Human Resource Management

People and Organisations

Stephen Taylor, Carol Woodhams, Stephen Taylor, Carol Woodhams

• Publisher: CIPD - Kogan Page
• Year: 2016
• ISBN:
  9781843984412
• Edition: 2
• Topic: Business
• Subtopic: Human Resource Management
• Index: Business

Written by experts in the field, Human Resource Management: People and Organisations is essential reading for all those studying the CIPD Level 5 Intermediate qualification in HRM. It contains essential coverage of key HR topics including resourcing and talent planning, reward management and contemporary developments in employment relations, making it equally valuable to all students on undergraduate HRM and Business and Management degrees. This 2nd edition of Human Resource Management: People and Organisations now includes three brand new chapters on Human Resource Development; improving organisational performance and organisational design and development as well as additional real-life case studies throughout, ensuring the most comprehensive and up-to-date coverage of people and organisations. Fully supported by online resources including new videos, podcasts and interactive multiple choice questions as well as a lecturer guide and powerpoint slides for instructors, this is an authoritative, informative and engaging guide essential for all HR students

CHAPTER 1

Human Resource Service Delivery

GAIL SWIFT

CHAPTER CONTENTS

• Introduction
• The changing context of HR service delivery
• Models of HR service delivery
• Challenges to the Ulrich model
• Outsourcing HR services
• The delivery of HRM by line managers
• Measuring the impact of HR services
• Future developments in HRM service delivery
• Conclusion

KEY LEARNING OUTCOMES

By the end of this chapter, you should be able to:

• understand the reasons why organisations change the structure and location of HR service provision by analysing the changing context of human resource service delivery
• critically evaluate different models of HR service delivery available to contemporary organisations
• critically discuss the reason for measuring the impact of service delivery and the measurement indicators used
• understand recent thinking on HR service delivery.

1.1 INTRODUCTION

One of the key variables in achieving the aims of HRM is the way the service is delivered. We know from studies of contingency variables in organisations and management that no two organisations utilise the same functional structure and involve the same levels and roles of staff in delivering HRM. Each HRM department is subject to different forces, producing a unique approach to HR service delivery. Our purpose in this chapter is to introduce the reader to the models of HR service delivery that are available to contemporary organisations, together with the reason why organisations have changed the structure and location of HR service provision.

Over the past two decades the role and structure of the HR function in organisations has been debated, with some research studies claiming that 95% of organisations have undergone some form of HR transformation in the past 10 years (Boroughs 2015). Dave Ulrich’s ground-breaking model of human resources services delivery in his book Human Resource Champions: the next agenda for adding value and delivering results (1997), spurred many senior HR leaders to restructure the delivery of their services to meet the challenges of changing national and international business conditions. It is now 19 years since Ulrich offered a powerful re-interpretation of the personnel function, which outlined the significance of HR as a change agent in championing competitiveness in US firms (Caldwell 2001). Debate has continued into the success or otherwise of this model and the question ‘What comes after Ulrich?’ has failed to deliver few coherent propositions of alternative operating models for HR (Fry and Fishman 2015). External challenges to the role and purpose of the HR function continue, ranging from the recent debate generated by Ram Charan’s proposal that HR be ‘split’ (Charan 2014) to David Ulrich’s recent comments on the need for HR to be structured in a way that reflects the business and delivers outcomes that focus on the capabilities that organisations require to win in the marketplace (Ulrich 2015). However, the need for HR to continue to exert strategic boardroom influence and work with their organisations to drive change and engagement remain the principal drivers for HR structural change.

1.2 THE CHANGING CONTEXT OF HR SERVICE DELIVERY

No two HR departments are configured in the same way to deliver their service, even though they share the same predominant aim. A recent CIPD report (CIPD 2006) concluded that the primary driver for the structural transformation of HR was the desire for the function to be a more strategic contributor and to maximise HR’s contribution to business performance. This trend appears to have continued over recent years with the CIPD’s 2014/5 Winter Outlook citing ‘becoming a more strategic contributor’ as the main reason for changes to HR structures (CIPD 2015f).

