Chapter 01
Future of HR
1.1.
Introduction
This chapter discusses one single topic of the future of HR. More specifically future of
HR is discussed under a few subheadings: Overview, the creation of HR value, HR
relationship to the business context and stakeholders, Targets HR – Individuals,
Organization and Leadership, and HR Investments by reviewing the work of Dave
Ulrich (2010).
1.2.
Overview
In this article, Dave Ulrich Argive that HR is a business partner rather than an
administrative service or compliance function. HR journey should focus on adding
value rather than trying for an endpoint. In today's complicated and unpredictable
business environment, HR faces plenty of challenges. There has been a shift to renewed
growth but the path to growth is not always uncomplicated. The HR function in most
organizations is challenging due to the growing requirement of skilled workers in a
complex environment and more difficult to retain efficient and effective workers in the
organization.
1.3.
The creation of value
In this step, he suggests that the HR profession has four waves such as administration
work of HR, creation of innovative HR practices, a connection of these practices for a
successful business through strategic HR, and using those HR practices to create value
and respond based on the external business environment.
1.4.
HR relationship to the business context and stakeholders
In this step he develops a framework which can cover the business context on any
country.
Social Trends: Health care, Life style, Family patterns
Technological trends: Internet usage
Economic Trends: Inflation, Growth, Financial literacy
Political trends: Stability, elections
Environment trends: Sustainability
Demographic trends: Race, gender, Income level
Stakeholders
In this step he layout five key stakeholders who benefits value from HR. He also
expresses that normal HR environment more focus on employees inside the
organization. In strategic environment in HR focus on external stakeholders such as
investors community, Line managers, employees, and customers.
1.5.
Targets HR – Individuals, Organization and Leadership
In this step he shows three targets of outcomes of HR.
Individual Ability (Talent)
Individuals: To deliver any strategy, the individuals need to be efficient and effective.
HR managers can make their employees more productive.
Talent = Competent x Commitment
Competency can be elaborated as a combination of knowledge, skills, and value
required for their duties. Without commitment, competency may not be valued by the
company. Committed and competent employees gain value for the company.
Organization Capabilities (Culture)
The Organization: To deliver any strategy, the organization needs to have right
capabilities.
To achieve organizational goals, individuals need teamwork. Without teamwork
achieving organizational goals might be difficult. HR as a talent function has a role to
create teamwork between the employees through training and organizing functions etc.
HR professionals need to identify and build talent and capabilities. the capabilities
might include,
Risk Management
In a competitive market, managers need to identify and manage risks. If the managers
are capable of handling risk, the organization can grow as a sustainable business unit.
Social Responsibility
Organizations that are thinking about environmental issues, can attract more employees,
customers, and investors.
Simplicity
Crating simple product designs.
Connections
Preparing a social network with the participation of employees, customers, and business
partners.
Innovation
Innovation not only products but also can expand up to customer interface,
administration, and business models.
Leadership
Leadership: To deliver any strategy, the leadership needs to be spread through the
organization.
The difference between leaders and leadership is, that the leader can guide the people
to achieve the objectives of the organization by understanding their talents and
behaviours while the leadership can build future leaders. HR professional's role is to
invest in training and orientation development programs to build future leaders. Dave
Ulrich also highlighted in this research how to upgrade the quality leadership by
conducting the followings.
a) Organizations that have leadership depth can positively respond to volatile business
environments, implement strategic skills, and increase investor confidence.
b) HR professionals can define the leadership through external expectations to fulfil
organizational goals as customers want and stakeholders confident.
c) HR assessment should be expanded within and outside the organization, and how well
the leadership fulfils the stakeholder's expectations.
d) Invest in leadership formula needs to be changed to 50-30-20 whereas 50% learning
from experience, 30% learning from training, and 20% learning from life experience.
e) Leadership role to create value for its stakeholders can use as an indicator for success.
Link intangible value with the leadership to become valuable to managers.
1.6. HR Investment
HR investments consist of the following four domains as described by Dave Ulrich.
a) HR Departments/Functions
b) HR Practices
c) HR People
d) HR Analytics and measures
HR Function
The functional structure of HR departments might be different depending on the business
structure. The HR function is created by most companies based on centralization and
decentralization. The HR department is aligned with the business operation structure.
HR Practice
HR practice can be summarised into four categories.
People - People who are in the organization and out of the organization. This includes staff,
training, development, planning, and retention.
Performance
HR performance is a process of performance appraisal, standardization, performance
evaluation, rewarding, and feedback.
Information
Information flow can include top to bottom, inside to outside and side to side.
Work
To achieve organization goals how to take the output from the employees through
workforce policies and physical settings.
HR people/Professionals
Dave Ulrich identifies in this research the HR professionals’ function with six roles.
a) HR professionals can deliver reputation to the business by providing consistency and a
proactive stance.
b) HR professionals contribute to developing and the process of business strategy and they
can deliver HR practises and the HR structure
c) Identify and facilitate a strong organisational culture that can compete and grow the
organization's objective.
d) Talent managers and structural designers can improve both talent and organization through
understanding, diagnosis and audit.
e) HR managers can do work effectively and cost-efficiently through an information system
and standardized HR policies
f) HR managers also can demonstrate how the business knowledge can be used internally
and externally to make a profit.
Conclusion
The author highlighted the future of HR and how its value to the organizations by creating
value from both outside and inside.
This HR journey, start within the businesses and
stakeholders and move towards the individuals, and organization, and at the end, it will reach
leadership which is the outcome of HR. After it reaches the leadership, it will move to the HR
investment function which consists of practice, people, and metrics. The HR departments are
important because it is the path to success of the organization where it can create leadership.
Further, HR creates value which can be evidenced by HR analytics.