Human Resource (HR) in Organisations: Strategy or Just Another Cultural Practice?

Introduction

As a matter of best practice, organizations and businesses rely on three critical resources: physical assets including equipment and materials; financial assets such as credit, debt, and cash; and the people. Undoubtedly, people have a pivotal role in every organization as a resource. Effective operations, a well-thought-out business plan, and a marketable product or service are all prerequisites for success. All of this, as per the findings of Malik, Pereira, and Budhwar (2018), is contingent on the capacity of the organization’s employees to implement the strategies, plans, and procedures that are necessary to ensure the success of the firm. Every aspect of the business is driven by people. Furthermore, by effectively managing people, firms may increase profitability, improve leadership effectiveness, develop brand loyalty, and provide higher-quality results. Success in any organization is determined on the effectiveness of its human resource function. It is critical for a company’s bottom line to expand and for its business strategy to be successful that the organization’s human resources department performs well. While some understand that HR ensures that a company’s services are of the highest quality while simultaneously increasing profit and team cohesion, others (such as Greg Jackson CEO Octopus Energy) see it as an impractical and purposeless function that does not contribute to employee motivation or productivity and therefore should not be incorporated in an organization. Even with different opinions, employees are undoubtedly the living embodiment of a company’s vital identity, and human resource management (HRM) is concerned with directing those individuals towards successful realization of shareholder goals and objectives.

What is HRM?

Managing human resources is a systematic strategy to ensuring that an organization’s personnel have jobs, opportunities for advancement, and a sense of belonging. HRM refers to all management decisions and actions that affect an organization’s relationship with its employees, or human resources (Minbaeva, 2021). A firm’s HR is a term that refers to the process through which a company handles all decisions pertaining to its employees. In order to fulfill its objectives, the company prioritizes the optimization of human resources as well as the improvement of employee performance. HRM is responsible for ensuring that policies and procedures are followed consistently and effectively throughout the organization (Carnevale & Hatak, 2020). Therefore, HR exists to create a balance between the requirements and contentment of employees, as well as the profitability and ability of a company to achieve its objectives.

HRM, essentially, is a strategy for optimizing the use of human resources, fostering individual advancement, and complying to government regulations in practice, as defined by Turner et al. (2019). Larger organizations usually have a HR department whose major responsibility is to ensure that corporate and employee goals are aligned with one another. People who will assist a corporation in accomplishing its objectives are essential in order for the organization to achieve its objectives. When a HR system is properly implemented, it allows workers to contribute efficiently and effectively to the attainment of the organization’s goals and objectives.

Value of HR in Organizations

Many academics and business writers, as well as company owners, have argued in recent years over whether or not companies should abolish HR functions (Claus, 2019: Kryscynski et al., 2018). The problem originates from widespread and serious skepticism about the significance of HR to the overall effectiveness of a business. There is a good reason why HR has had such a bad reputation as it is often perceived as ineffective, incompetent, and costly due to its transactional, bureaucratic, outdated and old-fashioned system applied in a majority of organisations. Despite this necessary criticism, Oh et al. (2017) find it important to mention that HR functions are always very important and abolishing them would be taking away a critical component of a firm. Organizational excellence is necessitated by the competitive dynamics managers are currently confronted with and will continue to face in the future. Businesses strive for overall excellence with a focus on quality, teamwork, reengineering, and continuous learning. These are fundamental HR issues that are central to the connection between the people and the organization. To put it clearly, HR must always strive to achieve organizational performance.

HR has the capacity to attain organizational excellence. HR should collaborate with senior and line managers to ensure that the company’s plan is implemented. This will aid in the transition of planning from the conference room to the real-world environment. Second, Patel et al. (2019) note that HR should become an expert in arranging and executing work, which will allow it to save money while still keeping quality standards. In line with emerging issues, it should actively convey workers’ issues to top management, as well as strive toward increasing employee commitment to the organization and ability to generate outcomes. They should also assist firms in changing by implementing new procedures and adopting a new way of thinking about the process of change.

While the value of HR in today’s organisations cannot be replaced, it is important to note that the HRM function and structure has had to change tremendously in order to adapt to the needs of the people in firms and also to depart from traditional status quo. The new HR strategy in successful organizations is a considerable divergence from the previous HR approaches. In a majority of firms, HR is only sanctioned to play policy oversight and a regulatory watchdog (Al Adresi & Darun, 2017). The HR department has traditionally been sanctioned to do these same old duties, and this continues to be true in the vast majority of organizations today. In addition, it maintains records of all documents pertaining to hiring and dismissal, benefits administration, and the compensation of others. If senior management delegated additional authority to it, it may be in charge of recruiting, supervising training and development programs, or implementing policies and procedures to increase workplace diversity. HR functions, in addition, are frequently perceived as being divorced from the organization’s primary mission and goals (Al Adresi & Darun, 2017). Firms that follow the new agenda, on the other hand, would be required to ensure that each of HR’s actions directly contributes to the company’s ability to better serve its customers or to generate shareholder value in other ways.

