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To what extent is the Human Resource function important to a business
To what extent is the Human Resource function important to a business
Strategy Formulation: Corporate Strategy
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Over time the importance of the value of human resources (HR) to its firm has increased. The management of human resources went from being operational to strategic, which are the two levels of HR, and from reactive to proactive. The HR field may organize its thinking about the past, present, and future around the framework that results from the combination of both proactive and reactive HR. Operational HR activities generally refer to the routing, day-to-day delivery of HR basics. The strategic level of HR activity is more difficult to explain and involves five criteria:
• Long term-whether the activity would add value in the distant future as opposed to the near future.
• Comprehensive-whether the activity involves the entire organization or individual departments or parts.
• Planned-whether the activity is thought out before it is done or if it is done on the spur of the moment.
• Integrated-whether it would bring other separated activities together.
• High value added-whether it focuses on business, financial and market success of not.
The two approaches to the management of HR that would be discussed are strategically reactive and strategically proactive. Reactive human resource management waits for problems to happen before something is done about it, e.g. waits for someone to quit before even thinking of a replacement or training for that replacement. Whereas proactive human resource management anticipates needs or problems and attempts prevent them. Both strategically proactive and strategically reactive HR are used to add value to an organization. In his book Strategic Human Resource Management, Mello explained the terms strategically reactive and strategically proactive as:
Strategically reactive HR focuses on implementing the business strategy; that is, given a clearly formulated business strategy (e.g., growth, new product, innovation, cycle reduction, new market entry), how can HR help support is successful implementation? Such activities include identifying and developing the technical knowledge, tactical skills, and business culture that are consistent with the demands of the business strategy. They may also include facilitating change management and organizing HR into service centers. (Mello, Jeffery A., 2006, p. 238)
Strategically proactive HR focuses on creating future strategic alternatives. Such activities include creating a culture of innovation and creativity; identifying merger and acquisition possibilities and creating internal capabilities that continually track and align with the marketplace for products, markets and capital with their respective lead indicators. (Mello, Jeffery A., 2006, p. 238)
The process of what is strategy and how it should be developed can be outlined by two major models.
In closing it is important to note that making HR a strategic partner, having the ability to attain a competitive advantage through HR, creating an effective performance management policy and having the ability to effectively measure HR’s impact will be a key driver to success
In conclusion, Human Resources department plays a significant role in the organization providing a wide range of valuable services to employees in various functional areas such as recruiting and training people, developing public relations, performance appraisals, maintaining workplace atmosphere, employee relations, benefits administration and much more. More than likely, HR essentially contributes to organization’s strategies and objectives through promotion of leadership activities, building friendly workplace environment and ensuring an efficient management of talented employees overall. As a strategic asset of a company, HR improves the human capital utilization and establishes the competitive workforce based on business and market demand.
Ramlall, S., Welch, T., Walter, J., & Tomlinson, D. (2009). Strategic HRM at the Mayo Clinic: A case study. Journal of Human Resources Education, 3(3), 13-35. Retrieved from http://business.troy.edu/jhre/Articles/PDF/3-3/31.pdf
Defining strategy is a difficult process because it is a complex concept that has many forms and is constantly changing. Andrews (1987) attempt is a comprehensive definition...
A thinking-performer, as defined by the CIPD, possesses personal drive and effectiveness, business acumen, professional and ethical competence, strategic capabilities, analytical and intuitive thinking and a commitment to continuous learning. A thinking-performer HR professional would perform a self-analysis using the profession map and use the insights gained to critically evaluate their role and the requirements of their organisation to inform the formulation of a development plan, with measurable objectives that can be implemented. The outcome of which would contribute to organisational success and their professional and personal development. This process is key, as an HR practitioner that is focused on continual professional and personal development can learn to provide strategic insights and therefore become a driving force for formulating organisational strategy for competitive
Businesses and organizations do what is called strategic management (Jurevicius 2013). Why? It is simple, every organization has a desire to strive and stand-out in this highly competitive industry. From a consumer’s perspective these concepts might not seem as detrimental as they do to the minds behind the systems that businesses revolves around. Nevertheless, there is a lot of tension in this fully blown out industry as companies are doing everything within their power to prosper. Several companies endure various forms of strategies that could be of possible benefit to them, however, most seem to focus their plans in on vertical and horizontal integrations. Purely because of the effectiveness that it delivers to a company’s HR system.
Whether an organization consists of five or 25,000 employees, human resources management is vital to the success of the organization. HR is important to all managers because it provides managers with the resources – the employees – necessary to produce the work for the managers and the organization. Beyond this role, HR is capable of becoming a strong strategic partner when it comes to “establishing the overall direction and objectives of key areas of human resource management in order to ensure that they not only are consistent with but also support the achievement of business goals.” (Massey, 1994, p. 27)
Changing Roles. Traditionally, HR has been an administrative position-processing paperwork, benefits, hiring and firing, and compensation. However, recently HRM has moved from a traditional to a strategic role, the emphasis is on catering to the needs of consumers and workers. Before, HR was seen as the enemy and employees believed that HR’s main purpose was to protect management. Now, the position requires HRM to be more people oriented and protect their human capitol, the staff. In addition, human resource management has to be business savvy and think of themselves as strategic partners in the 21st century.
Lengnick-Hall M.L.; Lengnick-Hall, C.A.; Andrade, L.S.; Drake, B. 2009. “Strategic human resource management: The evolution of the field.” Human Resource Management Review, 19, pp. 64-85.
...reat way to step back and make sure you have all of the information before employees dive into their next learning project, once information is gathered and tabulated the trainers can tabulate everything to have clear picture of what steps to take after the assessment is reviewed, changed, and implemented.
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Understanding the strategic potential of HRM is a relatively recent phenomenon. Strategic HRM attempts to bring HRM to the boardroom. It requires personnel policies and practices to be integrated so that they make a coherent whole, and also that this whole is integrated with the business or organisational strategy.
Human resource is the most valuable and unique asset of an organization. The successful management of an organization’s human resource is an exciting, dynamic and challenging task , especially at a time when the world has become a global village and economies are in a state of flux. The lack of talented resource and the growing expectation of the modern day employee has further increased the difficulty of the human resource function.
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