"Challenges faced by "HR Manager's" as a result of Globalization"

As the area of human resource management becomes more strategic and more global
it is becoming more important and critical to the organization. While not all co
mpanies are recognizing this yet, those that are most effective and most admired
, seem to be the ones that are. As a consequence they are doing many things that
make their management of human resources as effective as possible. In doing so
doing, several things are being observed: 1) the roles that the HR department an
d its HR professionals have traditionally played are changing substantially; 2)
the competencies required of the HR professionals to play these new roles are al
so changing rapidly with dramatic implications for the current HR staff and lead
ers; 3) the HR professionals are working more closely, in partnership, with line
managers, employees, suppliers and representatives of labour unions, strategic
partners and members of community organizations in order to be more effective in
managing the firm s human resources; and finally, 4) the structure of the HR depa
rtment and the HR function are being reshaped in order to better serve the vario
us stakeholders of HR in order to make the management of people and the organiza
tion more effective.
Because all these observed trends are important and rather complex in nature, th
ey are described in this chapter in some detail. We begin by providing an exampl
e of what these all mean to one of those effective and admired companies who als
o manages people rather well.
W. L. Gore & Associates, the company that manufactures GoreTexâ and other fabric-b
ased materials, doesn t have bosses and it doesn't have employees. Instead, consis
tent with their flat structure and culture of creativity, they employ sponsors a
nd associates who have no specified job titles. When Bill Gore, a research chemi
st, left his job of 17 years at DuPont to found the company, he worked out of hi
s home's basement. Now, more than 50 years later, some 200 Gore manufacturing pl
ants operate in 45 countries. Regardless of their location, all Gore work sites
reflect the company's core values:
Fairness to each other and everyone with whom we come in contact.
Freedom to encourage, help and allow other associates to grow knowledge, skill,
and scope of responsibility.
The ability to make one's own commitments and keep them.
Consultation with other associates before undertaking actions that could impact
the reputation of the company by hitting it "below the water line."
HR professionals serve as caretakers of these values. Day in and day out, they c
hampion the culture, guaranteeing that consideration for people plays into busin
ess decisions.
The structure of HR activities facilitates their success. Each plant is essentia
lly self-sufficient, with at least one dedicated HR generalist located on-site.
In addition to serving as a member of the leadership team, the HR generalist, de
velopment, staff allocation, and conflict resolution. They're the ones who creat
e an environment people want to work in, which is critical to getting business r
esults.
Supporting the HR generalists out in the plants are HR specialists, located in t
he corporate headquarters. Regardless of where they're located, however, HR gene
ralists and specialists often work together on special project teams. Gore refer
s to this structure as a "Lattice." Just as a garden trellis might support the g
rowth of a rambling rose, Gore's Lattice structure is designed to support the gr
owth and development of HR practices and decisions that complement the needs of
the business.
To understand how the Lattice structure works, consider what happens when a plan
t leadership position needs to be filled. Recruitment and hiring for the positio
n is carried out by a team that includes other plant leaders, the HR generalist
at the plant, and one or more specialists from headquarters. The business leader
s define their needs and the HR professionals help them meet those needs through
the use of effective recruitment and selection procedures. Those procedures rec
ognize the importance of finding talent that is both technically competent and a
ppropriate for the culture. HR knows that the needs of the business are changing
rapidly, so new hires must be agile and willing to learn new skills. When peopl
e are hired, they make commitments to perform within a general functional area--
they aren't hired to fill a specific job title.
Compensation activities are carried out in a similar way. A team comprised of le
aders within the company, one or more HR generalists, and compensation specialis
ts make the compensation decisions. HR's role is to ensure the process is fair--
that is, it must be based on performance and contribution to the business and it
must be externally competitive. Stock ownership and profit sharing plans furthe
r support this philosophy.
This democratic, high-involvement approach to HR has costs as well as benefits.
Conducting HR through partnership takes time and costs money. But in the end, Go
re believes that it results in an enhanced quality of life for employees (Anfuso
, 1999).
1 GROWING IMPORTANCE OF HUMAN RESOURCE MANAGEMENT
As the example of W. L. Gore highlights, the HR profession can contribute to--ev
en determine--the success (or failure) of an organization. Members of a company s
HR staff, working with external HR consultants and vendors, can help ensure that
the needs of the business and the needs of employees are reflected in HR polici
es, mission statements, and practices. These are central to the coordination and
operation of an organization. At W. L. Gore, HR professionals help the firm sat
isfy its key stakeholders.
An example of key stakeholders for the HR profession as a whole is provided in E
xhibit 1.
