The extent to which the world is changing has impacted on organizations especially organizations that tend to expand across international borders which are results of globalization (Hills, 2010). According to Boxall and Macky, (2009); Boxall and Purcell, (2011) HRM should be at the centre of organizational performance thereby using its functions and practices in managing the work in an organization and the people involved.
''It has been considered that the reliability and credibility of human resource functions and its ability to carry out the duties of its practitioners have been limited thereby putting HR in a struggling position in achieving the aims and aspirations it has set for itself''.
This report aims to evaluate the credibility of the HR function and its ability as to why it struggles in achieving the aims and aspiration it has set for itself. As it transcends, the report will be sectioned into various segments so as to assist in reflecting on issues regarding this research. The various sections are as follows: HR strategy in line with the overall strategy of the business, the role of HR which will critically examine HR as a strategic partner, the third will be HR competency and credibility and the fourth will focus on the future of HR.
This report will invariably use HR theories to backup its argument when necessary.
HR STRATEGY AND THE BUSINESS STRATEGY
A business strategy is implemented to resolve strategic issues such as advancement of technology, competition and satisfying the stakeholders of an organization and it involves the extent to which an organization's strategy is dependent upon, through which competitive advantage will be rewarded (Porter, 1987). Strategy according to Whittington (2001) can be processual, classical, systemic or evolutionary in nature which can be in 2 aspects: processes and outcomes. For an organization to formulate strategies that are planned, clear, deliberate and rational decides if it is an emergent or planned strategy. It can be argued that as organizations tend to adjust to the shifting environment, the business strategy would also change and this can be evident in the product life cycle of an organization. This is why the human resource of an organization should be familiar with the business strategy CIPD (2010) so as to be able to add value to the organization thereby implementing policies and practices that would be aligned to the strategy and needs of the organization, and this can be seen as an insight-driven process (CIPD, 2012). In line with the Michigan Model, there should be a vertical and horizontal link between HR strategy and the business strategy, but the truth is HR is still struggling in understanding the business environment and due to this; they lack the necessary routines that would strategically align the overall business strategy (Wright et al., 2004) and this can be caused by various reasons like HR not having the necessary experience to take up new roles when change occurs as evident in the business life cycle that as the business changes, HR should also change with it (Boxall, 1998). Also Gerhart et al., (2000) is of the opinion that issues like HR operating in segregation from the organization which has reduced HR capability to comprehend regular issues faced by managers in the organization which results in introducing unsuitable practices to the organizational needs and this gives credibility to the argument on who updates HR practices.
However, HR should be able to align its strategy to that of the business especially when there are conflicting issues amongst stakeholders so as to poise or stabilise the interests of stakeholders in the organization.
THE ROLE OF HR AS A STRATEGIC BUSINESS PARTNER
Considering the impact of HR in order to enhance organizational performance, HR has a substantial influence in an organization and also, when the organization is going through change which should be aligned to the business strategy (Sartain, 2010). As a result of this, HR has been required to carry out more strategic duties so as to enhance the performance of the organization (CIPD, 2010). Researchers like Armstrong (2011); Boxall and Purcell (2011) sees the importance of HR in an organization thereby linking HR to managing people and work in an organization, and also covering activities like talent leaning and development, recruitment and selection and reward management.
Sonnie (2007) is of the opinion that the functions of HR can be of 2 types which are operational and strategic in nature and the operational can be outsourced. This according to Armstrong (2011) cut across recruitment and selection, reward management, performance appraisals, learning and development and employee relations. On the other hand, in a modernized and flexible working environment, HR imposed by Ulrich (1997) should be proactively involved in an organizations development thereby operating in a strategic way. The idea about HR according to Legge (1985) is that HR is involved in activities that have nothing to do with it been strategic and this are activities that can be outsourced. This as a result, has affected the credibility and ability of HR in organizations. Since then, researchers like Ulrich (1997); Wener and DeSimone (2009) are of the opinion that HR should be more strategic which helps in achieving the goals of the organization and also, to validate the cost-effectiveness of the organization rather than been operational. Go'mez-Mejia et al (2009) is of the opinion that change is a process that needs to be done by HR specialist since HR is involved in the process of change in an organization. On the other hand, HR has failed to realise their credibility and capabilities (Rees and Johari, 2010). Also, Anita (2006) is of the opinion that Ulrich (1997) strategic view can be problematic.
In order for HR to effectively have an authentic partnership in the organization, its functions must be channelled towards the design, planning and development of the organization (Lawer, Boudreau and Mohrman, 2006). HR scholars and researchers have suggested that HR professionals should be able to communicate properly with senior managers in implementing strategies in the organization. HR should act professionally Ulrich (1997) and be focused on strategic practices and policies rather than just implementation process thereby creating values for the organization.
