Transformational HR

Transformational HRM: A Brief Outline

1. HR has come of age, as reflected in the appointment of HR people at the Board level in several important companies. The fact that organizations have started creating posts like the Chief People’s Officer is an indication of the rising importance of HR. In a move reminiscent to Infosys former CFO Mohandas Pai moving to head its HR function, S Nagarajan, the chief operating officer and co-founder of Bangalore-based 24/7 Customer is shifting to a newly created post of Chief People Officer. According to Nagarajan, ITES being people-enabled, the employees are his most important
2. While HR is being recognized as a strategic advantage, there are concerns about the image of HR amongst the employees. Business Manager, a monthly magazine has reported in its November, 2006 number results of a survey of 2145 employees from various managerial levels regarding the image of HR. The results show that 53% employees dislike HR and 47% have negative image. The results are given according to the various industries also. It is a matter of concern.
3. HR is facing new challenges because on the one hand several HR practices are being outsourced, and on the other hand, all line mangers are being (and should be) oriented to HR, so that they take over most of the HR work. The question then is what should HR do?
4. Originally we (Dr. TV Rao and myself) had designed HR for L&T and SBI in the mid 70’s with three main emphases: (a) HR should deal with all the units of the organization (from person to total organization), (b) It should be value-based, (c) it should be located at the highest level in the organsiation. Fortunately the leaders of the two organizations, Shri N M Desai and Shri R K Talwar accepted and implemented these recommendations. The main spirit of HR was that it should touch the core of people (it should remain human).
5. HRM is at the fork of the road—either to continue as a peripheral service function, or to become a strategic business partner and organizational process consultant-facilitator.
6. To play the latter role, HRM needs to do the following:
• Reposition HRM functions to make them more human
• Develop HR systems
• Help in decision about insourcing, outsourcing and open sourcing of HR functions
• Facilitate implementation of the HR Systems
• Provide internal organizational process consultancy
• Manage transformational HRM
7. It is time that we make a distinction between two aspects of HRM: transactional and transformational. By emphasizing transformational aspects, we shall be able to make HR the competitive advantage and as a business partner. Lot of transactional aspects of HR can either be outsourced or can be managed with involvement of line managers.
8. The transactional functions of HR will include the following: In all these functions human aspects must be emphasized.

· Recruitment: Based on futuristic competency mapping

· Induction: Communicating personal concern and pride

· Performance management: Separating Performance planning from rewards

· Development system: Expanding development modes

· Career development: De-linking promotions from competency decision.

· Separation system: Communicating organizational value for individuals

9. The transformational functions of HR will include the following: HR people must pursue these.
• Talent management: Searching, nurturing, mentoring

Finding, developing and keeping talent are among the top concerns for human resource (HR) executives for 2007, according to the ORC Worldwide HR Priorities Survey, which annually polls a group of global HR executives from a cross-section of industries.

Every six out of 10 respondents (61.7 percent) said the most pressing strategic HR issues companies will face in 2007 fall into the realm of "talent management”

Among the most important issues ranked were leadership development and succession planning, HR technology, workforce planning, executive compensation and diversity, respectively.

• Climate of trust, equity and involvement
• Change management, including mergers and acquisitions
• Leadership
• Ethics and social responsibility
• Reward system

10. The following preparations are necessary for HR to play strategic role and to become a competitive advantage.

• Thorough knowledge of the business and its various aspects
• Thorough knowledge of, and expertise in, applied behavioural science
• Consulting and research competencies

The various institutes of management preparing young HR professionals must make sure that the students get thoroughly oriented to play their role in this respects.

11. Work organizations must place HR at very high level, including their Boards, and make demands on HR as the strategic function.