Business Management/Leadership and Strategy

The HR Business Partner


 

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Over the past few years, there has been a lot of focus placed on the role of HR Business Partners. This has cast a spotlight on how human resources plays more than just a supporting role in an organization. While both HR Managers and HR Business Partners work with organizations to promote HR goals, HR Managers focus on “employee management tasks” while HR Business Partners “support the business structure of an organization by collaborating with the HR department” (study.com, n.d.).

HR Business Partners are human resource professionals, or internal consultants, that provide input on human capital management for an organization’s senior leadership. They report to and work in close collaboration with senior leadership to develop an HR agenda that promotes and upholds the goals, mission, and vision of the organization. They often work more with individual business units and department managers rather than with the organization as a whole. To be successful in this role, it is crucial that an HR business partner has a broad understanding of all business functions within an organization. This means recognizing business challenges and understanding the organization from both an internal and external perspective.

The Current Trend in HR Business Partnering

HR business partnering has been widely used in many companies to organize their HR functions. HR business partners are able to develop HR initiatives and align them to both the overall business objective of an organization and stakeholder’s needs using business partnering. This occurs when HR recruits and hires the right talent, motivates employees, and help line managers and executives better manage their workforce; all the while keeping their sight on the larger picture, the long-term goal of the organization, and its performance.

The Origin of HR Business Partnering

HR business partnering had its origin over 20 years ago when Dave Ulrich’s model for organizing HR function was introduced. The Ulrich Model, from his book Human Resource Champions published in 1996, identifies four roles of HR professionals:

  • Strategic partner
  • Change agent
  • Employee champion
  • Administrative expert

When broken down and analyzed, the purpose of business partnering is to produce HR policies and procedures that align people’s strategy to the goals, aims, and needs of the organization. Successful business partnering contributes to the overall success of the company.

The Role of Human Resources in an Organization – Part 1

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The role of Human Resource Management is one that has seen great changes over the years. Early in the twentieth century, Human Resources (HR) had narrow operational and administrative functions such as completing new hire paperwork and maintaining personnel files. The role has since evolved, and HR professionals now partner with every department and directly impact strategic-level business decisions. The roles of HR vary widely based mainly on company size and HR-to-employee ratio. For instance, a company with fewer than 100 employees may only have one HR professional. This person would need to be a Generalist, handling all aspects of HR (and possibly Payroll). A company with 200 employees might have a Recruiter, an HR Generalist, a Payroll Admin, and an HR Manager. Even larger companies might hire enough HR staff for there to be specialized roles such as a Compensation Analyst and Benefits Specialist.

HR roles vary widely from one organization to another. They can be proactive, reactive, or a combination of both depending on the company’s priorities and culture. The roles also vary based upon the HR department model. Many HR departments are broken up into business units based on the internal customer groups they support. HR professionals are known as Business Partners. HR roles can also be assigned based on the level at which they work (e.g. Senior Generalist, HR Director, CHRO) (Politeknik NSC, n.d.).

HR staff typically provide three types of support: advice, service, and control. These three forms of support have been and continue to act as the foundational basis of HR functions.

Advice

While HR as a function has no operational authority, HR professionals equip their leaders and employees with the knowledge and resources needed to make the best possible decisions. HR advisory services include advising line management on policies, laws, and employment best practices. HR staff provides solutions to organizational problems, guidance on the issues faced by employees, and employment-related resources.

Service

For HR, the role of providing service is all about maintaining records, hiring new employees, training them, and answering and clarifying information within a broad customer base; which includes management, workforce, legal and regulatory agencies, applicants, retirees, families of employees, and vendors.

Control

Control is more of an authoritative role that plays a huge part in the consistency of policy application, evaluation of employee performance, corrective action, and designing and implementing employee programs. An example of control would be a Recruiter requiring an application to be submitted and filled out completely prior to screening a candidate. Another example would be an HR Generalist requiring everyone who attended training to sign an acknowledgment.

