does hr devolution lead to hr evolution

DOES HR DEVOLUTION LEAD TO HR EVOLUTION?

Zeya Lin (31823426) MBS617: HRM PERSPECTIVES

1




2

EXECUTIVE SUMMARY

Th is researc h r epo r t exp la ins how the pe rsona l depar tmen t has

evo l ved and pe r f o rmed through the years to become the strategic partner of business

organization in today’s economy. Originally, t he pe r sona l depa r tmen t was j us t

c ons ide red as a me re r ec o rd -k eep ing un i t . The i r functions were just to hire,

prepare wages, and train the employees for the organization. It was with

the passage of the Civil Rights Act of 1964 that made some momentum was attained in the

growth of the personal department. In later time, it came to known as the Human Resource.

During the 1970’s, the HR department was forced to be more competitive as one of

the key strategic functions due to the demand for greater organizational accountability. This led

to HR being the strategic partner of business organization. Nowadays, the

responsibilities of HR were more related to business development rather than

administration alone. Technology played an important role in doing all the non-

strategic works of HR and so they were more focused on diagnosing the business

needs and offer reliable solutions to the organization. Globalization was also another factor

which made the HR a strategic partner; they had to create global policies for data management,

hiring workforce from different parts of the world keeping the organizations goals in mind.



3

CONTENTS

.

1. INTRODUCTION 4

2. HISTORY OF HUMAN RESOURCE 4

2.1. Industrial Revolution; the Initial Stage of HR 4

2.2. HR Responsibilities 5

2.3. Transitions to Human Resources 6

3. HUMAN RESOURCE 6

3.1. The HR Functions 7

3.2. HR as a Strategic Business Partner 8

4. CONCLUSION 9

BIBLIOGRAPHY 10



4

1.INTRODUCTION

Human resource management traced its origin back to the earlier times when

carpenters, builders, mason and other workers arranged into leagues so that they

could increase their productivities and working environments. The intention of

human resource management is to focus on managing the people within the

organization. As all other economic traders and professions are evolving, human

resources have been undertaking changes and developments. The ind ustrial

revolution in 18 th century was the major incident that most of the ordinary labors

were replaced with machines which led to the establishment of factories where

large labor forces are employed (J.Jamrog, 2004). During that time, a wide gap

between the employers and the employees began to grow which led to less

communication between them and the introduction of trade unions and other

movements from the employees’ started to protect their rights and protections

(Nayab, 2011).

These factors had led to the founding of the personal departments from the

employers so that they can be the representatives for the employers. Personal

departments are the early forms of human resource managements and their roles

basically include the employment, training, wages setting and counseling. During

the early days, these personal department actions were just administrative in

nature and it is still considered as a record keeping unit until the late 1960’s. It was

with the passage of the Civil Rights Act of 1964 the HR gained importance. It was

this period which directed to the growth of the modern HR professional (J.Jamrog, 2004). The

Hum an Res ourc e Managem ent has gone f a r f r om j us t r ec o rd k eep ing ,

employment, training etc. The modern HR professional involves in strategic decisions in the

company thereby taking more responsibility for overall organizational effectiveness. The present

organizational environment sees the HR as its strategic business partner for global economy.

2.HISTORY OF HUMAN RESOURCE

2.1.Industrial Revolution; the Initial Stage of HR

Establishment of large numbers of factories during the industrial revolution gave massive

employment opportunities. This had resulted in the increasing demands of job specialization as



5

well as the workers’ productivity and proficiency. Labors were treated as commodities that could

be bought or sold and that abuse made the labors to organize so that the employers would

improve their working conditions (J. Jamrog, 2004). It was during the 1920’s, the organizations

begun employing specialist to assist in labors’ personal matters. Some US companies such as

US Steel created a Bureau of Safety, Sanitation and Welfare in 1911 and Ford Motor created a

Sociological Department that dealt with safety, medical, welfare and other legal aspects (J.