The human resource department is the group formally established by an organizati
on to help manage the organization s people as effectively as possible for the goo
d of the employees, the company, and society. HR professionals include external
consultants and service providers with HR expertise. At the end of the day, howe
ver, the managing of human resources gets done through a working partnership of
HR professionals, line managers, and employees. At times, this partnership exten
ds outside the organization--for example, as the firm strives to forge better wo
rking relationships with its suppliers (Schuler and MacMillian, 1984). It may al
so venture into local education facilities as the HR staff works with schools to
prepare students for internships in the firm. And, increasingly, companies use
HR consultants to help with activities such as compensation, benefits, training,
recruiting and selection, and implementing large-scale organizational change (C
ook, 1999).
2 MULTIPLE ROLES FOR HUMAN RESOURCE MANAGEMENT
Addressing stakeholders' concerns requires HR professionals to play a variety of
roles. The effectiveness with which HR professionals play these roles depends o
n leadership effectiveness, the staffing of the department, and the department s o
rganization.
Linking Role
Traditionally, HR departments often had limited involvement in the total organiz
ation's business affairs and goals (Poole, 1999; Procter and Currie, 1999). HR m
anagers were often only concerned with making staffing plans, providing specific
job training programs, or running annual performance appraisal programs (the re
sults of which were sometimes put in the files, never to be used). They focused
on the short-term--perhaps day-to-day--needs of human resources.
With the growing importance of human resources to the success of the business, H
R managers and their departments have become more involved in the business. They
know the needs of the business and are helping address those needs (Ulrich, 199
8).
Linking HR to the business is a newer role played by the HR department.
One consequence of this role is an increased involvement in the longer-term, str
ategic directions of the organization. A second consequence is a new emphasis on
long-term activities in addition to the more typical medium- and short-term act
ivities.
Strategic Role
At the strategic (long-term) level, HR departments and their professionals get i
nvolved in broader decisions--those that provide overall direction and vision fo
r the organization. Being a strategic partner means understanding the business d
irection of the company, including what the product is, what it's capable of doi
ng, who the typical customers are and how the company is positioned competitivel
y in the marketplace. This process of linking HR to the broader, longer-term nee
ds of firms is the essence of strategic human resource management (Storey, 2000;
Schuler and Jackson, 1999; 2000).
Typically, strategic business needs arise from decisions such as what products a
nd services to offer and on what basis to compete--quality, cost, or innovation,
or for purposes of survival, growth, adaptability, and profitability. These dec
isions are associated with the formulation and implementation of the organizatio
n s strategy, so they reflect characteristics of the external and internal environ
ments. While a great many models of human resource management have focused on so
me part of strategy implementation or execution, the actual impact of managing h
uman resources is to be found in both formulation and implementation of strategy
(Thompson and Strickland, 1998).
Strategy formulation includes
deciding what business the company will be in, forming a vision, committing to a
set of values and a general strategy;
identifying strategic business issues and setting strategic business objectives;
and
crafting corporate and business level plans of action.
Strategy implementation includes
developing functional and operational plans of action; and
measuring, evaluating, revising and refocusing for the future.
The activities involved in strategy formulation identify "the needs of the firm.
" At a given time, these in turn reduce to specific strategic business issues an
d objectives that serve as the basis for the strategic management implementation
activities that are specifically associated with human resource management (Pfe
ffer, 1998). An illustration of these activities is shown in Exhibit 2 (Schuler
and Jackson, 2000).
Setting the Direction. The activities of effective organizations are guided by t
he firm s vision, mission (the type of business), values, and their general strate
gy. A vision is management s view of the kind of company it is trying to create, a
nd their intent to stake out a particular business position. A mission statement
 defines a company s business and provides a clear view of what the company is try
ing to accomplish for its customers. The mission of Merck is to provide society
with superior products and services innovations and solutions that improve the q
uality of life and satisfy customer needs to provide employees with meaningful w
ork and advancement opportunities and investors with a superior rate of return.
Values are the strong enduring beliefs and tenets that the company holds dear, t
hat defines it and distinguish it as a company, and that differentiates it from
other companies. While similar to culture, values have a broader coverage, and a
re more enduring. Statements of general strategy portray how the company plans t
o pursue its vision and mission. Thus, in this first strategic management task,
there are many implications for managing human resources, both in terms of the i
mpact on and the impact of human resource management. Further implications are r
eflected in the second strategic management task.
Identifying Strategic Business Issues and Setting Objectives. Identifying strate
gic business issues and setting objectives involves deciding upon what is most i
mportant for the company to focus on consistent with the corporate vision, missi
on and general strategy. Strategic business issues (SBIs) are those issues, whic
h if not resolved through effective strategic plans, will have significant negat
ive consequences on the firm. These can include dealing with global competitors,
developing new products, increasing productivity levels or creating a customer
focus and solutions orientation among all employees. While these have implicatio
ns for managing human resources, some strategic business issues are human resour
ce issues, e.g., hiring and retaining qualified workers. Setting objectives arou
nd these strategic business issues is likely to help in their attainment. Set wi
th specific objectives, the focus is on the attainment of strategic business obj
ectives (SBOs).