Advice, service, and control can be termed as the broader roles of HR, which are then narrowed down to more specific responsibilities. The significance of HR’s contributions has become more apparent and has earned HR a seat at the executive roundtable where they can directly contribute to the organization’s direction with strategic solutions designed for achieving organizational goals.

 

Trademark Act of 1946

You might not have realized it, but you have been dealing with trademarks on a daily basis. According to the U.S. Patent and Trademark office, a “trademark” refers to “any word, phrase, symbol, and/or design that identifies and distinguishes the source of the goods of one party from those of another.” A company brand is another simple way to think of trademarks. Trademarks are efficient tools of communication utilized by businesses to speak to customers. Trademarks represent the reputation of a brand; consumers’ purchasing decisions are influenced by them. That is why the government deems it fit to protect trademarks, and by extension, the intellectual property value of businesses using the Trademark Act of 1946.

The US Trademark Act of 1946, also known as the Lanham Act, was designed to protect all businesses that engage in interstate commerce. Unlike patents and copyrights, trademarks can be protected under state law, federal law, or both.

In protecting a trademark, registration is not necessary. See Pesos v. Taco Cabana, (1992) 505, U.S. 763 at 768. A trademark derives protection by virtue of distinctive use. The benefit of a trademark registered under the federal law is that the registration serves as evidence of both the ownership and validity of the mark, including the right to use it for commercial purposes.

Now, between an employee and an employer, who should own a trademark? The owner of a trademark can include but is not limited to the following; individuals, sole propriertorships, limited liability companies (LLCs), partnerships, corporations, trusts, etc.  See Section 1 (a) of 15 U.S.C 1051 for more information.

The person or entity that controls the nature and quality of the goods/services provided under the trademark is the owner of the trademark. (United States Patent and Trademark Office, 2020) Therefore, it is important that an employer maintains control of the use of the mark and most especially, controls the nature and quality of the goods or services during an employer-employee relationship. Failure to do so can invalidate the registration of the mark. However, an employee can enter into a contract of co-ownership with his employer to jointly own a trademark.

Using P.E.S.T. in Data Collection

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It has been suggested that companies that are not sure how to start a PEST analysis can do a competitor analysis. This would involve analyzing the competitor’s data and understanding what their selling points, challenges, and needed areas of improvement are. Information gathered through this type of research helps businesses identify a point market entry (Frue, 2017).

Collecting data on the political environment involves identifying government regulations and industry rules that affect an organization’s ability to be successful and profitable. This includes laws to which an organization already adhere to, as well as laws that may apply to them in the future. Businesses should assess the potential impact of adhering to these laws.

Analyzing external economic factors give an organization insight into the possible challenges their business will face and gives them the opportunity to find solutions to these challenges. Market trends, inflation rates, exchange rates, taxes, economic growth, and employment rates all impact the future performance of a company. A company may ask, ‘What will be the cost of hiring experienced, skilled workers?’ Being able to build a skilled workforce is vital to a company’s success.

Analyzing social factors tells an organization what influences consumer purchases, the needs of consumers, and what drives their purchases. This information not only provides an organization with information such as the potential size of a market but from an HR standpoint what the local workforce looks like and under what conditions they are willing to work. Demographics may also influence the type of benefits an organization provides, whether it be fitness classes in a health-conscious environment or enhanced retirement benefits for an older demographic.

Finally, analyzing technological factors helps an organization to understand how technology impacts their business on a day-to-day basis. Understanding the rapid rate at which technology changes or becomes obsolete, consumer appetite for new technology, how technology affects the ability to retain employees, and the productivity of employees can all be achieved through analyzing the technological environment of an industry. One question a company may want to ask is, ‘Do any of my competitors have new technology that is redefining the industry?’ It is important that organizations are prepared to respond to changes in technology.

Conclusion

SWOT and PEST analyses are essential parts of the strategic planning process. They help managers understand the business environment in which they operate so that they are able to position their organizations for the best performance possible. SWOT-analysis helps managers discover the strengths and weaknesses of their organizations as well as the threats and opportunities that are presented by the external environment. PEST analysis focuses on external factors that have a major impact on how organizations make decisions, expand their business, and increase market growth.

