THE PARADIGM SHIFT
“From Personnel Administration to Strategic Business Partner”
Human Resource Management: Is the utilization of human resources to achieve organizational objectives
Strategic Human Resource Management: The linking of HRM with company’s strategic goals and objectives in order to improve business performance
Top Management : Who cares?!
Line Managers: Not my job!
HR Professionals: Just do it!
How Does HR Create Value ?
“Should we do away from HR?”
Of course we should away with HR if it fails to add value”
“Of course we should keep HR if it creates value or delivers result”
“How can HR create value and deliver results?”
Current HR thinking can be seen in any HR text book. Title and content may differ slightly, but nearly all the chapter headings focus on what HR people do: staffing, development, compensation, benefits, communication, organization design, and high performing team, industrial relation, HRIS, and so on.
HR professionals should focus less on do and more on what they deliver. Delivery focus on the outcomes, guarantees, and results of HR work. There are four generic outcomes: strategy execution, administrative efficiency, employee contribution, and capacity for change.
- New market, new product, new mindsets, new competencies, new ways of thinking about business.
- Thinking globally but acting locally.
- Uncertain politics, religion, revolution, family, a single dominant political party.
o Value Chain
- Value chain for business competitiveness and HR services.
- HR practices within the firm should consequently be applied to suppliers and customers outside the firm.
- Profitability through cost and growth.
- Doing more with less.
- Downsizing, de-layering, consolidation, productivity gains, reengineering, and focus on quality.
ü How can executives create a commitment to rapid growth and the culture that supports it while simultaneously controlling costs?
ü How can executives be sure that they hire people who can grow the business while reducing overall labor cost?
ü How can executives create an organizational structure that provides both the autonomy needed for growth and the discipline needed to control cost?
o Capability Focus
§ In successful organization, whatever the industry or area, individual competencies are being turned into organizational capabilities.
ü What capabilities currently exist within the firm?
ü What capabilities will be required for the future success of the firm?
ü How can we align capabilities with business strategies?
ü How can we design HR practice to create the needed capabilities?
ü How can we measure the accomplishment of the needed capabilities?
- Change, change and change some more
- Transformation, reengineering, culture change, reinvention, flexibility, rapid learning.
- To change faster and more comfortably.
- “Walk the talk”.
ü How do we unlearn what we have learned?
ü How do we honor the past and adapt for the future?
ü How do we determine which HR practices to change for transformation and which to leave the same for continuity?
ü How do we engage the hearts and minds of everyone in the organization to change?
ü How do we change and learn more rapidly?
Technology innovations occur almost faster than we can keep up.
o Intellectual Capital
- Attracting, retaining, and measuring competence and intellectual capital
- Few people qualify. Successful firms will be those most adept at attracting, developing, and retaining individuals with the skills, perspective, and experience sufficient to drive a global business.
o Turnaround Is Not Transformation
- Many companies have initiated turnaround efforts, through downsizing, consolidation, and restructurings.
- Transformation changes the fundamental image of the business, as seen by customers and employees. Transformation focuses on creating mind-share more than market share.
o Business Initiatives
- Process improvement, cost competence, learning, market discipline, globalization, customer intimacy, operational excellence, learning culture, global management, organizational capabilities, cultural change, and intellectual capital and so on.
- Business-process reengineering, business-unit restructuring, continuous improvement, consolidation, corporate-centers study, cost analysis, cycle time, decentralization, downsizing, Economic Value-added (EVA), empowerment, excellence, goal-setting, quality, restructuring, Six Sigma, variable pay, out sourcing and so on.
Implication of Business Challenges
o For The Leaders of The Future
- Leaders at any level of the company must cherish and commit to winning.
- The successful leaders of the future must be able to identify the capabilities critical to business success, and be able to create organizational capabilities.
- Leader for the future must become human resource champions.
o For HR as a Profession
- Focused on championing competitiveness.
- As champions of competitiveness, HR professionals must focus on the deliverables of their work than on doing their work better.
- They must articulate their role in terms of value created.
- They must create mechanisms to deliver HR so the business results quickly follow.
- It is time to talk less and do more; time to add value, not write value statements; time to build competitive, not comfortable organizations; time to be proactive, not reactive; It is time to perform, not preach.
HR Strategic Perspective (the Changing Role)
o Strategic Partner
- Be partner of Management in strategy development and execution
- Influence business strategy – from organizational structure to selection, training and deployment
o Change Agents
- Responsible for leading change in organization
- Develop and support culture that enables organization to respond to changes in business strategy
o Employee Champion
- Be facilitator of effective relationships between employee and management
- Ensure that employees are engaged in adding value to the business in exchange for pay and benefits, fair treatment, and opportunities for growth and development
o Administrative Expert
- Focus more on rule-making and policy enforcement
- Focus more on managing data and transactions efficiently and accurately
- Baron, J. N. dan Kreps, D. M. 1999. Strategic Human Resources: Frameworks for General Managers. Ney York: John Wileys & Sons.
- Lossey, M. et al. 2005. The Future of Human Resources Management.
New Jersey: John Wiley & Sons, Inc.
- Mello, J. A. 2002. Strategic Human Resource Management.
- Phillips, J. J. 1996. Accountability in Human Resources Management.
Houston: Gulf Publishing Company.
- Ulrich, D. 1997. Human Resource Champion: Next Agenda for Adding Value and Delivering Results. Boston:Harvard Business School Press.
- Ulrich, D. dan Brockbank, W. 2005. The HR Value Proposition.Boston: Harvard Business School Press.