The process of identifying strategic business issues and setting strategic busin
ess objectives is likely to highlight numerous implications for human resource m
anagement. At this stage, however, they remain rather unspecified, waiting to be
developed based on the context of the strategic plans.
Crafting Corporate- and Business-Level Plans. Crafting strategic plans involves
deciding how the vision, mission, strategic objectives and general strategy are
going to be obtained. Combining a vision, mission and statement of general strat
egy with strategic business issues and objectives and a specific strategy consti
tutes the essentials of a strategic plan. Typically, a good strategic plan needs
analysis of economy and industry in which it competes;
sources of competitive advantage and the critical success factors;
analysis of existing and potential competition;
assessment of company strengths, weakness, and core competencies; and
plans of actions and strategic objectives.
Making the strategic plan a bit more complex is the reality that there are two l
evels of strategy formulation: corporate and business. Corporate strategy concer
ns how a diversified company intends to establish business positions in differen
t industries and the actions and approaches employed to improve the performance
of the group of businesses the company has diversified into. Business strategy c
oncerns the actions and the approaches crafted by management to produce successf
ul performance in one specific line of business: the central business strategy i
ssue is how to build a stronger long-term competitive position.
Developing Functional and Operational Plans. The relevant activities associated
with strategy implementation are found at the functional and operating levels of
the organization. At these two levels HR plans, as well as those from other fun
ctional areas, need to be created and then specific HR policies and practices ne
ed to be crafted and implemented.
Each function has to identify the organizational and functional meaning for itse
lf. By way of example, take the strategic business objective of enhancing custom
er focus and a solutions orientation. Here, the human resource function states i
ts understanding of what this objective means and its possible implications to t
he company and to itself. Enhancing customer focus and solutions orientation may
imply a
need for a new vision, values, objectives, and culture for the company, or
need for the human resource department to customerize itself.
Operating level plans concern the actions and approaches to support the function
al action plans. The primary tasks include
crafting still narrower and more specific approaches/moves aimed at supporting f
unctional action plans and the needs of the firm and at achieving operating-unit
objectives; and
discussing dependencies and needs with other units, e.g., information systems, f
inance or marketing.
Monitoring Role
The final task of strategic management task is reviewing what has been done agai
nst the strategic plans, deciding upon corrective actions, and establishing new
courses of action should the situation warrant. Reviewing and evaluating are bas
ed upon having criteria against which to compare results. Using comparisons indi
cating shortcomings in the attainment of the strategic plan needs to trigger a p
roblem diagnosis to determine the reasons for the deficiencies. Revised action p
lans are then formulated.
Although HR professionals may delegate much of the implementation of HR activiti
es to line managers, they remain responsible for seeing that HR programs are imp
lemented fairly and consistently. HR Professionals need to champion the causes a
nd concerns of the employee, with or without union involvement. Meeting this obl
igation requires monitoring the outcomes and effectiveness of all HR activities.
Innovator Role
Today, organizations are asking their HR departments for innovative approaches a
nd solutions to improve productivity and the quality of work life while complyin
g with the law in an environment of high uncertainty, energy conservation, and i
ntense international competition. They are also demanding approaches and solutio
ns that can be justified in dollars and cents. Past approaches do not always mak
e the cut in this environment; innovation is no longer a luxury, it is a necessi
ty.
As part of the innovator role, HR can serve as a role model (Lawler and Galbrait
h, 1995). HR departments face the same demands as their organizations. They must
continually streamline their operations and redesign the way work gets done. No
t waiting for mandated cutbacks, they review and evaluate expenses and implement
incremental changes to become, and stay, lean. Flexible HR departments aggressi
vely seek to be perceived as "bureaucracy busters," setting an example for other
staff functions and line organizations.
Change and Knowledge Facilitator Role
In the implementation phase, as in the initial strategy implementation phase, ma
nagement of change is crucial. Managing human resources through strategy impleme
ntation is often about change. Not surprisingly, this role of managing the chang
e process, both at the individual and the organizational level is seen by human
resource management professionals as one of the most significant ones today.
It's increasingly necessary for organizations to adapt new technologies, structu
res, processes, cultures, and procedures to meet the demands of stiffer competit
ion. Organizations look to the human resource department for the skills to facil
itate organizational change and to maintain organizational flexibility and adapt
ability. One consequence of this change facilitator role is the need to be more
focused on the future. For example, as the external environment and business str
ategies change, new skills and competencies are needed. To ensure that the right
skills and competencies are available at the appropriate time, HR departments m
ust anticipate change. Thus, the HR department can play a significant role in or
ganizational change. In addition, they must guide the discussion and flow of kno
wledge, information and learning throughout the organization (Johnson, 1998).