The Role of P.E.S.T. Analysis in Data Collection

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Unlike SWOT analysis which looks at both internal and external environments, PEST analysis examines the external factors that affect a business. PEST stands for political, economic, social, and technological factors. Each of these categories identifies forces that affect the business and to what varying degrees.

Political factors can either be a benefit and a burden to an organization. These factors refer to regulations, legal issues, and political climates that affect how an organization operates in the following areas: consumer relations, health and safety, trade regulations, tax policies, labor, and environmental laws and foreign trade. While these factors can restrict an organization negatively, such as not conducting business in a country under political unrest; they can also have a positive impact, such as tax incentives for companies that move into a new area.

Economic factors greatly impact an organization’s profitability, how they operate, and the decisions that they make. These are outside factors such as inflation, recession, unemployment rates, gross domestic product (GDP), consumer spending, and interest rates. For example, if the buying capacity of consumers has declined, this would force an organization to make important decisions. They would need to decide whether or not to decrease their prices or production, and if so, for how long. These factors also affect nonprofit organizations. A decrease in consumer spending may prompt nonprofit organizations to reduce their staff size as consumer’s willingness and ability to donate decrease.

Social factors that affect an organization are population growth, age distribution, education and career levels, lifestyle attitudes, buying habits, health consciousness and customer attitude towards saving and investing, the environment, and imported products to name a few. It is important that an organization understands the socioeconomic environment that they are operating in, as these factors drive consumer purchases. An organization that is able to analyze and understand these factors is in a better position to make decisions that shape the direction and the future of their business. This knowledge also allows them to target certain markets and make decisions on how and where to operate. For example, in an environment where people are becoming more health-conscious, businesses may see a growth in demand for organic produce and fitness centers.

Technological factors affect how an organization produces, distributes, and market their products or services, as well as its infrastructure. These factors can include advancements and innovations in technology, automating processes, research and development (R&D), and internet connectivity. Technology can also aid an organization in making decisions through the use of knowledge-based systems, which results in streamlining processes and reduced cost. While organizations with cutting-edge technology usually have a competitive advantage, they must balance this with the cost of adopting technology that is rapidly ever-changing. By carefully researching technological advancements in their industry, a company can protect itself from spending money on technology that will soon be out-of-date.

The Role of S.W.O.T. Analysis in Data Collection

 

The main goal of strategic planning is to create a balance between the organization and the external environment and to sustain this balance over time. (Sackett, Jones and Erdley, 2005).  Organizations are able to achieve this balance by evaluating new programs and services with the goal of maximizing the performance of the organization. SWOT analysis is a preliminary decision-making tool that sets the stage for this work. This planning process identifies the organization’s strengths, weaknesses, opportunities, and threats.

Before conducting a SWOT analysis, company leaders need to collect data that will help them to understand their business, market, and industry. The information gathered may vary based on these factors. This data might include population demographics, information on the competition, statistics on success and failure of similar ventures, barriers to breaking into the market, and organizational capabilities. Ways to gather this kind of information is through organizational surveys (data on the organization’s finances, operations, and processes), questionnaires, interviews, direct observation, and reporting (Harrison, 2010).

After collecting the data, managers sort it into the four categories summarized as SWOT. Strengths and weaknesses arise from factors within the organization (the internal business environment) whereas opportunities and threats are a result of external factors.

The next step involves the creation of a SWOT matrix for each business strategy being considered based on the data collected. Say a business wants to create a fruit juice production facility in a small business environment and its management wants to decide between using a joint venture approach and founding a new company; in this stage, the business would evaluate the strengths, weaknesses, opportunities, and threats involved in starting a new company as well as those involved in starting a joint venture with the local government authority in the locality (Harrison, 2010).

The last step in this process is deciding on the best course of action based on the results of the SWOT analysis.

