HR Effectiveness Services Roles and Contributions Essay Example
HR Effectiveness Services Roles and Contributions Essay Example

HR Effectiveness Services Roles and Contributions Essay Example

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  • Pages: 14 (3810 words)
  • Published: September 20, 2017
  • Type: Case Study
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Introduction
This study focuses on evaluating the performance and effectiveness of HR (Human Resources) in Pakistan. In this business field, HR has not yet gained the acceptance of top management. This can be attributed to two possible reasons; firstly, top management might be unaware of the abilities of HR to provide competitive advantage, or secondly, HR might be unable to deliver competitive advantage. Therefore, this research aims to examine the perception of managers regarding various background factors such as experience, managerial level, department, position, and educational background. Utilizing this background information, the researcher assesses the perception of HR effectiveness based on three HR variables: Services, Role, and Contribution.

The study assessed the performance of HR in both private and public companies in Pakistan. The data collected was random and not specific to any particular industry. The research survey included 100 m

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anagers/executives as respondents. The results indicated that only the independent variable 'category of managerial degree' significantly influenced all three HR variables - Services, Role, and Contribution. Additionally, there was a significant interaction between department and academic background with managerial degree category. The results showed that middle management had a higher recognition of HR compared to top and lower-level managers.


The conclusion is that HR is highly valued by new employees and middle-level managers in the business world. HR service, role, and contribution are important and recognized at all levels, but top-level managers have higher expectations from HR. This is why top-level managers rank HR lower than middle-level managers. The business environment is undergoing significant changes. In the late 90s, the rate of change increased due to globalization, advancements in information technologies, and shifts in economic, demographic, and

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regulatory factors. These changes have transformed the way businesses operate worldwide. Business structures are now becoming more flat, hybrid, and virtual.

The changes in organizational structure have led to the emergence of new functions such as information technology, and it is the responsibility of HR departments to develop and implement new procedures and redesign or reengineer business processes. Overall, organizations are becoming more flexible in operations and moving towards becoming learning organizations, where information flows freely and organizations continuously learn. Due to these changes in the business world, the importance of human resources has increased in corporate settings. Human resources are now seen as strategic contributors rather than just cost centers as they have been traditionally viewed. Managing human resources in this uncertain environment is a crucial task for HR departments. As a strategic partner, human resources can be considered an asset to the company, providing not only a competitive advantage but also a sustainable competitive advantage. This is because human resources are scarce and not easily replicated by competitors.

Research workers are uncertain about the most effective practices of HRM, as they believe that each organization should develop their own suitable approaches based on their internal and external environment. In Pakistan, we are currently attempting to rename our service forces as "human resources". It is important to note that the HR function is evolving and we need to move away from administrative functions towards a more dynamic role that positively contributes to the overall goals. Our situation differs from developed markets as HR practices in our country are primarily influenced by multinational corporations.

Several Pakistani companies also have a highly developed HR function; however, these practices are

influenced by Western or Japanese models. Nonetheless, the criticism of human resources appears to be universal and remains the heart of the issue. In Pakistan, HR is seen as a cost center rather than a strategic contributor, and HR is perceived to offer outdated solutions. To address this problem, no single solution will be enough to completely change the negative perceptions of existing human resources.

More significantly, cipher is traveling to hold human resources to the degree of credence that is intended - Hour has to turn out itself. One of the arguers of fiscal times perceives that HR has a good clip in front in cognition economic system, as HR will supply the council chamber with gifted people who can show their worth in fiscal betterment in their organisation (Leon, 23).

STATEMENT OF THE PROBLEM: In Pakistani scenario, companies established Human resource section but still most inquiry its place in the organisation. Some directors believe that Human resource has no function in supplying value to the organisation while many directors believe that Human resource provide sustainable competitory advantage.

Directors who recognize the significance of human resources for future success understand that HR is a valuable asset. To comprehend the differences in directors' perceptions of HR, we need to consider their beliefs, which are shaped by their academic background, professional experience, and involvement in the HR field. Therefore, my research aims to examine the impact of managers' backgrounds on their perception of HR effectiveness.