Enabler Role
Human resource policies and practices succeed because line managers make them su
cceed. The HR professional's bread-and-butter job, therefore, is to enable line
managers to make things happen. Thus, in traditional activities such as selectin
g, interviewing, training, evaluating, rewarding, counseling, promoting, and fir
ing, the HR department is basically providing a service to line managers. In add
ition, the department administers direct and indirect compensation programs. It
also assists line managers by providing information about, and interpretation of
, equal employment opportunity legislation and safety and health standards.
To fulfill these responsibilities, the HR department must be accessible, or it w
ill lose touch with the line managers' needs. Being accessible and providing ser
vices and products to others (customers) is a practice called customerization. C
ustomerization means the state of viewing everybody, whether inside or outside t
he organization, as a customer and then putting that customer first (Schuler and
Jackson, 1988).
3 THE HR PARTNERSHIP TRIAD
Responsibility for effectively managing human resources does not rest only with
those in the human resources department. All company managers are responsible fo
r leading people. No department alone can effectively manage a company's human r
esources. So, regardless of whether a line manager ever holds a formal position
in human resource management, she or he will be accountable for the task of mana
ging people (Schuler and Walker, 1990).

Line Managers
In small businesses, the owner must have HR expertise because he or she will be
building the company from the ground up. Eventually, as a company grows, the own
er may contract out some of the administrative aspects related to managing peopl
e (e.g., payroll), or delegate some of the responsibilities to a specialist, or
both. As the company grows larger, more specialists may be hired either as permane
nt staff or on a contract basis to work on special projects, such as designing a
new pay system. As with other business activities, these specialists won t bear a
ll responsibility for the project. For example, many companies have a marketing
department; nevertheless, they employ people outside that department to conduct
marketing activities. Similarly, most companies have a few people with special e
xpertise in accounting; nevertheless, employees throughout the company perform a
ccounting activities. The same is true for managing human resources.
HR Professionals
HR professionals refer to people with substantial specialized and technical know
ledge of HR issues, laws, policies, and practices. The leaders of HR units and t
he specialists and generalists staff who work within the function usually are HR
professionals, although this isn t always the case. Sometimes organizations fill
the top-level HR position with a person who has a history of line experience but
no special expertise in the area of HR. According to one survey of 1,200 organi
zations, this is a growing trend, reflecting increasing recognition of the impor
tance of people to business success. Line managers who are doing a "tour of duty
" in the HR department would be appropriately referred to as HR managers, but th
ey would not be considered HR professionals at least not until they gained substan
tial experience and perhaps took a few executive development courses devoted to
HR. External experts who serve as consultants or vendors for the organization ma
y be HR professionals, also. But don t assume that a consultant or vendor is an HR
professional on the basis of the products or services he or she offers. In addi
tion to a record of substantial HR experience, other things that might indicate
that a consultant or vendor has special expertise would include a college level
degree in the field and/or accreditation from a professional association.
Employees
The responsibilities of line managers and HR professionals are especially great,
but partnership involves even more sharing of responsibility. Employees in an o
rganization, regardless of their particular jobs, share some of the responsibili
ty for effective human resource management. For example, employees commonly writ
e their own job descriptions. Some even design their own jobs. Employees may als
o be asked to provide input for the appraisal of their own performance or the pe
rformance of their colleagues and supervisors, or both. Perhaps most significant
, employees assess their own needs and values and must manage their own career i
n accordance with these. Doing so effectively involves understanding many aspect
s of their employer's human resource management practices. As we move forward, w
e all need to position ourselves for the future. For all of us, learning about h
ow effective organizations are managing human resources is an essential step for
getting into position.
Exhibit 3 titled "The HR Triad: Partnership Roles and Responsibilities for Manag
ing Human Resources," summarizes several major roles and responsibilities for th
e HR partners.
4 STAFFING THE HUMAN RESOURCE DEPARTMENT
Effective management of an organization's human resources depends in large part
on the knowledge, skills, and abilities of the people in the human resource depa
rtment, particularly the HR leader, HR generalists, and HR specialists--collecti
vely referred to as HR professionals. The top human resource leaders and staff m
embers are often expected to be capable administrators, functional experts, busi
ness consultants, and problem solvers with global awareness. Management expects
the HR staff "to have it all." Administrative skills are essential for efficienc
y. Specialized expertise also is important, particularly in combination with bus
iness knowledge and perspective. In flexible organizations, problem-solving and
consulting skills are vital in guiding and supporting new management practices.
The Human Resource Leader
For the HR department to perform all its roles effectively, it needs to have a v
ery special leader. The leader not only must be knowledgeable in HR activities b
ut also must be well-versed in topics such as mergers and acquisitions, producti
vity, and total quality efforts. He or she must be familiar with the needs of th
e business and able to work side by side with line management as a partner. Bein
g part of the management team means assuming some new key roles, which are illus
trated in Exhibit 4 (Ulrich, Losey and Lake, 1997).
