Human Resources Supporting Business Performance

Models and Their Application

Over the past few decades, notable changes have occurred to the place that HR managers take in the organizational environment and the role that they play in it. Due to the surge in the techniques on improving human relations and the general propensity toward viewing talent management as one of the most effective frameworks for promoting organizational growth, the role of an HR manager has evolved past the concept of selecting the candidates that meet job opening requirements to the greatest extent. Due to the reconsideration of HR as the main asset of an organization and the source of future investments, the change of the HR role toward the development of tools for increasing the human capital and the competitive advantage of an organization has been observed.

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The Ulrich Model suggests splitting the roles and responsibilities that an HR manager has in the context of a company into four large subcategories, namely, the one of a strategic partner, a change agent, an administrative expert, and an employee champion (Gerpott 2015). The described innovation in the understanding of the role of an HR manager and the HR Department in the context of an organization allows stretching the concept of HR to the extensive cooperation with staff members in order to increase the human capital, simultaneously building a communication channel based on the principles of reciprocity and professional development.

Approaching the changes in the role of an HR from the standpoint of the Ulrich Model, one will realize that the new business context has generated new needs for HRM purposes. The rapidly growing influence of talent management as the principal philosophy for company-employee relationships has allowed viewing an HR manager as a partner in the process of pan employee’s professional development (Jamali, El Dirani & Harwood 2015). Specifically, the role of an HR manager has been expanded to include the one of a guide to employees’ professional development.

The Michigan Model offers a more intricate way of considering workplace relationships. The framework splits the roles of an HR into two large categories, each containing three subcategories. The first (internal) set includes mission and strategy, organizational structure, and human resource management, whereas the second (external) one is comprised of economic, political, and cultural forces that shape the performance of an HR manager (Uysal 2019). The specified model is admittedly the one that encapsulates the expanding role of an HR manager to the fullest extent. Linking the performance of an HR manager to multiple aspects of a company’s performance shows that an HR manager has to evaluate the effects that the selected approach for employee relations will have on a firm’s performance in the target setting. Moreover, the analytical review of political, economic, and sociocultural factors that may shape the performance of staff members is an admittedly new part of an HR manager’s functions.

The Warwick Model also suggests considering internal and external contexts, yet it also adds the Business Strategy and HRM-related ones, allowing one to view an organization as a single entity. Thus, an HR manager becomes the mediator between an organization and its employees. The described role is quite new and implies a greater extent of responsibility. A similar idea is represented in the Harvard Model, where the role of stakeholders is amplified, and an HR expert becomes the link between them and staff members (Tiwari, Srivastava & Kumar 2019). Thus, the transfer from a hard, product-oriented model to a soft, people-oriented one, can be observed, with HR outsourcing becoming an important tool for sharing experiences in managing teams with unique needs.

Apart from the described models, there are other forces that have a distinctively vast effect on the change in how the role of an HR manager is perceived in the organizational context. For example, several critical forces have recently been introduced into the environment of HRM decision-making, causing HR managers to select appropriate strategies based on the constraints that the described areas incorporate. Specifically, it is crucial for HR managers to align the approaches toward building an HRM framework with the business objectives of a company, its organizational culture, management, structure, and stakeholder demands. The business objectives, perhaps, have the most straightforward effect on the choices made within the HR system since these objectives dictate the course of the workflow and, therefore, the decision-making and attitudes among staff members (Voegtlin & Greenwood 2016). Therefore, an HR manager has to take the company’s objectives into account when modeling an appropriate strategy for keeping the levels of engagement and motivation among employees high.

The factor of the organizational culture is connected internally to business objectives as a factor redefining the role of an HR manager. Therefore, an HR manager has to shape the organizational culture in order to create an environment in which employees will perform actively. Thus, the transformation of an HR manager’s role toward the one of a leader and the agent affecting the organizational setting can be observed. Finally, the structure of the organization and its hierarchy, as well as the requirements set by stakeholders, imbue the role of an HR manager with the functions of a mediator between a company and its staff members in accordance with the Warwick Model.

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External Factors and the HR Function

The performance of an HR manager and the efficacy of the strategy developed by the HR Department is largely affected by the environment in which an organization functions. Political, economic, and social factors define in which way an HR strategy is going to develop since a company needs to adjust its decision-making, production, supply chain management, and organizational processes to the economic, cultural, and financial properties of an entirely new market environment. Consequently, the performance of its employees and the focus of their decision-making have to be altered to meet the requirements set in the target setting (Marler & Parry 2015). Thus, it would be a legitimate assumption to make that an HR function is affected significantly by external factors associated with the cultural tradition of staff members and the target market, economic and financial constraints, and numerous other factors.