Business leaders have also come to perceive the link between talent management and business success and to recognise HR’s potential role in unlocking the discretionary effort of employees as a source of competitive advantage. The link between HR and customer service has strengthened over recent years, with those in the vanguard of change moving to increase the value HR offers to its business customers (CIPD 2006). HR has been charged with developing and organising ‘human capital’, and the ways in which employees are recruited, developed and managed are seen as key to this. Talent has also become the number one issue for CEOs, with the HR function being asked to lead the transformation of most companies towards a more engaging, high performing, well aligned and highly capable organisation (Bersin 2015). Employee engagement continues to be the top current priority for HR functions (CIPD 2015a), reflecting a recognition of the importance of employee satisfaction in delivering effective services. The link between well-organised and well-managed teams and business success appears to be well recognised in many organisations. However, there continues to be debate as to HR’s success in delivering value to the organisation and whether there is definitive evidence of the impact of HR structures and staffing on organisational performance (CIPD 2006). More recently some HR commentators optimistically see the profession sitting ‘at the centre of some of the most important decisions in any business’ with the function ‘rapidly expanding its influence’ in the workplace (Brown 2015). Their view is that ‘organisations across the globe recognise HR as a way to elevate acceptable business practices up to exceptional business performance’ (Brown 2015). What is clear is that current business conditions demand a greater delivery of competitive advantage via HR agendas and require HR to have true strategic influence that is internally coherent with the values of the business and aligned to its goals and objectives (Becker and Huselid 1999). With the world of work growing ever more complex, diverse and ambiguous together with the continuing change in the norms of managing the employment relationship, the way the HR function operates must continue to evolve (CIPD 2015g). It may be concluded therefore that the way in which HR is structured to deliver its services is a key factor in determining its operational success.

REFLECTIVE ACTIVITY 1.1

Consider your organisation or one that you are familiar with. How is HR delivered? Is it delivered in partnership with other organisations or are certain activities totally outsourced to expert organisations such as consultants? In particular, how involved are line managers in the delivery of HR services?

This question pivots firstly on the extent to which the organisation you are considering retains in-house HR expertise, and secondly on the nature of the relationship between the HR function and the organisation’s line managers.

Each organisation is different and the models of delivery are affected by variables such as:

Organisation-level factors

• Organisation size: larger organisations are likely to utilise more innovative features of delivering HRM – for example, more partnerships, shared arrangements and outsourcing.
• Sector: private sector organisations are also more likely to consider arrangements such as those listed above.
• History, traditions and structure: bureaucratic, layered, staid and static organisations, which may also have a longer history and maturity to them, are more likely to have a traditional line-manager-associated delivery model.
• Culture of the organisation – such as the difference between organisations that encourage decision-making at a low structural level and those that are paternalistic and more supportive.

HR-level factors

• Level of organisational representation and responsibility for input into strategy – it is suggested that outsourced transactions, for example, can give the HR manager more time for strategic input
• Size of department
• The history and traditions of HR operations

Personal factors

• The power, influence and perspective of the HR manager/director
• Their experience and background
• The CEO’s previous experience of HR

1.3 MODELS OF HR SERVICE DELIVERY

How HR is structured to deliver its services has been the subject of considerable debate and discussion over recent years. A variety of ways in which HR functions have been organised have been examined and whether services should be organised on a best-practice or a best-fit basis is at the centre of much of the debate. Research carried out by the CIPD highlighted the views of practitioners that HR should be structured to reflect the business and what its business customers want (CIPD 2006). What emerges from the literature are two approaches to HR structures that continue to dominate the way in which services are currently organised, which are discussed in further detail in this section of the chapter:

• traditional approaches of a single team of generalists, specialists and administration, or a corporate strategy team aligned by business units or locations
• the ‘three-legged stool’ model of business partners, shared services and centres of expertise.

1.3.1 TRADITIONAL HR STRUCTURES

A traditional structure of HR services, consisting of a single team with generalists, specialists and administration, is still common in many organisations. In this type of structure, an integrated HR team generally looks after line managers and employees at specific locations or within specific units of the business. Within these teams, depending on their size, there may also be specialisation by work area or by employee grade or group (CIPD 2006). HR staff in these structures may look after administrative and clerical staff as opposed to managerial grades, or look after technical specialities – for example, medical staff in the NHS.

Evidence from the CIPD research suggests that this is still the most common structure for HR functions, with 43% of respondents reporting that their HR departments are structured like this. This model ...