HUMAN RESOURCES MANAGEMENT

The success of any organization depends on how the resources are managed because the resources propel the company towards its goals. Human resource is one of the most important corporate assets of an organization. Nowadays, due to the recognition of the crucial importance of people, HRM has become the major aspect of developing strategic plans for an increasing number of organizations. According to Armstrong (2006, p.2), “Human resource management is a strategic and coherent approach to the management of an organization’s most valued assets – the people working there who individually and collectively contribute to the achievement of its objectives.” Both domestic and global companies align their organizations strategically with HRM to gain competitive advantage. This essay seeks to identify and investigate the strategic importance of HRM either with an HR specialist inside the company or without employing them.

Every organization consists of people, so, acquiring their services, developing their skills, motivating them to get the high level of performance and maintaining their commitment to the organization are essential for achieving organizational objectives (Decenzo et al., 2012). Managers of successful companies are aware of the importance of recruiting, selection, training, developing, rewarding, compensating and motivating the employees (Ivancevich, 2009). On the other hand, many organizations struggle with managing their employees without involving HR specialists. However, HR can provide them invaluable support with such areas of people management as cost saving, managing performance, providing guidance with employment legislation, helping companies manage their staff fairly, helping avoid employment tribunals, training and development, recruitment, employee engagement, helping with change and rewarding (SJ Beale HR Consult, 2013).

There are two main goals of HRM. The first one, supporting the organization in achieving its objectives by developing and implementing human resource strategies integrated with the business strategy by contributing to the development of a high-performance culture. The second one, creating a positive employment relationship between management and employees by ensuring that the organization has the talented, skilled and engaged people it needs (Armstrong and Taylor, 2014). According to Dyer (1984, p.159), “HR strategy is the pattern that emerges from a stream of important decisions about the management of human resources, especially those decisions that indicate management’s major goals and the means that are (or will be) used to pursue them.” Since HRM strategy is closely linked to business strategy, the managers or executives who create business strategies can also create HRM strategies of the organization. According to Bratton and Gold (2000), “once the business strategy is determined, without the involvement of the HRM professional, HRM policies and practices are implemented to support the chosen competitive strategy.”

When HRM and business strategies are aligned to each other, there will be no need for HR specialists or any other professionals to formulate HR strategies. However, companies also need HR to manage their employees. There are three main methods of doing it. Firstly, they can give the responsibility of HR to their department or office managers. For example, small business owners often do not hire an HR specialist at the beginning in order to reduce the costs. However, when the business grows and the number of employees increases, companies need HR specialists for getting a professional approach for hiring, benefits, dealing with labour laws and other functions (Popick, 2012).

Secondly, companies can create an HR department inside the organization by hiring HR specialists. The HR department inside the company allows having a variety of specialists, who perfectly fit the needs, vision and strategies of the company. According to Armstrong and Taylor (2014), HR managers can be generalists or specialists, work at different levels, have experience in working in different contexts and corresponding various senior managers approaches, have a certain set of capabilities. Their function inside the company may also differ. They can be innovators, change agents, strategists, business partners, internal consultants and facilitators. HR specialists are also crucial for big companies as process standardizators. Westfall (n.d.) suggests that companies do not need any HR specialist until 50 employees and it is better to hire one HR specialist for each fifty employees. According to Popick (2012), an HR specialist can adapt more professional approach to hiring but only the managers of organizations know what specific skills are needed in the company.

Thirdly, companies can outsource their HR functions if they do not want HR department in their organizations to save money and get more professional support from experts. According to Adams (2016), outsourcing is a great option if a company is rather small and needs only occasional guidance or help in hiring. The employers are able either to outsource a particular aspect, such as tracking the applicants or outsourcing all functions of the HR department. However, according to Jampala et al. (n.d.), “the main problem in HR outsourcing is finding the suitable person for outsourcing and identifying the activities for outsourcing. If the companies manage this, they can achieve better results with HR outsourcing.”

Some major companies were able to deal without HR departments. For example, Ruppert Landscape Inc., a landscaping company has never had a traditional HR department despite having 900 employees. The managers of the company were performing HR functions themselves, including getting talented employers by organising college recruiting sessions and making the actual employees aware of the strategies and plans of the company. (Weber and Feintzeig, 2014) On the other hand, the absence of HR specialists in the company can be risky. The absence of an HR department in Outback Steakhouse resulted in losing the lawsuit. The company was accused of sex discrimination and had to pay $19 million. As a result, the company created an executive-level HR position. (Weber and Feintzeig, 2014)

Based on personal experience, it can be concluded that despite many advantages of HR professionals, they are good at creating policies and practices but they are not so successful in implementation. It is crucial for companies to hire the specialists who understand the working environment and objectives of the organization. It is very difficult for an HR specialist to evaluate a specific job if that specialist does not have any experience in that field. Sometimes, the specialists hire wrong people because they do not understand the capabilities of employees. In addition, they cannot advice necessary trainings to people to increase their performance if they cannot understand the work environment. Furthermore, the specialists are not able to describe job requirements to an employee and they have to ask the department managers. Purcell et al. (2003) also point out that “high levels of organizational performance are not achieved simply by having a range of well-conceived HR policies and practices in place. What makes the difference is how these policies and practices are implemented.”

In summary, nowadays, HR management is vital for gaining the competitive advantage. Small companies can get success without traditional HR department. However, it is essential for middle-big size companies to hire HR specialists or outsource them from a professional HR company who have experience in the company’s sphere of business. Otherwise, the specialists would not be able to hire right people, to contribute enough to the performance of employees and to help companies achieve their objectives. Guest (1991, p.159) states, “HRM is too important to be left to personnel managers”. In addition, Guest and King (2004, p.421) state, “better HR depended not so much on better procedures but better implementation and ownership of implementation by line managers”. The best method of HR management is to combine hiring or outsourcing several specialists experienced in company’s ongoing business with giving more HR responsibilities to line managers.

Serkan Baran ?Z

29.03.2017

Reference List:

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