However, the effects of the identified change are not necessarily positive. The increase in the range of responsibilities that an HR function incorporates and the number of factors that shape decision-making in the HR context increases the amount of pressure that an HR manager experiences when developing an appropriate strategy for addressing the needs of staff members and the company. For example, in their paper, Marlet and Parry (2015) specify that a range of extraneous factors has shaped the HR function significantly, the most noticeable ones being the IT and ICT innovations that have garnered the status of essential components of successful communication flow within a form.

Therefore, the exogenous environment of the external market has had an undeniably strong impact on the development of the HR function and the manner in which key HR processes are performed in the organizational setting. The impact of technology has been especially noteworthy as it has redefined the relationships between HR managers and employees. Allowing the former to build a communication channel through which feedback from the latter could be received, IT and ICT tools have contributed to shaping the modern corporate setting to gain the form that is currently observed in most organizations. Thus, given the dramatic effect that the changes in technology and communication tools have produced on decision-making and workflow in the HRM context, one will have to admit that external factors shape the function of HR extensively.

Moreover, cultural factors are likely to have a profound impact on the development of an HR strategy. The socio-cultural aspects of managing the HRM processes within a firm are particularly difficult to address since they allow establishing a rapport with employees, which, in turn, leads to greater motivation rate san an improved level of engagement in staff members. The importance of considering cultural factors is especially necessary when using the HRM techniques linked to outsourcing (Gerpott 2015). Due to the necessity to build motivation and corporate loyalty among employees of an entirely different cultural background than the rest of the company members, it is critical to deploy the HRM techniques that allow appealing to staff members’ cultural values (Gerpott 2015).

Thus, an HR manager will be able to create a system of HR functioning based on the principles of reciprocity and understanding (Marler & Parry 2015). Sociocultural factors will also define the approach that a company can use to motivate its employees to attain the set goals to the best of their abilities. The integration of a cultural analysis into the management of a company’s human resources will help to develop a set of incentives and a benefit package that will seem particularly enticing to staff members. For instance, in the sociocultural context that is unfamiliar to an organization, it may consider offering its new recruits extra benefits such as holidays due to their religious beliefs. Once making a gesture that shows he company’s ability to recognize the unique needs of its employees, a firm is likely to contribute to an increase in employees’ engagement and loyalty levels. Thus, the use of sociocultural factors as an essential external influence on the HR function is critical.

Finally, legal issues as essential extraneous factors have to be taken into account when building an HRM approach. As an HR manager, one has to scrutinize the legal provisions within the target market set to ensure that the rights of staff members are met fully. Thus, with the incorporation of the described factor, the role of an HR manager expands to include the assessment of legal standards and possible collaboration with legal authorities representing the market in question.

In fact, the assortment of influences that the HR manager experiences when designing an appropriate strategy can be embraced by considering the tools such as PESTLE (Political, Economic, Sociocultural, Technological, Environmental, and Legal factors) or SWOT (Strengths, Weaknesses, Opportunities, and Threats) (see Fig. 1). Offering a more orderly approach toward the arrangement of key influences on a company’s decision-making, the PESTLE analysis embraces the importance of specific types of factors, such as the ones related to the market’s economy, its legal standards, and so on, for the choice of an HR strategy.

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Comparing Two Different Analytical Tools

The use of an analytical tool as a method of evaluating the challenges and opportunities that a company is likely to face in the selected market is a critical requirement. Therefore, an HR manager has to consider utilizing several assessment techniques in order to assess the opportunities and risks that need to be considered when building an HRM approach. For this purpose, several tools can be considered. Given the fact that the environmental analysis is imperative for determining the crucial characteristics of the chosen environment, an HR manager may need to consider using either SWOT or PESTLE. While the former focuses mostly on the organization’s characteristics, PESTLE evaluates the factors that shape a company’s performance in a very particular setting. In order to understand the extent to which SWOT and PESTLE can assist an HR manager, one will need to perform a detailed comparison thereof.

Figure 1. SWOT and PESTLE: A Comparison.