Jamrog, 2004). Those personal departments founded by the organizations are the basis of the

modern HR departments.

2.2.HR Responsibilities

HR should be leaders in ensuring the highest level of social responsibility. According to

Milton Friedman, a business has no social responsibilities other than to maximize its profits.

However, today there is a growing perception among enterprises that sustainable business

success and shareholder value cannot be achieved solely through maximizing short-term

profits, but instead through market-oriented yet responsible behavior. Bottom-line, HR has to

focus more on the employee and the employee‘s well-being. An outcome will be higher

employee performance and overall organizational performance. Not only will there be better

performance at work but stronger families, communities, and a better world for all of us. This is

one of the primary HR responsibilities that have not been fulfilled.

The responsibility of the personal management is the effective use of the skill of the

people. In the 1980s, a combination of economic and political factors led to the demand for

greater accountability in all functional areas of business, including HR. The massive

restructuring of organizations in the 1990s led to the outsourcing of many of HR’s basic

transactional functions. In an organization, the personal management’s duty starts with

the hiring of qualified people and continues with directing and encouraging the employees

when they face any encounter in fulfilling the tasks required for the organization. In order for HR

to add value to an organization, it must have several key competencies. Some other

responsibilities of the personal management include:

a ) Ca t egor i ze and p r epar ing wages and sa la r y sca le

b ) C o u n s e l i n g e m p l o y e e s

c ) Dea l i ng w i t h d isc i p l i na r y p rob lems



6

d ) Nego t ia t i ons w i t h labor o rgan i za t ions

e ) D e v e l o p i n g a n d s e t t i n g s a f e t y s t a n d a r d s

f) M a n a g i n g t h e b e n e f i t p r o g r a m s

g) To g i ve pe r iod ic r ev i ews on the pe r f o rmanc e o f eac h

em p loyees on how the employee is currently performing in the organization

and in what ways they can improve.

h ) To support individuals in developing their attributes so they can meet

the requirements for further jobs

i ) P lan and o rgan i ze s a f e t y t r a in i ng p rog rams

2 . 3 .T rans i t i on t o Moder n Human Res ou rce

In the 1960’s, the personal department was still considered as a record-keeping unit,

who handed out tenure awards and organized the company’s picnic. The passage of Civil

Rights Act of 1964 accelerated the importance of the personal/HR function which made the

managers of other sectors take notice. The top management made it clear that incompetence in

the HR function will be tolerated (J. Jamrog, 2004). Later in the 1980’s, the HR professionals

were told to use the concepts of system thinking. The system thinking that views is a concept all

the events as interrelated. For example, if an organization hires people of better skill and

education that it did previously before, then the HR function need to upgrade its training

program and must pay attention to the areas where it need more advancement (J. Jamrog,

2004). The personal management that did the administrative works have evolved due course of

time to HR that utilized the concepts of system thinking to attain the business goals of the

organization.

3.HUMAN RESOURCE

3.1.The HR Functions

The m odern bus iness i s com pos ed o f sever a l t ypes o f r esourc es .

They a re p h y s i c a l , f i n a n c i a l a n d h u m a n r e s o u r c e ( G i l l e y , 2 0 0 2 ) .

T h e p e o p l e w i t h i n t h e organization constitutes of the Human resource. Human

resource is that function of the organization which deals with the issues r e l a t ed t o

peop le s uch as h i r ing , t r a in ing , pe r fo rmance m anagement , o rgan i za t ion



7

d e v e l o p m e n t , c o m p e n s a t i o n , s a f e t y , e m p l o y e e m o t i v a t i o n ,

c o m m u n i c a t i o n a n d administration. During the late 1970’s many companies struggled

with high interest rate, growing international competition, shrinking productivity, which

lead to the demand of greater accountability in all functions of the company. The

HR function was not exempt from this. While there were many tools for the

measurement of the HR function these were not widely used. So suggestions came that

the entire HR department should be scrapped off or given to some outsourcing companies.

