Strategic Management

This chapter is from the book

PHR Exam Prep: Professional in Human Resources

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This chapter is from the book

This chapter is from the book 

PHR Exam Prep: Professional in Human Resources

Learn More Buy

The Evolving Role of HR

As explored in Chapter 1, HR has been on a long and sometimes challenging journey through which it has redefined itself as a profession and redefined itself with respect to its role in the organization.

A Brief Historical Scan of HR

Much has changed about our profession during the last 50+ years, during which an ongoing discussion around professionalism and certification has continued to evolve. Perhaps the most outwardly recognizable sign of the struggle in which we have been engaging is how we refer to our profession

Originally, it was known as "Industrial Relations" (the "I" and the "R" in Cornell’s "ILR" come from "industrial relations"; the "L" comes from "labor"). Sometime back in the 1950s, it started to be called "Personnel." Today, for the most part, we know it as "Human Resources." Tomorrow, who knows what it will be called; in some organizations, a "Chief People Officer" or a "VP of People" already leads our function.

One thing is certain—our name hasn’t changed just to "keep up with the times." Rather, these changes reflect the transformation of our role from a "job" or a "support function" to a bona fide profession—from administrative support roles to strategic organizational partners.

Of course, just as the name of our department has not changed in all organizations, so too our role has not evolved at an even pace in all organizations. Let’s take a closer look at what this means, and at what its true impact is on how we carry out our roles.

HR As It Was, and HR As It Is (or Can Be)

As mentioned previously, the way in which HR professionals carry out their functions has changed and evolved over the years. Table 3.1 highlights these:

Table 3.1 HR: Then and Now

The distinctions between "then" and "now," however, aren’t always quite as absolute as this chart may indicate.

• Many organizations fall somewhere along the spectrum between "then" and "now" in terms of how their HR departments function in an overall sense.
• Other organizations might more closely resemble "then" with respect to some HR functions, and more closely resemble "now" with respect to others.
• So, too, each of us might function in some ways closer to the "then" end of the spectrum, and function in other ways closer to the "now" end of the spectrum.

This can be true on an organizational, functional, or even individual level.

Dimensions of HR—Three Legs of a Stool

Just as our role has evolved, so too the ways in which we need to carry out that role have evolved.

Leg #1: Administrative

These are the transactions—the things that need to be done. Over the years, some of the transactions we used to perform have gone away. More often, however, those functions simply take a dramatically different form today than they did yesterday, or are being handled in different (and often more streamlined and/or more technologically sophisticated) ways (such as self sever kiosks, Intranets, HRIS applications, outsourcing, and so on).

Leg #2: Strategic

The difference between the administrative functions in HR and the strategic functions in HR is like the difference between being a person who designs automobiles and being a passenger. Both are important and, ultimately, each needs the other. Were there no automobile designers, the current generation of cars would become the future generation of cars, leaving certain safety and efficiency needs unmet (not to mention ever-changing stylistic trends). Were there no passengers, there would be little need for cars in the first place, and certainly no need for anyone to invest time and energy in looking toward the future.

Strategic HR takes a long-term, future-focused approach to the ways in which it will work with the organization to attain its organizational mission. It looks at business and organizational issues, rather than "HR issues." It fosters and cultivates change, rather than maintenance of the status quo. It is dynamic, effective, consultative and ever-evolving—just like our profession itself.

Leg #3: Operational / Tactical

Somewhere in between the administrative functions that must be performed and the inventive and creative life force that is part of strategic management lies the operational—or tactical—dimension of the HR function.

One definition of the word "tactical" offers a militaristic reference, which might help to explain its particular relevance to the HR profession. The American Heritage Dictionary of the English Language defines "tactical" as follows:

• (a) Of, relating to, used in, or involving military or naval operations that are smaller, closer to base, and of less long-term significance than strategic operations.
• (b) Carried out in support of military or naval operations: tactical bombing.