SWOT PESTLE
Focuses on internal factors: the strengths, weaknesses, opportunities, and threats associated with a specific company are analyzed. Focuses on external factors: the influences of political, economic, social, technological, environmental, and legal factors are listed and explained.
Category factors in relation to the company (specifically, positive or negative). For instance, the strengths and opportunities can be considered as positive factors, whereas weaknesses and threats are clearly expected to outline the major negative ones. Category factors based on their nature (economic, political, and so on). The quality of their effect, namely, whether it is positive (strength, opportunity) or negative (weakness, threat) is not taken into consideration. Instead, factors are grouped depending on the type of their influence.
Sources of a threat or an opportunity are outlined Sources of a threat or an opportunity are implied
Addresses a state of a company: the assessment provides a basic description of the business and the essential characteristics thereof. The descriptive nature of the analysis allows inferring essential information from the stated data concerning the strengths, weaknesses, opportunities, and threats observed in the target environment. Addresses a situation of a company: the assessment does not delve into the nature of a company but, instead, gives a detailed account of the external forces that shape its performance and its choices.
Describes internal environment: the key facts mentioned in the assessment are interpreted from the perspective of an organization and its unique characteristics. The strengths and weaknesses offer a direct description of the firm’s assets, whereas opportunities and threats explain how the current strengths should be used to propel the company to the top of its target market, avoiding crucial threats. Describes external environment: while the unique characteristics, strengths, and weaknesses of a company are implied, these are the forces shaping the firm’s performance that are at the forefront of the assessment. The focus is kept on the evaluation of the external influences and not the organization itself, although the outcomes of the assessment are used to shape the firm’s strategy.
The multipurpose nature of the SWOT analysis: the tool can be used to evaluate not only a particular organization, but also projects, products, people, and other elements of a company’s functioning. The constrained nature of the tool’s application: the PESTLE analysis can only be used to evaluate the setting to which an organization is transferred or in which a project is developed.
Goals: the goal of using the SWOT is to determine whether particular conditions are favorable enough to attain a particular objective. Goals: The ultimate goal of the PESTLE tool is to determine whether the combined effect of the factors related to a particular setting will affect a project or a company positively.
Allows understanding the company: SWOT is primarily used to determine the competitive advantage and the internal problems of a particular organization, with the focus being kept constantly on the firm and its characteristics. Allows understanding the market: the PESTLE assessment zooms in on the unique properties of the market chosen for penetration and the economic and political environment in which a project is going to be planted.

As Table 1 provided above shows, there is an observable difference between the SWOT analysis and the PESTLE one. Although the results of both assessments may provide similar information, a significant portion of which is going to overlap or be self-explanatory given the results of one of the assessments, each of the evaluation tools delivers a unique perspective on the performance of a business. Thus, the tools compared above can be utilized to assess the efficacy of the designed HRM strategy, while each of the tools will deliver a unique insight into the situation under analysis. Correspondingly, the described tools can be used both separately and alongside each other to observe and analyze a specific situation in the business setting of a certain company. In fact, when combined, the two assessment strategies offer a two-dimensional overview of an organization due to the focus on internal (SWOT) and external (PESTLE) issues that it faces. Therefore, arguably, the two strategies are best used in tandem as the method of performing a fully developed analysis of a company’s position in the market.

Strategies Formulation and Implementation, Business Ethics, and Accountability: The Role of an HR Manager

Measurement of Business Performance.
Figure 2. Measurement of Business Performance.

As an HR manager, one contributes extensively to the development of corporate ethics and the promotion of accountability as a critical organizational value to staff members. The development of accountability-related perceptions of their workplace in staff members is linked to the promotion of engagement and loyalty to the organization that an HR manager inspires in employees.

In a similar way, an HR manager structures and develops the pillars on which the business ethics of an organization will reside. As an HR, one has to encompass the workplace issues associated with health and safety, address problems of the existing benefits package, including more reasonable compensations into it, focus on privacy issues, ensure that staff members develop responsibility, and supervise a range of other ethics-related concerns. Thus, an HR manager lays the building blocks for the creation of a system of corporate business ethics and encourages compliance with the set standards among employees.

In this context, ethical theories linked to Utilitarianism and Deontology will have to be considered. The principles of Utilitarianism imply that the decisions made within the environment of a firm should be made taking the end result into account, whereas Deontology suggests that strong ethical standards should lie at the core of the company’s decisions (Park et al. 2016). Therefore, an HR manager has to balance between the two notions, selecting the one that leads to the least amount of harm and is rooted in corporate values. For this purpose, the concepts of beneficence, least harm, respect for authority, and justice should be seen as the foundation for decision-making within a firm. The proposed notions allow one to address the needs of vulnerable staff members within the workplace team, thus promoting the principles of equity (Park et al. 2016). The concept of autonomy is also central to HR ethical decision-making since it will allow fostering the idea of personal development and professional growth in staff members, increasing the efficacy of talent management.

