We looked at the promises and pitfalls of strategic Human Resource Management (SHRM) last week. We identified it simply as an approach that defines how an organisation’s goals will be achieved through people by means of HR strategies and integrated HR policies and practices.
Where are we in practicing it in Sri Lanka? Today’s column of Humane Results will focus further on this.
Gratton and Truss (1994) stated that HR’s strategic role is to adapt individual HR practices (recruiting, rewarding etc.) to fit specific corporate and competitive strategies. As they further elaborate, “For any particular organisational strategy, there is purportedly a matching human resources strategy”.
In response to the changes at strategic levels, the role of the HR function is dramatically changing (Schuler and Jackson, 1987; Ulrich, 1998; Armstrong, 2006). As a strategic partner, the HR Manager has to acquire the business mastery, a path that would lead him / her to greater interactions with the top team (Ulrich and Broackbank, 2005). This is an essential component of SHRM.
Dave Ulrich, in his path-breaking article to Harvard Business Review (January-February, 1998) highlights several such challenges. According to Ulrich, “HR should be defined not by what it does but what it delivers”. He identifies five critical business challenges faced by organisations around the world. It is worthwhile to discuss the above in relation to Sri Lankan context as well.
With the rapid expansion of markets, managers are struggling to balance the paradoxical demand to think globally and act locally. Globalisation requires that organisations increase their ability to learn and collaborate and to manage diversity, complexity, and ambiguity.
Sri Lankan organisations should be geared to explore the gold mines the globalisation offers, while avoiding land mines. SHRM has to cater for competency development of employees. Their enhanced knowledge, attitude and skills will lead to competitive advantage of the organisation. That is the only way to survive and succeed in a “flat world”.
ii. Profitability through Growth
The drive for revenue growth puts unique demands on an organisation. Being creative and innovative, encouraging free flow of information, keeping in touch with the rapidly changing need of customers are some of the key strategies involved. This focus got further reinforced in the wake of the current global recession.
Sri Lankan organisations need to take note as to how best they can assess the real customer needs on a regular basis, whilst being dynamic providers of goods and services as progress partners, is the order of the day. SHRM should work hand in hand with business leaders in providing people with right competencies in ensuring the required performance. Appropriate measuring tools such as the Balanced Scorecard should be employed.
Managers need to stay ahead in the effective use of information, and should learn to leverage such information for business results. Else as Ulrich (1998), says, it will be a case of “being swallowed by a tidal wave of data without new ideas”.
In Sri Lanka, too, an increasing awareness on the use of Information and Communication Technology (ICT) for economic and business development can be seen. Despite multiple initiatives from both the private and public fronts, the real utilisation of hardware and software assets, with tapping the full potential of our bright, young “liveware” is yet to be done. SHRM should cater for technology leadership, in using ICT for employee development.
iv. Intellectual Capital
Knowledge has increasingly becoming direct competitive advantage, posing a challenge to organisations to ensure that they have the capability to find, assimilate, develop, compensate and retain competent individuals.
Sri Lanka, in the face of brain drain, particularly in industries such as ICT, needs to find ways and means such as gain –sharing, in order to retain such intellectual capital within the country. A reverse brain-drain is a strong possibility with the growing optimism in the business circles. There are opportunities for SHRM to play a vital role in this respect.
v. Change, Change, and More Change
Perhaps the greatest competitive challenge organisations face, according to Ulrich (1998) is adjusting to the need of embracing non-stop change. The ability to learn rapidly and continuously, innovate ceaselessly and take on new strategic imperatives faster and more comfortably has become the order of the day. In other words, organisations need to be in a never-ending state of transformation, perpetually creating fundamental, enduring change.
With the liberalisation of economy since 1977 saw a rapid phase of change in business activities in Sri Lanka, but the real challenge lies in the sustaining the dynamism in the face of global changes, not being a victim but becoming a victor. Now the time has come, to enter into a rapid phase of growth and development. SHRM role is immense in this aspect, where organisations have to plan and implement how people factor can be utilised for the goal attainment.
Let’s take tourism industry for an example. Experts have forecasted an acute shortage of professionals in time to come, with the wake of business expansion. SHRM strategies, action plans and implementation should cater for bridging such gaps.
Having discussed the need for SHRM in the context of accelerated change, few specific challenges can be identified in Sri Lanka. Figure 1 contains the details.
The crux of the matter is whether impelling forces are successful in overcoming impeding forces in moving from current state to the desired state. The scenario we see is a conscious transformation from narrowly focusing on personnel and administration to becoming a strategic partner of organisational success.
This needs further reflection as to how HR professionals and organisational leaders can play a pivotal role, in that endavour. Next column of Humane Results will address such aspects in detail.