various roles of HR function that will add value to the organization.
Secondly, it provides an insight of how HR aligns its HR strategy to the business strategy; and how it delivers its strategic capabilities.
As employees are the main asset of an organization, it also provides a perspective of HR role being employee advocate.
In order to perform these strategic roles, HR must transform such that it devolves HR responsibilities from HR managers to line managers. As a result of this devolution, it also describes the line managers' role and its accountability to people management of their staff.
Lastly, it provides a conclusion that an organization to be successful, HR strategies must align to the business objectives and strategies, i.e. strategic HRM. For strategic HRM to be successful, it must devolve to the line management
As Ulrich and Brockbank (2005) stated, the emerging vision of an HR department is to create value for key stakeholders of an organization. To achieve this objective, HR must transform such that they are better assessed by the outcomes created that support the company's objectives (Ulrich, Younger & Brockbank 2008), hence the need of strategic HRM.
Strategic HRM is defined as the linking of the HR function with strategic goals and objectives of the organization in order to improve business performance and develop organizational cultures (Truss and Gratton 1994; Tyson 1997).
Hence, to achieve the strategic HRM goal, the role of people management function has had to change, moving from a traditional centralized and controlling personnel management to strategic HRM (Teo & Rodwell 2007). It is different from traditional personnel management in that HRM has at its core, the increased responsibilities for employee management and development performed by non-personnel staff i.e. managers at all levels, whilst leaving the traditional personnel professional to take on a more strategic HR role aligned to organizational corporate aims and objectives.
The forth iteration (2002) of the Human Resource Competency Study conducted by University of Michigan Business School found that 43 percent of the HR's impact on business performance came from its strategic contribution. Another study conducted by Human Resource Institute found that business partner and strategic thinker had become the most important roles of HR professionals. Therefore, it is critical that HRM is successful in the organization as it "can lead to competitive advantage" (Montpellier 2005).
Professor Ulrich has developed a framework for describing the added value of HR function (1997). The four key roles that HR professionals have to perform are: management of strategic human resources ('strategic partner'), management of transformation and change ('change agent'), management of employees ('employee advocate') and management of administration ('administrative expert'). Ulrich also emphasised that HR professionals do not have to fulfil each of the four roles themselves, but in partnership and to devolve to the line managers within the organization.
HR to create value and deliver strategic capabilities
For HR function that can deliver value to the business, the role of HR needs to become strategic business partner (Ulrich 1997). By being involved in the strategic decision making processes, HR can make an impact to the organization, hence creating value. As a strategic partner, HR needs to ensure its HR strategy aligns with the business strategy. The approach described by Buyens and De Vos (2007) focused on aligning with the business strategy:
The use of planning;
A coherent approach to the design and management of personnel systems based on an employment policy and staffing strategy
Matching HRM activities and policies to explicit business strategy
Valuing the employee as a strategic resource for achieving competitive advantage
With its HR strategy in place, HR can now focus on delivering its strategic capabilities that become HR deliverables in employee value proposition, investor intangibles and firm brand (Ulrich, Younger and Brockbank 2008).
It proposed that the HR organization must be structured to reflect the structure of the business organization, aligning with the strategies of the business they support.
Secondly, it suggested the creation of service centers through technology-enabled employee self-service. This allows employees to manage much of their own HR basic transactional activities, such as leave application, benefits claims processing, training and learning, etc.
Thirdly, HR professional need to perform corporate HR roles to create a consistent culture face and identity, shape the programs that implements the CEO's agenda, e.g. globalization, product innovation, social responsibility etc.
For HR professional to concentrate on value adding strategic and change management roles, the transfer of operational HR activities to line managers is central to HRM, hence the devolution of HR to line managers (Cunningham & Hyman, 1999)
As Ulrich (2007) highlighted, one of HR functions includes the role of being employee advocates, securing employee welfare "as a guardian of ethics" (Woodall and Winstanely, 2001), and managing diversity, family-friendly policies, counselling on alcohol and early retirement (Kelly and Gennard, 2001).