Performance Measurement and the Role of an HR Manager in Business Planning and Change Management

Evaluating the efficacy of workplace performance is another crucial task that an HR manager has to accomplish in order to ensure that the goals and standards of the organization and the critical objectives of the business are met correspondingly. Therefore, tools for performance measurement have to be identified or developed from scratch in order to manage the efficacy of employees’ work and address issues that occur during production processes and organization-related events. From the specified perspective, the role of an HR manager can be expanded to include the identification of the criteria that can be used to assess staff’s performance, and the evaluation itself, with the following analysis of the results and the identification of the vector for the present talent management strategy to take.

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Although the concept of business planning might seem unrelated to HR management, it is also linked internally to the tasks related to the HRM process. Specifically, the issue of staffing and the distribution of roles across staff members should be seen as a critical part of business planning, which is linked directly to the job of the HR department. The HR function, in turn, allows determining the strategies for employee selection, thus creating perfect teams that will deliver the optimum results and work to the full capacity. Admittedly, the process of assigning jobs and responsibilities to people working in a company that has only recently been created implies certain challenges caused by the lack of awareness about the unique characteristics of employees, their ability to collaborate, and the general functioning of the teams. However, with the help of surveys and other tools for learning about employees’ needs, unique abilities, and collaboration skills, one will be able to create a team within which communication will run as smoothly as possible. The issue of costs is also linked to the process of business planning as viewed through the lens of an HR manager. For instance, it will be critical to ensure that every staff member receives appropriate payment and that the company should not suffer losses with the adopted approach toward distributing benefits.

When approaching the management of business planning and the distribution of responsibilities and benefits among employees from the described perspective, one may consult the HRIS framework. Designed to gather crucial data about staff members, their needs, the extent of their possibilities as the company’s HR, and many other pieces of information, the Human Resources Information System (HRIS) can be seen as an important framework in which an HR manager can work to allocate the available human resources in the best way possible (Esanga et al. 2017). The specified approach allows connecting essential facts that allow understanding how the HRM situation within a company develops and by what it is influenced. Based on the rise in the significance of HRIS-type devices, one may conclude that the role of HR in business planning has risen exponentially, making the process of managing the information related to staff members and the issues that motivate them a crucial part of an HR manager’s job. The assessment of external and internal factors that affect staff members’ willingness to perform and the quality of the end result has expanded the role of an HR manager, turning them into the person that manages the company-employee communication channel. Consequently, with the appropriate strategy deployed for business planning, an HR manager can build a team of employees that are willing to reach excellence in their work and embrace the idea of professional growth.

Similarly, an HR manager has to advance a company’s change management framework by introducing the concept of constant change as the method of keeping the organization flexible and resilient in the target setting. Due to the rapid changes occurring in the global market, it is crucial for a firm to be able to adjust to them in a timely and effective manner. However, while the principles of continuous change may be established within a firm at the regulation level, the process of convincing staff members to adopt new strategies and principles of decision-making may be a bit more time-consuming and complicated. The situation may be aggravated by the presence of miscommunication due to problems in the cross-cultural dialogue and the inability to establish a reciprocal communication process with employees. Herein lies the role of an HR manager, who can promote the concept of change as an important part of any employee’s life and become a link between an organization and its workers.

Thus, the promotion of change management strategies is being introduced into the set of responsibilities of an HR manager currently in the global business context. By performing a complex analysis of the compatibility of the corporate philosophy and employees’ cultural values and needs, an HR manager can create an effective approach for encouraging employees to accept the idea of continuous professional development as the tool for keeping employees engaged and willing to make an effort to support the development of the organization. The concept of change management is linked directly to Lewin’s change management model and its more recent extension, Kotter’s 8-step change management framework (Esanga et al. 2017). The specified approaches to change management allow institutionalizing the idea f improvement, thus making it constant and encouraging organization members to adopt the principles of innovative leadership into their work routine. The resulting shift toward decision-making based on the integration of the latest developments in the selected business domain is bound to cause rapid organizational development.

Overall, the current interpretation of the HR function seems to gear toward the notion of the HR manager being the mediator between an organization and the people employed in it at different levels. Consequently, the responsibility for introducing innovative solutions to the process of fostering corporate values development in office workers and other staff members is placed on the HR manager in the context of the modern business environment. The described change in the workplace dynamics implies dealing with a substantial amount of pressure placed n an HR manager due to o the necessity to coordinate a range of projects and tasks. The latter include the communication of corporate values to staff members, navigating and correcting the present set of business values, and shaping the approach toward business planning to incorporate the approaches for meeting employees’ needs.

