How the HR Function Can Add Value as Strategic Business Partner

Samuel Tengey, PhD

Introduction

The human resource (HR) functions (departments) in many organisations have been brought under intense pressure in recent times largely due to developments in the external business environment. Questions have been raised about the relevance of the HR function. Although HR functionaries tend to defend their importance, it would appear, in many organisations, there is little clarity about precisely what role the HR function should be playing, and how it should go about doing so. This paper summarises these and related background issues, and answers the WHAT and HOW questions raised above in order to position the HR function in its appropriate place and improve its capacity to add value and increase recognition accorded it in organisations.

HR theory holds that when HR experts design and implement HR systems, policies and practices in alignment with organisation’s strategic direction and business strategy, the organisation can more quickly reach its goals through its people. Realising their objectives coincides with many organisational objectives, employees commit fully to the organisation, and the organisation no longer requires relying solely on control to get its employees to do the right things. Ideally, HR is a strategic function, serving as consultant to senior management. Where the HR function knows, becomes proactive about, and plays its role effectively, an efficient organisation, stronger than any individual, evolves. In the absence of this, top management and some individuals can, and

tend to wield unbridled power, and the entire organisation comes to be subsumed in the mercies of the former. But what is this role and how should it be played? I explore these questions further.

Background and Context of HR Experts’ Work

External EnvironmentThe role of the HR function continuous to be more and more challenging and complex due to several factors, including:• Challenges of the current business environment:

competition, cost-constraints, innovation, instability, sophistication of customer demands;

• Technological advances: new discoveries, methods, IT revolution and its application to business processes – producing losers and winners;

• Globalisation and its implications for the job and labour markets, business processes, customer demands, employment practices, diversity, etc.

• Changes in the structure of organisations, including the development of virtual and networked organisations, and the resultant need for a change in approach to managing organisations’ HRs.

Internal EnvironmentIn many organisations, HR has not performed excellently, leading to several criticisms being raised against the HR function, such as:– Little understanding of the business environment, corporate

and business strategy, and cost-efficiency issues– Most HR proposals lack a clear link to business realities,

hence are seen as unrealistic, uninformed, wishful thinking– Most HR officers can only perform mundane personnel

administrative duties, even so, often in very inefficient ways

– HR functionaries have been and continue to be used as a tool for management control of employees rather than as voice for employees; hence

– HR functionaries, including some HR directors are mere rubber stamp and toothless dogs

Public Sector OrganisationsIn public sector work environment, the complexity and challenge of HR role is further exacerbated by certain century-old, lingering realities:• The non-profit orientation, which constrains the judicious

application of economically rational and cost-efficiency approaches to workplace and workforce management

• The use of grades and seniority - not necessarily skills, expertise and experience, contribution and performance - as the fundamental consideration for promotions and pay determination

• Bad, negative work habits, which eventually build into pervasive, deep-seated organisational norms /culture, and impede efficiency

• Non-performance culture, lack of results-orientation, hence performance-related and contingent pay systems have at worst not been known, and at best not been successful

Perceptions about the HR FunctionVarious segments of management and employees certainly have their perceptions about the HR function – and it is important to ascertain these. The following summarise statements from my students on MBA programmes as well as from participants on management training sessions I facilitated.

– Top and other senior management: HR as those with no ideas or little understanding of the realities of business?

– Middle Management: HR as department which redundant staff are asked to go?

– First-line Managers: HR as lazy people with little to do?– Employees: as tools used by management to control them?– Unions: as failing to champion their cause?

HR Function as a Strategic Business PartnerOne way of adding value is for the HR function to view itself and operate as a Strategic Business Partner. Acting as a strategic partner, the HR function devises strategies and plans to develop people, processes and systems that support the organisation’s strategic plan and its implementation. Under this role, HR will have responsibility for:– Developing the people components of strategy

implementation– Training and Development interventions – Coordination between HR, line managers and Heads of

Departments in determining training needs, training content and training providers.

– Evaluation of training and systems to ensure that they both direct and support strategy implementation

– Controlling, monitoring, and evaluation of progress on aligning people development with the organisation’s strategy

– Helping various departments to device their strategy for implementing their portion of the strategic plan, if there is one.

In conclusion, whether or not HR people would get taken seriously when they talk or engage with CEOs and their Boards will depend on not only the fact that they are professionally qualified practitioners but that their activities are adding real, measurable value to the business of their employers. After all, the employer’s ultimate objective is not to develop policies, train staff, reward staff, provide welfare facilities and the like; it is to make profit or deliver value (in the case of non-profits). These HR activities must

demonstrate that they are a means to an end; otherwise, HR staffs are simply a drain on the employer’s payroll. In other words, the continued inclusion of the HR function must be continually justified. Well, contact me via mcsam3000@gmail.com or better still, visit www.strategicresourcers.com for more.