The most effective person who can head the HR department is an outstanding perfo
rmer in the organization, with both HR management expertise and line management
experience. To be a true professional in many areas of HR management, individual
s virtually have to have an advanced degree in the subject and spend full time i
n that field. Areas like compensation have become incredibly complicated because
of their close connection to strategic, legal, financial, and tax matters. Howe
ver, with the exception of technical specialists, HR managers need to spend a si
gnificant amount of time in line management positions. It is not enough for seni
or HR managers to have worked in different areas of the HR function; they must h
ave had some line business experience so that they have a first-hand familiarity
with the business operations (Huselid, Jackson and Schuler, 1997). Short of act
ually serving as a line manager, such individuals could serve as special assista
nts to line managers or head up a special task force for a companywide project (
Scullion, 1992).
The Human Resource Staff
As the HR leader begins to play many of the roles listed in Exhibit 4, staff mem
bers must recognize this and adapt accordingly. Just as the department and its l
eader must change, so must the staff members. Although they may not play the sam
e roles to the same depth as their leader, the staff members still need to know
the business, facilitate change, be conscious of costs and benefits, and work wi
th line managers (although this is probably more true for the generalist than fo
r the specialist). The HR staff is active at the operational level and the manag
erial level, whereas most of the leader's time is spent at the strategic level a
nd some at the managerial level.
In effective organizations, managers like the HR staff to work closely with them
in solving people-related business challenges. Although line managers may best
understand their own people, many desire the more distant perspective of HR staf
f in handling problems. As the HR staff actively builds working relationships wi
th line management, managers find it easier to work with them as partners.
HR specialists and HR generalists are types of staff positions typically found i
n larger organizations. Human resource specialists can pursue their fields of sp
ecialization within a company and/or sell their expertise to external organizati
ons as consultants. Generalists can remain in human resources and also occasiona
lly serve on companywide task forces for special issues such as downsizing or ca
pital improvement projects. Finally, as U.S. organizations become more global, o
pportunities for careers in international HR management will increase (Henson, 1
994). Most U.S. firms see growth coming from abroad, thereby, having overseas as
signments may be a typical part of any manager s career.
Human Resource Generalists. Line management positions are one source for human r
esource generalists. HR generalists come from a variety of backgrounds: some are
career HR professionals with degrees in business or psychology, some are former
line managers who have switched fields, and some are line managers who are on a
required tour of duty. As human resources becomes more heavily valued by organi
zations, required tours of duty by line managers will become more frequent. A br
ief tour by a line manager in an HR staff position conveys the knowledge, langua
ge, needs, and requirements of the line in a particularly relevant way. As a res
ult, the HR department can more effectively fill its roles.

Human Resource Specialists. Human resource specialists should have skills relate
d to a particular specialty, an awareness of the relationship of that specialty
to other HR activities, and knowledge of where the specialized activity fits in
the organization. Since specialists may work at almost any human resource activi
ty, qualified applicants can come from specialized programs in law, organization
al and industrial psychology, labor and industrial relations, HR management, cou
nseling, organizational development, and medical and health science. In addition
, specialists are needed in the newer areas of total quality management, service
technologies, and information systems. With such rapid changes occurring in har
dware and software technologies, the HR information systems manager is a particu
larly important HR specialist.
Typically, when organizations create an HRIS, they need to have a specialist man
age the area. Over the years, the role of this leader has changed from that of a
project manager to that of a systems manager and now to that of a strategic cha
nge partner. An emerging trend is to see the specialist who manages the HRIS as
playing a strategic rather than technical role. This new role asks the HRIS mana
ger to be concerned not with how efficiently the department can store and retrie
ve information but with how the HRIS manager can be a strategic partner and mana
ge organizational change (Fasqualetto, 1993).
HR Competencies
To effectively play the roles described in Exhibit 4, the HR leader in a highly
competitive environment needs the competencies shown in Exhibit 5 (Ulrich, 1998b
; Jackson and Schuler, 2000).

The globalization of business is putting HR professionals from around the world

in almost daily contact with each other and with line managers representing many
different countries and cultures (Worldlink, 1998). Coinciding with this global
ization of business is the globalization of the HR profession. The World Federat
ion of Personnel Management Associations (WFPMA) links together country- and reg
ion-specific professional associations around the world. As a service to its mem
bers, the WFPMA investigated the question of how the work of HR professionals is
similar and different around the world. Their research revealed how little is k
nown at the global level. Although few countries have developed national standar
ds for HR professionals, there are no such standards in most countries. To addre
ss this information vacuum, the WFPMA decided to conduct a study of its own. Amo
ng the questions their study addresses are these:
How do different countries define the standards that constitute an HR profession
al? What are the competencies they will need to be able to perform HR activities
, from the operational to the most strategic?