1.2 THEORETICAL/CONCEPTUAL MODEL/FRAMEWORK TO BE USED:

  • Line Manager's perception
  • HR Manager's perception
  • HR Services
  • HR Role
  • HR Contribution
  • HR Effectiveness
  • Background of Directors

VARIABLES TO BE STUDIED:
Independent Variable:

  • Background of Line and HR Directors
  • Academic Background
  • Positional Background
  • Class of the Director
  • Department of Director
  • Managerial Experience
  • Ratio

of HR employees to total employees/HR employment ratio

  • Time period since HR establishment
    • Sub Variables of HR Effectiveness
      • HR Servicess
      • HR Role
      • HR Contribution

      PROPOSED RESEARCH HYPOTHESIS:

      • H01 = HR Managers and Line Managers have equal perceptual experience sing HR effectivity
      • H02 = Directors with HR academic background and Directors with non-HR academic background have equal perceptual experience sing HR effectivity
      • H03 = HR Managers belonging to different classs and Line Managers belonging to different classs have equal perceptual experience sing HR effectivity
      • H04 = HR Managers and Line Managers of different sections have equal perceptual experience sing HR effectivity
      • H05 = HR Managers and Line Managers of different Experience have equal perceptual experience sing HR effectivity
      • H06 = Companies with different HR employment ratio have equal perceptual experience sing HR effectivity
      • H07 = Companies with different clip period of HR constitution have equal perceptual experience sing HR effectivity

      RESEARCH SCOPE & LIMITATIONS The survey is limited to

    the sample size collected, time restraint to incur in-depth survey, utility restraints, and researchers' prior knowledge. The information generated through the survey should not be generalized to all the Managers' perception in Pakistani Firms.

    LITERATURE REVIEW Defining HR According to the HRM book, 9th edition, Human Resources in an organization involve planning a formal system that ensures the effective and efficient utilization of human resources to achieve organizational goals. The function of HR activity is to provide a system that ensures a continuous supply of the desired level of human resources, plans for future HR needs, and ensures desired outcomes from employees.

    Figure 1 illustrates the Goals of HR, the activities they perform, and how these activities align with the organization to achieve success. The productivity can be assessed based on the output per employee. Quality plays a critical role in ensuring customer satisfaction, and a well-equipped human resource can deliver high-quality products and services. To enhance the organization's service, HR must revamp processes and make changes in corporate culture, leadership styles, HR policies, and practices (source: Human Resource Management Book, 9th edition).

    Development of HR Management

    HR began its formal operation in 1900, when most HR decisions such as hiring, firing, training, and pay adjustments were made by supervisors. Frederick W. Taylor's studies in scientific management helped make work more efficient and productive. In the mid 1920s, Hawthorne studies revealed the impact of work groups on individual workers, leading to the use of employee guidance and testing in industry. From the 1930s to 1950s, major labor laws were enacted which standardized HR operational roles, including tasks such as maintaining payroll and retirement records,

    arranging shareholder visits, managing school relations, and organizing company field trips. From the 1960s to 1990s, HR became more professional and focused on meeting legal requirements for HR policies and practices due to increased regulation.

    The text discusses the transformation of HR practices from traditional to current methods, with a focus on strategic values and job design to enhance worker productivity. This shift is driven by four factors: economic shifts, demographic shifts, technological advancements, and globalization. The economic shifts in the 1970s, including inflation and slow growth, increased the importance of HR in addressing productivity challenges. Additionally, the increasing service-oriented nature of the economy required HR to adapt to labor-intensive practices. In the 1980s, demographic shifts brought changes in culture and a focus on career development, work-life balance, and diversity management. This required HR to be proactive in establishing a supportive work environment. These changes ultimately necessitated a more strategic approach to HR management.- Regulative Shifts: New laws pertaining to health and safety, affirmative action, and corporate rights alteration in HR policy making.

    - Management becoming more complex or restructuring: In the near future, HR managers' jobs will become complex and difficult due to globalization and organizational strategies such as integration, restructuring, unifying, and outsourcing. The main focus will be on selecting, developing, and compensating managers.

