Strategic Human Resource Managemen

This paper is dedicated to review the principles of human resource management, to determine HRM as science, to estimate current position of human resources management and to look through its perspectives. The purpose of the paper is to propose the methods of transformation that can make HRM the strategic, value-added function in the organization.

1. The evolution of strategic role of HR.

The term “human resources management” appeared in 1960-sas the replacement of old term “personnel management”. After the Industrial Revolution organizations needed the specialists to manage the huge staff, to integrate immigrants into U.S. workspaces and to prevent protests against company management (Dunn, 2006). Functions of personnel manager were mostly administrative. During the Post-war period the duties of personal management specialist include the issues of financial coordination and economical security.

The dynamics of social development in 1960-S attracted the attention to human relations inside organizations. That time HRs became the mediator between employer and employee. Specialists trained and developed people helping them to release their working potential; from the other hand they helped their organizations to meet new laws and regulations.

“Personnel” officially became “HR management” to reflect its emphasis on employees as valued organizational resources.” (Dunn, 2006)

Nowadays HR manager have to employ people, develop their resources, utilize, maintain and compensate services according to organizational requirements. Thus, the HRM became the independent branch of management.

According the contemporary perception the of term “human resources” is outdates, because people are not the resources or vehicles but creative and social beings. Thus, the term “talent management” could be appropriate.

2. The importance of HR in business organization

Planning is very important to for every business organization. The task of HR manager is to estimate human resources of the company and to plan what talents are needed to optimize its work. HR develops necessary talents inside the organization or recommends hiring new specialists. Then HR manager audits the results in correspondence with the company aims.

Due to the work of good HR manager – selection, training, compensation, motivation and information analysis – company could save costs and prevent the financial losses. Besides, it is the HR responsibility to conduct the activities in legal, fair, and consistent manner. It is very important when companies merge or in time of global financial crisis.

3. The relation between HR planning and business planning

As it was mentioned before, HR manager works on achievement the company goals. Cutting expenses is the main task of many companies in current economic conditions.  Qualified HR manager is able to optimize the performance of the organization and each employee.  Thus, HR planning has to be connected with strategic business plan of the company.

Company management takes into account human factor in the broadest meaning of this term.  Human Capital Management is the new technology that affords to understand the perspectives of social development and find the correct business strategy. For example HCM can foresee the population explosion and the following brain drain as baby boomers begin to retire, or it can estimate the future demand for qualified workers under the condition of growing competition between private and government sectors.

4. How Human Resource and Organization Development can partner to help an organization?

Actually the partnership of Human Resource and Organization Development is the nearest future of the HR industry. Nowadays Organization Development pays more attention to the personalities, meantime the Human Recourses broadens its work to strategic planning.  In simple words Organization Development decides were to drive people and Human Resources determines its way.

“The O.D. and HR professionals who will succeed in guiding their organizations into the future will be those who understand and use business strategy; understand corporate culture, plans and policies; recognize future problems and work solutions; can deal with all types of people; can communicate well verbally and in writing; and can recognize, recruit and train future executives.” (Dunn, 2006)

The Common Social Responsibility is also the issue of interrelation between Human Resources and Organization development.  Nowadays companies don’t write checks for charity but integrate charitable work in their business strategy.  The task of HR is to motivate people with this strategy.

“A CSR initiative doesn’t have to be a massive billion-dollar project such as GE’s to inspire employees to make a positive impact on the environment while making the company money or cutting expenses. It can be as simple as recycling or re-using materials that would otherwise end up in a landfill, or retrofitting a building to make it more environmentally sound.” (Fox, 2007)

Bob Willard, author of The Sustainability Advantage: Seven Business Case Benefits of a Triple Bottom Line (New Society Publishers, 2002) and former senior manager of leadership development at IBM Canada, is the follower of social responsibility as a business philosophy. This philosophy appeared in 1960-1970 and began to spread. Its acceleration was closely connected with terrorism, corporative scandals and growing environmental concerns

“At it’s most basic, HR can ask employees how they can help the company save money environmentally,” says Willard. “Turning off lights and computers at the end of the day is one example. But don’t just pocket the money for the company. Share a percentage of the savings with employees. That’s how you change the behaviors of employees.” (Fox, 2007)

Thus, the future of Human Resources management is closely connected with the Organization Development.

5. How to quantify the HR?

John Sullivan, professor of management at San Francisco State University, tries to create some metrics for HR industry that could quantify the HR. Here are three metrics that he proposed to use:

“1. Companies should ensure the metric fits the corporate culture of what is deemed important. For example, measuring the level of customer service would be important for a company such as Nordstrom Inc.”Â  (McKewen, 2005)

Sometimes customer service is not important for the company, so it can use another metrics. Thus, if the company emphasizes being the first to market, it has to select time-related metrics.
“2. A metric should echo the critical success factors that make a company’s product or service successful. HR, for example, might choose to measure the satisfaction of managers and applicants.
3. Metrics should focus on issues that are likely to be reported to the chief executive officer. Dr. Sullivan recommended that HR select strategic output metrics that have the most impact on profit, revenue or product development.” (McKewen, 2005)

With this metrics HR can estimate its success and compare it with the benchmark information of the Society for Human Resource Management.

Conclusion.

Strategic Human Resource Management nowadays are in the period of change. From the one hand it tends to split into different branches like Human Capital Management and Talent Development. From the other hand the common trend to globalization makes HRM closely connected with business planning, organization development and philosophy of business strategy.