Transforming HRM

Importance of Transforming HRM from an Administrative and Operational Function to a Strategic Partner

Abstract

The significance of transforming human resource management (HRM) from an administrative and operational function to a strategic partner is discussed in this paper. The paper begins by offering a brief history of the HR function, after which the concept of HR as a strategic partner is described, with the core elements of strategic HRM outlined and described. Using the case study of CISCO, a major player in the internet industry and the top network solutions provider globally, the paper then outlines why it is important for organizations to shift from transactional HRM to strategic HRM. Key findings made from the Cisco case study are that using HRM as a strategic partner helps to enhance efficiency, improve productivity and performance, facilitate succession planning, and aid legal compliance. Combined, these factors are summed up in one important conclusion: HRM as a strategic partner is a source of sustained competitive advantage to organizations.

Importance of Transforming HRM from an Administrative and Operational Function to a Strategic Partner

Introduction

Organizations require a number of resources in order to function effectively and achieve their desired objectives. Four among the well-known resources, popularly referred to as factor inputs, are capital, labor, management, and land. Of these four, labor-better known as human resource- has been established the most valuable. This argument is supported by the resource-based view, which postulates that although a firm’s external environment influences the organization’s success, sustainable competitive advantage can be drawn from factors within the organization, namely its strategic resources together with capabilities (Marler, 2009). Management theorists agree that people are the most treasured assets in organizations as it is their individual as well as collective efforts that determine the extent to which organizations can accomplish their objectives (Rotich, 2015). It is in this realization that the human resource management-HRM- function has gained increasing popularity in organizations, existing to maximize performance of employees.

History of the HR Function

The HR function may be traced to the start of the 20^th century when it was realized that employees are not puppets to be manipulated but people who have emotional as well as psychological needs. This realization caused personnel departments to put in more efforts in training workers and developing more attractive remuneration packages (Entrekin & Scott-Ladd, 2013). With the onset of World War 1, HRM gained more significance as there occurred a mass recruitment of women when men went to fight. In the 1920s, jobs with new titles, such as employment manager and labor manager were introduced in different industries. The roles of these managers included recruitment, addressing bonus-related queries, and handling absence together with dismissals. The 1930s saw quite a number of sectors adopting employee benefits to retain and motivate employees (Entrekin & Scott-Ladd, 2013).

Problem Statement

Organizations should not expect to deliver or exceed their expectations and objectives unless they adopt a proactive rather than reactive approach to business. Considering that the business environment is inherently turbulent and dynamic, it is dangerous for firms to maintain a transactional approach of HRM as an administrative function. Ever-occurring demands and changes call for a strategic approach to HRM.

Significance of the study

Organizations do not operate in a stable, static environment. Virtually everything within the market environment keeps changing, with some factors changing almost on a daily basis. Demographic patterns, technology, economic fluctuations, and political instability are just of the few features of the business environment that warrant timely, well thought-out responses by organizational managers (Jansson & Rozenbachs, 2016). More precisely, managers are faced by ever-evolving challenges, demands, and problems- this means that they must remain flexible, proactive, and innovative in the way they respond to these issues. It is therefore dangerous to cling onto the old ways of doing things. In HR, for example, it is necessary to discard the practice of approaching HR as an exclusively administrative function, and adopt the concept that HR is a strategic partner. Treating employees as colleagues and strategic assets, rather than subjects to be instructed and controlled, is the more productive approach in the modern business environment.

Transforming HRM from an Administrative and Operational Function to a Strategic Partner

Just as HRM has undergone significant developments since it was introduced, notable changes have been made regarding the role, place, and nature of HRM in organizations. With mounting competition and the unpredictability of business environments, it has been realized that embracing the view of HRM as a strategic partner is a strategic partner helps organizations to achieve and maintain competitive advantage. In its simplest terms, the concept of HR being a strategic partner means moving HRM from being merely about administrative expertise and making it a pivotal force in employee advocacy, strategic business management, and change management (Lawler & Mohrman, 2003). More precisely, strategic HR partnership entails ensuring that a company’s HR procedures and policies are in line with the organization’s big picture, seeking to create and maintain a culture of high performance and teamwork.

There are four defining themes of organizations that have embraced HR as a strategic partner. The first is involvement: here, the HR department is actively involved in formulating business strategies. The second theme is communication: HR is regarded a strategic partner if it not only participates in strategic decision-making but also has the freedom and power to communicate its values to the organization’s top management (Jansson & Rozenbachs, 2016). Strategic partnership in HRM is also defined by role balance, which refers to striking a compromise between an organization’s strategic activities and the traditional administrative function (Jansson & Rozenbachs, 2016). Mindset and competence are the fourth theme in HR strategic partnership. Where HR is seen as a strategic partner, HR managers adopt a mindset that focuses largely on transforming the organization. Additionally, HR professionals demonstrate an ability to connect the organization’s business strategy to its human capital (Jansson & Rozenbachs, 2016).

