DOES HR DEVOLUTION LEAD TO HR EVOLUTION?

DOES HR DEVOLUTION LEAD TO HR EVOLUTION?

Zeya Lin (31823426)

MBS617: HRM PERSPECTIVES

DOES HR DEVOLUTION LEAD TO HR EVOLUTION?

EXECUTIVE SUMMARY

This research report explains how the personal department has e v o l v e d a n d p e r f o r m e d through the years to become the strategic partner of business organization in todays economy. Originally, t h e p e r s o n a l d e p a r t m e n t w a s j u s t c o n s i d e r e d a s a m e r e r e c o r d - k e e p i n g u n i t . T h e i r functions were just to hire, prepare wages, and train the employees for the organization. It was with the passage of the Civil Rights Act of 1964 that made some momentum was attained in the growth of the personal department. In later time, it came to known as the Human Resource. During the 1970s, the HR department was forced to be more competitive as one of the key strategic functions due to the demand for greater organizational accountability. This led to HR being the strategic partner of business organization. Nowadays, the

responsibilities of HR were more related to business development rather than administration alone. Technology played an important role in doing all the nonstrategic works of HR and so they were more focused on diagnosing the business needs and offer reliable solutions to the organization. Globalization was also another factor which made the HR a strategic partner; they had to create global policies for data management, hiring workforce from different parts of the world keeping the organizations goals in mind.

Zeya Lin (31823426)

MBS617: HRM PERSPECTIVES

DOES HR DEVOLUTION LEAD TO HR EVOLUTION?

CONTENTS
. 1. INTRODUCTION 2. HISTORY OF HUMAN RESOURCE 2.1. 2.2. 2.3. Industrial Revolution; the Initial Stage of HR HR Responsibilities Transitions to Human Resources 4 4 4 5 6 6 7 8 9 10

3. HUMAN RESOURCE 3.1. 3.2. The HR Functions HR as a Strategic Business Partner

4. CONCLUSION BIBLIOGRAPHY

Zeya Lin (31823426)

MBS617: HRM PERSPECTIVES

DOES HR DEVOLUTION LEAD TO HR EVOLUTION?

1.INTRODUCTION
Human resource management traced its origin back to the earlier times when carpenters, builders, mason and other workers arranged into leagues so that they could increase their productivities and working environments. The intention of human resource management is to focus on managing the people within the organization. As all other economic traders and professions are evolving, human resources have been undertaking changes and developments. The ind ustrial revolution in 18 th century was the major incident that most of the ordinary labors were replaced with machines which led to the establishment of factories where large labor forces are employed (J.Jamrog, 2004). During that time, a wide gap between the employers and the employees began to grow which led to less communication between them and the introduction of trade unions and other movements from the employees started to protect their rights and protections (Nayab, 2011). These factors had led to the founding of the personal departments from the employers so that they can be the representatives for the employers. Personal departments are the early forms of human resource managements and their roles basically include the employment, training, wages setting and counseling. During the early days, these personal department actions were just administrative in nature and it is still considered as a record keeping unit until the late 1960s. It was with the passage of the Civil Rights Act of 1964 the HR gained importance. It was this period which directed to the growth of the modern HR professional (J.Jamrog, 2004). T h e Human Resource Management has gone far from just record keeping, employment, training etc. The modern HR professional involves in strategic decisions in the company thereby taking more responsibility for overall organizational effectiveness. The present organizational environment sees the HR as its strategic business partner for global economy.

2.HISTORY OF HUMAN RESOURCE

2.1.Industrial Revolution; the Initial Stage of HR Establishment of large numbers of factories during the industrial revolution gave massive employment opportunities. This had resulted in the increasing demands of job specialization as

Zeya Lin (31823426)

MBS617: HRM PERSPECTIVES

DOES HR DEVOLUTION LEAD TO HR EVOLUTION? well as the workers productivity and proficiency. Labors were treated as commodities that could be bought or sold and that abuse made the labors to organize so that the employers would improve their working conditions (J. Jamrog, 2004). It was during the 1920s, the organizations begun employing specialist to assist in labors personal matters. Some US companies such as US Steel created a Bureau of Safety, Sanitation and Welfare in 1911 and Ford Motor created a Sociological Department that dealt with safety, medical, welfare and other legal aspects (J. Jamrog, 2004). Those personal departments founded by the organizations are the basis of the modern HR departments.

