My Ten Cents

Thursday, August 13, 2015

The Role of Human Resources in Company Strategic Objectives

11.    Introduction
In many organizations, the Human Recourses department is always seen – and often, treated as a step-child; it is not regarded as an integral part of the company and, therefore, not included in the core decision-making arm of the firm. This paper will attempt to explain the importance of the Human Resources department in the achievement of a company’s strategic objective by defining human resource, explaining its various roles in a company, and connecting these roles with those of other departments in the company and, finally, linking these roles to the goals and objectives of the company

22.  Definitions
a.    Human Resources:
Investopedia defines Human Resources as “the company department charged with finding, screening, recruiting and training job applicants, as well as administering employee benefit programs”.
From Merriam-Webster we get: “a department within an organization that deals with the people who work for that organization
Finally, Entrepreneur magazine defined Human Resources as “the department or support system responsible for personnel sourcing & hiring, application tracking, skills development & tracking, benefits administration and compliance with associated government regulations”.
 “The human resource refers to the people whose knowledge, skills, and abilities are utilized to create and deliver the product and service. This resource is considered to be an organization’s greatest resource. This is due to the fact that an organization could not be managed or products and services created and delivered without the use of the KSAs of people. Technology and money are also required to achieve the goals of the organization, but these resources cannot be utilized without some assistance from people”. – Andrea Soberg, CHRP
The common trend in all these definitions of Human Resource is that they all used the word “department” – an arm of an organization.
b.    Strategic Objective:
Strategic objectives are operational tools used to provide guidance in the achievement of the vision and mission statements of an organization. It puts into motion the concepts and ideals contained in an organization’s mission statement.
According to Management expert, Peter Drucker, they fall into eight categories: market standing, innovation, human resources, financial resources, physical resources, productivity, social responsibility, and profit requirements.
Strategic objectives must be measurable, specific, realistic, and timely.
“An organizational strategy is the creation, implementation and evaluation of decisions within an organization that enables it to achieve its long-term and short- term objectives “ … Tasneem Hameed

33.    Role of Human Resources in a company:
Though the primary role of a human resources department in any organization is to hire, train, retain, and evaluate employees on a continuous basis, these processes are always done with the organization’s mission statement as a guiding light; the Human Resources department conducts these responsibilities based on the stated mission and vision of the company, and the talent and training required to achieve this mission.
The fact is that strategy is rarely developed without the consideration of human capital. Perhaps, more importantly, no strategic plan is successful without the successful recruitment, deployment and management of human capital”  (Role of HR in Strategic Planning - The Frelix Group).

a.    Hiring: The Human Resources department is responsible for supplying the staff needs of all the departments that make up the organization, based on information from the managers of these departments and forecasts based on senior management’s expansion and diversification plans. The hiring or recruiting process involves advertisement of job openings for both internal and external applicants. Based on the number of positions available, the Hr department will review applications and resumes and, from the information contained therein, match the skills of the applicant to the required qualifications for the available job openings.
According to Tasneem Hameed, the ability to attract and select human resource having the right knowledge, skills and attitude is an important function of HR
b.    Training: The next responsibility of the HR department, after the hiring process, is to train the new hires. The training process could be in-house or conferences and seminars, or classroom lectures. In most cases, it could be two-fold: (1) company-wide policies, goals, objectives and vision and, (2) their roles and responsibilities in the various departments they will be working in. The departmental part of the training process is most often conducted by the department managers, but in line with policies and procedures developed by the HR department, according to the strategic goals of the organization.
 Incorporated in this training process is the acquainting of the new employees with the organization’s facilities and amenities.
c.    Retraining: Regularly, employees apply for and moved to new opening within the organization. These new positions mean different responsibilities, require new skills, and access to restricted company information. To ensure that these employees are well-acquainted with the responsibilities and duties of their new positions, the HR department conducts retraining programs. The retraining could be done in-house or by an outside consulting firm; however, regardless of who conducts the training program, the curriculum will still be developed with the organization’s strategic goals in mind.
d.    Evaluating/Appraisal: Another responsibility of the HR department is performance evaluation of employees. While evaluations are performed to reward employees for hard work, it is also an opportunity for the HR department and senior management to review the overall performance of employees to determine whether these performances are still geared towards the achievement of the organization’s strategic goals. Departmental managers, based on criteria developed by the HR department, conducts the evaluation/appraisal process for employees in their immediate departments; the reports are then forwarded to senior managers for review and recommendations, after which senior management communicates their final compensation recommendations to the HR; thereby, completing a cycle that started from that department.
e.    Benefits Administration: The HR department is responsible for structuring a benefit/compensation package for employees based on skills, academic qualification, years of experience and responsibility within the organization, and comparable worth. Benefits include salaries, commissions, bonuses, incentive payments, profit-sharing, health insurance programs, employee retirement benefits and stock option programs. In structuring a benefit package, the Hr department also takes into consideration what other companies in the industry offer for the same sill and job levels. The department is responsible for reminding management and staff of important dates for expiration/renewal of some of the benefits.
f.     Regulations Compliance: Finally, the Human Resources department is responsible for ensuring that senior management is aware of government regulations; current changes in such regulations, and how the regulations affect the strategic goals of the organization. It is also responsible for disseminating such information like new labor laws, OSHA rules and regulations, immigration, and Equal Employment Opportunity Commission laws to employees. These could come in the form of seminars, handbooks.

