Table of Contents
- Business Partner Model
- The use of centralised shared service centres
- The devolution of HR Responsibilities to the Line Managers
- Reference List
In the last decade, a classic HR model based on the work of Dave Ulrich et al has gained prominence based on three core elements, namely: business partners, shared services, and centres of expertise (Ulrich 1997, p.6). A difference should be created between “hard” and “soft” approaches to HRM, in which the company can follow a “hard” strategy in which, like all development considerations, workers may be viewed as a resource to be handled. In the other side, companies should emphasise a “soft” HRM strategy in which workers appear as a valued commodity whose commitment plays a vital role in achieving the performance of the company. The paper discusses the feasibility of the business relationship model in resolving the improvements and changes needed by investing in “human capital.”
Business Partner Model
HR business collaboration is the mechanism in which HR practitioners collaborate together with business leaders or line managers to accomplish common operational priorities, mainly for the purpose of developing and integrating HR structures and processes that drive strategic business objectives (Caldwell 2010, p.49). In the HR business partnership model, human resources departments play a critical role in strategic planning, especially in achieving current and future objectives (Ian 2006, p.33). The model reflects not only on HR tasks such as accounting, compensation and employee partnerships, it also brings value to the enterprise by guiding the development, growth, preparation and placement of new and existing workers (Lambert 2009, p.7).
Company partnering aims to enable line managers to assume responsibility for overseeing the HR staff at diverse levels. The business partner paradigm aims to increase HR performance and minimise costs. The ultimate goal of business partnering centres is to match people’s approach more tightly with what the organisation wants. The engagement in training and development can be undertaken with full knowledge of the inner workings of the business (Dowling, Festing, and Engle 2008, p.4). Hence, the strategic orientation that business partner model heralds allows organizations to attain the most productive outcome.
Some of the key issues encountered in the implementation of business partnering entail absence of clarity regarding the HR’s role, and the lack of a consistent business strategy within which HR can work. HR may be marginalized from real decision making, and the influence of business partnering may differ. Some of the inherent conflicts within the model derive from the fact that the performance of one role may conflict with competing demands yielding to potential role-overload (Ian 2006, p.34). Other possible conflicts emanates from incomplete performance criteria in undertaking a single role, such as being strategic while at the same time responding to line manager’s tactical issues (Lambert 2009, p.8).
The implementation of business partner model can herald enhancements on the organization’s bottom line and productivity. The implementation of business partnering can lead to sustained revenue growth, profit growth and cost reduction, and improved customer royalty and retention. This hinges on the capability to work smarter (business partnering heralds more flexibility, speed, and adaptability) and strategy execution capability, which play a part in the improvement of bottom-line performance. Business partnering yields to: improvements in the company’s bottom line by driving HR efficiency and effectiveness; reduction in HR administration costs; enhancement of employee retention; and, minimizing attrition rates (Farnham 2010, p.13).
Some of the challenges linked to HR business partner model centres on the fact that the HR department may be already overworked with everyday employee relation issues; as a result, there may not be sufficient time and personnel to dedicate to partnering (Kramar and Syed 2012, p.8). Moreover, the HR business partner model has faced backlash from managers who question its effectiveness, especially its structure (Farnham 2010, p.14). The barriers to line managers supporting the HR initiatives can be viewed as heavy workloads and short-term job pressures.
From a practical stance, some confusion and tension may manifest in relation to line manager’s understanding, which may reduce trust between HR specialists and line managers’. Majority of organizations appear to be struggling to make business partnering work effectively, whereby difficulties entail uncertainties over the approach, insufficient preparation, and weak implementation. Other challenges centring on business partnering include the urge to clarify HR customer focus; tackling manager concerns/scepticism; and, not fully appreciating the underpinning causes of why the model does not work well (Caldwell 2010, p.50). The focus should centre on HR-led differentiations of today’s business world relating to talent, change, and performance.
The Use of Centralised Shared Service Centres
Shared service centres avail corporate services necessitated across the organization in areas such as IT, finance, or HR from a centralized or sole unit. Companies implement shared services to derive benefits from knowledge management; improved service; drive cost reduction (by attaining economies of scale and averting role duplication) and, enhanced HR credibility. The adoption of an HR shared service centres can result to reduction in cost of close to 25-40%, inclusive of savings derived from reduced transaction overheads and HR headcount (Reilly 2000, p.2).
Shared services processes include administrative processes (payroll, compensation and benefits; scheduling), operational (organizational management, recruitment, workforce planning, training and development), and strategic (HR strategy, executive compensation). Shared service centres shift a sizeable administration burden form HR, which in turn, frees HR to contribute to improved level of thinking and advice, especially in critical areas such as performance, talent, and change (Dressler 2004, p.128). The benefits that can be derived from shared service include reduction in costs, better HR rations, enhanced HR effectiveness, and improved satisfaction with HR among leaders, managers, and employees (Kew and Stredwick 2010, p.10).
Some of the issues associated with the implementation of shared services include IT (may be costly to implement and maintain) line managers may lack the interest in undertaking some of HR practices, operational issues emanating from a rigid model, and unintended consequences such as longer than anticipated by back owing to hinge upfront costs. Some organizations may select the option of outsourcing their shared services so as to derive economy of scale and economy of knowledge. However, this opting may present challenges given that outsourcing is difficult, time consuming, predisposed to early errors, which may upset employees, HR professional, or line managers (Compton 2009, p.81).
