HR Centre of Excellence
HR Models – lessons from best practice
Initial desk research October 2009
Nick Holley
© Henley Business School 2009
www.henley.reading.ac.uk
Contents
Introduction The classic HR model
Over the last decade a classic model, based on the work of Dave Ulrich et al, has emerged that has three elements (recently he has added to the model but these three remain the core). We don’t need to go into detail but we will simply highlight these three key elements: business partners, shared services and centres of expertise: Business Partners Establish relationships with customers line/ business units Contribute to business unit plans Shared Services Deliver HR services Manage routine processes effectively and
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Drivers for change: •Dissatisfaction in many organisations with HR’s contribution to the restructurings and mergers in the early 2000’s. •Increasing disillusion with HR’s contribution beyond following the latest management fad. This disillusion has led to calls to reduce the cost of HR and to see harder measures of outcomes, whilst increasing HR’s flexibility and business focus. •The move in many businesses to outsource non core activities including HR whilst providing a stronger business contribution by enhancing HR’s contribution to strategic business initiatives. •The change in organisational models themselves that are trying to balance the need for centrally driven efficiencies with locally driven responsiveness. This highlights the challenge of providing strong functional expertise with the need to align with different business needs. •A shift in the role of HR from being employee focused to an organisational and management focus. •The adoption of ERP systems accelerated by legacy fears in the run-up to Y2K and the use of these systems to improve and systematise administrative and HR processes so they become more efficient and consistent whilst linking seamlessly to the front office. As one commentator said: “The human resources function within companies today needs to look at itself much more as a business, because that is how executives are looking at it and
Dr. Ulrich goes on to support the need for HR in today’s business world. He feels that there are 5 critical challenges that businesses face: Globalization, profitability through growth, technology, intellectual capital, and change (Ulrich 126). Conversely, these things do not matter on a competitive scale. All businesses need these things to survive, but they can be attained and copied. The only competitive weapon left is organization (Ulrich 127). That is where Ulrich believes HR plays its most vital role. The differences between the leading businesses in their respective markets is their organization. Top-tier businesses are run efficiently with good HR relations. For businesses to take the next step towards maximizing their operations, they must change the culture surrounding HR and train their HR teams to become sufficient in promoting higher employee morale. Ulrich is convinced that senior operating managers must value the “soft” matters, define and hold HR accountable for its results, invest in innovative practices, and upgrade HR professionals (Ulrich
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