How HR Function can add Value to the firm

HR function is a core department that can help the entity plan effectively for challenges it could face. For instance, HR is vital in ensuring effective change in organization as well as managing diverse interests of a multicultural group to meet organizational goals. In the section below, ways in which HR can add value to the firm are evaluated.

Enhancing the capability of an entity to adopt to change; Change agent role

The competitive nature of the modern business environment and its dynamism imply that organizations must adapt to such changes by transforming their practices, some of which could necessitate a change in corporate culture. HR in this respect enables organization to achieve such a change effectively, by performing the role of a change agent (Haines & Lafleur 2008). For instance, HR professionals could play a critical role in creating opportunities through which a memory on change is created throughout the organization (Court 2011). This would entail engaging individuals and teams to identify aspects that the organization has experienced that would better orientation of future approaches. Through such sessions, principles on what works for the organization and those aspects that may never work, are built and, following the engagement of employees, help to drive commitment (court 2011).

Secondly, role of human resource in developing and entity’s capacity to change involves delineating the behavioural aspects required for change (Court 2011). This would involve developing principles of guidance (e.g. corporate code of conduct) that highlights what the organization expects of its employees, both as individuals and in teamwork. Recent cases of unethical practices, which have had significant impact on the affected organizations (e.g. leading to some of the entities becoming bankrupt; House of Commons 2008), buttress the role of HR in ensuring policies that encourage ethical practices prevail throughout the organization (Feldman 2006; Heineman 2007).

To build a firm’s ability to manage change, the third role of HR professionals would be to developing interventions that support the employees making the transition (Court 2011). Such interventions could involve organization into teams through which training is provided. Other interventions are can be exemplified in a case that details the transformation of the organizational culture in General electric, during the reign of Jack Welch – 1981-2001 (Bartlett & Wozny 2005). During his tenure, notable changes that necessitated a cultural change for instance included changing of business heads with a fresh team whose management approach (towards a more open, flat organization) was different from that of the departing heads (hierarchical with many reporting levels) (Bartlett & Wozny 2005). Without appropriate interventions (e.g. team sessions) that would prepare the employees for such a new approach to management, the organization may not have succeeded in overcoming liabilities such as the lack of employees to share vision, associated with new leaders (Pretorious 2009).

After implementing the interventions, HR role as a change agent would be to track improvements. In such a way the role of HR professionals would be to provide individualized performance appraisals on a frequent basis (Court 2011). Such performance  appraisals however need to take into account aspects such as innovation, to avoid impeding innovative approaches that the organization fails to implement thus may not be highlighted in an individual’s performance (Cohen 2004; Ismail, Omar & Bidmeshgipour 2010). Such perspectives are exemplified in the case study about Jack Welch’s transformation of GE, where “stretch” goals – goals that were aimed to help employees become their best selves – were used for rewards but not to punish those who never met such goals (Bartlett & Wozny 2005). In line with the change agent role, the HR can thus help the organization to develop appropriate behaviour that would ensure it remains competitive, thus adding value to the business (Haines & Lafleur 2008).

Aligning towards the goals of the Organization; business partner role

HR department could also serve as a value adding department by enhancing its alignment towards the organization’s strategy.  One way through which this can be achieved, has been suggested as incorporating HR professionals into decision-making arena of the organisation (Caldwell 2011; Lawler 1995; Sisson 1995; Shipton & McAuley 1993). Through this approach, it hypothesized that such professionals would be involved in planning process thus enhance the extent to which the integration of the business strategy and the HRM strategy is achieved (Caldwell 2011; Lawler 1995; Sisson 1995; Shipton & McAuley 1993).

Kane and Palmer (1995) for instance present a theoretical framework that highlights how the HRM strategy may be integrated into the business strategy (p. 7). According to this framework, HRM strategy would be linked to the organizational strategy to provide policies and practices that are advised on the analysis of internal and external environments of the organization. When not linked to the organizational strategy, implemented policies may for instance run contrary to the prevailing conditions external to the organization. Dyler and Holder (1988) for instance highlighted such a scenario with respect to macro-economic challenges, noting of some US corporations to have “…“…found their paternalistic HR strategies to be unsustainable in the face of continuing competitive pressures and depressed earnings” (cited in Kane & Palmer, 1995, p. 9). Accordingly, by serving the role of a business partner, HR would better the value of the entity, by ensuring practices in the organizations are not discordant with realities in the external environment. go to part 7 here.

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