Human Resource Functions in Small and Large Companies

Cite this

Briefly describe the major features you would expect to find in an HR function, which has adopted the ‘Ulrich Model’ as the basis for its structure Explain the thinking behind this approach to the organization of an HR function. In what types of organization do you think it works best and why?

The Ulrich model, like other theoretical models, has its underlying principles. These principles are the underpinning pillars from which the model draws its strength. Any organization that seeks to derive the benefits of the Ulrich model has to pay close attention to these fundamental principles, and they include establishing an HR business partnership, an HR center of excellence or expertise, and a shared service center.

Ulrich’s model is defined by these three principles, which explain why it is sometimes referred to as the ‘three legged stool’ model or ‘three box’ model. Organizations that subscribe to the model will have all or some of these elements embedded within their structure as some firms embrace the model wholesomely while others embrace it sparingly. For purposes of this paper, a typical scenario is considered by exploring the outlook of an organization that has fully embraced the Ulrich model.

The first key feature of an organization that has fully embraced the Ulrich model is that it features business partnerships or strategic partnerships within its functional arrangement. In other words, such an organization has HR business partnerships within its business units. An HR business partnership is an arrangement in which an HR professional works in close liaison with business unit leaders/ line managers or operational managers towards a common organizational cause.

The HR business partner has to be a key HR professional within the organization. In the process of working closely with the business leaders, the business partners usually form an integral part of the business unit they are designated to work within their operations. This aspect implies that for an organization that operates several business units to expedite the achievement of its overall business goals, every business unit has its HR business partnership embedded deep within its structure.

The HR business partner works with the operational managers in their designated business units to make sure that based on their HR knowledge, they influence strategic planning and its implementation. Notably, by being within the business unit arrangement, the HR business partner is in a position to understand the needs of the unit extensively such that any effort made at influencing the operation of the unit is informed by an in-depth understanding of the unit’s needs coupled with the HR expertise of the partner.

In this respect, from a superficial perspective, organizations that operate the Ulrich model are known to have HR business partnerships within their business units. However, a closer consideration of the recurrent activities of the HR business partnership function reveals that its specific roles vary across organizations. Depending on the nature of an organization’s activities, the functions of the HR business partner will be tailored to fit with the needs of the organization and by extension, the respective business unit to which the HR business partnership is designated. Despite these variations, the bottom line is that an HR function that bases its operation on the Ulrich model has HR business partnerships as one of its major features.

The second major typical characteristic of an HR function that has chosen to operate under the auspices of the Ulrich model is that it has an HR center of excellence or expertise. The center of expertise is an arrangement that comprises a team of highly skilled HR professionals with specialist knowledge of innovative HR solutions. This team of highly qualified professionals is a distinct formation that often has the capacity to serve several business units. This assertion implies that organizations that use the Ulrich model in their HR functions in most cases need just a single center of excellence, which liaises with the HR business partners to ensure that the organization is up to date with the latest and most relevant HR solutions.

The HR centers of excellence are charged with the responsibility of seeking HR innovations in areas of personnel management to ensure that an organization stays abreast of the competition. Apart from being accessed at the corporate level, HR centers of excellence can also be accessed at the regional or national level probably due to their resource intensive nature. The HR center of excellence often operates as an independent business outfit that offers HR services to businesses through HR business partners or sometimes line managers. However, in implementing the Ulrich model, an organization should have access to these establishments.

The third key element of the Ulrich model that is associated with organizations that choose to implement it is a shared services outfit. A shared services center is an arrangement that is concerned with the handling of the routine transactional requirements of an organization. This aspect implies that according to the Ulrich model, numerous administrative tasks within organizations can be centralized. This outfit together with the HR centers of excellence and HR business partners is typical of any organization whose HR department is guided by the Ulrich model.

The main idea behind this model was to depart from the traditional HR arrangements, which were considered inefficient and expensive to operate. For instance, the main idea behind HR business collaborating is that since the business partners are directly involved in the activities of a designated business unit, they are in a position to choose the most relevant and appropriate HR practices for implementation in their designated units.

The idea behind the establishment of centers of excellence is that since the personnel involved are primarily concerned with researching innovative HR solutions at times as well as the business landscape changes, organizations also need to transform alongside these changes in a bid to stay competitive. The HR center of excellence provides the necessary primary research and passes it to respective business units via HR business partners.

The shared services outfits are more concerned with cost-cutting and organizational transformation. Since HR is concerned with people management, the shared-services outfit becomes part of the Ulrich model because it eliminates inefficient high operational costs brought about by traditional HR arrangements. Therefore, the main thinking behind the idea is that through centralizing the concerned services, operational costs reduce, quality of service delivery improves, and it instigates organizational change.

