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Potential roles of the human resource management professional in the strategic planning process.

Organizations must consider many critical factors as they face the future. Technology is advancing at a frenetic pace, especially in relation to the transfer and accessibility of information and the increasing ease of establishing communication-networking facilities. The continuing removal of trade barriers and tarrifs, the consequent globalization of markets, the volatility of consumer demands within existing markets, currency fluctuations, and political upheaval are by now familiar characteristics of an environment in flux. The capability of people to cope and manage within such an environment is a vital element in the success of any business. The new business context is prompting managements to take a greater interest in the utilization of their organizations' human resources.

Because of this, the human resource function is playing a far more significant role in corporate strategic planning than ever before. Today's top company executives are increasingly looking to HR to improve the bottomline. The traditional HR functions of staffing, recruiting, compensation, and benefits are losing ground to a new generation of value-added core HR functions that include career planning, executive development, training, succession planning, and organization development. Insurance claims administration, outplacement services, employee assistance programs, 401(k) plan administration, dependent care assistance, and other nonvalue-added functions are being outsourced by many companies in an effort to become more competitive (Caudron, 1994).

Moving From Administrative Support To Strategic Business Partner

Tomorrow's competitive business environment will include HR as a strategic business partner and a bottomline decision-maker. In contrast to its traditional emphasis on personnel administration, HR's future role will be supporting a company's competitive advantage by providing high quality people and by helping business manager strategically plan the functions of those people within the organization. HR must shift from being an administrative support function to becoming partner in charting business strategy. This requires transforming the HR function into a strategic business partner that will positively affect a company's earnings.

HR must begin this transformation by understanding the company's business direction. This understanding includes what the company's product is capable of doing, the typical consumer of the product, and the company's competitive position in the marketplace. Also, the HR function must change from a staff function that delivers prepackaged HR services to a service that helps managers create customized strategic plans to influence the effectiveness of company performance.

A key factor in the process of integrating strategic planning with HR is ensuring that the HR staff recognize their roles as change agents and strategic business partners. This may be particularly difficult in a rapidly changing organization where the lack of stability tends to leave people with the feeling that they are victims of change rather than champions of it. However, one key to creating a successful HR function is to organize the chaos caused by change. This can be accomplished by forging ahead with innovative strategic plans that add value to the company instead of retreating into comfortable, traditional roles that will not effectively improve a company's bottom line (Cipolla, 1996).

Effective strategic planning involves analyzing current data and identifying trends that may affect a company's future performance. Next, it involves mapping out a strategy that will most likely result in a company's success over the long term. A study by Eichinger and Ulrich (1995) indicates that in the next five to seven years at least 10 profound changes will alter the course of businesses and the function of HR. They identify these changes as (1) global economic and financial, (2) technological, (3) political, (4) structural (to the business organization), (5) educational, (6) labor-related, (7) social, (8) conflicts due to globalization, (9) environmental, and (10) crime-related.

These changes are dominated by the shrinking world, as telecommunication, travel, information, ideologies, partnerships, and businesses are becoming global. As a result, businesses, regardless of size, must become global in their thought processes to compete in a worldwide marketplace. As globalization continues, businesses will find it increasingly necessary to compete for scarce resources, requiring business managers to function in a global financial arena instead of local or regional ones. Another issue of globalization is the uncertainty in politicization of global markets. No longer will Western rules apply in countries where power can be influenced by religion, revolution, and single or dominant political parties. Learning to deal with changing political scenes will be a new challenge for many Western firms that try to compete globally (Coates, 1997).

Following globalization, but clearly affecting and being affected by it, are technology trends. Technology has decreased geographic distances as well as language and cultural differences. Technology has also changed the flow and use of information. Innovation and ideas will be the currency of the next century, and intellectual capital can now be immediately captured and communicated to others. Staying competitive will require businesses to invest constantly in the information superhighways of the Internet and the World Wide Web (Grundy, 1997).

