The document discusses the role of human resources in organizations. It outlines that HR helps achieve strategic objectives by ensuring staffing aligns with strategy and manages change from external and internal factors. The HR function varies based on organizational size, with smaller organizations having less formalized practices. Building core competencies and capabilities is important for competitive advantage, and organizations must develop, maintain, and update these over time through activities like training, partnerships, and acquiring new companies.

1. Business Performance &
Human Resource Role
Presenter: Maikal Fardha Savariappan

2. Learning outcomes
 To understand the role of the human resource department
 To be able to understand and describe the responsibilities of the HR
function
 To be able to describe the role of external and internal factors that affect
the human resource function

3. Role of the Human Resource (HR)
function
 In pairs, spend 5 minutes outlining what you think the role of the HR
function is within organisations

4. Role of the HR function
 Strategic
 Staff and organisational goals
 Operational
 Includes guidance and support to other managers
 Decentralisation
 Flexible workforce to meet dynamic external environment

5. Role of the HR function (Torrington)
 Staffing objectives
 Performance objectives
 Change-management objectives
 Administrative objectives
Competitive
advantage

6. Staffing objectives
 Appropriate staffing
 Contracts
 Competing in the labour market

7. Staffing – recruitment and selection
Recruitment
1.Assessment of the job (job analysis)
2.Assessment of the type of applicant
required (person specification)
3.Attracting applicants
4.Assessment of applicants
 Selection (number 4)
 Assessment of the applications
 Shortlisting
 Assessment of the applicants
 Could be interviews,

8. Performance objectives
 Motivation
 Discipline
 Employee involvement

9. Change management objectives
 Change is continuous
 External factors
 Cultural change

10. Administrative objectives
 Underpins the other forms of change
 Processes and systems
 Pay
 Accurate records are kept
 Taxation etc

11. External influences on the HR function
 Legislation
 Demographics (including labour market)
 The economy

12. Legislation
 Employment legislation
 Health and safety at work
 Equality
Frequently
changes

13. Employment & Health and Safety
(H&S)
 Employment
 1970’s to 1990’s Conservative
Govt – decline in employment
rights
 2002 & 2008 Employment Acts:
 Working parents
 Vulnerable workers
 Facilities time for union work
 Minimum wage (21yrs + £6.31, 18
to 20 £5.03, under 18 £3.72,
Apprentice £2.68)
 H&S
 Range of legislation 1960s onwards
(see text book)
 Protect workers
 Health and Safety at Work Act 1974
(HSE)
 Health Act 2006 – smoking (2008 –
mental health units)

14. Equality legislation (before 2010)
 Equal Pay Act (1970)
 Sex Discrimination Act (1975)
 Race Relations Act (1976)
 Disability Discrimination Act (1995)
 Employment Equality (Age) Regulations (2006)
 The Equality Act (Sexual orientation) Regulations (2007)
 Employment Equality (Religion or belief) Regulations (2003)

15. Equality (after 2010)
 The Equality Act (2010)
 Unifies previous legislation
 Protected characteristics
 Age
 Disability
 Gender reassignment
 Pregnancy and maternity
 Race
 Religion and belief
 Sex
 Sexual orientation
http://www.equalityhumanrights.com/legal-and-
policy/equality-act/what-is-the-equality-act/

16. Demographics
 More women entering the labour market
 Default retirement
 Increase in representation of BME
 Increase in proportion of disabled people in employment

17. Organisational size and the HR function (Cassell et
al., 2002; Guo et al., 2011)
 Can small companies be managed in the same way as large companies?
 In pairs, spend 5 minutes considering how organisational size might affect
the HR function.

18. HR function in third sector (Guo et al., 2011)
 Charities, not for profit
 Larger organisations more likely to have formal HR which is strategically
aligned
 Regional offshoots similar
 Smaller, newer orgs without HR team also more likely have strategic HR
 Those with paid staff and technological expertise more likely to have HR

19. The HR function in SMEs (Cassell et al., 2002)
 Neglected in the literature – a diverse field
 Less likely to have access to the resources of large companies
 Are adopting HRM (less strategic)

20. Key study: Cassell et al., 2002
 Survey (n=100) and face to face interviews (n=22) with SMEs
 Survey
 20% have formal HR strategy
 Commonly used practices – equal opportunities, appraisal,
development/recruitment and selection.

21. Key study: Cassell et al., 2002
 Interviews.
 HR function – no key person – or the MD
 Doubling up of roles
 Informal systems
 Recruitment

22. BUILDING A CAPABLE
ORGANIZATION — WHAT
IS INVOLVED?

23. The Three Components of Building an
Organization Capable of Proficient Strategy Execution

24.  Assembling a capable management team is a cornerstone of the
organization-building task
 Find the right people to fill each slot
 Existing management team
may be suitable
 Core executive group
may need strengthening
 Promote from within
 Bring in skilled outsiders
Putting Together a
Strong Management Team

25. Selecting the Management Team:
Key Considerations
 Determine mix of
 Backgrounds
 Experiences and know-how
 Beliefs and values
 Styles of managing and personalities
 Personal chemistry must be right
 Talent base needs to be appropriate
 Picking a solid management team needs to be acted on early in
implementation process

26.  The quality of a company’s people is an essential ingredient of successful
strategy execution
 Biggest challenge facing companies
 How to recruit and retain the best
and brightest talent with strong
skill sets and management potential
 Intellectual capital, not tangible assets, is increasingly being viewed as the
most important investment
 Talented people are a prime source of competitive advantage
Recruiting and Retaining Talented Employees:
Implementation Issues

