The New Human Resource Manager: Focus on Improving Performance

They Focus on Improving Performance
Employers expect their human resource managers to help lead their companies' performance -improvement efforts. Human resource managers recognize this. Surveys of HR professionals list competition for market share, price competition/price control, governmental regulations, need for sales growth, and need to increase productivity as top challenges HR managers face.

Today's human resource manager is in a powerful position to improve the firm's performance and profitability, and uses three main levers to do so. The first is the HR department lever. He or she ensures that the human resource management function is delivering its services efficiently. For example, this might include outsourcing certain HR activities such as benefits management to more cost-effective outside vendors, controlling HR function headcount, and using technology such as portals and automated online employee prescreening to deliver its services more cost-effectively.

The second is the employee costs lever. For example, the human resource manager takes a prominent role in advising top management about the company's staffing levels, and in setting and controlling the firm's compensation, incentives, and benefits policies.

The third is the strategic results lever. Here the HR manager puts in place the policies and practices that produce the employee competencies and skills the company needs to achieve its strategic goals. For example, Yahoo's new employment policies helped to improve its innovation and competitiveness, and the bank's new software helped its customer service reps improve their performance, thanks to new human resource training and compensation practices.

The New Human Resource Manager

"Personnel" managers used to focus mostly on administrative activities. They took over hiring and firing from supervisors, ran the payroll department, and administered benefits plans. As expertise in testing emerged, the personnel department played a bigger role in employee selection and training.47 New union laws in the 1930s added "Helping the employer deal with unions" to the list of duties. With new equal employment laws in the 1960s, employers relied on HR for avoiding discrimination claims.

Today, employers face new challenges, such as squeezing more profits from operations. They expect their human resource managers to have what it takes to address these new challenges. Let's look how today's HR managers deal with these challenges.

They Focus More on Strategic, Big-Picture Issues
First, human resource managers are more involved in helping their companies address longer- term, strategic "big-picture" issues. Chapter 3 (Human Resource Management Strategy and Analysis) explains how they do this. In brief, we will see there that strategic human resource management means formulating and executing human resource policies and practices that pro¬duce the employee competencies and behaviors the company needs to achieve its strategic aims. The basic idea behind strategic human resource management is this: In formulating human re¬source management policies and practices, the manager's aim should be to produce the employee skills and behaviors that the company needs to achieve its strategic aims. So, for example, when Yahoo's new CEO recently wanted to improve her company's innovation and productivity, she turned to her new HR manager (a former investment banker). Yahoo then instituted many new HR policies. It eliminated telecommuting to bring workers back to the office, where they could continuously interact, and adopted new benefits (such as 16 weeks' paid maternity leave) to lure new engineers and to make Yahoo a more attractive place in which to work.

The model follows this three-step sequence: 

1. Set the firm's strategic aims 
2. Pinpoint the employee behaviors and skills we need to achieve these strategic aims
3. Decide what HR policies and practices will enable us to produce these necessary employee behaviors and skills.