How do national associations certify the attainment of national standards? What
are the learning and development routes they might pursue in order to keep those
competencies up to date?
Are there generic standards of professionalism in HR common to all or many count
ries? What standards might be appropriate to certify the attainment of generic c
ompetencies?
Could standards be expressed in such a way that they would be helpful to emergin
g professional associations wishing to develop HR professionalism in their count
ry?
Plans call for the initial results from this study to be released in the year 20
00, with the possible development of global HR competency standards following in
the next year.
PROFESSIONALISM IN HUMAN RESOURCE MANAGEMENT
Like any profession, HR management follows a code of ethics that provides standa
rds for behavior and serve as useful guides to professionals.
The code of ethics for human resource management states that:
Practitioners must regard the obligation to implement public objectives and prot
ect the public interest as more important than blind loyalty to an employer s pref
erences.
More specifically, in daily practice, HR professionals are expected to
thoroughly understand the problems assigned and must undertake whatever study an
d research are required to ensure continuing competence and the best of professi
onal attention;
maintain a high standard of personal honesty and integrity in every phase of dai
ly practice;
give thoughtful consideration to the personal interest, welfare, and dignity of
all employees who are affected by their prescriptions, recommendations, and acti
ons; and
make sure that the organizations that represent them maintain a high regard and
respect for the public interest and that they never overlook the importance of t
he personal interests and dignity of employees (Applebaum, 1991).
Some of the most serious ethnical issues HR professionals face center around dif
ferences in the way people are treated because of favoritism or a relationship t
o top management. In a survey conducted in the U.S. by the Society for Human Res
ource Management (SHRM) and the Commerce Case Clearing House (CCCH), HR professi
onals agreed that workplace ethics require people to be judged solely on job per
formance. Ethics requires managers to eliminate such things as favoritism, frien
dship, sex bias, race bias, or age bias from promotion and pay decisions (Grensi
ng-Pophal, 1998).
By acting in an ethical manner, companies will hire, reward and retain the best
people. This will, in turn, help assure that the company has the best work force
possible to achieve its business goals (Bulletin to Management, 1998b) By adopt
ing a definition of workplace ethics that centers on job performance, HR profess
ionals may be in a better position to persuade others in the organization that m
aking ethical behavior a priority will produce beneficial results.
A good starting point for managing ethical issues is for top management to criti
cally examine practices as such reward systems, managerial style, and decision-m
aking processes. In some organizations, the reward system promotes unethical beh
avior by encouraging the achievement of organizational goals at almost any cost.
Because of HR s traditional involvement in reward systems, HR has a natural role
in encouraging ethical behavior (Grensing-Pophal, 1998). But in the spirit of pa
rtnership, encouraging ethical behavior is a responsibility of all parties--the
employees, line managers, and HR professionals. A result of this partnership mig
ht be the creation of an easy-to-use hot line and dissemination of standards tha
t offer guidance on issues of ethical behavior.
Professional Certification
The society for Human Resource Management (SHRM) in the U.S. has established the
Human Resource Certification Institute to certify human resource professionals.
The institute's purposes are to
recognize individuals who have demonstrated expertise in particular fields;
raise and maintain professional standards;
identify a body of knowledge as a guide to practitioners, consultants, educators
, and researchers;
help employers identify qualified applicants; and
provide an overview of the field as a guide to self-development.
The certification institute has two levels of accreditation: basic and senior. T
he basic accreditation level is appropriate for all HR professionals. This desig
nation requires an examination covering the general body of knowledge and four y
ears of professional experience. A bachelor's degree in HR management or in the
social sciences counts for two years of professional experience. A senior level
accreditation requires a minimum of eight years of experience, with the three mo
st recent years including policy development responsibilities. All professionals
receiving accreditation are listed in the Register of Accredited Personnel and
Human Resource Professionals.
The accreditation process in the U.K. and Canada appears to be rather similar to
 that in the U.S., particularly concerning the major stakeholders and certificat
ion criteria. Conversely, there are major differences with respect to the basic
assumptions underlying the programmes' complexity and their integration with the
government, industry and academia (Wiley, 1999).
6 ORGANIZING THE HUMAN RESOURCE FUNCTION
In traditional, bureaucratic organizations, HR professionals resided almost excl
usively within a centralized functional department. As organizations have restru
ctured into a variety of newer forms, however, they have often re-evaluated this
approach. As is true for many support functions, there is currently much experi
menting going on to find the most effective way to organize the HR function. Whe
n considering new organizational forms, two major questions need to be addressed
are
Where are the HR decisions made?
What level of investment will the company make?
The first question has to do with the advantages and disadvantages of centralize
d and decentralized organizations. The second question has to do with costs and
deciding who will do what HR activities.