44.    Relationship with other departments
A business is defined as an organized effort by a group of individuals to produce and sell for profit, the goods and services consumers want. To be able to do that successfully, every major business has to have a mission, vision, and a strategic objective on how to go about producing and providing the goods and services the consumer needs. The following four departments are key to every organizations success, and the Human Resources department plays a major role in ensuring that these departments function with the strategic objective in mind.
a.    Finance: The finance department is responsible for raising and managing the financial capital needed by the company for investment assets like buildings, production machines, operational vehicles and other big ticket items an organization might need to start and keep in business. It is also responsible for proper keeping of the accounts of the organization, and generating financial reports for both internal and external use. In order to effectively carry out its responsibilities, it must have the staff with the necessary skills; this is where the Human Resources play an important role. Working with the Finance department, the HR department recruits and trains the finance staff, in line with the needs of the finance department towards the achievement of the strategic objectives of the organization.
b.    Purchasing: Like the finance department, the purchasing department liaises with the HR department to recruit the right staff for its department. Also, like the finance department, the primary objective of the purchasing department is to conduct its services in line with the organization’s strategic objectives towards achieving its mission. Mindful of this, the department forward’s its staff and skills needs to the HR department which, in turn, recruits and trains the right employees to effectively carry out their duties in the Purchasing Department.
c.    Information technology: Every organization has an information technology system run by an executive-level manager who is responsible for making sure that it has the necessary tools in place to provide the required information the managers and employees need to make a decision. The management information system in any organization is designed in line with the strategic objectives of that organization; with that in mind, the Human Resources department has the responsibility to recruit and train the right people in the information requirements of the organization to fill the positions in the IT department. Once again, the role of the Human Resources department is critical in establishing an organization’s information system.
d.    Operations Management:  What is the role of the Human Resources department in the operations management of an organization? First, it is necessary to define operations management: this is an area of management that consists of all the activities involved in producing the goods and services the company offers to the consuming public. From the production manager to the assembly line staff; from the delivery drivers to the in-house equipment repair technician, the HR department is responsible for hiring, orientation and training of all of them. As usual, their roles towards achieving the strategic objectives of the organization are explained to them during the training process and reinforced, at least once a year, in refresher training.


55.    Human Resources Department & Strategic Objectives
So far, we have discussed the role of the HR department in an organization and its relationship with other core departments within the organization; going by these roles and relationships, one is hard pressed to believe some claims in articles researched for this paper that the HR department is not aligned with the strategic objectives of the organization. As rightly pointed out by Huselid, Jackson, & Schuler in their 1997 article, an organization’s people ultimately determine the effectiveness of strategy development, implementation, and subsequent competitive success. A strategic approach that is aligned with HR ensures that an organization’s employees, skills, and abilities contribute to the achievement of its business goals.
Considering that the HR department seems to, by its duties and responsibilities have its fingers in every organizational pie, it would be more accurate to say that the HR department is not only a player in the strategic objectives of the organization, but the main player.
The HR Role is to take the full responsibility for the alignment of employees’ skills and competencies with the strategic plan”: . . . . (Human Resource Role in Strategic Planning, Maxpeopleperform)
This, according to the article referenced above, could be achieved in the following ways:
1.   HR has to demonstrate that it is the respectful business partner for the strategic planning
2.   HR has to demonstrate that it understands the business of the organization
3.   Third, HR has to prove its understanding to modern HR Management trends
4.   Fourth, HR has to determine the art of connecting the strategic plan with the real business
HR must expand beyond administrative function and focus more on how it can support the organization in strategic planning and implementation. By increasing the competencies of HR personnel, the department will increase its credibility and be integrated into a strategic role. For that purpose measuring itself from a business perspective and by the value it brings an organization is the key to its elevation to the role of a strategic business partner. Once there is a clear understanding of how HR affects the bottom line from a business / and or strategic point of view, the role of the HR function in the overall success of the organization will become crystal clear (Tasneen Hameed, 2011)
It would seem that with the intimate involvement of HR in the assembly of the skills needed to execute the strategic objectives of the organization, the steps outlined in the above referenced articles are already being taken by the HR department. So, why is it still kept out of core decision-making team of the organization? Or, is it?

66.    Conclusion
The Human Resources has always had a seat at the decision-making table; it has always been, and remains, an integral part of strategic objectives of every organization. While a vision and mission statement could be formulated without HR department, an organization could not implement the needed strategy to achieve its mission and vision without its human resources department.
From the recruitment of mid-management to the warehouse staff across every department; organizing and implementing a training and re-training program geared towards achieving the strategic objectives, and role as the department responsible for ensuring organizational compliance with government rules and regulations, the HR department already has a seat at the executive table.
Just as anyone could dream up a company, product, marketing and distribution channels, one could equally dream up as many vision and  mission statements as possible; without the right people with the right skills, all the dreams and ideas will remain just that … dreams and ideas. Only the Human Resources department could provide the right personnel to turn dreams into reality, and in the process, add value to the organization.

References:
1.    The Strategic Objectives for Restructuring HR & Significance of Strategic Role for Future Leaders – Ali Muslim Bin Aqeel, Aamna Shakeel, Ali Naseer Awan
2.    The Link Between Strategic Planning & Human resource Planning – Andrea Soberg (CHRP) Trinity Western University, British Columbia.
3.    Human Resource Role in Strategic Planning – Maxpeopleperform, an Hr Consulting firm.
4.    HR Strategic Objectives – Ruth Mayhew, Demand Media
5.    The Role of HR in Strategic Planning – The Frelix Groups
6.    HR & Organizational Strategy – Steven V. Manderscheid, Ed.D
7.    Strategic Human Resource Management – John Bratton
8.    Importance of Human Resource Planning in Organizations – Nyamupachari Vareta, WHO, Brazzaville, Congo
9.    Aligning Human Resources & Strategic Plans – John P. Righeimer, Maverick Energy

10.  Organization Strategy & Human Resources – Tasneen Hameed
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