In this ever-changing global and technologically demanding world, attracting, developing, and retaining individuals with the skills, perspectives, and experiences sufficient to drive a global business becomes the talent battleground of the future. Firms will be specifically interested in the intellectual capital necessary to create and distribute the products and services needed for global businesses. In addition, the organization of the future will have to respond faster to changes, be able to learn better, and find new ways to compete in unfamiliar markets. As a result, organizational structures will become flatter, enabling organizations to operate more efficiently in a globally competitive environment (Eichinger & Ulrich, 1995; Boxall, 1996).

The HR professional will need to be keenly aware of international social and environmental issues. A strong possibility exists that the gap between those who have and those who have not will widen, causing social unrest not only within countries but also across borders. As businesses in technologically-advanced countries become global producers, they have the opportunity to amass enormous wealth very quickly, thus creating greater economic and social distance between the haves and the have-nots. Unresolved, this inequity may be the fuel for unrest, revolt, and revolution. The possibility also exists that some countries, especially those that are emerging, will sacrifice sound environmental practices to gain the capital necessary to access the global marketplace. For example, the fact that some countries may hack down and sell the timber from a whole rain forest in order to purchase the technological infrastructure needed to compete on a global scale, has profound implications (Bolwijn, 1996).

Strategic Skill Development

According to Zigarelli (1997), in order for HR professionals to help managers develop an effective strategic plan to deal with these trends, they need to possess the following: (1) global operating skills, (2) business and financial savvy, (3) strategic visioning, critical thinking and problem solving skills, (4) ability to use information technology, (5) deep HR knowledge, (6) change management skills, and (7) organizational effectiveness skills.

In addition, HR professionals need to master global operating skills. They should learn to do business in non-native environments, with individuals of different backgrounds and perspectives and with products and services used in different ways. HR professionals must also be masters of the business environment. They need to understand financial reports, business goals, and consumer and investor importance. Also, they must have the business acumen necessary to understand and support the business function. This will make HR professionals an indispensable part of a team assigned the task of charting a business's future (Hussey, 1995).

HR professionals need to partner with business managers in thinking and problem solving areas. They should take the lead in the contribution of strategy, vision, and critical thinking to gain credibility to gain credibility for the HR function. The process of problem solving will require HR professionals to use technology such as teleconferencing, telecommuting, and shared data sources to learn and leverage information for business results. This will require HR professionals to continuously develop information technology skills. Also, they should be well grounded in the theoretical and practical fundamentals of HR and be able to articulate why certain HR practices are appropriate for some situations and others are not. HR professionals need to invest time and resources in becoming better educated - by taking classes or seminars and by reading current journals and periodicals on HR strategic planning (Mechelen, 1996).

In addition to these skills, HR professionals should be committed to change the organization. This may mean that the HR function will take the lead in new and more efficient ways of doing business. Also, these professionals should learn how to diagnose the effectiveness of an organization through the creation of organizational models that accurately portray the current and future state of the organization. By using a model, HR and business managers can monitor and correct inefficiencies. This will create the opportunity for a more competitive organization where business managers and HR professionals work together effectively in responding to the rapidly changing global environment (Gunnigle & Moore, 1997).

Identifying HR Roles

The emergence of new activities has been accompanied by new patterns of involvement identifying the HR professional as far more than an administrator or clerk. Because the strategic planning process is defining the new work of human resource management, it is incumbent on HR professionals to lead this change. Effective implementation of strategic planning requires professional roles and competencies that are not quite matched by any other function; it involves total competence.

Exactly what role the HR professional will play in the strategic planning process has been the subject of recent research efforts (Conine, 1997: Saratoga Institute, 1997). The very nature of the planning process opens the possibility of a variety of roles for the HR professional, including those of advocate, stakeholder, and facilitator. The nature of each role and an explanation of how or when or under what circumstances each should be chosen will be discussed. Figure 1 below lists each role and its duties.
FIGURE 1 HR Roles and Descriptions

ADVOCATE This role allows the HR professional to be
 an instigator of the strategic planning
 process, a proponent of its virtues, and a
 driving force in its successful conclusion.

STAKEHOLDER This role represents the organization's HRM
 needs in the planning process.

FACILITATOR This role serves as an enabler of the
 process to help over come some of the
 commonplace problems that emerge in
 the process.


