Hrd Strategic Role Within An Organization Management Essay

According to George and Jones (2005, p.3), organization is “a collection of people who work together and coordinate their action to achieve a wide variety range of goals.” These goals would be what an individual, groups or an organization as a whole want to achieve. On the other hand, Cloisi, Cook and Hunsaker (2009) see an organization as a group of people working in a network or relationships and systems with an objective of providing value to the people. Therefore, it is no doubt that people are a centre of an organization and for this reason human resource development plays a very important role within an organization. This paper will discuss the ways in which HRD can play strategic role in the organization, basing on some HRD literature perspectives. The paper also discusses the benefits of HRD and obstacles in achieving the strategic objectives.

HRD – STRATEGIC ROLE WITHIN AN ORGANIZATION

Organizations nowadays are looking at human resource as valuable asset that can provide sustained competitive advantage. If a human resource in an organization can not provide organization with strategic advantage, the human resource management in the organization is said to be ineffective. The idea that human resource acts as sustainable competitive advantage is not new (Schuler&MacMillan, 1984; Ulrich, 1991) but it is proved to be always true. Both Schuler and MacMillan (1984) and Ulrich (1991) provide practice – oriented perspectives, demonstrating the ways in which they believe that Human resource can serve as a sustained competitive advantage. Delahaye (2005) noted that ” Human Resource Development has become a critical function for many organizations and the basis of their competitive advantage”. Human resource departments these days are not just looking at managing the workforce, recruiting and training but also looking at providing a platform for increased work-life balance of the employees so that they can remain committed to the organizational goals by delivering high productivity. Human resource development is defined as a set of intentional activities by an organization to increase employee’s skills, abilities or knowledge, and direct these skills and abilities for the company’s benefit (Marsick and Watkins 1990). Human resources development is the structure that allows for individual development, potentially satisfying the organization’s goals. The development of the individual will benefit both the individual and the organization. The Human Resources Development framework views employees, as an asset to the enterprise whose value will be enhanced by development, “Its primary focus is on growth and employee development…it emphasizes developing individual potential and skills” (Elwood, Holton and Trott 1996).

Human resource development (HRD) is divided into four functions: investigation, design, implementation and evaluation. These stages aim to explore the simultaneous impact of employees’ participation in non-technical training, technical training, and coaching on subsequent job performance, job involvement, and job satisfaction. Human resource development programs and interventions operate at three levels: career development, training and development and organizational development. Participants might be highly motivated to join in all levels. The purpose of these stages is to achieve Human resource goals: qualified employees, work-life balance, clients, change, value for money, organization, communication, EO & diversity. The operational context requires empathy with various stakeholders: environmental, social, political, scientific and industry. We will have a closer look to the strategic role of HRD in organization performance.

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DEVELOPING PEOPLE WITH STRATEGIC ROLE

A definition of business strategy is given by Tichy, Fombrun, and Devanna: “strategy is the process by which the basic mission and objectives of the organization are set, and the process by which the organization uses its resources to achieve those objectives” (1982, p. 47). HRD could becomes a critical component in this view of strategy because HRD is the developer of key resources – the human resources – needed to achieve business objectives

During the long period, the HRD function could be relied upon to support a broad range of business initiatives that required a competent workforce. All business issues, from new marketing strategies to innovations in production technology, were based on, among other factors, the performance capabilities of expertises who has been expanded through effective programs of employee development. Expertise is defined as the optimal level at which a person is able and/or expected to perform within a specialized realm of human activity (Swanson, 1994). In short, the development of workplace expertise through HRD has been vital to optimal business performance.

However today’s business environment requires that HRD not only support the business strategies of organizations, but that it assume an important role in creating business strategy. In the aspect of sustaining an organization’s competitive, HRD serves a strategic role by assuring the competence of employees to meet the organization’s demands. Along with meeting present organizational needs, HRD also serves a vital role in shaping strategy and enabling organizations to take full advantage of business strategies. Both the strategy supporting and strategy shaping roles of HRD have distinctive features that are evident in the business practices of successful companies.

The HRD function has long been relied upon to support a wide range of business objectives that require high quality employees. Business objectives themselves are varied. They can span long- and short-term time frames, and can focus on broad business issues and more specific issues. The rationale for using HRD interventions to support business objectives is quite straightforward: Enhancing employee expertise through HRD increases the likelihood that business objectives will be achieved (Jacobs and Jones, 1995; Swanson, 1994).

Besides the role of business strategy supporting, HRD is assuming a more influential role at the point of strategy formulation and is becoming one of the key determinants of business strategy. Successful business strategies increasingly turn on the organization’s ability to apply state-of-the-art expertise to new and emerging business opportunities. In today’s marketplace, organizations that possess or can quickly achieve the levels of employee expertise required to meet emerging business needs will win; those that don’t will be left behind. This rapidly changing business environment requires a dynamic strategic planning process and flexible use of resources..

