Strategic HR? A study of the perceived role of HRM departments in Brazil and Peru.
| Autor | Coda, Roberto |
| Cargo | Human resources management - Report |
Introduction
In the management field, most contemporaneous studies highlight the competitive theme, introducing various approaches to competition and competitiveness (Cho & Moon, 2000). As per the more generic definition (proposed by Stigler as cited in Newman, Eatwell, & Milgate, 1998) competition is perceived as rivalry between individuals (or groups or nations) which always arises when two or more parties struggle for something that not everybody can achieve; the core element of competition is the freedom that traders have to use their resources, in whichever way they want, exchanging them at whatever price they wish. Assuming that competition involves the search for and retention of scarce factors, competitiveness is regarded as a means to surviving this competition, and it can be associated to performance (revealed competitiveness) or efficiency (potential competitiveness) --assumptions that are often questioned as they are insufficient to express the essence of the phenomenon when organizational past behaviors are analyzed, regardless of market and competition dynamisms.
The Resource Based View [RBV], one of the dominant theories of competitiveness analysis with a focus on company resources, has already been identified since the 50's in studies published by Selznick (as cited in Liu, 2005, p. 103) and Penrose (as cited in Lockett, 2005, p. 88). In this approach there are two fundamental concepts: resources, defined as tangible and intangible advantages, which are related to the firm in a semipermanent way, and capacities, regarded as a means to carry out different activities, depending on available resources (Skaates & Sapannen, 2005). Human Resources are presented as one of the main factors in the search for competitiveness. Therefore, the HRM area is supposed to be strategic, situational and proactive in relation to business demands, offering support, mainly to operations strategy, which among the dimensions proposed by Kaplan and Norton (1997, 2000), is the one that depends most on people's resourcing, development and retention.
Recent studies developed in the area of Human Resources show that the HRM department has already become aware that people are part of the rare and hardly imitable capital. People are value generators. They are invaluable resources in the quest for competitiveness. Searching for, preparing and motivating them to grant their capital to the company is the major HRM strategic challenge. The core objective of this study is to identify to what extent people in organizations as stakeholders really consider the HRM area to be strategic, and how much they think it is prepared (in terms of current capacity) to cope with the challenges imposed on it. The research herein presented was conducted by instructors of MBA and MS Programs in major universities in Brazil and Peru, countries frequently labeled as having a typical Latin culture and sharing the same view in their entrepreneurial community towards the need for improving HRM departments role and policies in private and public organizations.
THEORY AND HYPOTHESES
This section includes a literature review on HRM classical functions as well as comments on cultural aspects that may influence the adoption or benchmark of HRM practices between different cultures.
HR Classical Functions and Innovative Practices
HRM classical functions may be understood as all activities and processes dealing with the professional life of an employee in an organization since his/her hiring, until his/her retirement or dismissal. Such processes are named people resourcing and retention, compensation and rewards, training and development, performance appraisal, benefits and relations with employees. All of them have undergone major changes during the last decades both in terms of their strategic relevance in the business context and the approaches used to conceive actions for their implementation in work settings. This section introduces a description of HRM functions as well as comments on the evolution of the strategic importance linked to people management in organizations.
Resourcing and Staffing
Millmore (2003) proposes a vertical integration of each HRM activity with company strategy priorities, a strategic position that outlined what was already being stressed 20 years ago (Pettigrew, Sparrow, & Hendry, 1988). Recruiting and selection functions have remained relatively unchanged through time, still searching for the right person at the right place. Currently, the focus is the search for people to work in the organization, rather than to take over a specific job position, giving value to the set of human competences that are in line with companies' core competences.
Development
It has long been discussed that the development function may be beyond the training of technical competences or capacities demanded by market (Pettigrew, Sparrow, & Hendry, 1988). The training and development function needs to be aligned to strategic factors, company policies and personality, time restrictions and willingness to change. The search for competitiveness speeds up the technological evolution process, which provokes ever larger skill gaps, requiring people and business units to be trained, looking forward to development and apprenticeship transfer (Berry & Grieves, 2003).
Benefits and Compensation
Compensation systems strongly impact individual performance and company competitiveness, particularly when dimensions associated with intrinsic factors, such as status, independence and power are added to extrinsic traditional dimensions of motivational factors (Baron & Kreps, 1999). From a purely economic point of view, work is considered as a commodity, with a price determined by the market. The point is that the worker is no longer labor work but rather human capital. Thus, the problem resides in identifying which level is considered adequate, by employer and employee, for the latter to assign its capital to the company.
Relations with Employees
Companies have been adopting family-friendly programs that seek to improve the relation between employee and family (Poelmans, Chinchilla, & Cardona, 2003). These programs include work regimes with flexible hours, e-learning programs, available kindergarten facilities, seniors' support, sick leave to care for a family member, personal non-paid leaves, psychological services and support to expatriates. These practices have been valued as they enable the benefited people to better reconcile their personal needs with their companies' needs.
Strategic Human Resource Management
Human Resource Management [HRM] has been introducing significant changes over the last twenty five years (Gubman, 2004). An evolution can be seen since the times when thinking was quite nonstrategic (before the eighties, when the HRM area was merely the Personnel Department), going through the arising of functional strategies (in the eighties), the proposal of strategic capacity development (in the early nineties), up to the current vision, in which an effort from the area to be aligned with the company's strategic results prevails. Strategic proposals encompass the analysis of factors such as organizational culture, alignment between organizational core competences and human essential competences, employee commitment dimensions, among other factors, all focusing on the organization's future. People have began to be considered as one of the resources that contribute to competitive advantage, as human capital is unique, inimitable (people's intellectual capital is not easily replicated by competitors) and non-transferable (human capital is not easily acquired in the market) (Paauwe & Boselie, 2003). In this scenario, in which the classical HRM functions (such as resourcing, people admittance and retention, staffing, appraisal and compensation) need to be aligned to the company and employees' performance (Gubman, 2004), the HRM focus is perceived as flexible, adapting to ongoing change and anticipating demands forecasted in future scenarios, in as much as the HRM functions support the business (Ashton, Haffender, & Lambert, 2004). Research conducted in 2003/2004 in 30 English corporate organizations showed that HRM is poorly prepared to assume its strategic role. Criticism includes a lack of a robust theory backing the functions of the area, which is rather concerned with internal processes than with business strategy, that the area is poorly linked with the goals, needs and measures related to the business success. In other words, the HRM department is not regarded as a competitive advantage for organizations. Another survey carried out in 2003 by Accenture (Ashton, Haffender, & Lambert, 2004) confirms these findings; among 1,000 leaders interviewed, only 34% evaluated the performance of the area as good, although 83% stated it was critical to the success of the business. From this last perspective, HRM should have three key capacities to be considered strategic. Firstly, it should distribute services related to HRM work processes, so all employees could have access to the internal and external channels related to them (communication). Secondly, the area should bring in HRM management consultancy services, performing as partners of executives, business units and business line managers. In this way, it would attend to the specific needs of each of the other departments of the company helping to develop core competences that are relevant to them and that may constitute business differentiating factors. Thirdly, the HRM department should provide more support and strategic services to the organization's senior management, an option foreseen as the future of the area, but which has yet to be established.
In a complementary study, Jacobs (2004) proposed five questions to analyze how the HRM department is evolving towards strategy: 1) Is the HRM manager effectively involved with or does it provide solid contributions to business strategy-related...
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