Because the business world is changing, the role of HR must change. Once HR departments were considered as ‘‘mechanical’’ agents, helping the organization to hire and fire (and possibly train) employees. The HR department was an administrative necessity but little more. Over the last 20 years, the importance of a highly skilled, well-motivated, flexible workforce has become clear. HR departments are now expected to ‘‘add value’’ to the organization –not simply incur cost. Ulrich (1998) has suggested four ways for HR to deliver organizational excellence:
- Partner with senior and line managers to move planning from the conference room to the marketplace.
- In order to deliver efficiency to reduce costs and yet maintain quality, become an expert in the way work is organized and executed.
- Become a champion for employees while working to increase employee contributions, specifically commitment and ability to deliver results.
- Become an agent of continuous transformation, shaping processes and a culture that will improve an organization’s capacity for change.
This makes the HR department much more than ‘‘policy police’’ and regulatory ‘‘watchdog’’. Even more advanced and empowered HR departments may only oversee recruitment, manage training and development programs, and design initiatives to increase workplace diversity. This is not what is required of modern HR professionals. They must form partnerships with operating managers to rethink and reconfigure the HR function and become committed to outcomes. Line managers are answerable to the shareholders to create economic value; the customers for product or service value; and the employees for creating workplace value. HR managers must be part of this ‘‘agreement’’.