Human Resource Management

Human Reasorce Function
In the economic system, the factors of production are land, labor (Human Resource) and capital. Labor as Human Resource (HR) is the most precious of all; It is the HR that manages and generates return on investment (ROI) on the land and capital. . However, the time has come for HR to evaluate and generate its own ROI.

The function of HR is to manage the human capital on the job. However, in China this function is changing over the last ten years from administration to time spent on strategic activities (about 13 percent to nearly 30 percent globally): Traditionally this function was seen as hiring, establishing a personnel department to, inter alia, handling complaints, organizing a pension scheme, and to be at the manager’s disposal. HR function was, and still is in some organizations, very transactional since it performs routine task without the involvement of the other departments, some organizations even believe that they have established a strategy by creating a mission statement. The problem with these mission statements is that, for the most part, they are ambiguous, lofty, and empty.
Truth be told, HR is working in a hostile environment. More is expected of HR! HR now needs a strategy as is evident in the transformational study[1] done in the United States.

The shift of HR function is now for it to move from being traditional to be transformational i.e. to make a difference to the organization’s bottom line by working with the mission statement, goals and objectives of the organization. For HR to be viewed as transformational it’s objective is to appraise its contribution in quantitative terms. Beer et al posits that HR must now show commitment, competence, cost effectiveness and congruence.

The reason for the change in HR’s function is for HR to go beyond keeping pace with technological advances, processes, and people skills by building capabilities to deliver new values to customers in spite of globalization, and stronger shareholder’s demands.
The HR environment and model must change to suit the organizations strategic plans by putting strategy into action and thus enable HR to do a complete job. This will abate the hostility towards HR and to make it accepted and valuable.

The delivery mode of HR can have a direct correlation to the contribution of HR to the company in all areas of compliance, client satisfaction, culture management, cost control and its contribution to the organization.

The HR environment in a large organization is sometimes better managed when when a sourcing alternative is sought to develop, partner or contract all the operational, technical and capital functions of the organization, with the specific objective of maximizing the return on internal resources. These sourcing alternatives, respectively, are Insoucing, Cosourcing, and Outsoucing. Further, alternative sourcing may be sought for payroll, training, recruitment, benefits administrating. However, a small organization with below one hundred employees may not need a HR department since the manager can handle the aspects of hiring, training, benefits and terminating.

In conclusion, HR functions must produce benefits that extend to the wider community or market despite global challenges in its operating environment. These benefits will accrue from the delivery mode of HR with changes from administrative excellence to strategic contribution.
[1] Point of View: Unfinished Business. Mastering HR Business Design. New York, NY2004 Mercer Human Resource Consulting, Inc