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Strategic HR: Reactive or Proactive Role?

May 24, 2021

The role of human resource has traditionally been seen as being a supportive role. It has always been perceived as a cost centre as its efforts typically have an intangible outcome, which is difficult to quantify unlike sales and operations. Therefore, HR finds it difficult to justify its existence in the organizations. Traditionally, the human resource department is called into action only when quick fixes are required like finding a replacement urgently when an old employee suddenly decides to quit or organizing rangoli competitions or festivals or get togethers for the employees and their families. That is how HR roles have typically been perceived by many employees and their organizations.

However, with the changing work environment, the role of HR has evolved into a proactive and strategic role rather than simply a supportive and reactive role. To achieve their objectives, organizations have realized the importance of HR and the strategic role that it plays. It has become important for organizations to understand how to align human resource with their strategic objectives and hence changed the perception of people towards this important function that had been neglected for years.  HRM has become the backbone of organizations by helping them to achieve their objectives and create worth for all their stakeholders. HRM has become more proactive and developmental in its role. Increase in competition and the changing nature of employment contracts has imposed a demand on HR to evaluate its intangible contribution to the organization. Earlier, HR struggled to highlight its contribution, but it has now been able to evaluate its contributions by relating the best practices and work culture that it has put into place with the improved performance of the organization. By inducing a proactive culture with regard to better human resource planning and strategic training to its employees, and aligning performance evaluation and rewards with the objectives of the organization, HR has increased the importance of its function and its role in the growth of the organization.

In the current business environment, HR polices, strategy, system and practices have a direct influence on employee performance and overall organizational outcomes. It results in achievement of the higher organizational goals, reduced absenteeism, high employee satisfaction and reduced employee turnover at the organizational level. At the group and individual levels, it results in better coordination, higher job involvement, commitment and better team performance. HR is using various performance indicators in the form of increased productivity, return on investment, increased innovation in product and services as a result of their proactive role in the organization. Despite all of the above, establishing the link between HR and a firm's performance has been a tough task because improved productivity, innovation and performance is just one side of the coin. The other side of the coin are the environmental factors (economic, political, technological and social) that may also contribute to an increase or decrease in the financial performance of the firm. Hence, making HR a scapegoat for the dire financial consequences of the firm would not be fair.

Bhupinder Arora, Assistant Professor, Unitedworld School of Business (UWSB)

Disclaimer: The opinions / views expressed in this article are solely of the author in his / her individual capacity. They do not purport to reflect the opinions and/or views of the College and/or University or its members.

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