2.2.HR Responsibilities HR should be leaders in ensuring the highest level of social responsibility. According to Milton Friedman, a business has no social responsibilities other than to maximize its profits. However, today there is a growing perception among enterprises that sustainable business success and shareholder value cannot be achieved solely through maximizing short-term profits, but instead through market-oriented yet responsible behavior. Bottom-line, HR has to focus more on the employee and the employees well-being. An outcome will be higher employee performance and overall organizational performance. Not only will there be better performance at work but stronger families, communities, and a better world for all of us. This is one of the primary HR responsibilities that have not been fulfilled. The responsibility of the personal management is the effective use of the skill of the people. In the 1980s, a combination of economic and political factors led to the demand for greater accountability in all functional areas of business, including HR. The massive restructuring of organizations in the 1990s led to the outsourcing of many of HRs basic transactional functions. In an organization, the personal managements duty starts with the hiring of qualified people and continues with directing and encouraging the employees when they face any encounter in fulfilling the tasks required for the organization. In order for HR to add value to an organization, it must have several key competencies. Some other responsibilities of the personal management include:

a) b) c)

Categorize and preparing wages and salary scale Counseling employees Dealing with disciplinary problems

Zeya Lin (31823426)

MBS617: HRM PERSPECTIVES

DOES HR DEVOLUTION LEAD TO HR EVOLUTION? d) e) f) g) Negotiations with labor organizations Developing and setting safety standards Managing the benefit programs To give periodic reviews on the performance of each e m p l o y e e s o n h o w the employee is currently performing in the organization and in what ways they can improve. h) To support individuals in developing their attributes so they can meet the requirements for further jobs i) Plan and organize safety training programs

2.3.Transition to Modern Human Resource In the 1960s, the personal department was still considered as a record-keeping unit, who handed out tenure awards and organized the companys picnic. The passage of Civil Rights Act of 1964 accelerated the importance of the personal/HR function which made the managers of other sectors take notice. The top management made it clear that incompetence in the HR function will be tolerated (J. Jamrog, 2004). Later in the 1980s, the HR professionals were told to use the concepts of system thinking. The system thinking that views is a concept all the events as interrelated. For example, if an organization hires people of better skill and education that it did previously before, then the HR function need to upgrade its training program and must pay attention to the areas where it need more advancement (J. Jamrog, 2004). The personal management that did the administrative works have evolved due course of time to HR that utilized the concepts of system thinking to attain the business goals of the organization.

3.HUMAN RESOURCE
3.1.The HR Functions The modern business is composed of several types of resources. They are p h y s i c a l , f i n a n c i a l a n d h u m a n r e s o u r c e ( G i l l e y , The people within 2002).

t h e organization constitutes of the Human resource. Human

resource is that function of the organization which deals with the issues r e l a t e d t o people such as hiring, training, performance management, organization

Zeya Lin (31823426)

MBS617: HRM PERSPECTIVES

DOES HR DEVOLUTION LEAD TO HR EVOLUTION? development, compensation, safety, employee motivation,

c o m m u n i c a t i o n a n d administration. During the late 1970s many companies struggled with high interest rate, growing international competition, shrinking productivity, which lead to the demand of greater accountability in all functions of the company. The HR function was not exempt from this. While there were many tools for the measurement of the HR function these were not widely used. So suggestions came that the entire HR department should be scrapped off or given to some outsourcing companies. Some even suggested that the HR functions be divided within the other departments of the organization (J.Jamrog, 2004). As a result of these suggestions the HR function was told to change and add more responsibilities thereby becoming a strategic partner in business. By doing so the HR function was made t o t h i n k l i k e b u s i n e s s p e o p l e f i r s t t h e n followed by as HR professionals. H R M is anticipated to add values to the

strategic utilization of employees and that employee programs impact the business in appreciable ways.

3.2.HR as a strategic business partner In the recent years technology and outsour cing has replaced HR in non-strategic works such as benefits enrollment, payroll. W ith the introduction of t e c h n o l o g y t h e administrative role of the HR personal has become a thing of the past (Brandel, 2005).HR as a strategic partner focuses on developing a varied workforce which helps in attaining the goals set b the organization. The modern business scenario requires the HR professionals to develop strategies for acquiring the right people. Diagnosing business n e e d s a n d o f f e r i n g a d v i c e s a r e s o m e o f t h e a c t i o n s d o n e b y t h e HR professional as strategic partner. HR professionals as strategic

managers need to work with the line managers to manage the people process which enable the organization meet the business requirements (Parus, 2003). The example mentioned show how the HR professionals act as strategic partners in business organizations.

Target Corporation: The organizations mission is to be the preferred shopping

destination for its customers and the best workplace for its employees. According to Target Corporation HR is the strategic partner that is not

Zeya Lin (31823426)

MBS617: HRM PERSPECTIVES

DOES HR DEVOLUTION LEAD TO HR EVOLUTION? only present at the table but is accountable for staffing retention,

development and brand management of the team members (Parus, 2003). HR as its strategic partner delivered the required results, added values and developed a successful relationship with its customers, shareholders and employees. Globalization has played an important role; the change it has

brought is self-evident. For example, if a car company needed to develop a new engine the manufacturers could look at the whole world and ask themselves where they should develop the engine (Johnson, 1997).

Similarly, people from different parts of the world are competing against other in the same field. The strategies followed by the HR are,

standardized global

assessment for data

development management,

and

compensation

practices; and

policies

performance

management

development, creating a centralized reporting relationship around the globe (Rioux).