Some even suggested that the HR functions be divided within the other departments of the

organization (J.Jamrog, 2004). As a result of these suggestions the HR function was told

to change and add more responsibilities thereby becoming a strategic partner in business.

By doing so the HR function was made to t h i nk l i k e bus iness peop le f i r s t t hen

f o l l owed by as HR p ro f es s iona ls . H R M i s anticipated to add values to the

strategic utilization of employees and that employee programs impact the business in

appreciable ways.

3.2.HR as a strategic business partner

In the recent years technology and outsourcing has replaced HR in non-strategic

wo rk s s uc h as bene f i t s en ro l lmen t , payr o l l . W i th t he i n t roduc t i on o f

t echno logy t he administrative role of the HR personal has become a thing of the past

(Brandel, 2005).HR as a strategic partner focuses on developing a varied workforce which helps

in attaining the goals set b the organization. The modern business scenario requires the

HR professionals to develop strategies for acquiring the right people. Diagnosing

business needs and o f f e r i ng adv ic es a r e s ome o f t he ac t i ons done by t he

HR p ro f ess iona l as s t ra t eg ic pa r tne r . HR p ro f ess iona l s as s t r a teg i c

manager s need t o wo rk w i t h t he l i ne m anagers t o m anage the peop le

p roc ess wh i ch enab le t he o rgan i za t ion mee t t he bus iness r equ i rements

( Par us , 2003) . The exam p le men t i one d s how how the HR p ro f es s iona ls

ac t as s t ra t eg i c pa r tne rs i n bus iness o rgan i za t ions .

Ta rge t Cor por a t i on :

The o rgan i za t i on ’s m is s ion i s t o be t he p re f e r red shopp ing

des t i na t ion f o r i t s c us t omers and the bes t work p lace f o r i t s em p loyees .

Acc ord ing t o Targe t Cor por a t ion HR i s t he s t ra t eg ic pa r tne r t ha t i s no t



8

on l y p r es en t a t t he t ab le bu t i s acc oun tab le f o r s ta f f i ng re t en t ion ,

deve lopment and b r and managem ent o f t he t eam members ( Par us , 2003) .

HR as i t s s t ra t eg ic pa r tne r de l i ve red the requ i red res u l t s , added va lues

and deve loped a succ ess f u l r e la t i onsh ip w i t h i t s c us tomers , s har eho lde rs

and emp loyees .

G loba l i za t ion has p l ayed an im por tan t ro l e ; t he c hange i t has

b rough t i s s e l f - ev iden t . Fo r examp le , i f a c a r com pany needed t o deve lop

a new eng ine t he manu f ac t u re rs cou ld l ook a t t he who le wo r l d and ask

t hems e l ves whe re t hey shou ld deve lop t he eng ine ( J ohns on , 1997) .

S im i l a r l y , peop le f r om d i f f e ren t pa r t s o f t he wor l d a r e com pet i ng aga ins t

o t he r in t he same f ie l d . The s t ra teg ies f o l l owed by t he HR a re ,

s t andar d i zed ass es sment deve lopment and com pensa t i on p rac t i ces ;

g l oba l po l i c i es f o r da ta m anagement , pe r f o rmance managem ent and

deve lopment , c rea t ing a cen t ra l i zed repor t i ng r e la t ions h ip a round the

g l obe ( R ioux ) .

HR devo l v i ng down the l i ne

Some of the functions of the HR department are now being transferred down to the line

managers. Line managers are taking an important role in the recruitment and the selection of

employees. When line managers assume most of the routine activities associated with people

management (e.g., training, recruitment and selection, performance appraisal), HR specialists

are free to spend more time orchestrating large-scale organizational change efforts

(Cunningham & Hyman, 1999) and developing overarching employee-focused policies (e.g.,

with respect to work and family integration) (Lansbury & Baird, 2004). Through these activities,

the HR unit is likely to gain more visibility within the organization and be viewed as making a

clear value-added contribution that affects the well-being of the organization as a whole. For

example, Gennard and Kelly (1997) studied senior HR executives in 28 organizations; 26 of

these organizations had been placing greater responsibility for managing human resources with

line managers over the last decade. Gennard and Kelly (1997) observed that line managers in

devolved organizations became more demanding in seeking higher-value contributions from the

HR unit. As a result, line managers in devolved organizations developed a greater appreciation

of what HR could offer.