    Despite these environmental shifts, human resource management has made little progress. Corporations still struggle with HR issues, but a few have responded by establishing strong HR functions (Tichy, Fombrun, and Devanna, 1981). These HR problems arise when businesses expand and transition from organic to functional structures, with entrepreneurs prioritizing other functions over HR. The present century has seen rapid changes in all

    these factors. This has altered how businesses operate, now prioritizing cost efficiency, the development of effective processes, the delivery of quality services, the innovation of new products, and flexibility in response to customer demands.To achieve success in today's business world, it is crucial for organizations to navigate through a complex and dynamic environment. This requires managers to have a rational human capital. Without it, businesses cannot achieve their strategic objectives or gain a competitive advantage (Becker and Gerhart, 1996).

    Technical and strategic human resources effectiveness

    Both internal and external stakeholders prefer proficient HRM practices. External stakeholders prefer conformity, while internal stakeholders (line directors and executives) prefer high-quality proficient HRM practices. Technical HRM practices include recruiting, selection, performance measurement, training, and the management of compensation and benefits. The impact of proficient human resource management activities on firm performance is an important field of study in HRM, industrial relations, and organizational psychology. Numerous studies argue that these practices can improve firm KSAs, increase motivation, reduce turnover, retain quality employees, and discourage non-performers (Jones & Wright, 1992).

    In contrast, there are late-developed patterns of strategic HRM that stakeholders do not prefer to follow. However, numerous research studies prove that these strategic HRM practices have a positive impact on firm performance. These practices include employee empowerment, high-quality work practices, flexible human resources, team-based job designs, scanning the environment to meet the firm's strategic needs, and developing the necessary resources through planning to implement strategy and achieve operational goals (Huselid, Jackson, and Schuler, Feb 1997). The importance of strategic human resource practices has increased with the growing professionalism in this field. There are three perspectives in strategic human resources management: the universalistic perspective,

    contingency perspective, and configurational perspective. The universalistic perspective believes that there are best HR practices that are superior to others and that firms should adopt those practices.

    According to the contingency perspective, integrating HR patterns and house scheme is essential for achieving exceptional results. The perspective emphasizes that HR patterns should be customized to align with both the internal and external environment, especially the organizational scheme (Hamish G. H.).

    Elliott ) . Resource based attack The resource based position of acquiring competitory advantage believes that the resources and capabilities are the foundation for long term strategy for two reasons. First, internal resources and capabilities are seen as the sources of acquiring competitive advantage and secondly, firms acquire high returns from these sources. However, these sources may not provide sustainable competitive advantage because other rivals may imitate or purchase them. Therefore, sustainable competitive advantage is achieved when the company adopts a strategy that has not been simultaneously implemented in existing or potential rivals and when these other companies cannot replicate the benefits of this strategy (Barney, 1991).

    Firm resources encompass all of the assets, capabilities, procedures, attributes, information, and knowledge controlled by a company. These resources are utilized to devise and implement strategies that enhance the company's efficiency and effectiveness (Daft 1983, cited in Barney, 1991, p. 101). The resources fall into different categories including physical capital resources, human capital resources, organizational capital resources, financial resources, technological resources, and reputation. If these resources are readily available on the open market, anyone can acquire them and achieve similar or better results. However, sustaining a competitive advantage from these resources may be challenging unless the resources are limited in supply

    as suggested by Barney (1986b). On the other hand, a more favorable approach to achieving sustainable competitive advantage is by utilizing intangible or implicit resources that are typically built rather than purchased (Dierickx and Cool, 1989). Human resources are the only resources that possess the characteristics of being rare, valuable, incompletely imitable, and non-substitutable. Other resources such as reputation for quality can be developed over time through consistent production and quality control policies. However, human resources cannot be replicated exactly in the same manner.

    ( Lado & A; Wilson, 1994; Pfeffer, 1994; Wright & A; McMahan, 1992). According to the resources-based perspective, firms cannot achieve a competitive advantage by simply purchasing resources or copying a set of best practices universally. Instead, firms should adopt a configurational view and develop a system of HR practices that align with their competitive strategies. This includes considering internal practices, policies, and resources to ensure both vertical and horizontal fit. By doing so, firms can properly utilize their rare, unimitable, and non-substitutable human resources (Dierickx and Cool, 1989). Wright et al.