27. Key Human Resource Practices to
Attract and Retain Talented Employees
 Spend considerable effort in screening job applicants, selecting only those
with
 Suitable skill sets
 Energy and initiative
 Judgment and aptitudes for learning
 Ability to adapt to firm’s work
environment and culture
 Put employees through training
programs throughout their careers
 Give promising employees challenging, interesting, and skills-stretching
assignments

28.  Rotate employees through jobs with great content, spanning functional
and geographic boundaries
 Encourage employees to
 Be creative and innovative
 Challenge existing ways of
doing things and offer better ways
 Submit ideas for new products or businesses
 Foster a stimulating work environment
 Exert efforts to retain high-potential employees with excellent salary and
benefits
 Coach average employees to improve their skills
Key Human Resource Practices to
Attract and Retain Talented Employees (continued)

29. Building Core Competencies
and Competitive Capabilities
 Crafting the strategy involves
 Identifying the desired competencies and
capabilities to build into the strategy to help
achieve a competitive advantage
 Good strategy execution requires
 Putting desired competencies and capabilities in place,
 Upgrading them as needed, and
 Modifying them as market
conditions evolve

30. Example: Intel’s Core Competence
Design and mass production
of complex chips
for personal computers

31. Example: Procter & Gamble’s
Core Competencies
Superb marketing-distribution skills and R&D
capabilities in five core technologies - fats,
oils, skin chemistry, surfactants, emulsifiers

32. Example: General Electric’s
Core Competencies
Developing professional managers with
broad problem-solving skills and
proven ability to grow
global businesses

33. Example: Disney’s Core Competencies
Theme park operation and
family entertainment

34. Example: Dell’s Core Competencies
Capabilities to deliver state-of-the-art
products to customers within days of next-
generation components coming available and
at attractively low costs

35. Example: Toyota’s Core Competence
Legendary “production system” giving it
the capability to produce high-quality
vehicles at relatively low costs

36. 1. Develop ability to do something
2. As experience builds,
ability can translate into a
competence or capability
3. If ability continues to be polished and refined, it can
become a distinctive competence, providing a path
path to
competitive advantage!
Three-Stage Process of Developing
Competencies and Capabilities

37.  Develop ability to do something
 Select people with relevant skills/experience
 Broaden or expand individual abilities as needed
 Mold efforts and work products of
individuals into a cooperative effort
to create organizational ability
Step 1 in Developing Competencies

38.  As experience builds and company learns how to perform the activity
consistently well and at acceptable cost, the ability evolves into a
competence or capability
 Typically, a capability or competence emerges from establishing and
nurturing collaborative relationships between
Individuals and groups in different departments and/or
A company and its external allies
Step 2 in Developing Competencies

39.  If company masters the activity, performing it better than rivals, the
“capability” or “competence” becomes a
 Distinctive competence and
 Holds potential for
competitive advantage
This is the optimal outcome of the process
of building capabilities-competencies!
Step 3 in Developing Competencies

40. 1. Competencies are bundles of skills and know-how growing
from combined efforts of cross-functional departments
2. Normally, competencies emerge incrementally from various
company efforts to respond to market conditions
3. Leveraging competencies into competitive advantage requires
concentrating more effort and talent than rivals on
strengthening competencies to create valuable capabilities
4. Sustaining competitive advantage requires adjusting
competencies to new conditions
Managing the Process of Building
Competences: Four Key Traits

41.  Internal development involves either
 Strengthening the company’s base of skills, knowledge,
and intellect or
 Coordinating and networking the efforts
of various work groups and departments
 Partnering with key suppliers,
forming strategic alliances, or maybe
even outsourcing certain activities to
specialists
 Buying a company that has the required capabilities and integrating these
competences into the firm’s value chain
Approaches to Developing
Competencies

42.  Competencies and capabilities must
continuously be modified and perhaps
even replaced with new ones due to
 New strategic requirements
 Evolving market conditions
 Changing customer expectations
 Ongoing efforts to keep core competencies up-to-date can provide a
for sustaining both
 Effective strategy execution and
 Competitive advantage
Updating Competencies and
Capabilities as Conditions Change

43.  Training plays a critical role in implementation when a firm shifts to a
strategy requiring different
 Skills or core competences
 Competitive capabilities
 Managerial approaches
 Operating methods
 Types of training approaches
 Internal “universities”
 Orientation sessions for new employees
 Tuition reimbursement programs
 Online training courses
Strategic Role of Employee Training

44. Competitive Advantage Potential
of Competencies and Capabilities
When it is difficult to outstrategize rivals
with a superior strategy . . .
. . . Best avenue to industry
leadership is to out-compete
rivals with
superior strategy execution!
Building competencies and capabilities
rivals can’t match is one of the
best ways to out-compete them!

45. Conclusions
 HR – ensure competitive advantage by aligning staffing with strategic
objectives
 Manage change (external and internal forces)
 Organisational size affects the presence and formality of HR practices and
procedures

46. Reading
 Cassell, C., Nadin, S., Gray, M., & Clegg, C. (2002). Exploring human
resource management practices in small and medium sized
enterprises. Personnel Review, 31(6), 671-692.
 Guo, C., Brown, W. A., Ashcraft, R. F., Yoshioka, C. F., & Dong, H. K. D.
(2011). Strategic human resources management in non-profit
organizations. Review of Public Personnel Administration, 31(3),
248-269.
 Torrington, D. (2008). HALL. L.; TAYLOR, S. Human resource
management, 5.
 http://odi.dwp.gov.uk/disability-statistics-and-research/disability-
facts-and-figures.php#imp