The Importance of Transforming HRM to a Strategic Partner

Based on the above literature, there are a number of identifiable benefits that organizations reap when they shift from viewing HRM as an administrative/operational function to a strategic partner. To begin with, this shift confers invaluable competitive advantages to organizations. As HR managers involve employees in decision-making while also providing learning and creativity opportunities, they are also keen on employing workers who are dedicated and experienced. All these factors help to boost productivity together with efficiency in the organization, besides enhancing customer experience together with product quality. As strategic HR managers concern themselves with employee development, organizations gain a competitive edge since they possess and can access the industry’s brightest minds.

The argument that shifting focus to HR as a strategic partner helps organizations to attain cost efficiency may be illustrated using Cisco as an example. The leading network solutions provider worldwide attributes its success largely to its HRM practices. In regard to employee recruitment together with selection, Cisco remains very keen on efficient hiring of the right individuals to fill vacant positions. To ensure thus, the company aligns its recruitment policies and practices with its corporate values. In so doing, Cisco has managed to keep staff training costs minimal, thereby improving staff efficiency (Chen, 2017). Apart from this, Cisco observes diversity in recruitment, acknowledging that diversity is a source of competitive advantage. The company relies on diverse recruitment networks that provide a wide pool of individuals with diverse skills.

Regarding the idea of HR as a strategic partner conferring competitive advantages to organizations, this benefit is also clearly illustrated in Cisco. In addition to recruiting experienced and skilled, diverse workers, Cisco attaches a lot of value to executive as well as employee development. These investments are informed by the understanding that training employees is crucial to promoting the organizations business development globally while also forming different competitive advantages. As such, the company has developed a team dedicated to providing learning together with training solutions. Specifically, the team ensures that necessary and up-to-date learning resources are available and accessible to all members of the organization. To equip its executives with skills necessary for managing change, Cisco offers curriculum training including role play, e-learning, 360-degree assessment, and case studies (Chen, 2017).

Adopting a view of HR as a strategic partner helps companies to do succession planning. It goes without saying that in small businesses, success is normally dependent on the owners’ efforts, networks, and expertise. Unless such organizations adopt strategic HRM, it may be difficult to design and manage in the event that the company owner dies or is unable to continue working. Adopting a strategic perspective allows HR managers to identify potential successors long before this happens; they then groom them through training and mentorship so that changes in management happen smoothly. In Cisco, the relevance of strategic HRM in succession planning may be reflected in the training as well as development opportunities given to employees and executives alike. Tools such as role play and case studies (Chen, 2017) are effective training materials for individuals in the organization such that anyone can act as a replacement if a senior manager exits.

Lastly, HR as a strategic partner helps organizations to remain compliant with the law. A major difference between purely administrative HRM and strategic HRM is that unlike the former that takes a reactive approach, strategic HRM is more proactive. This may be interpreted to imply that managers who have a strategic view of HR will implement policies that keep them on the safe side of the law, especially where employment is concerned. To avoid legal issues relating to employee remuneration and compensation, Cisco offers a Total Rewards remuneration program to employees. The program comprises a range of monetary and non-monetary benefits that go a long way in motivating employees, making the company one among the world’s most successful (Chen, 2017). On a different note, Cisco pursues legal compliance through a fair as well as equal culture in which every member is treated fairly. The company gives all its employees equal opportunities for success, their race, gender, etc. notwithstanding (Chen, 2017). This way, it is safe from legal actions that are taken on organizations whose workforce practices and policies are found to be discriminatory.

Conclusion

As organizations face frequently-occurring changes and dynamics in the market environment, there is need to shift from HR as a purely administrative and operational function to that of a strategic partner. This is the only way that organizations can succeed and enjoy sustainable competitive advantage. When viewed and treated as a firm’s most strategic resource, the workforce has great potential of deploying their capabilities, skills, expertise, and creativity towards meeting and even exceeding organizational objectives. Organizations that transform their HR from an administrative function to a strategic partner enjoy inimitable competitive advantages, superior performance, enhanced efficiency, improved succession planning, and reap the benefits of legal compliance.

References

Chen, H. (2017). The success of cisco systems, Inc.’s human resource management strategy. Journal of Service Science and Management, 10(3), 206-215.

Entrekin, L. & Scott-Ladd, B. (2013). Human resource management and change: a practicing manager’s guide. Routledge.

Jansson, A., & Rozenbachs, A. (2016). HR as strategic partner: How to make it happen. https://www.diva-portal.org/smash/get/diva2:947073/FULLTEXT01.pdf

Lawler, E. E., & Mohrman, S. A. (2003). HR as a strategic partner: what does it take to make it happen? Human Resource Planning, 26(3), 15-29.

Marler, J. H. (2009). Making human resources strategic by going to the Net: reality or myth? The International Journal of Human Resource Management, 20(3), 515-527.

Rotich, K. J. (2015). History, evolution and development of human resource management: a contemporary perspective. Global Journal of Human Resource Management, 3(3), 58-73.