Considering Internal and External Data When Planning

As an HR manager, one has to consider the process of business planning as an inherent aspect of the HR function. Thus, information management and its specifics are critical elements of the tasks that an HR manager has to handle. Thus, an HR manager needs to be aware of the critical factors that have an effect on the organization and the decisions that have to be made in it. Consequently, as an HR manager, one has to consider external and internal data when performing business planning and designing appropriate HRM strategies. In the specified process, internal and external data implies company-related and environment-related factors that shape an HR manager’s decisions concerning the choice of an HRM strategy (Park et al. 2016). In regard to the former, corporate values and philosophy typically serve as the foundation on which an HRM approach is created (Marler & Parry 2015). As far as the latter is concerned, socio-cultural and economic factors can be named among the ones that define an HR manager’s decision-making.

The analysis of the internal data may involve performing a SWOT analysis. Although the described tool is typically deemed mostly as the vehicle for assessing an organization’s economic potential or the probability of implementing a project, it may also be utilized to assess the factors linked to HRM issues. For this purpose, an HR manager has to consult different sources of data, which may include trends in HRM, company-related information, and government-issued information. Current tendencies and trends in HRM will shed light on how to deploy innovative talent management approaches in a particular business context, as well as introduce one to the methods of managing challenges that the current global business setting contains. For instance, the difficulties associated with interdisciplinary cooperation in the business setting can be evaluated when considering recent trends in the industry.

The assessment of the company’s data, in turn, will help to evaluate its chances of advancing in its target economic environment. With the help of the tools such as SWOT, PESTEL, Porter’s Five Forces, and other tools, a company can determine the factors that shape its decisions, define its customers’ choices, and allow it to build a sustainable competitive advantage.

The consideration of employee turnover and retention rates, in turn, is another critical source of data that an HR manager has to consider when performing business planning. The changes in the specified indices allow determining the success of the chosen HRM tool. For instance, the propensity toward a drop in retention rates and a subsequent rise in employee turnover shows that the present setting in which staff members are placed is unanimously deemed unsuitable for effective work. Similarly, the absence data points to the problems in the workplace environment, also pointing to the issues in organizational behaviors and standards for it. Finally, government data will shed light on the statewide statistics regarding employee management, as well as the regulations for building relationships between a staff member and an organization. Thus, the specified data can be utilized to define the number and scale of workplace benefits.

Reference List

Gerpott, FH 2015, ‘The right strategy? Examining the business partner model’s functionality for resolving Human Resource Management tensions and discussing alternative directions’, German Journal of Human Resource Management, vol. 29, no. 3-4, pp. 214-234.

Jamali, D, El Dirani, A & Harwood, I 2015, ‘Exploring human resource management roles in corporate social responsibility: the CSR-HRM co-creation model’, Business Ethics: A European Review, vol. 24, no. 2, pp. 125-143.

Likofata Esanga, J, Viadro, C, McManus, L, Wesson, J, Matoko, N, Ngumbu, E, Gilroy, K & Trudeau, D 2017, ‘How the introduction of a human resources information system helped the Democratic Republic of Congo to mobilise domestic resources for an improved health workforce’, Health Policy and Planning, vol. 32, no. 3, pp. 25-31.

Marler, J & Parry, E 2015, ‘Human resource management, strategic involvement and e-HRM technology’, The International Journal of Human Resource Management, vol. 27, no. 19, pp. 2233-2253.

Park, G, Kappes, A, Rho, Y & Van Bavel, J 2015, ‘At the heart of morality lies neuro-visceral integration: lower cardiac vagal tone predicts Utilitarian moral judgment’, SSRN Electronic Journal, vol. 1, no. 1, pp. 1-10.

Tiwari, V, Srivastava, S & Kumar, DP 2019, ‘Adoption of HRM practices: a practical model-case study of a hotel’, IOSR Journal of Business and Management (IOSR-JBM), vol. 21, no. 4, pp. 59-63.

Uysal, G 2019, ‘3rd definition of SHRM: HR systems approach’, Management Studies, vol. 7, no. 5, pp. 496-501.

Voegtlin, C & Greenwood, M 2016, ‘Corporate social responsibility and human resource management: A systematic review and conceptual analysis’, Human Resource Management Review, vol. 26, no. 3, pp. 181-197.

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