Being employee advocate is to "caring for, listening to, and responding to employee" and it requires HR professionals to "see the world through employee's eyes - to listen to them, understand their concerns, and empathize with them" (Ulrich 2005).
Ulrich (1997) also stated that being the employees' voice in management discussions, by being fair and principled, by assuring employees that their concerns are being heard and by helping employees to find new resources that enable them to perform their jobs successfully (e.g. learn how to set priorities, eliminate non value added work, clarify goals, simply complex processes, share in economic gains and so on). This will enable employees to contribute fully because they will have the competence to do a good job and the commitment to do it right.
The HR advocacy role also includes developing fair policies for health and safety, terms and conditions of work, and discipline, as well as implementing these policies firm-wide. In addition, when performance of an employee is unacceptable, HR in partnership with line managers, needs to act swiftly and decisively to correct the mistake or, if appropriate, to terminate the employee. Good performer employees lose confidence in leaders who fail to act when people perform poorly (Ulrich 2005).
Line Managers' roles and accountability
One of the main characteristics of HRM is the devolution of HR responsibilities to line managers (Guest 1987; Schuler 1992) and one of the most critical constituencies for HR is the organization's line managers (Heraly & Morley 1995; Tsui 1987; Ulrich & Brockbank 2005). Because of this criticality, HR managers need to cultivate this stakeholder relationship in order to enhance the power and influence of the HR units. Line managers are central to the successful delivery of HRM at the workplace. If HRM policies and practice to be effective, HR managers must gain "line management trust and commitment to and buy-in for their proposals and recommendations" (Marchington and Wilkinson 2007).
As HR develop the policies and guidelines for HR issues relating to recruitment, reward and recognition, performance appraisals and reviews etc, HR professional must also provide the 'advisory role to both line managers and staff' (Conway and Monks 2008).
Good communication between HR professional and line managers is critical, particularly with regards to the ongoing day-to-day HR matters. Having the opportunity to talk with a named person from the HR function is seen as essential (Legge 1995).
The skills required by line managers having HR responsibility should be such that they can execute their role competently, enabling the organization to align it strategic HR objectives successfully to its corporate business strategy. De Jong et al (1999) states that continual training on line managers is central to effective devolved HR.
To implement HRM successfully, line managers must assume HR responsibilities. Examples of line managers' responsibilities are to perform "soft" elements of HR, such as performance appraisals, mentoring and coaching as well as reward and performance related pay. These are observed by employees as being important towards job satisfaction (Guest 2002)
In addition, with HR advice and guidance, line managers can be expected to take on extra responsibilities to carry out recruitment process, such as conduct job interviews (Whittaker and Marchington 2003). Line managers are also responsible for the development needs of their staff to support the business aims and objectives.
The devolution of HR is not only successful when HR provide support and training to the line manager (Whittaker and Marchington 2003), but also the people management effectiveness to the extent to which line managers were held accountable for their HR responsibilities.
Hence, this reinforces the fact that 'employees really are the primary asset of any organization' and they can create the 'competitive advantage' to the organization (Ulrich 2005).
According to Marchington and Wilkinson (2007), not only is HRM now often acknowledged as the major factor differentiating between successful and non-successful organizations, more important than technology or finance in achieving competitive advantage, but that for an organization to be successful, it must align its HRM strategies to its organizational aims and objectives, i.e. strategic HRM.
Also, as Dave Ulrich (1997) stated in many articles and journal, he emphasized the need of HR becoming the key strategic differentiator for an organization to be successful. He highlighted the various strategic roles that HR needs to play, namely: strategic partner, change agent, employee advocate and administrative expert.
For strategic HRM to be successful; it must devolve to the line management. The devolution of HR responsibilities from HR managers to line managers is both a growing and global trend (Larsen and Brewser 2003). With the adoption of devolution strategy, HR leaders can involve more in the strategic planning and activities (Cunningham & Hyman 1999)
As Whittaker and Marchington (2003) stated, the line managers given greater HR responsibilities regarded it as entirely appropriate and that it links them to align more with the business goals and objectives. In addition, they also emphasized the need for HR and the line management working in partnership and that HR function was crucial as a means of support and advisors for line managers to carry out their HR responsibilities competently.