An organization’s success increasingly depends on the knowledge , skills and abilities of its employees particularly as they help establish a set of core competencies that are activities that the firm performs especially well when compared to its competitors and through which the firm adds value to its goods and services over a long period of time, e.g. ONGC’s oil exploration capabilities and Dell’s ability to deliver low cost, high quality computers at an amazing speed) that distinguishes an organization from its competitors . When employee talents are valuable, rare, difficult to imitate and organized a firm can achieve sustained competitive advantage through its people. The strategic role of HR management focuses attention on how to enable ordinary employees to turn out extraordinary performance taking care of their ever changing expectations. The key areas of attention in this era of global competition include effective management of key resources (employees, technology, work processes) while delivering cost effective value enhancing solutions.
Strategic HR as it is popularly called now aims at building the organization’s capacity to embrace and capitalize on change. It makes sure that change initiatives that are focused on creating high performing teams, reducing cycle time for innovation, or implementing new technology are defined, developed and delivered in a timely manner. The HR manager in his new avtar would help employees translate the vision statements into meaningful format (Ulrich 1998). HR’s role as change agent is to replace resistance with resolve, planning with results and fear of change with excitement about its possibilities. HR helps an organization identify the key success factors for change and assess the organization’s strengths and weaknesses regarding each factor. It may not decide what changes the organization is going to embrace but it would certainly lead the process to make them explicit. In helping to bring about new HR environment there needs to be clarity on issues like who is responsible for bringing about change? Why do it? What will it look like when we are done? Who else needs to be involved? How will it be measured? How will it be institutionalized? How will it get initiated, developed and sustained?
HR’s role is not just to adapt its activities to the firm’s business strategy or certainly to carry out fire fighting operations like compensating employees. Instead, it must deliver strategic services cost effectively by building a competent, consumer oriented work force. It must assume important roles in strategy formulation as well as strategy implementation. To this end, it must identify external opportunities from time to time develop HR based competitive advantages and move in to close the gaps advantageously (like excellent training center, design center, automation center etc. which could be used by others as well). While implementing strategies HR should develop appropriate ways to restructure work processes smoothly such as out placing affected employees.
In order to complete through people, HR managers have to do a good job of managing human capital – the knowledge skills, and capabilities that add value to organizations, They must develop strategies for hiring, training, evaluating, compensating and retaining people in the most appropriate manner. They must be able to integrate technology , processes and people with corporate strategy, deliver cost effective services to the satisfaction of customers. To perform these diverse roles, HR managers must possess excellent qualities of the head and the heart in addition to having state of the art HR competencies, business competencies and change management competencies.
Source: HRM by VSP