* The Advocate Role. Of all the people in a management role, it is often the HRM manager who has the required objectivity, together with the appropriate process-analytical skills, to recognize the need for strategic planning and to press for the initiation of that process. The HR professional is attuned to the entire organization, not just one department or function. He or she deals with employees at all levels from the boardroom to the production floor to the marketing department to accounting. She or he also deals with the issues such as recruiting, retention, compensation, employee-assistance-programs, health and safety, and training and development that span the entire organization. The HR professional focuses on the characteristics of a company's human resources, including all of the knowledge, skills, experience, and commitment of the employees and their relationship with each other and with those outside the company. In addition, HR practices include all of the programs, policies, and practices that a company uses to manage its human resources. The HRM professional is therefore in a unique position to recognize that an organization may be floundering; that it goes from crisis to crisis; that there is no overarching sense of purpose of direction; and that is run tactically rather than strategically.

One of the most striking bits of evidence that no strategic plan is in place is the lack of any clear-cut guidelines for deploying an organization's resources, especially human resources. Such guildelines for deploying an organization's resources, especially human resources. Such guidelines are a necessary outcome of a strategic planning process. Without them, each resource-allocation decision must be made in a vacuum, greatly stressing the system and its members because decisions will be contradictory, unpatterned, and disruptive.

If guidelines are not directly available to the HRM professional, the need for a strategic plan is quickly apparent from indirect sources - exit interviews with departing employees, performance-appraisal reports, climate-survey data, and many sorts of informal discussions within the organization. Because of their unique role in organizations, HRM professionals are more likely to be privy to such indirect information, and how they make use of it is often critical to the organization's success, especially in the strategic planning process. This information needs to be shared with the other managers of the organization to alert them to risks the organization faces. As part of this, an organization must look at its strengths, weaknesses, opportunities, and threats (SWOT analysis). The HRM professional can be invaluable in contributing to this analysis.

Obviously, it is not suggested that the HRM professional violate individual or group confidentially, but rather that they serve as an early warning system about how emerging HRM issues may portend serious organizational problems stemming from a lack of strategic planning. One important positive consequence of sharing this awareness will be to help dispel the perceived distinction between the HRM professional and the rest of the organization, especially at the managerial level. The HRM manager's responsibilities can then be seen as extending beyond simply managing human resources to include sharing with peers the responsibility for the future direction and vitality of the entire organization (Gunnigle & Moore, 1997).

Once the needs for strategic planning has been identified, the HRM professional needs to care-fully orchestrate a campaign for such a process. He or she needs to understand what is involved in such a process, how it can benefit the organization, what it will cost the organization, and how to proceed. The importance of this advocacy role for the HRM professional as an individual and for the HRM component of the organization can hardly be overemphasized. This advocacy role helps blur the boundaries between the HRM group and the rest of the organization, especially at the management level. This blurring has positive consequences for the effectiveness of the organization and for the status and power of the HRM function.

Strong support for this idea is found in recent research (Saratoga Institute, 1997). A study of highly productive organizations found the HRM group to be often involved in planning and implementing organizational strategies and making business decisions. The HRM groups in more productive organizations also are likely to use their resources to solve important company problems and be more proactive, whereas in less-productive organizations, the HRM group tends to be reactive, primarily to line requests.

* The Stakeholder Role. To be a stakeholder means, "any parties that have an interest (or a stake) in the success, or performance of a firm, or the outcome of a process within the firm (Miller, 1998). As stakeholder, the HRM professsional has the responsibility to link the organization's overall strategic plan to its human resources. To do this, she or he needs to understand the nature of overall strategic planning and be willing to work within such a context. More than anything else, the HRM professional should understand that strategic planning is the process through which the management of the organization clarifies what it intends the organization to become and what its goals are, both financial and nonfinancial. The process by which such a set or decisions is made requires a high degree of problem-solving skills, and the HRM professional is expected to be a model of such skills.

The HRM professional also should be clear about his or her function in this process. The human resources necessary for achieving the goals that are the outcomes of the planning process should be identified. The gap between the organization's present resources and future human resources requirements also needs to be clearly identified together with an action plan to close the gap in accordance with the strategic plan. The success of the organization's basic strategy depends on how its two most precious resources, people and money, are used.

