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.