P.O.L.C.: Controlling and Conclusion

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Controlling

Controlling is a function performed by managers to ensure that the organization’s performance does not deviate from established standards. It is worth mentioning that “controlling” in this case does not refer to control or manipulation of behavior; or that managers should try to change the personalities, values, perspectives, or attitudes of their employees. On the contrary, controlling deals almost exclusively with the operation of the organization.

The controlling process takes place in three steps. First, the manager must determine which performances should be measured within the organization. In this step, management would set up Key Performance Indicators (K.P.I.) to measure the performance of their organization. K.P.I.s allow an organization to thoroughly measure their performance in the scope of time, expense, or quality to determine if established standards were met.  The second step is comparing the organization’s actual performance against the established standards. Two commonly used control methods are budget and performance audits. The first, budget audits, consist of verifying the organization’s financial records against what was budgeted to see if procedures were followed regarding financial planning. The second, performance audits, are performed by comparing the actual performance of the organization against established standards. In addition to using financial statements, companies can utilize reports that track customer satisfaction, input, and output, the number of units sold, or the number of defective units to audit organizational performance.

The third step is taken if there is a disparity. Managers must make an assessment to determine where the gap exists between established standards and their performance. If so, corrective action is needed. For example, if customers are not satisfied with the company’s products, managers may choose to create a customer survey to determine the cause of the dissatisfaction then take measures to correct the issue. In the case of low customer satisfaction, for example, they could choose to train their employees to better cater to customer needs, or offer discounts if affordability was the consumers’ complaint. By the end of the control process, managers are able to “correct” the performance of the organization.

Conclusion

The P-O-L-C framework was developed more than a century ago to define the roles of a manager. Although it does not accurately depict or cover every function managers perform, this framework makes it easy for individuals to understand what to expect from managers.

Through this framework, people can understand what it means when a manager must plan, lead, organize, and control the activities of an organization. They can comprehend what a manager’s job entails. Even with advancements in technology and the environment, as well as advancements in this field such as Mintzberg’s Roles of a Manager, the P-O-L-C framework remains a valid and essential tool for managers to understand and perform their functions.

P.O.L.C.: Organizing and Leading

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Organizing

Once a plan has been established, managers must decide how to allocate human, physical, and economic resources within the organization to achieve organizational objectives with minimal expenditure. These steps, which are performed by a manager, refers to the organizing function.

Organizing is usually done in three distinct steps. First, managers must create an organizational structure or chain of command. The chain of command details the hierarchical relationship of reporting employees in the organization. This is normally presented as an organizational chart.  In this stage, human capital is distributed throughout the organization depending on their skills, knowledge, or experience. The second stage of the organizing function is known as organization design. In this stage, managers define the structure of the organization in terms of departments. Managers must decide what is the best way to group or classify jobs into departments that will results in improved efficiency, employee productivity, and meet organizational objectives. There are several different ways to departmentalize jobs within an organization, such as geographical locations, functions, products, or consumer-base.

The final stage of organizing is known as job design. Job design is the way that an individual job or a set of tasks is organized to achieve specific objectives. It determines the responsibilities of a particular job: what the job entails, how it is done, the order in which it is done, etc. In the past, job design focused on dividing labor and specialization. However, modern management studies have shown that job design that considers the welfare of employees is more effective in enhancing the well-being and performance of company employees (Daniel et al., 2017). Google is one company that showcases the credibility of this assertion.

 

Leading

Leading calls for managers to influence and motivate their employees. Effective managers inspire their employees to be enthusiastic about working towards achieving organizational goals. Ideally, a manager who is also a good leader can inspire others to take actions that will positively impact the organization and pave way for the company to achieve its objectives.

Leadership within an organization is a social and informal exertion of influence. Whereas directing is telling employees how to perform their duties accurately, leadership is about inspiring them to do it. To be an effective leader, managers must first understand the attitudes, perspectives, personalities, values, emotions, and motivations of their employees. Studies into motivation and motivation theories could be a good place for managers to start when they want answers to questions such as ‘Who is a Good Manager?’ and ‘When are Specific Leadership Styles Appropriate?’