Most strategic planning decisions have direct human resource consequences; that is more or fewer people are needed, new skills are necessary in the workforce, new obstacles need to be overcome, and so forth. The HRM professional needs to be involved in these discussions to help determine how many people are needed and what types, what kind of training should be provided, what the impact of these decisions will be on the organization's culture and bottom line. It is critical that the HRM professional both raise these issues and be able to assist the other managers in exploring them and in answering the questions raised by these considerations.

These decisions invariably require moderate to high degrees of expertise in areas outside the human resources field, including understanding finance and financial analysis, legal considerations, the competitive environment, the longterm trends in the industry, the market potential for the organization's goods or services, and the threats and opportunities facing the organization. Although the focus of the HRM professional's concern should be the proper planning for and utilization of human resources, these concerns need to be expressed within a total organizational context, and each HRM professional must be able to hold his or her own in the general give-and-take of the strategic planning process (Zigarelli, 1996).

* The Facilitator Role. The HRM professional can also fill at least one other role, that of facilitator, an often critical role in the planning process. The facilitator helps the planning team with the small-group process issues that are critical to a successful planning process. Facilitators help the group with issues that otherwise might be avoided, overlooked, or swept under the rug. A facilitator can also ensure that reluctant participants are involved in the process, that consensus rather than compromise is the primary method of decision making, that the necessary group norms of confrontation and openness develop, and that the group process enhances rather than blocks the development of a functional strategic plan that will provide the vision for directing the organization's future.

The strategic planning process requires that members of the planning team directly confront their most fundamental beliefs about organizational life and the future of the organization. Engaging in such a values-based planning process is difficult and painful for most groups, especially those with little or no experience in team building,values clarification, or the other processes integral to an organization development (OD) effort. The honesty and openness needed for a valid performance audit will require similar efforts. Planning teams, especially those with little or no experience in these procedures, will need a skilled facilitator.

Planning teams experience a number of common problems that result from natural human tendencies. If these are not properly identified and managed, they can dramatically interfere with a successful outcome of the planning process. One of the most common of these is the unwillingness of the team to face important organizational issues - especially if they have never been directly addressed such as declining markets, a preponderance of mature products or services, a lack of resources for growth, complacency among senior managers, strong conflict or competition among organizational segments, and so on.

Strategic planning is concerned with what the organization will do not how plans will be implemented. The members who compose the planning team probably rose to prominence in the organization because they excelled at how to do things. They need to learn to think of what should be done. An important role of the facilitator is to teach the planning team to start to think in terms of "what" rather than "how."

In addition, the facilitator should recognize and identify with the group the natural tendency to be overly optimistic about the future. Conversely, in organizations in which negativism abounds and there is a prevailing belief that all is lost and nothing can be done, the facilitator needs to challenge such concepts and help the group address the realities of the situation. Also, planning teams often have trouble maintaining the long-term time frame required in planning, even though there is clear-cut agreement about the necessity or doing so. The future is uncertain and hard to read. It is much easier to consider short-term performance and plan for tomorrow. Most managers are too pragmatic, too limited in their scope, and too uneasy about uncertainty to tackle such tasks with enthusiasm, especially the first time (Barney & Wright, 1998).

The common problems encountered in strategic planning should surprise few, if any HRM professionals. Dealing with these is part of their daily work. Moreover, these problems provide some support for the need to have a facilitator of the strategic planning process. Clearly one role for the HRM professional is as a process consultant to the planning team.

Role Choice

All the roles discussed may be necessary in an organization's planning. The strategic planning process needs an advocate, the HRM function needs to be strongly represented at the planning table by a stakeholder, and the planning team requires some expert facilitation. The latter two roles, however, may conflict. It is difficult for most people to hold strong stakeholder positions and also be impartial and objective facilitators of the group process. Although it may be possible for one person to fill both roles if all the members of the group in question are skilled in group process and have a high shared commitment to using these skills, most HRM professionals should assume that these conditions are not likely to exist in their own organization.

Generally, the two roles of stakeholding and facilitator are incompatible and should be avoided. Although the HRM professional can be an advocate of strategic planning and also fill either of the other two roles, few people can be sufficiently objective and alert to process considerations when they are strongly advocating a particular the position. The HRM professionals in an organization must choose which of these roles to fill.