Centralization versus Decentralization
Centralization means structuring the organization so that essential decision mak
ing and policy formulation are conducted at one location (at headquarters); dece
ntralization means structuring the organization so that essential decision makin
g and policy formulation are conducted at several locations (in various division
s or departments of the organization).
Organization of HR departments differs widely from one company to another not on
ly because of the differing requirements of various industries but also because
of differing philosophies, cultures, and strategic plans of individual organizat
ions. With a centralized structure, large specialized corporate staffs formulate
and design human resource strategies and activities, which are then communicate
d to the small HR staffs of operating units for implementation. High levels of c
onsistency and congruence with corporate goals are thus attained. In a decentral
ized structure, small corporate staffs manage HR systems for executives but they
act as advisers to operating units. This allows organizations to operate with a
wider divergence in practices and a greater flexibility in addressing local con
cerns (Bulletin to Management, 1997).
Because of today's rapidly changing and highly competitive business environment,
the trend seems to be toward greater decentralization. This entails a greater d
elegation of responsibilities to lower HR levels and to the operating units and
line managers themselves. Along with this is a trend toward less formalization o
f policies--that is, fewer rules that are seen as bureaucratic hurdles (Johnson,
1999). Human resource departments and their organizations thus have greater fle
xibility to cope with the continually changing environment. Diminished bureaucra
tization can also lead to a greater openness in approaches to problems. On the o
ther hand, it tends to reduce the consistency of HR practices found throughout a
n organization. When HR practices vary dramatically across different units withi
n an organization, it may become more difficult to maintain a common corporate c
ulture. To address this concern, decentralized organizations generally strive to
develop broad policy statements state basic principles to be followed by everyo
ne, and then allowing local units to develop practices that fit their specific c
ontexts (Gedvilas, 1997).
Cost Control
Larger organizations generally have been able to spend less per employee because
 they have taken advantage of the efficiencies associated with standardized poli
cies and practices (Bulletin to Management, 1998a). As organizations attempt to
decentralize their HR function, many find that their administrative costs begin
to increase. In order to keep administrative costs under control, some organizat
ions have adopted a structure that includes shared services (Ulrich, 1995). Like
a traditional functional department, a shared services unit provides service to
units throughout the entire organization. But a major difference is that costs
associated with shared services usually are allocated to the specific units that
use the services.
One approach to shared services is to create service centers that handle transac
tion-based activities such as processing medical claims, answering questions rel
ated to retirement planning, and handling tuition reimbursement programs. Such t
ransactions can be efficiently carried out by one unit for the entire firm, ofte
n over the telephone or online. Among the many activities handled by a service c
enter are payroll transactions, benefits management and problem solving, the des
ign and management of a self-service HR website, establishment of affirmative ac
tion plans, compliance reviews, processing of job applications, and the dissemin
ation and analysis of employee surveys.
Another way to reduce costs within a decentralized structure is through the use
of centers of excellence (Ulrich, 1995) A center of excellence typically houses
a variety of HR specialists who have in-depth expertise in activities that are o
f significant value to the firm. Such activities include recruitment and selecti
on, compensation, job redesign, reengineering, organizational change, and measur
ing organizational effectiveness. These specialists essentially work as internal
consultants, providing service only to the units that request (and are willing
to pay for) them. Like shared services, the objective behind organizing HR activ
ities into centers of excellence is to improve efficiency while also allowing fo
r flexibility and decentralization of HR practices.
Reengineering and Outsourcing
Reengineering the HR department basically means reconsidering what the departmen
t is doing to see whether it can do it better and more effectively (Davidson, 19
98). Customerization is consistent with this process because it asks, "What are
we doing for our customers, what do they want, and how can we fill in the gaps b
etween what they get and what they want?" But reengineering goes much further. I
t seeks to examine all the parts of the department, asking, "What is the purpose
of this group, what does it do and how does it do it, and can it improve the wa
y it does things." The reengineering process should identify what counts; what a
dds value; and what can best be done by someone else--particularly a consulting
firm that specializes in supplying HR activities, such as pension plan administr
ation. Reengineering may lead to a decision to outsource some HR activities (Rog
ier, 1998). During the 1990s, many firms began outsourcing a variety of staff fu
nctions, including HR. The logic underlying this trend is that outside vendors,
who might serve dozens of organizations, should be more efficient. Consequently,
the cost per employee for their services should be lower. But after a few years
of experience, many companies have discovered that outsourcing often results in
higher costs (Workforce, 1998). At the same time, service levels from outside v
endors often don t match the level formerly provided by the company s own staff. Lik
e all other decisions regarding how to manage human resources, organizations can
avoid some of the disappointments associated with outsourcing by treating outso
urcing as a key strategic move (Wallace, 1998).
