The Strategic Role of HRM in Companies

The administrative practices in some companies have been to limit the functions of Human

Resources Management (HRM) to its simple traditional role, such as following up on working

hours, issuing official documents, controlling behaviours and implementing violations and

penalties, recruitment processes, performance evaluations, wages, benefit management,

and employee relations to name a few.

However, if HRM was identified as a strategic role, squeezing the most out of its vital

position, it can be looked at as a valuable resource towards achieving business goals at all

stages, according to the planned strategy. By searching for skills, competencies and talents

and refining them to form a real competitive advantage it can contribute to increasing the

market share through inventions, creations, and innovations that can be achieved to

enhance the organization's core capabilities.

Although some theoretical literature refers to this important role and sheds light on it when

preparing the strategic plan and what other roles it may include for marketing and sales

functions, information systems, supply chains, warehousing and distribution, some

departments ignore this strategic role of HRM in that mix.

Either due to the ignorance of the necessary knowledge and lack of applied practical

mechanisms or deliberate marginalization of this role as a cost centre that can be avoided

now and compensated later.

The long term is imposed by the strategy, while traditional managers of the old school of

management (The Old Management School) tend to focus solely on specific job outcomes

that align with the visions of the board of directors. They tend to retain general managers in

their positions for longer periods before realizing the existence of an apparent crisis. This

happens while they overlook the strategic role of human resource management.

Modern management v. old school management

Practical experiences have proven that leadership mindsets differ from one company to

another. Managers who are enlightened with scientific knowledge and up-to-date insights in

modern management tend to better comprehend the increasingly important role of achieving

the company's goals, not only in the medium term but also in the long term.The long term is imposed by the strategy, while traditional managers of the old school of

management (The Old Management School) tend to focus solely on specific job outcomes

that align with the visions of the board of directors. They tend to retain general managers in

their positions for longer periods before realizing the existence of an apparent crisis. This

happens while they overlook the strategic role of human resource management.

With the increase in market competition and the entry of new competitors with innovative

strategies, mechanisms, and methodologies, these traditional departments can be caught off

guard, leading to a loss of achieved results or a slow exit from the market due to rising costs

and the inability to capitalize on opportunities or avoid various crises. Such an outcome is

expected, given that the market is a volatile and unstable environment, which cannot be

relied upon for long periods without disruptions.

Experiences also indicate that the departments that follow the approach to intervention in

details (Micro Management) are the most lagging departments to absorb this strategic role of

human resources, and are the least efficient in development and modernization. Micro

managers may take certain decisions, or impose perceptions that contradict or disrupt the

aspirations of HRM, which can ultimately lead to the downfall of implementing a corporate

strategic plan.

The success is linked to its human resources department

The success of companies is linked in one way or another to the efficiency and skillset of its

human resources department. It is not possible to see a real success story or experience a

companys success without the strengthening of this role.

If companies took it this way: the best performance can initiate the lowest possible cost and

lead towards a more efficient and effective use of resource, success could be measured a lot

smarter.

Which leads us into smart management, we are all aware of this role and realize its

importance. A smart manager, consults from the strategic plan before they even set their

own smart goals/objectives.

However, what is the strategic role of HRM in companies, and how can it contribute to

enhancing competition, obtaining the lion's share in the market, improving financial positions

by increasing revenues, profits, and reducing costs? This strategic role can be summarized

in the following points:The HR Department assists in setting strategies for recruiting, developing, and retaining

talented and distinguished employees who support the vision and goals of the organization.

It analyses HR needs and directs recruitment, training, and staff development efforts in line

with the organization's strategy.

Companies often focus on short-term returns and immediate results. Focusing solely on

operational and financial aspects always leads to a delay in recognizing the importance of

this role. The longer companies delay in realizing this role, the more difficult the task of

making HRM the sustainable engine of creativity and innovation becomes.

HRM contributes to the development of employee capabilities.

On the other hand, HRM contributes to the development of employee capabilities to enhance

the organization's performance and increase its ability to adapt to new challenges. This

includes implementing training and development programs, providing opportunities for

learning, and developing skills and knowledge that enhance innovation and organizational

effectiveness.

HRM manages change and transformation

HRM also plays a critical role in managing change and transformation in the organization. It

helps improve the organizational culture, enhance communication and cooperation between

employees, guide them through periods of change and structural transformation, and also

works to manage tensions and problems arising from change processes while promoting

employee adoption of change.

HRM builds a positive organizational culture

One of the strategic and important functions of HRM is building a positive organizational

culture. It works to create a healthy and inspiring organizational culture in companies, which

contributes to strengthening basic values and principles and encouraging employees to

adhere to them. HRM enhances communication, cooperation, and transparency, in addition

to investing in the talents of employees by encouraging creativity, innovations, and providing

an incubating environment for them.

We emphasise here that a narrow and shortsighted view often prevents corporate

management from realizing the dimensions of the strategic role of HR in their companies.Companies often focus on short-term returns and immediate results. Focusing solely on

operational and financial aspects always leads to a delay in recognizing the importance of

this role. The longer companies delay in realizing this role, the more difficult the task of

making HRM the sustainable engine of creativity and innovation becomes.

Let us not ignore that investing in HR and enhancing their strategic role requires long-term

investments, which constitute a financial challenge that may not be available to companies

with limited resources.

In addition, poor coordination and direction within the company may lead to insufficient

interest in managing HR, hiding a supportive and strong will towards managing human

resources by senior leadership in companies, and diminishing the strategic role of HR in

them over time.

QUESTION ONE [50]

1.1. In light of the information provided in the above article, evaluate the following

statement: However, if HRM was identified as a strategic role, squeezing the most

out of its vital position, it can be looked at as a valuable resource towards achieving

business goals at all stages. (30)

1.2. Evaluate the strategic role of HR in relation to change and culture. (20)