This definition aligns well with the application of this term in the HR profession. The operational, tactical, or day-to-day performance and execution of the HR role can be accomplished in many different ways—some of which do more to define us toward the administrative end of the spectrum, while others demonstrate more vividly how, and whether, the overarching strategic objectives of HR (and, therefore, of the organization) are being brought to life. In the metaphor used previously, the tactical area might be depicted by the role of the driver. We also wouldn’t get anywhere without drivers—even if we had the most evolved designs and finest appointments imaginable. Also, the performance and safety features that were woven into the design will come to life in the hands and feet of the driver—who plays a more active and involved role than any of his or her passengers.

Understanding Your Clients’ Management Functions

To be an effective strategic business partner, it’s also critical to have an understanding of some of the foundational underpinnings of management.

Principles of Management

Perhaps an unlikely guru, Henri Fayol was hired at the age of 19 to work as an engineer for a French mining company. He worked there for many years, ultimately serving as its managing director from 1888 to 1918. Based on the experience he gained at the mining company, Fayol—known as the Father of Modern Management—identified five functions of a manager, which he referred to as

• Prevoyance
• To organize
• To command
• To coordinate
• To control

In modern parlance, these five functions are referred to as planning, organizing, coordinating, directing, and controlling. Let’s take a closer look at each of these so as to better understand organizational structure and the context within our clients carry out their roles.

Planning

Planning lays the groundwork for how managers will work toward accomplishing the organization’s goals. Through planning, managers decide what needs to get done, when it needs to get done, who will do it, how it will get done, and where it will be done. In the absence of planning, the organization—and the people in it—will lack direction, and perhaps even just "coast along." In other words, to quote the immortal words of the great philosopher (and baseball "Hall of Famer") Yogi Berra, "If you don’t know where you are going, you will end up somewhere else."

Organizing

Organizing speaks to the ways in which the manager obtains and arranges the resources that he or she needs to implement the plans (the output of the "planning" function). Those resources could include people, facilities, materials, and so on. During the organizing function, the manager must also decide reporting relationships within the organization. In short, the linkages between people, places, and things must be established.

Coordinating

Through the coordinating function, the manager brings together all of the resources that he or she has organized to accomplish the stated plan. The manager must also ensure that "the pieces fit."

Directing

During the directing phase, the "rubber hits the road." The actual work is performed—goods are produced or services are provided. In addition to ensuring that things go smoothly from a technical perspective, in the directing phase, the manager must also focus attention on leading and motivating the human resources who are actually performing the work.

Controlling

Controlling assumes more of an oversight role, and in some senses an evaluative role. In this phase, the manager ascertains the degree to which the planning he or she engaged in actually produced the desired results. If the manager determines that there is a gap between the targeted goals and the actual results, the manager must then focus on ways to bridge that gap.

Fayol subsequently broke these five functions further down into fourteen principles of management:

1. Division of work
2. Authority and responsibility
3. Discipline
4. Unity of command
5. Unity of direction
6. Subordination of individual interests to general interests
7. Remuneration of personnel
8. Centralization
9. Scalar chain
10. Order
11. Equity
12. Stability of tenure of personnel
13. Initiative
14. Esprit de corps (union is strength)

Project Management—A Valuable Tool

More and more, work is project based. For many of us, and for many of our clients, project management is a critical skill needed to perform our own work and to support the work that our clients are performing, as well.

A common difficulty of project-based work is the inherent challenge of balancing day-to-day workload with efforts to complete high priority "special" projects. Projects are frequently delegated to individuals with nothing more than a deadline—and with no additional resources. Understandably, the person to whom the project has been delegated will seek assistance in undertaking the project from people and from equipment that is already being utilized to carry out the day-to-day responsibilities of the operation. In addition to slowing down productivity relative to the regular workload, it is also quite possible that the project may not be accomplished within its stated time frame. Enter "project management."

Project Management: Definition and Processes

"Project management" is interesting and somewhat unique in that it is both a means to an end as well as an end (and a profession) unto itself (sounds a bit like human resources, doesn’t it?).

The Project Management Institute (PMI) defines project management as "the application of knowledge, skills, tools, and techniques to a broad range of activities in order to meet the requirements of a particular project." Project managers seek to accomplish their objectives by gaining control over five factors: time, cost, quality, scope, and risk. To do this, those who undertake a project must clarify the needs and scope of the project, work out a plan for meeting those needs, and manage the project according to that plan. These steps, however, are sometimes easier to talk about than they are to execute.

