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Human Resources Strategic Role in an

Organization

Page 2: Neocase: HR Strategic Role

Human Resources Strategic Role in an Organization www.neocasesoftware.com

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Human Resources Strategic Role in an Organization

The role of HR today goes way beyond the tactical administrative-based functions of the

past. HR has evolved and its impact has grown significantly since the bygone days of being

known as the Personnel Department. If the most valuable asset a firm has is its people –

then the impact of HR on a company is crucial to its organizational and strategic success.

But what do we mean by ‘success’ in this context?

Dr. Christopher Lee, noted HR professor, researcher and author points out in his column

‘Strategic Human Resources is Key to Organizational Success,’ "If success is defined as

helping the organization make a profit, it muddies the issue. If success is defined as helping

the organization achieve its mission, vision, strategy, and goals (MSVG), HR’s role is

clearer. HR professionals must ensure that there is a direct connection between the policies,

procedures, programs and services they offer and the organization’s larger purposes.

Absent clear and deliberate linkages, the HR department is just a cost center that is

undervalued and unappreciated."

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How HR Operates within an Organization Affects Business Strategy

Human Resources is about finding, acquiring and retaining the best talent – and then

ensuring that people maximize their potential – we all know that, right? But of course there’s

so much more to it than that – myriad responsibilities from researching and selecting

benefits packages to compiling employee training programs – often take time away from a

more strategic planning and organizational role in the direction of the firm. So much so that

many firms are turning to outsourcing their more tactical HR functions. “In fact, many of the

transactional functions that traditionally formed the core of HR departments’ responsibilities

are now often outsourced so that organizations can focus on business strategy through

talent management and leadership development activities,” from HR’s Evolving Role in

Organizations a study by the Society of Human Resource Management (SHRM).

So how and why does an HR Professional go about becoming more strategic in their role

within their organization? According to China Gorman, Chief Executive Officer of Great

Place to Work, in a column titled: ‘Why Strategic HR Matters and How HR Can Become

More Strategic,’ "I think that most CEOs and C-suite leaders are beginning to understand

and believe that HR isn’t a separate thing but has to be part of the strategic leadership of

any size organization. That means that business leaders of the largest organizations around

the world really are starting to see people and talent issues not as a separate thing but as a

critical part of the strategic leadership of the enterprise.

I think that is why strategic HR really matters; it’s because it’s the foundation of any

organization’s success whether the organization is large, small, for-profit, non-profit, a start-

up, or a mature business. People and talent issues are the most important issues in

organizational leadership today. So it’s just business leadership. It’s not a separate thing.”

Page 4: Neocase: HR Strategic Role

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Ms. Gorman outlines three actions that an HR professional can take to position their role to

operate more strategically:

Have HR operate as a business strategy function, not a tactical compliance unit -

becoming integral to other departments and not a separate entity.

Provide talent-related business solutions, not roadblocks, to desired business

outcomes - be a partner in providing solutions so that others in the organization know

that if they go to HR with an issue, they are going to get help and answers as

opposed to hearing what can’t be done.

Make sure that HR speaks the language of business, not the language of HR. Inside

their departments; others may talk the language of their functions. But once they are

talking about the business, they speak the language of business.

Page 5: Neocase: HR Strategic Role

Human Resources Strategic Role in an Organization www.neocasesoftware.com

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HR – Becoming a Key Strategic Resource for Corporations

"HR appears to have some influence when it comes to how staffing relates to strategy and

how organizational structure relates to implementing strategy. But our results suggest that

HR plays a less prominent role when it comes to the development of strategy, the

consideration of strategic options and other strategy areas, including acquisitions and

mergers," from 'Corporate Strategy: How HR Can Become a Player' by Edward E. Lawler III,

professor of business, University of Southern California.

Professor Lawler suggests that HR could increase its influence in shaping strategy by

providing the unique perspective available via the lens of those who have knowledge of the

talent market and human behavior. For HR executives to expand their role strategically

requires the understanding of the firm’s business strategy, accessing the organizations’

human assets, and helping set and implement the plan to support and achieve the strategic

direction and goals consistent with ‘talent decision science.’

Professor Lawler concludes, "Overall, being a strategic contributor demands that high levels

of business knowledge and skill be present in HR. It also requires information systems that

have the right metrics and analytics, and organization designs and practices that link HR

managers to business units. Last but not to be overlooked is the need for the effective and

efficient delivery of HR services. Providing good services is the price of admission; if HR

cannot operate effectively as a mini business, it is hard to convince others that its input on

business issues is worth anything."

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HRs Impact in Business Strategy

"HR Strategy Is Business Strategy," according to Ruth Mayhew of Demand Media in her

column, 'Relationship between HR Strategies & Business.' “Human resources strategy today

involves executive leadership teams conferring with human resources experts to develop

complementary goals for human resources and the overall business.” The two should not be

exclusive from one another, but rather be so tightly integrated as to be one in the same.

Developing a talented pool of employees is instrumental to the continued success and

longevity of a company. Ensuring that a company’s leaders are convinced and on-board with

the value of their employees as assets to the firm; as well as investing the time and

resources to cultivate and maintain their talent – will help ensure a successful future and

return on investment.

Successful business leaders know that HR strategy and business strategy go hand-in-hand.

Plans and goals must be developed in tandem with both of these challenges in mind to

develop a productive workforce and successful company. The trend toward blending HR and

business strategies into one integrated and cohesive directive is gaining momentum among

firms – as HR information systems are integral to the establishment and maintenance of

meeting overall corporate goals.