However, popular conceptions of the strategic role of HRD, if HRD is even thought of in a strategic context at all, view it in a role that is simply supportive of a given strategy. Strategies for product innovation or cost leadership, for example, are usually conceived and adopted by the organization, and when implementation constraints surface, only then is formal consideration given to employee expertise and the training implications of the strategy.

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Although the role HRD serves in support of strategy is necessary and important to operational success, HRD can offer an organization even greater strategic value. This section lays the groundwork for demonstrating a more influential role for HRD in becoming an important determinant in the formulation of strategy. First, two factors that have had a major influence on expanding HRD’s strategic role are examined. These two forces are: (a) the centrality of information technology to business success; and (b) the sustainable competitive advantage offered by workforce expertise.

Although not always obvious, there is a natural fit between initiatives for developing employee expertise and the organization’s strategic direction. This “HRD – business strategy linkage” is the basis for HRD’s influential role as shaper of strategy. Jacobs and Jones posit the argument as follows: “Organizations in the new economy have come to realize that employee expertise is a vital and dynamic living treasure. The desire for employee expertise is meaningless unless an organization can develop it in ways that respond to the business needs” (1995, p. 178).

Two factors that have influenced the evolution of HRD toward a more active role as a key determinant of business strategy: (a) the centrality of information technology to business success, and (b) the sustainable competitive advantage offered by workforce expertise. These two factors work together in such a way that the competitive advantages they offer are nearly impossible to achieve without developing and maintaining a highly competent workforce.

CHALLENGES AND OBSTACLES

The first obstacle is how to measure the benefits of HRD . In fact, the benefits of HRD are too difficult to measure because many variables involved (Matthew Mitchell 2005). The HR managers are still measuring training person-hours rather than the relationship between learning and productivity. To become key players in the development of organizational strategy, HRD practitioners must demonstrate how what they do correlates with the productivity and welfare of the company (Russ-Eft & Preskill, 2001; Swanson & Holton, 1999). Therefore, HRD professionals must become skilled systems thinkers who can design and conduct measurement and analysis across the organization and pinpoint the influences of HRD efforts on employee productivity and organizational performance, linking past research results to current practice. HRD professionals must have the skills to identify valid measures of learning and growth and develop meaningful and accurate interpretations, while being ever mindful of the myriad of intervening variables that can influence learning and performance curves in work settings (Preskill & Russ-Eft, 2003).

The second obstacle is the cost for HRD. The managers could easily decide to invest money to buy equipments, machines, cars, stocks, but in general they would be reluctant to spend money for HRD. Good HRD generally costs a fair amount of money. Most worthwhile projects in an organization cost a fair amount of money. Whenever something must be purchased that apparently will have little effect on the business, management will request the one with the lowest price. Cost figures by themselves are irreverent. Reviewing HRD costs without reviewing the associated benefits is not smart. What most HRD managers fail to realize is that organizational decision makers usually focus only on HRD costs.

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The third obstacle is that HRD is a relatively young field. There are lacks of many professional Human resource developers. Chalofsky (1998) argued that HRD had yet to reach the level of a mature profession because practice is based on guesswork and not on theories tested by research, practice is based on research and thinking that are at least ten years out of date, and practice is based on what the client wants rather than on what works. As Swanson (2001) stated, “HRD practice does not come close to what we know from sound theory”. Many HRD practitioners are running learning activities that are out-of-date relative to new business strategies and new knowledge about learning. The challenge to HRD researchers is to anticipate what research is needed and how it can contribute to HRD practice in one, two, or years, and then to make it available in ways that maximize the likelihood that research findings influence practitioner behavior. It will require HRD to continue professional development, construct a sound theory base and apply those theories in practice.

The fourth obstacle is information problems. The information here includes 3 stages: information when recruiting, information for training and problem of information disclosure. The new business context is prompting senior management to take a greater interest in the development of their organization’s human resources. They meet difficulties in recruiting skilled, competent managers for a big demand of leadership and team building skills at all operational and administrative levels (Thomas et al, 1995). However, asymmetric information in recruiting can lead to agency problems, even in the absence of opportunism, poor decisions. Thus, information is a valuable commodity and firms have strong incentives to seek better information sources. If a firm is able to obtain scarce information, this, in itself, may be an important part of gaining a sustainable advantage (Coff, 1997). When recruitment is completed, HRD must be aligned with business plans, and HR plans.

In conclusion, HRD is very important to companies. HRD’s roles related to the process and people development for both short-term and long-term matters. HRD also play a role in generating improved organizational performance and individual growth. HRD bring many benefits as improving quality and productivity; helping organization adapt with changes; increasing employee satisfaction and reducing labor turnover; improving quality of work life; and developing a learning culture. All of these benefits are to create sustainable competitive advantages and contributing to organizational growth. Beside many benefits, HRD still have challenges and obstacles. The human resource manager will be successful if they realize the benefit and overcome the challenges of HRD.

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