9

4.CONCLUSION

The changes undergone by the HR function shows us that there was no

period when the HR function stopped to evolve (Ulrich, 1997). From being the personal

function that did the administrative tasks to the strategic business partner, the transition has

been gradual and impacted by the external and internal environmental changes. In

this age of mergers and acquisitions, HR has been all the more important for the

success of these ventures. Besides the cultural issues that come up during these

acquisitions, it is also needed t o c r ea t e a ba lanc e be t ween goa ls , s ys tems

and p r oc ess es . The indus t r y i s undergoing constant changes, with these changes

there is revision of strategies and goals of the organization (Ulrich, 1997). To cope up with these

revisions the HR has to acquire good talents and add effective training programs to meet these

challenges. All professions evolve; it is up to those individuals who participate to

take an i nc r eas ing r o le i n de te rm in ing how t he changes w i l l have an

impac t on t he i r j obs . Companies who still use the HR as an administrative

function are ignoring the market conditions and the current requirements for

success. Studies show that company who make the HR as their strategic partner is more

productive and profitable than those who do not follow this practice. Now it time to look

forward to and start to adopt new business practices and further advancing the

advancing the HR in the coming years. As John F.Kennedy once said “Change is

the law of life and those who look only to the past or present are certain to miss the

future”.



10

BIBLIOGRAPHY

Björkman, Ingmar, Mats Ehrnrooth, Adam Smale, and Sofia John. "The Determinants of Line

Management Internalisation of Hrm Practices in MNC Subsidiaries." The International Journal of

Human Resource Management 22, no. 8 (2011/04/01 2011): 1654-71.

Cascio, Wayne F. "From Business Partner to Driving Business Success: The Next Step in the

Evolution of Hr Management." Human Resource Management 44, no. 2 (Summer2005 2005):

159-63.

J. Jamrog, Jay & Miles H Overholt. "Building a Strategic Hr Function: Continuing the Evolution."

People and Strategy (2004): 51-61.

Jerry W Gilley, Steven A Eggland, Ann Maycunich Gilley. Principles of Human Resource

Development 2nd Edition ed.: Basic Books, 2002.

Johnson, Mike. "Hr: Tomorrow's Strategic Partner." Management Review (1997): 60-61.

Kulik, Carol T., and Elissa L. Perry. "When Less Is More: The Effect of Devolution on Hr's

Strategic Role and Construed Image." Human Resource Management 47, no. 3 (Fall2008

2008): 541-58.

Mary, Brandel. "HR Gets Strategic." Computer World (2005): 33-34.

Nayab, N. "A Traditional Approach to Human Resource Management."

http://www.brighthub.com/office/project-management/articles/75466.aspx.

Parus, Barbara. "Hr: From Paper Pusher to Strategic Partner." Workspan (2003): 26-29.

Perry, Elissa L., and Carol T. Kulik. "The Devolution of Hr to the Line: Implications for

Perceptions of People Management Effectiveness." International Journal of Human Resource

Management 19, no. 2 (2008): 262-73.

Ramlall, Sunil J. "Continuing the Hr Evolution: Building Resilience in Turbulent Economic

Times." International Journal of Global Management Studies 1, no. 3 (2009): 19-28.

Stone, Raymond J. Managing Human Resources. 3rd Edition ed.: John Wiley & Sons Australia,

Ltd, 2010.

Ulrich, Dave, Jon Younger, and Wayne Brockbank. "The Twenty-First-Century HR

Organization." Human Resource Management 47, no. 4 (Winter2008 2008): 829-50.

does hr devolution lead to hr evolution

Documents