All managers are, in a sense, HR managers, since they all get involved in activities like recruiting, interviewing, selecting, and training."
Yet most firms also have a Human Resource Department with its own Human Resource Manager. How do the duties of this HR Manager and his or her staff relate to "Line" Managers' human resource duties?
Before going over to answer this question, we should know that HR managers are, in most of the cases even now in this modern world, generally staff managers. They are responsible for advising line managers (like those for production and sales) in areas like recruiting, hiring, and compensation.
One major company outlined its line supervisors' responsibilities for effective human resource management under the following general headings: -
1. Placing the right person on the right job.
2. Starting new employees in the organization (orientation).
3. Training employees for jobs that are new to them.
4. Improving the job performance of each person.
5. Gaining creative cooperation and developing smooth working relationships.
6. Interpreting the company's policies and procedures.
7. Controlling labor costs.
8. Developing the abilities of each person.
9. Creating and maintaining departmental morale.
10. Protecting employees' health and physical conditions.
In small organizations, line managers may carry out all these personnel duties unassisted. But as the organization grows, they need the assistance, specialized knowledge, and advice of a separate human resource staff.
The human resource department provides this specialized assistance. Thus, an HR manager will perform three distinct functions: -
1. A Line Function: An HR manager possesses a line authority over his own department to accomplish the task and roles assigned to each employee of the department. And since the majority of the decision is trickled down from the corporate level, he actually exudes such power. His suggestions also are taken as orders.
2. A Coordinative Function: An HR manager is also a coordinator of all the decision, activities in the personnel area. This is referred to as functional control. Whatever policies, procedures and objectives are set for the HR manager implements on employees in the organization.
3. A Staff Function: This is basically an advisory role played by the manager whereby he only assists line managers, but that does not mean his advice shall be taken finally. It all depends on the discretion of the line manager. Such a function involves assisting on areas such as training, evaluating, rewarding, counseling, promoting, and firing of employees, etc. Many a times, HR managers also update the line managers as well as top management regarding the current trends and new methods of solving problems.
HR as Strategic Player
The HR function now becomes a strategic player. To continue the analogy, a player adds value; more importantly, a player scores. HR's focus must, therefore, be on scoring on making things happen for customers rather than merely being a part of the team. HR must be "on the field", in the game, and positioned to score. HR may not be the lead scorer, but it cannot be on the sidelines coaching, in the training room prepping, or, least of all, outside the stadium gates taking head count. If HR can evolve to a role that adds significant economic value to the firm, its security is likely to be substantially enhanced, and many comments, such as by Fortune's Stewart, signaling doom for HR or calls to eliminate the function, will be seen as relics of the 1990s.
How HR Executes Different Company Strategies: Operational Excellence, Product Leadership, or Customer Intimacy
How the choice of business strategy relates to HR work force issues can be examined in terms of Treacy and Wiersema's Model of three basic paths to competitive advantage: operational excellence, product leadership, and/or customer intimacy. An organization following an operational excellence strategy attempts to be low price provider. Thus, it must build operational systems that continually reduce cost / price, while offering a quality product that consistently adds greater value to its customers than do competitor's products. A performance measure that could energize a work force to attain operational excellence might include total cost productivity, whereby the work force would be constantly reminded that it must do more with less in order to achieve strategic success in the market place. The message maybe reinforced by rewarding productivity improvements' through programs such as gain sharing. In gain sharing, the power of the "HR tools" of reward and measurement has been clearly demonstrated to impact the bottom line.
Another HR tool or lever for change, work force selection and development, could also be aligned with the low-price strategy by recognizing that most operational excellence firms require employees who are trainable and flexible. They can fit in and follow the "battle plan", because the work design is explicit and does not permit variation. In a low-cost environment, few customers can have it their own particular way. Economic efficiencies come through standardization; variation must be driven out. A firm with an operational excellence strategy would seek to create a core force "mind set" which focuses on the shorter-term production objectives, avoids waste, and is concerned about quantity; it would certainly avoid free spirits and ostentatious behavior.
In contrast, a firm competing on a product strategy requires innovation in products and/or services to create its competitive advantage, and would likely seek a core work force with an anti-bureaucratic, entrepreneurial mind-set, individuals who are highly versatile;
possess a longer-term focus; have a very high concern for results over processes; have a high tolerance for ambiguity; and enjoy challenging one another, cross-functional collaboration, a high degree of creative behavior, and risk taking. Because the value-add is in the product or service itself, firms such as 3M, which are pursuing a product leadership strategy, have developed employee incentives based on sales of new products developed during the prior three years to reward employees.
Firms following a customer intimacy strategy offer unique solutions that enable their products or services to be readily customized at the lowest level of customer interface. Since unique customer solutions are essentially what provide the competitive advantage for such organizations, the selection and development system would seek and develop active learners, customer advocates, and employees who demonstrate a willingness to share and enhance learning in the organization. Over-riding measures of performance might include delivering on customer guarantee / warranties and going beyond them to retrain profitable customers. Rewards would focus on those in primary contact with customers to reinforce employee networking, communication, and relationship-building with the customer, so that customization would be continually improved. Thus, HR's use of its tool kit in strategy execution would be continually improved. Thus, HR's use of its tool kit in strategy execution would afford the HR function an opportunity for an impact on near-term economic value.
How Can We Say That HR Functions Are Line Functions?
The HR line function concept has been popular for over a decade. This concept recognizes that the HR field is to move beyond its polite (people focused) and police (regulation focused) roles and add value to executing a firm's strategy. The shifting role of HR comes from changing business demands. Organizations must establish new covenants with customers, manage disruptive technologies, create new forms of engagements with employees, and face scrutiny of investors who determine a firm's market value by assessing its intangibles, not just its present or past earnings.