Unfortunately, despite its great potential benefits, the Ulrich is a preserve of a certain category of organizations, which implies that although some may want to implement it, they are not in a position to affect the implementation. This aspect could be the reason why the number of organizations that have fully implemented the Ulrich model is far much less than the number of organizations that have partially implemented it.

Establishing the three key elements of the model is very costly, and thus only large corporations can afford it. The costly nature of its implementation is an impediment to small and medium enterprises, which have largely remained with traditional HR models. The Ulrich model is thus suitable for large organizations such as corporations because they are capable of sustaining their elements without any strain.

You have been asked to advise a growing organization that employs 75 people in office-based roles but which has no specialist, dedicated HR function. Managers are particularly keen to know how they can best evaluate the effectiveness of their HR activities and initiatives. Despite limited funds being available, the organization manages to provide some form of formal training and development opportunities for everyone each year, gives everyone an annual performance appraisal, and seeks to involve staff through a consultative forum, which all attend at least once a year. What advice would you give? Justify your answer.

An organization that employs 75 people in office-based roles falls in the category of small and medium-size enterprises (SMEs). In this respect, the argument that is put forth here is based on the consideration that the organization in question falls under the category of SMEs.

The economic significance of SMEs has been proven the world over. Both developing and developed countries recognize the influence that SMEs have on their economic wellbeing. This assertion stems from the view that SMEs, in any economic setting, form a huge fraction of operational businesses and as such, they make a big contribution to the GNP of a country. Additionally, due to their numbers, SMEs employ sizeable fractions of the population in any country in the world, which implies that they cater to the wellbeing of more people as compared to large organizations. Those in charge of SMEs should thus put the following into consideration.

SMEs often have no distinctive HR departments mostly due to resource constraints. Mostly, a majority of SMEs operate under constrained budgets and thus they lack enough resources to allocate meaningful amounts towards the improvement of the human resources management function. In effect, their staff tends to be ‘neglected’ or rather feel neglected even in cases where an organization is apparently trying its best to deliver a palatable working environment and decent terms of service for their employees. The problem, in this case, arises from the view that large corporations, which invest heavily in their HR departments, raise the bar for SMEs.

Large corporations set the standards very high such that even if a small enterprise strives within its means to cater to the needs of its employees, they will always feel discontented. This aspect leads SMEs to lose in the battle for skills and talent during recruitment. The best way to go about this issue is thus not trying to emulate the personnel management techniques of the large corporations blindly because SMEs cannot succeed at carrying out this emulation. Instead, SMEs should focus on making their employees perceive themselves as valuable assets to the organization. This aspect, in other words, is a suggestion that SMEs should focus more on the attitude of their employees.

In the case in question, there is no distinct HR department, but the management strives to step in and carry out some functions, which are clearly a preserve of the HR function in organizations that have it. This aspect appears like an emulation of what large corporations do via their HR functions. This kind of approach cannot be ruled out in SMEs especially if their financial resources can support it. However, it would be much better for this organization to focus on building an organizational culture that is deeply entrenched in esteem for everyone in the organizational structure. In this sense, servant leadership can auger well with SMEs such that if combined with the little resources at the disposal of the organization, such a firm would move on well.

In addition, the organization at its level of operation is not far from establishing an HR function. In essence, it should develop an HR vision in which it outlines how it would handle its workforce when it actually gets to establish the HR function. This way, even before the actual establishment of an HR function, the organization will be in a position to start a gradual move towards the general direction outlined in the HR vision. The organization is already undertaking this step, which is encouraging especially if the organization does not strain financially to cater for it. However, a clear HR vision can help in what is more important so that it can be handled first.

In its current state, the organization offers training for its employees in the absence of a department that deals with HR functions. Although this element is a welcome move, it can be quite costly for the organization if the relevant workforce needs of the organization are not addressed within the training program. This assertion implies that the training program needs to equip employees with skills that are crucial to their areas of work.

This element is important because since SMEs lose highly skilled employees to large corporations both at the recruitment level and after the employees have already started working in SMEs, it is arguable that SMEs often end up with a not-so-skilled workforce. Therefore, if the training is aimed at providing employees with the specific skills that they need for their job tasks, the organization will develop a competitive edge and cut down on training costs that might have been channeled towards irrelevant training programs.