    In 1994, the Competency Approach emerged as a belief in acquiring competitive advantage through HR systems. This approach categorizes HR systems into two types: competence-enhancing and competence-destroying. The first proposition states that firms with HR systems that facilitate the development of all organizational competences related to input, output, and managerial aspects are more likely to achieve competitive advantages compared to those with systems that hinder these competences. In order to obtain sustained competitive advantage, firms should not only have competency-enhancing HR systems but also ensure that these systems are unique, interactive, and create synergy. This leads to the second proposition which

    suggests that firms with unique, causally ambiguous, and interactive constellations of competence-enhancing HR attributes will maintain a competitive advantage over those with typical, causally determinate, and non-interactive constellations. With this understanding, it becomes crucial for organizations to sustain their competitive advantage in today's business world by deploying HR processes that develop organizational competences effectively.

    The organizational procedures within a company can be categorized into self-maintaining procedures and ego reclamation procedures. Self-maintaining procedures focus on maintaining the status quo, with HR prioritizing cost reduction through efficient practices such as pay disposal and handling grievances. On the other hand, ego reclamation procedures aim to bring about developmental transformation by fostering imagination, commitment, and free will among employees. According to Lado and Wilson (Oct. , 1994), firms with self-renewing HR procedures are more likely to generate competences at a higher rate and achieve sustained competitive advantage compared to those with self-maintaining HR procedures. While individual HR practices have limited ability to create competitive advantage, when integrated as a whole, they can realize the company's full competitive advantage (Barney, 1995: 56). However, some argue that there are specific employee management practices that have a positive impact on firm performance (Pfeffer, 1994; Schmidt, Hunter, & Pearlman, 1981).

    The sentiment of various researchers regarding the best practices is shown in table 2 (Brian Becker and Barry Gerhart, 1996). While HR often focuses on practical aspects, a strategic approach is more likely at higher levels if they adopt the best practices overall. In other words, if there is a positive impact from good practices, it is likely due to the system's architecture. Although Pfeffer (1994) refers to them as management practices, many of the

    attributes identified as part of a successful system are based on this architecture. For example, one architectural characteristic is the recognition and rewarding of high-performance human resources.

    It is this architectural characteristic that has the power to generalize (best patterns) and has consequences for concerns. The HR system architecture should be the best, but the activities performed within an organization should be harmonized and compatible with the HR architecture in order to have an impact on organizational performance. Case studies of Lincoln Electric and Hewlett-Packard illustrate this interpretation (Milgrom & Roberts, 1995). These two companies have different HR patterns but are likely similar in terms of HR architecture. For example, although their salary and selection policies may differ in design and implementation, the similarity is that both aim to reward desired behaviors and performance outcomes by selecting and retaining people who fit their culture.

    Measuring Effectiveness

    After all of this discussion, the question arises: how effective is HR? Many researchers have attempted to measure the effectiveness of human resources.

    Four different approaches have been taken in measuring the effectiveness of Human Resource in terms of Firm financial performance (AMJ Special Issue, 1996; Becker et al., 1996; Delery et al., 1996; Huselid, 1995; Becker et al., 1997). Another approach is to demonstrate the value of Human Resource through theoretical modeling. For example, Wright et al. (1994) analyze how the human resources department contributes to proving its value as a source of sustainable competitive advantage. The third approach is to use HR metrics to measure performance relative to other firms or its own past performance (Fitz-Enz, 1980, 1984, and 1990). The fourth approach is to compare the perception of Line and

    HR executives regarding HR effectiveness through HR service (in terms of importance and delivery), the role of Human Resource, and its contribution in developing and achieving strategic objectives (Wright et al., 1998).

    Research workers prefer to use a meaningful matrix that aligns with the expectations of the business world (e.g., shareholder return, profits, organizational endurance, productivity, cycle time, customer complaints). However, the suitable variables depend on the specific industry's environmental context, and the strategy of a company can vary from one period to another. For example, a company focused on growth may have a low accounting profit, and vice versa. Therefore, in order to measure HR performance and align it with overall company performance, HR measurement should be based on the company's objectives.