Summary

Changes in the business world require an unprecedented alignment of human resource professionals with other managers - dynamic new partnership formed to map long-term organizational planning strategies in an era when the path to success is in constant flux. As never before, new economic pressures from global competition, politically activity, social change, technological improvements, and an increasingly costly and more diverse workforce require persistent updating of strategic planning maps leading to bottom-line success. HRM professionals must play key roles in this process.

Three potential roles for the HRM professional in the strategic planning process have been explored. The first is that of an advocate of the process. The HRM professional often has access to unique information about the organization's need for strategic planning, about the consequences of the failure to plan strategically, and about the internal resources for planning. This information enables the HRM professional to be an instigator of the process, a proponent of its virtues, and a driving force to its successful conclusion.

A second role for the HRM professional in strategic planning is that of stakeholder. The HRM professional should represent the organization's HRM needs in the planning process just as the organization's financial staff speak for financial considerations, the engineering staff for plant needs, and so on. The strategic planning process that does not include a careful consideration of the HRM component is badly flawed, and only the organization's HRM people can adequately speak to these issues.

The third role of the HRM professional is to serve as a facilitator of the process. The many psychological and emotional concerns that ordinarily are aroused in the strategic planning process require strong facilitator skills. These skills can help overcome some of the common problems that emerge in the planning process, including the tendency to avoid hard choices, to be overly optimistic, to avoid confrontation, and to minimize resistance to change. This role however, may conflict with that of the stakeholder.

Perhaps the most striking change in HR is its growing importance in developing and implementing corporate strategy. Traditionally, strategy was a job primarily for the company's operating managers. Today things are different. Strategies increasingly depend on strengthening organizational responsiveness and on building committed work teams. In a fast-changing, globally competitive, and quality-oriented industrial environment, it is often employees themselves - its human resources - who provide the competitive edge. It is now increasingly common for the HR professional to play a role in developing and implementing the company's strategic plan.

REFERENCES

Barney, J., & Wright, P. (1998). On becoming a strategic partner: The role of human resources in gaining competitive advantage. Human Resource Management, 37(1), 31-46.

Boxall, P. (1996). The strategic HRM debate and the resource-based view of the firm. Human Resource Management Journal, 6(3), 59-75.

Bolwijn, P. (1996). About facts, fiction and forces in human resource management. Human Systems Management, 15(3). 161-172.

Caudron, S. (1994, August). HR leaders brainstorm. Personnel Journal, 54-61.

Ciplolla, F. (1996, June). Strategic human resource management. Bureaucrat, 24-28.

Coates, J. (1997). Emerging HR issues for the twenty-first century. Employment Relations Today, 23(4), 1-9.

Conine, C. (1996). The integration of human resource development into the strategic planning process: A comparative case study of three corporations. Unpublished doctoral dissertation, Georgia State University, Atlanta.

Eichinger, B., & Ulrich, D. (1995, December). Are you future agile? Human Resource Planning, 30-42.

Gunningle, P.,& Moore, S. (1997). Linking business strategy and human resource management: Issues and implications. Personnel Review 23(1), 63-84.

Grundy, T. (1997). Human resource management: A strategic approach. Long Range Planning, 30(4), 507-517.

Hussey, D. (1995). Human resources: A strategic audit. International Review of Strategic Management, 6, 157-195.

Mechelen, R. (1996). Strategic human resource management. Public Manager. 25(2), 37-39.

Miller, A. (1998). Strategic management (3rd Ed.). Boston, MA: McGraw-Hill.

Saratoga Institute (1997). Restructuring the human resources department: Objectives, methods, and results. New York: American Management Association.

Zigarelli, M. (1996). Human resources and the bottom-line. Academy of Management Executive, 10(2), 63-64.

Dr. Rowden, who has worked in business as a training and development manager and in human resource management, teaches and researches in the human resource management and training and development fields. He has published several articles, edited Workplace Learning: Debating Five Critical Questions of Theory and Practice, and also consults.
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Author:Rowden, Robert W.
Publication:SAM Advanced Management Journal
Date:Jun 22, 1999
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