Globalization
The 1990s have seen dramatic changes in international trade and business. Once-s
afe markets are now fierce battlegrounds where firms aggressively fight for thei
r share against both foreign and domestic competitors. It is, therefore, not sur
prising to find that in an increasing number of firms, a large proportion of the
workforce is located in other countries. As a consequence, HR departments and t
heir professionals have to be familiar with concerns and aspects of operating ac
ross countries and cultures.
When it comes to operating in a global context, most organizations and most HR p
rofessionals are at an early stage of learning. Globalization is forcing manager
s to grapple with complex issues as they seek to gain or sustain a competitive a
dvantage. Faced with unprecedented levels of foreign competition at home and abr
oad, operating an international business high on the list of priorities for top
management. So are finding and nurturing the human resources required to impleme
nt an international or global strategy.
HR professionals play a critical role in the globalization process by helping co
mpanies evaluate the human resource prospects and possibilities involved in movi
ng to different regions of the world (Luthans, Marsnik and Luthans, 1997). The c
omplexities of operating in different countries and of employing people of diffe
rent nationalities, are the main issues that differentiate domestic and internat
ional HR management. Many companies underestimate these complexities, and some e
vidence suggests that business failures in the international arena are often lin
ked to poor management of human resources (Dowling, Welch and Schuler, 1999).
The primary causes of failure in multinational ventures stem from a lack of unde
rstanding of the essential differences in managing human resources, at all level
s, in foreign environments (Scullion, 1995). Certain management philosophies and
techniques have proved successful in the domestic environment, yet their applic
ation in a foreign environment too often leads to frustration, failure, and unde
rachievement. These "human" considerations are as important as the financial and
marketing criteria upon which so many decisions to undertake multinational vent
ures depend.
Increasingly, domestic HR is taking on an international flavor as the workforce
becomes more and more diverse. Despite the merging of domestic and international
concerns, several issues differentiate international HR from domestic HR. In th
e future, more and more HR professionals will find that being effective in an in
ternational HR work is required for success in their profession. A consideration
of how international and domestic HR differ today provides a glimpse of the fut
ure (Schnell and Solomon, 1997).
More Functions and Activities. To operate in an international environment, the H
R department must engage in a number of activities that would not be necessary i
n a domestic environment: international taxation, international relocation and o
rientation, administrative services for expatriates, host-government relations,
and language translation services (Scullion and Starkey, 2000).
Broader Perspective. Domestic managers generally administer programs for a singl
e national group of employees who are covered by a uniform compensation policy a
nd who are taxed by one government. International managers face the problem of d
esigning and administering programs for more than one national group of employee
s, and they must therefore take a more global view of issues.
More Involvement in Employees Lives. A greater degree of involvement in employees
personal lives is necessary for the selection, training, and effective managemen
t of expatriate employees. The international HR department needs to ensure that
the expatriate employee understands housing arrangements, healthcare, and all as
pects of the compensation package provided for the assignment.
More Risk Exposure. Frequently, the human and financial consequences of failure
are more severe in the international arena than in domestic business. For exampl
e, expatriate failure (the premature return of an expatriate from an internation
al assignment) is a persistent, high-cost problem for international companies. A
nother aspect of risk exposure that is relevant to international HR is terrorism
. Major multinational companies must now routinely consider this element when pl
anning international meetings and assignments.
More External Influences. Other forces that influence the international arena ar
e the type of host government, the state of its economy, and business practices
that may differ substantially from those of the originating country. A host gove
rnment can, for example, dictate hiring procedures or insist on a company provid
ing training to local workers. Mergers and acquisitions that cross country borde
rs are likely to accelerate the blending of domestic and international HR activi
ties (Numerot and Abrams, 1998).
SUMMARY
Because of the increasing complexity of human resource management, nearly all mi
d- to large- size companies employ human resource professionals as full time emplo
yees, as vendors with long-term contracts, and/or as consultants who work on sho
rt-term projects. The ways organizations allocate responsibility for HR activiti
es are many. They vary from firm to firm, and even over time within the same fir
m. Regardless of how HR activities are structured, however, companies that are m
ost concerned with HR management seek professionals who effectively perform as t
he roles of business partner, enabler, monitor, innovator, and adapter. When thi
s occurs, HR professionals can help organizations link their HR activities to th
e business. In doing so, they demonstrate their value to the organization and he
lp in achieve enhanced productivity, quality of work life, competitive advantage
, adaptability, and legal compliance--all goals associated with the organization
's several stakeholders. Going forward, human resource professionals will increa
singly be called upon to perform their roles in a global context. Globalization
adds additional challenges for the HR profession and it may ultimately reshape t
he professional s role. Regardless of how the roles of HR professionals shift, how
ever, getting everyone involved in human resource management will continue to be
essential. Employees, line managers, and HR professionals have to work together
in order for organizations to manage human resources effectively.