The global outlook

Roger Trapp looks at the new thinking behind human resource management

LEADING companies are transforming their human resources (HR) departments to meet global needs, according to research recently published in the United States.

The report "Transforming the HR Function for Global Business Success" by the US management organization, the Conference Board, indicates that nearly two-thirds of more than 200 HR executives in organizations based around the world are engaged in "the recreation or re-invention of the human resource function".

Brian Hackett of the Conference Board suggests that there is still a certain amount of tension between HR professionals and top management over who is responsible for global strategy in this area. But Ginny Olds of the management consultants William M Mercer UK, says the report "clearly shows that the most important driver of transforming the HR function is the alignment of human resource management with the company's global business strategies".

In adding that existing HR and personnel functions will need to change and develop partnerships with senior executives in order to achieve this objective, she is building on the thinking of Gareth Jones, BT professor of organizational development at Henley Management Centre.

In a Harvard Business Review article written with Prof Rob Goffee of London Business School, he introduced the idea of the nature of human resource strategy, dependent on whether the organization to which it applied fell into one or other of a number of categories, such as communal or mercenary.

There are three potential relationships, says Prof Jones, who recently returned to academic life after a spell as vice-president responsible for human resources at the entertainment company PolyGram. Business strategy and personnel practice can occupy different domains, human resource strategy can be deduced from business strategy or human resource strategy can be constitutive of business strategy.

No one approach is necessarily the right one, but those involved need to realise the "cultural context" for human resource strategy he stresses. Consequently, in a "communal" organization the key HR issues will be guarding values, induction of new employees, critiquing actions and ensuring that leaders are visionary. Alternatively, in a "mercenary" operation, HR people will be concerned with installing measurement systems, "exiting" those who have failed and creating a situation in which leaders are seen as winners.

But, as the US report points out, there are certain barriers to HR departments taking a more central role in the running of their organizations - the competencies of HR staff, the credibility of the HR function, senior management resistance and technology.

HR executives see the key gauges of their success in this area as direct impact on business outcomes, internal customer satisfaction and HR capabilities.

As one serving HR executive has pointed out, HR departments have got to show that they can add value to the business rather than just acting as an overhead that deals with recruitment and administrative issues.

If people really are an organization's greatest asset, the executives responsible for them should be able to devise ways of making an impact.