In order to function strategically as a business partner and execute successfully challenging and critical roles that are new, so as to impact on the bottom line of the organization, HR needs to articulate the necessary strategic skills or competence that is relevant. This is evident in Ismail and Long (2009:118) that it is an employee related concept which is seen as a set of behavioural components of an employee work performance that is effective. Also, Iyang (2009:65) is of the opinion that competencies are connected skills, knowledge and attitude attributed by employees in an organization so as to perform exceptionally well. This according to Aitchison (2007) may affect the performance of HR professional to take up strategic roles as a result of low competencies.
According to Ismail and Long (2009), there are competencies needed by HR professionals. They are: personal credibility, to have knowledge of the business, contribute strategically to the organization, HR delivery, HR technology, and consulting internally in the organization which is needed by HR to perform in strategic roles and to succeed in an environment that is competitive. These are human resource competencies (Brockbank and Ulrich, 2003). The internal consultation is an exception, but the HR professional needs consulting skills that is a combination of analytical and negotiating skills so as to enable the HR professional work in synergy with line managers so as to generate strategic results in solving business problems and problems of other departments (Ismail and Long, 2009).
However, due to the fast changing business environment, there is need for HR to be highly skilled and knowledgeable so as to effectively function as strategic business partners. This is why Iyang (2008:61) is of the opinion that HR professionals should have a wider strategic knowledge so as to manage effectively. Lawer III and Mohrman (2003:4) is of the opinion that as HR professionals become more strategic, they should generate new thinking thereby going beyond its operational activities. Also, HR needs to be involved in the management team thereby making effective contributions to the design of the organization, be involved in strategic change and in developing strategy (Lawer III and Mohrman, 2003).
HR COMPETENCY AND CREDIBILITY
Changes in the last decade have placed recent requirements on HR practitioners as a result of this; HR practitioners must generate recent competencies in order to be successful. It can be argued that successful HR professionals in the last 20 years cannot be effective or successful today due to the changing environment.
According to Brockbank et al., (2002) cited in Boselie and Paauwe (2005), for HR professionals to be competent, they must possess these three factors which are, having the knowledge of the business, be able to manage change and also HR capability function, and should be realistic or practical when thinking about the context of the business. Consequently, personal credibility, cultural and diversity management were included. Also, Brockbank and Ulrich (2002) cited in Boselie and Paauwe (2005) in a survey, generated HR factors similar to that of Brockbank et al., (2002) which are HR technology, personal credibility, strategic contribution, knowledge of the business. HR delivery and when possessed can enhance the performance of an organization.
It has been suggested that for HR to be effective in an organization, they need to have the knowledge of the workforce and their capabilities as well as skills; with this the function of HR would be essential and effective in the organization (Schuler et al, 2003).
Ulrich et al., (2009) generated HR competency functions for enhanced performance in the organization which are strategic positioned, credible activist, HR innovator and integrator, change champion, technology proponent, capability builder which must target the workforce, the organization and the context (External Environment).
In a survey by the RBL Group (2011), 32% of HR department has more influence on the performance of an organization whilst 8% on HR professional skills. Therefore, it can be suggested that HR should put more effort to work in synergy so as to add value to the organization. This is why the CIPD (2010) suggests that HR function should contribute to the performance of the organization which should be emphasised by the stakeholders. However, since HR can be suggested to be a strategic partner, they should be able to communicate and work alongside with line managers and executives so as to effectively formulate generated strategies.
FUTURE OF HR
In order to respond to the uncertainties of the complex and global business environment in the future, HR professionals should be able to act in a strategic way thereby investing in them so as to deliver value fully to the organization, workforce and stakeholders (Investors, communities and customers).
The reason why organizations expand across international borders is to be competitive and generate profit. As a result of this, the function of HR has become more challenging. For this reason, DeCieri et al., (2005) is of the opinion that HR should re-align its agenda so as to focus more on flexible international organizations and cross-cultural management. In the light of Ulrich (1997), a strategic partner should be involved when deciding the nature of job to outsource. Also, Wang (2005) postulate that in order to administer value and deliver technology in various locations in a manner that involves cost-effectiveness and is on time, human resource managers should be involved. However, for strategy to grow, organizations decide to go into mergers and acquisitions and this is where HR also plays a vital role in ensuring that HR matches its resources so that there will be a strategic fit when going global.
Conclusion
According to Thompson (2011), it has been criticised and observed that the attention of HR has moved away from focusing on the employees/workforce and shifting towards befitting the management of an organization thereby acting as hand-maidens and as a result reducing their credibility. In order to resolve these criticisms, HR should be able to establish a balance amongst the stakeholders relating to the business. The CIPD (2010) is of the opinion that HR will enhance its credibility and ability if they are able to create a balance amongst stakeholders thereby fulfilling their role as a function that is relevant to enhancing and sustaining organizational performance (CIPD, 2012).