Businesses are heavily reliant on shared services to develop effective relationships with employees’ throughout the organization. Some of the strategic objectives driving shared services implementation include: minimize the operational costs and enhance process efficiency; allow HR to focus on strategic issues; and enhance service quality. Shared service centres may be deployed for diverse reasons such as reducing costs of decentralization linked to delivery of HR services, enhance the quality of professionalism by redirecting talented HR resources to task of strategic business partnership; enhance cost flexibility for supporting services (improve the efficiency, efficacy, and consistency of HR service delivery); and generate an enhanced degree of strategic flexibility. Other benefits include improved controls, creating a platform for growth, and improved data visibility. Some of the characteristics of shared service processes include ease of standardized delivery; few interfaces with other processes; limited product/business dependence; low financial or business risk; reduced external customer dependence; and a high degree of corporate-wide commonality.
The implementation of shared services can be linked to several pitfalls such as loss of momentum HR perceived as high-touch, broken promise, HR orphans (HR staff outside the scope of shared services centre), and possibility of resulting to meaner rather than leaner HR. It would be difficult to find like-minded partners, being concise on why adoption is necessary, and manage change. Some of the underlying cause of problems facing shared service centre in HR include inconsistent adoption of models; inadequate investment in HR talent; culture change; and, inadequate preparation on the part of the managers. Majority of HR professionals has registered dissatisfaction and frustration as they attempt to make shared services live up to outlined expectations. Some of the managers who operate service centres complain that resources are increasingly shrinking the technical staff support is waning fast, and outsourcing is yielding to increased cost, which cumulatively diminish the quality and level of services they can offer.
The Devolution of HR Responsibilities to the Line Managers
The transition of HR roles illustrates a mechanism of reallocation to line managers of staff duties or operations. In addition, the improved devolution of the position of HR managers is changing the competitive importance of managers and impacting them. The devolution of HR responsibilities draws from the fact that line managers, rather than HR specialists are regularly in contact with employees and are responsible for the performance of subordinates (Whittaker and Marchington 2003, p.245). Line manager splay a critical role in the implementation of HR strategies, practices, and policies.
The areas of responsibility typically exercised by line managers include absence management, team briefing, staff development, and performance appraisal. Line managers and HR professionals also have shared responsibility in performance pay, induction, training and discipline (Morris, Willey, and Sachdev 2002, p.8). Increasingly, HR responsibilities are devolved to line managers within organizations mainly in conjunction with HR professionals as partners (Clark, Grant, and Heijltjes 2000, p.6). Devolving HR activities to line managers can also be accompanied by a number of difficulties: first, line managers may not always have the skills and competencies critical in effective management of people (Wilton 2011, p.426). Second, line managers may not be interested in HR works based on the notion that competency within the HR field gained from the interplay of common sense and experience rather than training. As such, line managers may presume that they know how to manage and motivate employees, as well as address their problems, but manifest challenges in accomplishing this objective (Armstrong 2007, p.96).
The function of line managers is essential to training and development within organizations. Line managers initiate the bulk of training that manifest in organizations and account for more than 50% of the discussion with employees on the efficacy of training that occurs in organizations. The coaching and guidance availed by line managers is essential to learning activity and are responsible for structuring and delivering learning opportunities. The line manager plays a critical role during induction activities, job rotation, coaching and guidance, provision of formal and informal training activities, responsibility for promotion and career development (Clark, Grant, and Heijltjes 2000, p.7).
Businesses should devolve more responsibilities to line managers so as to realize the full potential of the organization; however, such a move features successes and pitfalls. The devolution of HR responsibilities can be problematic given that line managers do not enjoy the HR skills and knowledge to handle the circumstance properly (Price 2011, p.12). Majority of HR specialists and managers like to control since they are risk averse; however, letting go in full knowledge that the receiver will make mistakes, is advisable since that is where the real power lies. It is essential to institute a prescriptive framework to highlight and communicate the correct behaviours to line managers, and manifest a zero tolerance on counter-culture behaviours (Monks and McMackin 2001, p.58).
The benefits of devolution of HR responsibilities include potentiality of cost saving, enhance decision making, and broadening knowledge on human management issue. The devolution of HR responsibilities raises questions on its viability due to its potential to: increase local management responsibility and workload; and, line managers may lack the time to accomplish a task. Moreover, the devolution of HR responsibilities may yield to lack of uniformity in decision making, heighten opportunities for conflict, increase training cost, and heighten confusion relating to the responsibilities of the line manager. The line manager’s concerns remain on the perception that lack of support from HR during service delivery can distort the overall effectiveness. Some research have not confirmed the anticipated positive association between the dimensions of the HR mechanism and the improvement in the HR function’s strategic importance. Nevertheless, line managers can be effective HR partners given that line managers are responsible in managing employees at the operational level.
It essential that Snow Mountain Hotel’s Group establish and implement effective business-focused HR policies. HR must become a strategic business partner and tailor its functional activities to constructively impact on the bottom line. Solution such as outsourcing and HR technology can aid HR department to minimize administrative workloads and enhance accuracy of HR function. The adoption of business partner model will highly likely free administrative burden and allow concentration on value-added strategic activities. The new recruitment and selection strategy should emphasize commitment, flexibility, and creativity. The management of Snow Mountain Group should appreciate that the implementation of the model may be underpinned by paradoxes such as pressure to keep administration costs low; create a harmonious single HR team; deal with varying local perceptions; and, deliver against local tactical requirement.
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