A New Mandate for Human Resources Article Summary and Critique Human Resource Management

Article Summary: A New Mandate for Human Resources

HR’s role in an organization has been perceived as peripheral at best, and value sapping at its worst. In today’s world, when most of the processes & systems can be copied thus rendering no sustainable advantage in long term, companies can majorly differentiate themselves only by building its intellectual capital (employee competence) & organizational excellence (organizational capabilities) – which are very hard to copy. HR’s contribution to achieve this is vital.

It is in this light that HR’s role & responsibilities needs to be relooked & redefined to extract meaningful contribution from HR. To achieve this, both, senior management’s & Line manager’s expectations from HR, and HR’s expectations from itself, needs a sea change.

Challenges & Competencies needed

Following are five major business challenges (that any company faces) and the corresponding competencies needed to face these challenges

Challenges Competencies Needed 1. Globalization It requires that an organization must learn and collaborate to manage diversity, complexity & ambiguity. 2. Profitability through Growth Companies must be creative & innovative. 3. Technology Learn to leverage information for business. 4. Intellectual Capital Attract, develop & retain competent personnel. 5. Constant Change Ability to detect emerging trend. Ability to adapt to needed changes.

HR’s Role (in developing above competencies)

HR has got a major role to play in helping the company to develop and achieve the above-­‐mentioned five competencies. The new mandate for HR looks upon the following imperatives to develop those competencies: 1. Becoming a partner in Strategy execution: The HR executive should be involved in discussions of how the company should be organized to carry out its

strategy. Following 4 steps are required to create conditions for such discussions: a. The HR should be held responsible for defining an organizational architecture. Or in other words, HR should identify the underlying model of doing business. Several frameworks are available for this purpose like the Galbraith’s Star Model or popular McKinsey’s 7-­‐S framework.

b. HR must be accountable for conducting an organizational audit. Such audits are critical in helping the managers in identifying the components of the company that must be changed to facilitate strategy execution. c. The HR should identify methods for renovating parts of organizational architecture that need it. Changes in the organizational architecture should be brought in as and when required. d. HR must take a stock of its own work and set clear priorities. The HR has got to look at many issues at any given moment of time. However, priorities must be set among the initiatives based on what is linked directly with the business outcomes. 2. Becoming and Administrative Expert: The new role dictates that the HR has the responsibility of improving efficiency of both their own function and that of the entire organization. As the quality if HR works improve, cost is also be expected to come down. Improving efficiency will help in establishing the credibility of HR functions and open doors for it to become a strategy partner. 3. Becoming an Employee Champion: HR should be held accountable for keeping the employees engaged. In the new role, the HR has to take the responsibility of orienting and training line management about the importance of high employee morale and ways to achieve it. They should also educate the line managers about the causes of low employee morale to ensure that employees are satisfied. The HR should also act as an advocate for the employees and be their voice in management discussions.

4. Becoming a Change Agent: The HR has got a responsibility of building organization’s capacity to embrace and capitalize on change. It’s imperative that the HR has to adapt, learn and act quickly to change. It’s definite that the HR will face a lot of resistance to change in organization. Thus, HR’s role as a Change Agent is to replace resistance with resolve, planning with results, and fear of change with excitement about its possibilities.

Four Changes for the Line

The following are four ways through which senior operating managers can create an era where HR is focused on outcomes rather than activities 1. Communicate to the organization that the “soft stuff” matters For HR to be taken seriously, the senior managers would have to demonstrate that they believe typical HR issues such as culture change, intellectual capital are critical to business success. The operating managers can signal this in many ways like including HR professionals in strategy discussions, talking about how organizational capabilities can create value for stakeholders etc. 2. Explicitly define the deliverables from HR, and hold HR accountable for results: The new mandates requires the senior managers to define specific goals for HR and communicate what is expected from HR. Also, a mechanism is required to track, measure and reward performance. 3. Invest in innovative HR practices Senior line executives should lookout for innovative HR practices through different ways like conferences, management literature etc. Investing in new HR practices is another way to signal that HR is important to the company. When a new practice is identified to beneficial for the company, HR is expected to adapt to them rather than adopting them. The focus of investment on new HR practices should be on how a new practice would work in company’s unique competitive situation. 4. Upgrade HR professionals

The new mandate requires the senior managers to come forward in order to improve the quality of HR staff itself. A higher quality HR professional must be found if the expectations from the HR are more. Sometimes, such individuals already exist within HR function but need additional training. Other times, they will be needed to be brought in from other parts of the company or even form outside the company. If HR is to effect a real change, then it must be made up of people who have the skills derived from a base of confidence and earn respect.

Critical Review: A New Mandate for Human Resources.

Dave Ulrich. Harvard Business Review, 1997. Reprint 98111. pp 124-­‐134 The age-­‐old question has surfaced once again to haunt management experts and business strategists for the umpteenth time. There seems to be no end to the debate and the survival of an ancient management field is at stake. But this time, noted author, speaker, consultant and professor, Dave Olson Ulrich, has thrown his hat into the ring to help answer the dilemma: Is it time to lay HR to rest?

Ulrich’s article, A New Mandate for Human Resources, suggests that HR in its traditional form has become completely ineffective and if it continues to function in its current avatar, then it is better to do away with it. Yet, this professor of Human Resource Management from Ross School of Business, University of Michigan, makes a pitch for a new role to be given to the HR department – one that involves playing a part in shaping business strategy and requires HR managers to be more involved in helping the organization achieve excellence. Using his skills as a shrewd author, Ulrich creates a case for HR by outlining the challenges faced by organizations today. He seems to have carefully dissected the mindset of his target readers (i.e. CEOs) and knows that they are looking for solutions to these problems. He is cautious enough not to appear to be selling his favored subject but instead goes about with the skill of a surgeon carefully explaining how a revitalized and empowered HR department can play an important role in helping an organization overcome its challenges.

Ulrich envisions HR managers as partners in the organization aiding in the successful execution of its strategy. He believes that it is the right time for these managers to transform themselves into administrative experts to help build credibility with the top management. At the same time, he reiterates that they must continue in their present role as employees’ agents but also learn to adapt to ever changing environments. As is his characteristic style, Ulrich goes on to synthesize complex ideas into simple frameworks and tools that executives can use. He advises CEOs to involve themselves more in soft skills to help signal emphasis towards employee importance. He suggests that the HR department be held more accountable and that the HR executives should play a front line role in executing organization change and employee development. He propagates increased investment in upgrading HR talent and pushing for innovative HR practices. However, for a relatively new and inexperienced CEO, the methods suggested in the article can be a real test. While there are examples given regarding similar strategies used by other organizations, each company is different and requires certain modifications to be made in the methods. Simply using a photocopied solution, without considering organizational ground realities can lead to a disaster. Looking at the bigger picture however, it must be said that having worked as a consultant to some of the top companies, Dave Ulrich is a treasure trove of knowledge and experience. He gives rare insights into the innovative practices of HR professionals in successful companies and creates benchmarks wherever necessary. The article is sprinkled with anecdotes and examples wherever necessary and keeps the reader’s alive till the end. It is written in a structured and lucid manner and is very clear regarding the new role that HR can play in shaping a successful future for an organization. While there is some ambiguity regarding proper execution of some of the suggested strategies, such details can be incorporated into a more detailed document, which can form the basis of a major paradigm shift in this field. Overall, A New Mandate for Human Resources is an extremely insightful article and gets its readers thinking about a possible new and improved re-­‐birth for the HR function.