    There is no general theoretical account to measure the effectiveness of HR; it varies. Conducting research on different business units with varying goals can sometimes lead researchers away from using a standardized metric. Some devices focus on profitability, while others prioritize market share or growth. Empirical studies may show little correlation between HR and device performance if effectiveness is solely defined in terms of profitability or growth. In some cases, it may be necessary to introduce subjectivity in measuring the effectiveness of a particular unit in achieving its key objectives (Campbell, 1977; Kahn, 1977; Mahoney & Weitzel, 1969; Tsui, 1990).

    Another challenge in measuring HR performance is the variability of HR activities among different companies within the same industry, making it difficult to compare and evaluate them using standard patterns. Thus, researchers should focus on standardization and replicated activities in HR measurement. One approach to achieve this is through collaborative design among researchers to establish

    measurement steps (Brian Becker and Barry Gerhart, 1996). HR performance can also be assessed using the balanced scorecard method, which considers the perspectives of three key stakeholders: investors, customers, and employees. However, a problem with this approach is that employees evaluating HR may not be aware of their own needs and what is best for the company.

    The task at hand can be accomplished by learning from top-level executives. There are three reasons for this. Firstly, they are users of the services that the employees rely on, and as directors, they have a vested interest in these services and the patterns that have the most positive impact on employees. Secondly, they have a better understanding of what would benefit the company and are in a unique position to assess tradeoffs between services that employees may want, but could result in financial losses for the company. In fact, these individuals are in an ideal position to make decisions about how to balance the needs and returns for shareholders, customers, and employees. Therefore, we evaluate the effectiveness of the HR function by examining the opinions of line managers and human resource executives in our sample of companies (Wright, McMahan, Snell, and Gerhart, 1998).



    Measuring HRM effectiveness

    There have been numerous studies evaluating the performance of human resource management as a factor contributing to organizational success. This is evident to business management and researchers (Poole and Glenville, 1996). Effectiveness is often defined as doing the right things at the right time.

    Most traditional job thinkers have criticized most systems and patterns of human resource direction, especially the main organizations and human resources staff, for

    not being able to do things correctly even if they are efficient. The demand for effectiveness in human resource direction arises from the changing business and management context, where competition and public sector efficiency are increasing pressures. This context is evolving with the recognition of human resource direction as a strategic partner (Walton and Lawrence, 1985, Beer et al.).

    In the era of the quality movement in the 1980s, there was a focus on re-engineering business processes (Hammer and Champy, 1993). Nowadays, the study of human resource management is centered around knowledge management, digitalization, and virtual administration (Tapscott, 1996). This field encompasses a wide range of seemingly unrelated research that examines the effectiveness of human resource management. One way to organize and categorize these studies is to propose that there are two underlying dimensions. The first dimension is the extent to which efficient human resource management requires a focus on internal organization or external guidelines. The second dimension is whether a subjective or objective framework is used to evaluate the effectiveness of human resource management.

    Figure 3 demonstrates the various positions that structural research cleavage outlines. In particular, this research focuses on subjective factors with an internal orientation. This area is often overlooked, but there is growing concern for the perceptual experience of HR staff function (Eisenstat, 1996). Additionally, the research suggests that the perceptual experience of HR staff is not poor. However, there is a disconnect between the subjective ratings of HR staff and the overall effectiveness of HRM. This lack of alignment implies that other perspectives on HRM effectiveness may be more valid and reliable.

    However, there is a disconnect between what the

    director and employees have to say about HRM staff and HRM practices. Instead, the results should suggest that there is a connection between the evaluations of HRM staff's effectiveness and overall HRM effectiveness. Good HR staff leads to good HRM performance, while poor HRM practices result in negative evaluations of HR staff. The research does not suggest that the subjective perception of HRM and HR staff should replace objective measures of evaluating HRM effectiveness. Instead, the aim of subjective perception is to supplement and support the results.

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