The value of the HR function is on its ability to complement every other component of an organization. in this regard, HR is more important now more than ever. Businesses nowadays are confronted with five major business challenges, regardless of their industry, size, or geographic location. They have to contend with the competitive forces brought about by globalization, profitability in growth, technology, intellectual capital, and change (Minbaeva, 2021). When considered as a whole, these issues drive businesses to build new capabilities. At present, developing such skills and abilities requires the input of all firm employees, a role that the HR is able to coordinate using its skills and expertise. Taking advantage of this gap presents an opportunity for human resources to play a pivotal role in enabling businesses to respond to emerging competitive challenges.

Extended Value of HR during the COVID-19 Pandemic

As a result of COVID-19, one of the most important transformations in the workplace has come to light. The way people work, exercise, learn and interact will all need to change in the coming years. They will also need to change where (location) they will work throughout this time. Organizations all across the world are being impacted by the Covid-19 coronavirus pandemic, and some are requiring or encouraging their employees to work from home in order to ensure that they stay healthy themselves (Dirani et al., 2020). As the coronavirus spreads, an increasing number of people are choosing to work from home. When it comes to the future of work, it is more important than ever to ensure that people are happy and healthy at their jobs. With the development of the digital economy, the stress of juggling work and family life, and now the coronavirus, it is more important than ever to ensure that employees remain in good health.

The COVID-19 outbreak has had a deep and immediate impact on the way society functions as well as the way individuals connect and cooperate with one another. In response to shifting individual and organizational needs, there has been a major shift towards remote working, dynamic resource reorganization, and the acceleration of digitalization and automation around the globe. Organizations have, for the most part, navigated through this era of crisis effectively. When the world begins to imagine a post-pandemic society, a management system based on established rules and the old HR status quo—a hierarchy that provides control, uniformity, and bureaucracy—cannot be used due to its proven ineffectiveness (Ngoc Su et al., 2021). This paradigm should be replaced by a HR structure that is more adaptive and responsive and is built on four interrelated trends: increasing people connectivity to their organization, unmatched automation, reduced transaction costs, and shifts in demographics.

A prime example of the need for HR functions in the organization has been made more relevant by the ongoing pandemic. As more organizations opt for remote working as a way to ensure continuity while keeping their employees safe, companies with effective HR functions have had a smooth transition in adopting these new demands. Those that do not have functional HR systems have had to hire external help in order to manage employees remotely and to ensure that the organization remains productive while catering to the needs of the shareholders. Lee et al. (2020) point to the value of HR in a period when its basic functions cannot be overlooked. In the same vein, Carnevale and Hatak (2020) assert that HRM has helped firms to maneuver the intricate and complex environment created by the pandemic, and the demand for firms to reduce contact with customers and employees. In short, organizations are now solely relying on the prowess of their people resource to remain afloat in a period where many firms have fallen victim to the crisis.

Theoretical Support for HR Functions in Organizations

While the HR department is still responsible for the overall performance of the workforce, as well as its productivity and efficiency, the major goal nowadays is to better understand the issues that individuals face both at work and outside of work. This line of thought is aligned to the organizational behavior theory that supports the presence of HR functions in organizations. In order to better understand how people in firms think, feel, and act, organizational behavior theory is used to have a better grasp of human resource management and associated problems (Manuti et al., 2020). This understanding assists human resources and, more likely, all employees in predicting, identifying, and tracking organizational events and activities. Workplace performance, job security, creativity, and leadership are all investigated in the field of organizational behavior. Stahl et al. (2020) present that studies in organizational behavior allow for a greater understanding of how different behaviors affect workers’ efficiency and discretionary effort. They may also examine and estimate the long-term effects of different policies on how they manage human resources. Overall, the organizational behavior theory focuses on the social interactions between people in firms, issues of justice and equality, and the connection between organizations.

While the organizational behavior theory specifically looks at the interactions between the people, the organizations, and the interlinking factors of justice and equality, it may overlook important elements such as supporting employees to attain the best. Here, the motivation theory, as explained by Dorado et al. (2021), looks at how firms can create passion and the drive to attain organization goals, through its HR function. Motivation theory examines what drives people to achieve a goal. It applies to many areas of society, but especially to business and management. According to this theory, motivated employees make greater profits and are reported to increase productivity by nearly 12% (Harney & Collings, 2021). Although motivation theory encompasses many areas, it has two essential components: external and internal factors. Extrinsic motivation comes from rewards for good work or penalties for failure to reach goals. When it comes to intrinsic factors, people are led by human desires. Overall, the HR function has a mandate to ensure that these motivations are attained using policies and practices relevant to the organization.

Conclusion

The current discussion has shown that even where opinions on HR roles may vary, employees are undoubtedly the living embodiment of a company’s vital identity, and the HR function is concerned with directing those individuals towards successful realization of shareholder goals and objectives. Greg Jackson’s view of HR as an impractical and purposeless function that does not contribute to employee motivation or productivity should not be ignored. This comes from a definition of the conventional HR function that is ineffective, incompetent, and costly due to its transactional, bureaucratic, outdated and old-fashioned nature. However, the examples presented on the current pandemic management of employees shows the increasing need of HR functions as the world moves towards remote work.

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