PMI goes on to identify five distinct (yet overlapping) processes within project management:

• Initiation Processes: Initiation processes are those processes that secure approval and/or authorization to undertake the project.
• Planning Processes: Through planning processes, objectives are established, as are the best alternatives that will support the attainment of those objectives.
• Executing Processes: Everything comes together through the executing processes—the scope, the objectives, and the deliverables all fall into place. In order to attain this level of successful execution, the right resources need to be in the right place at the tight time.
• Controlling Processes: Controlling processes include managing the scope of the project and making sure the project stays in line with the original objectives. A significant degree of follow-up is required to carry out controlling processes.
• Closing Processes: Closing processes involve "signoff" processes and mark the end of the project. As part of closing processes, stakeholders must determine whether and to what degree the project met its obligations.

These processes, while separate, are interrelated. The output from one set of processes contributes significantly to the inputs used for other processes. While the processes are not wholly finite and discrete, they are more or less sequential, in the order presented here. Perhaps the best way to describe these processes is that they are "interdependent," while still separate.

HR’s Role in Change Management

It has been said that the only constant is change. That is perhaps particularly—and at times poignantly—true in the workplace.

Organizationally, change is all around us and can take many forms: downsizings, redeployments, introductions of new processes, reassignment among staff, mergers and acquisitions...the list goes on and on. Without a doubt, HR plays a major role with respect to managing that change productively (in those organizations where HR has truly earned a "seat at the table," HR will ideally have an important role with respect to shaping change, as well).

HR’s role, in this regard, is inextricably linked to the attainment of organizational objectives and the furtherance of the organization’s mission. During times of change, HR is called upon to lead people management processes. HR professionals—individually and collectively within the organization—must align their people management efforts with the strategic goals of the organization. HR must also be prepared to measure the degree of success that has been attained (see "Measuring HR Effectiveness").

To meet the ever-accelerating pace of change, HR professionals must understand change as well as the environments that cause change. This understanding will be particularly important when HR is called upon to adapt the organization’s people management practices to new workplace-based realities while maintaining and improving upon current levels of organizational performance. As such, successfully designing, aligning, and implementing adaptive people management practices is an essential component of being a strategic HR partner.

Change theory and process is addressed more thoroughly in Chapter 5, "HR Development."

Outsourcing

Outsourcing—otherwise known as the use of "third-party contractors"—is a growing trend that has directly impacted, and that will continue to directly impact, HR’s role. That impact has two distinct dimensions: First, HR is an area that has, in many organizations, experienced partial or significant outsourcing of its components. Second, HR facilitates—and sometimes oversees or even orchestrates—outsourcing that takes place within other parts of the organization.

Outsourcing Defined

Let’s take a step back, however, and take a closer look at the concept of outsourcing. Outsourcing can be described as the reassignment of responsibilities, functions, or jobs that had been performed within the organization to now be carried out by resources that are outside the organization.

How to Outsource: An Outline

Outsourcing is a complex process that can have a significant impact on the organization, the people who work within the organization, the attainment of organizational goals, and even the organization’s reputation in the marketplace. The decision to outsource should not be made lightly, and the "three step process" outlined here is in no way intended to "dummy down" the required course of action. Like so many other components of this book, this three step process is intended to provide you with a starting point—an overarching framework that will help you identify those areas in which you would benefit from additional information.

• Question #1: Is outsourcing appropriate?

  In addressing this question, a number of factors need to be taken into consideration, a few of which are

  • Internal costs versus the costs associated with outsourcing

  • Internal abilities and talents versus abilities and talents available through outsourcing

  • The importance and complexity of the function that is being considered for outsourcing

  • The degree of variability in transaction volume of the function that is being considered for outsourcing

  Question #2: If outsourcing is appropriate, how will we select a vendor?

  There are many factors to take into consideration, and questions to ask, when choosing a vendor. Here are a few that are particularly important to consider:

  • Technological strength: Do the vendor's technological resources and capabilities meet or exceed your project requirements? If so, by how much? Are there appropriate backup systems and redundancies in place?