Organizations that are just starting out like the one in question often tend to be labor-intensive, which implies that even in the absence of a distinctive HR department, there is a need to maximize the utilization of the skills and abilities of the workforce. This kind of organization cannot afford to operate with employee-instigated inefficiencies because the workforce is their biggest and a major source of strength because SMEs in most cases do not have funds to invest in huge advertising campaigns such as those conducted by corporations. They should thus harness the potential of their employees who, in most cases, are not highly qualified professionals.

You are asked to brief a newly appointed manager on the role HR managers should play in order to maximize the likelihood that a forthcoming organization restructuring exercise is judged to have been successful after it is complete. This new manager is particularly concerned to ensure that staff turnover rates do not increase because of the proposed reorganization. What key points would you want to make? Justify your answer.

HR departmental functions become crucial at the time an organization seeks to restructure because restructuring is often met with ambivalent reactions from the staff of an organization. Experience has taught employees to associate organizational restructuring with job losses and possible exposure to unfamiliar tasks, which often lead to resistance aimed against the restructuring process. This assertion implies that the HR function in an organization has to be vigilant and take a proactive approach to prepare employees whenever such an exercise is imminent lest the management of the organization is considered too overbearing.

For an HR manager to play his role effectively so that a restructuring process may be termed successful at completion, there are fundamental factors that he or she has to consider closely. The first one is communicating with the staff. Decisions about restructuring like any other important decisions in an organization are made by the management of an organization. Such decisions should in some way get down to the employees.

Since the HR function is concerned with people management, the management gives it the responsibility of passing such information to employees. Even in cases where the management announces plans for restructuring, the HR function is expected to support such announcements by following up with detailed explanations about them to avoid misconceptions. In this respect, an HR manager seeks to ensure that an organization gives the right information to the right people at the right time. This move can serve well in ensuring that an organization undergoes a smooth transition while at the same time retaining the right people for its desired functions.

An organization in which a restructuring process is imminent cannot overlook the issue of retention. The HR manager needs to pay very close attention to the mechanism that is applicable in ensuring that the best employees are retained in the organization. This assertion implies that the HR department should devise a mechanism through which it identifies the right talent from an organization’s workforce so that if the restructuring involves laying off, only the desired employees may remain in operation.

The laying off may cause the remaining employees to feel insecure and prompt them to seek employment elsewhere. Under such circumstances, the HR department needs to come up with mechanisms of ensuring that they do not lose the employees that they have retained. In this respect, they may at times need to use bonuses, training, and promotion opportunities as well as better working terms and conditions. This move can ensure that an organization keeps the best of its workers.

During the restructuring process, the HR department needs to work in liaison with operational managers to project an organization’s labor force needs after the exercise. This exercise should place the organization in a position to decide whether it needs to bring more employees on board after the process.

If so, the HR department should conduct the process by researching and identifying competitive compensatory packages that can aid in retaining the already available employees and attract highly qualified workers to join the organization. While intrinsic motivators are becoming crucial as to why employees prefer to work in a certain organization, extrinsic factors like pay hikes also play a crucial role. This way, the HR manager will be considered to have succeeded in keeping the organization up to date with an adequate workforce all through.

It is important for the HR department to be vigilant in maintaining the right numbers of employees who have the right qualifications because, during organizational restructuring, there is always a sense of job insecurity, which may prompt employees to leave even before they are required to leave. Most employees are highly concerned with their job security and thus anything appearing to infringe on that security is seen as a threat to the very survival of the affected employees. This scenario is attributable to the view that in most cases, restructuring processes often lead to leaner organizations, which means that laying off of some employees either temporarily or permanently becomes inevitable.

The restructuring process also comes with unfamiliar job activities, which may cause some employees discomfort because they are required to venture into unfamiliar territory and still produce good results. This assertion hinges on the view that after restructuring and layoffs, some departments are merged, which means the remaining employees have to handle tasks that they did not handle before. In a bid to stop such employees from seeking employment in places where they will continue handling their previous tasks, there is a need for an HR department to reassure and encourage the employees about their future in the organization.

Cite this paper

Select style


BusinessEssay. (2021, June 19). Human Resource Functions in Small and Large Companies. Retrieved from


BusinessEssay. (2021, June 19). Human Resource Functions in Small and Large Companies.

Work Cited

"Human Resource Functions in Small and Large Companies." BusinessEssay, 19 June 2021,


BusinessEssay. (2021) 'Human Resource Functions in Small and Large Companies'. 19 June.


BusinessEssay. 2021. "Human Resource Functions in Small and Large Companies." June 19, 2021.

1. BusinessEssay. "Human Resource Functions in Small and Large Companies." June 19, 2021.


BusinessEssay. "Human Resource Functions in Small and Large Companies." June 19, 2021.