HR devolving down the line Some of the functions of the HR department are now being transferred down to the line managers. Line managers are taking an important role in the recruitment and the selection of employees. When line managers assume most of the routine activities associated with people management (e.g., training, recruitment and selection, performance appraisal), HR specialists are free to spend more time orchestrating large-scale organizational change efforts (Cunningham & Hyman, 1999) and developing overarching employee-focused policies (e.g., with respect to work and family integration) (Lansbury & Baird, 2004). Through these activities, the HR unit is likely to gain more visibility within the organization and be viewed as making a clear value-added contribution that affects the well-being of the organization as a whole. For example, Gennard and Kelly (1997) studied senior HR executives in 28 organizations; 26 of these organizations had been placing greater responsibility for managing human resources with line managers over the last decade. Gennard and Kelly (1997) observed that line managers in devolved organizations became more demanding in seeking higher-value contributions from the HR unit. As a result, line managers in devolved organizations developed a greater appreciation of what HR could offer.

Zeya Lin (31823426)

MBS617: HRM PERSPECTIVES

DOES HR DEVOLUTION LEAD TO HR EVOLUTION?

4.CONCLUSION
The changes undergone by the HR function shows us that there was no period when the HR function stopped to evolve (Ulrich, 1997). From being the personal function that did the administrative tasks to the strategic business partner, the transition has been gradual and impacted by the external and internal environmental changes. In this age of mergers and acquisitions, HR has been all the more important for the success of these ventures. Besides the cultural issues that come up during these acquisitions, it is also n e e d e d t o c r e a t e a b a l a n c e b e t w e e n g o a l s , s y s t e m s a n d p r o c e s s e s . T h e i n d u s t r y i s undergoing constant changes, with these changes there is revision of strategies and goals of the organization (Ulrich, 1997). To cope up with these revisions the HR has to acquire good talents and add effective training programs to meet these challenges. All professions evolve; it is up to those individuals who participate to take an i n c r e a s i n g r o l e i n d e t e r m i n i n g h o w t h e c h a n g e s w i l l h a v e a n i m p a c t o n t h e i r j o b s . Companies who still use the HR as an administrative function are ignoring the market conditions and the current requirements for success. Studies show that company who make the HR as their strategic partner is more productive and profitable than those who do not follow this practice. Now it time to look forward to and start to adopt new business practices and further advancing the advancing the HR in the coming years. As John F.Kennedy once said Change is the law of life and those who look only to the past or present are certain to miss the future.

Zeya Lin (31823426)

MBS617: HRM PERSPECTIVES

DOES HR DEVOLUTION LEAD TO HR EVOLUTION? BIBLIOGRAPHY

Bjrkman, Ingmar, Mats Ehrnrooth, Adam Smale, and Sofia John. "The Determinants of Line Management Internalisation of Hrm Practices in MNC Subsidiaries." The International Journal of Human Resource Management 22, no. 8 (2011/04/01 2011): 1654-71. Cascio, Wayne F. "From Business Partner to Driving Business Success: The Next Step in the Evolution of Hr Management." Human Resource Management 44, no. 2 (Summer2005 2005): 159-63. J. Jamrog, Jay & Miles H Overholt. "Building a Strategic Hr Function: Continuing the Evolution." People and Strategy (2004): 51-61. Jerry W Gilley, Steven A Eggland, Ann Maycunich Gilley. Principles of Human Resource Development 2nd Edition ed.: Basic Books, 2002. Johnson, Mike. "Hr: Tomorrow's Strategic Partner." Management Review (1997): 60-61. Kulik, Carol T., and Elissa L. Perry. "When Less Is More: The Effect of Devolution on Hr's Strategic Role and Construed Image." Human Resource Management 47, no. 3 (Fall2008 2008): 541-58. Mary, Brandel. "HR Gets Strategic." Computer World (2005): 33-34. Nayab, N. "A Traditional Approach to Human Resource Management." http://www.brighthub.com/office/project-management/articles/75466.aspx. Parus, Barbara. "Hr: From Paper Pusher to Strategic Partner." Workspan (2003): 26-29. Perry, Elissa L., and Carol T. Kulik. "The Devolution of Hr to the Line: Implications for Perceptions of People Management Effectiveness." International Journal of Human Resource Management 19, no. 2 (2008): 262-73. Ramlall, Sunil J. "Continuing the Hr Evolution: Building Resilience in Turbulent Economic Times." International Journal of Global Management Studies 1, no. 3 (2009): 19-28. Stone, Raymond J. Managing Human Resources. 3rd Edition ed.: John Wiley & Sons Australia, Ltd, 2010. Ulrich, Dave, Jon Younger, and Wayne Brockbank. "The Twenty-First-Century HR Organization." Human Resource Management 47, no. 4 (Winter2008 2008): 829-50.

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MBS617: HRM PERSPECTIVES

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