  • Scale: How much growth do you anticipate? Is the vendor prepared to meet your growth expectations and requirements?

  • Experience: Does the vendor have related and recent experience? How closely does that experience resemble the current project in terms of scope, complexity, and so forth?

  • Costs: What are the up-front costs that you would incur with this vendor? Up-front costs could include training, program design, IT setup, and many others. Additionally, what hidden costs might you incur, perhaps as a function of attrition, telecommunications charges, and the like?

  • Quality: What is the vendor's commitment to quality? How does it manifest itself, and how can it be measured? On average, how much time does it take for the vendor to resolve concerns that originate from customers and/or clients? What are current client/customer satisfaction rates with those resolutions?

  • Communications: What is the nature and frequency of the communication that you can expect to engage in with the vendor? If appropriate, will someone (an individual with appropriate authority) be available 24/7 throughout the life of the project?

  • Success Record: What is the vendor's track record with recent clients? To find out, talk with recent clients of your choosing. Ask them what went well in their experiences with the vendor and what didn't. Ask about lessons that the vendor learned and how well (and quickly) the vendor was able to incorporate and apply those lessons. Also ask about communication—as the relationship went on, did the nature and frequency of communication deviate from what the vendor had initially committed to at the beginning of the relationship (or project)?

  Question #3: Once we select a vendor, how will we manage the vendor, and our relationship with the vendor?

  • If possible, start out with a pilot program and see how it unfolds before devoting all necessary resources to the endeavor.

  • Set clear and reasonable expectations (SMART performance management objectives— specific, measurable, action-oriented, realistic, and timebound—work well with vendors, as well. See Chapter 5).

  • Observe, monitor, measure, and evaluate actual performance.

  • Give the vendor constructive and positive feedback (BASIC—behavioral, as soon as possible, specific, interactive and consistent—see Chapter 5).

  • As appropriate and possible, coach the vendor.

  • As appropriate and possible, incorporate upside potential and downside risk into your negotiated agreements with vendors.

HR Technology Concerns/Opportunities

Technology touches indirectly or perhaps quite directly all dimensions of the human resource function and profession. The speed with which this transformational impact has taken place has increased exponentially, and will likely continue to do so into the foreseeable future.

Many organizations both small and large now use a human resource information system (HRIS) to better manage HR-related data. An HRIS is an integrated computer-based system that collects, processes, analysis, stores, maintains, and retrieves information relating to all dimensions of the HR function.

HRISs have redefined, in many ways, how HR professionals perform their jobs. When utilized to its fullest extent, an HRIS can even help HR professionals move from the "then" end of the spectrum to the "now" end of the spectrum (see this chapter’s section titled "HR As It Was, and HR As It Is (or Can Be"). This is possible because an HRIS can help to free us from some of HR’s required, albeit mundane, administrative responsibilities, and thus can afford us time that we may be able to use to address more strategic issues.

It is not enough, however, for an HRIS to make our lives easier. Instead, we must ensure that the HRIS we choose will truly address business needs, not just HR-specific concerns. By this, for example, we mean that an HRIS must be a tool that can be used to support initiatives that contribute to attainment of overall organizational objectives. For instance, an HRIS should provide us with information that will ultimately facilitate and support

• Increasing overall employee productivity
• Identifying and rewarding top performers
• Investing in ongoing employee development
• Placing the right people in the right jobs at the right times
• Ensuring readiness to identify and appropriately respond to changing business strategies

Changes on the Horizon—and How They May Impact HR

In many ways, HR trends are best identified by looking for business/organizational, industry, and societal trends. As a microcosm of the outside world, organizations are directly impacted by what happens in the external environment. It logically follows that since HR exists to support the attainment of organizational objectives, it is impossible—or at least extremely ill-advised—for us to isolate ourselves.

Here are just a few of the trends that all HR professionals should monitor and revisit on a regular basis:

• Globalization
• Technology
• Safety and security
• Terrorism
• Aging workforce
• Multi-generational workplaces
• Work/life balance
• Changing technology
• Contingent workforce