Strategic Human Resource Evaluation
Cabrera, Angel, Cabrera, Elizabeth F., Human Resource Planning
Every day more organizations recognize that their people are a source of competitive advantage. As a result, HR departments are evolving from playing a merely administrative role to becoming "strategic partners" responsible for contributing to the achievement of business objectives. This evolution requires that new ways of defining and assessing HR success be developed. Traditional operational measures of internal efficiency are not sufficient. HR departments must now be able to demonstrate the value of their strategic contributions.
This article describes a framework for HR evaluation that can help assess the impact of HR on the organization's business objectives. It then presents information that HR directors from 72 companies in Spain provided regarding their HR evaluation practices, as well as the roles realized by their HR departments. The findings illustrate the current state of HR evaluation and show how, as HR departments assume more strategic responsibilities, their evaluation systems become increasingly sophisticated.
Traditionally, many human resource departments measured their accomplishments by how busy they had been (Cascio, 1991): how many people they had recruited or interviewed, how many hours of training they had provided, or how many grievance procedures they had handled. This practice responded to a view of HR as an administrative support function needed to carry out personnel-related activities. This conception of the HR function is changing as organizations begin to realize the potential competitive value of their people (Wright, et al., 1994). More and more organizations are making conscious efforts to design HR practices that allow them to develop the strategic value of their people. This new approach, referred to as strategic human resource management (SHRM), calls for an expanded HR role that includes strategic as well as administrative functions (Boxall, 1996; Kane, 1996; Purcell, 1995; Schuler, 1992). Changing the focus of HR also requires that new ways of defining and assessing HR success be developed.
According to Ulrich (1998), the modem HR function encompasses four complementary roles. The first role, administrative excellence, is important because it is an immediate way of contributing to the overall efficiency of the organization and it helps build the credibility that HR needs to assume other influential roles. The second role HR professionals must realize is that of employee champion. Recognizing the value of committed, motivated employees, HR must play the critical role of employee advocate. The HR department must be the employees' voice in management discussions and should initiate actions that address employees' issues and concerns.
Two additional roles modern HR departments must realize are those of strategic partner and change agent. Being a strategic partner calls for an ongoing evaluation of the alignment between current HR practices and the business objectives of the firm, and a continuing effort to design policies and practices that maximize this alignment. HR professionals must help determine how the company's current culture, competencies, and structure must change in order to support the organization's strategy. At the same time, the HR department should play a key role in implementing and managing these changes, assessing potential sources of resistance to change, and collaborating with line managers to overcome these barriers (Exhibit 1).
The first two roles mentioned, those of administrative expert and employee champion, are of a day-to-day, operational nature, whereas the roles of strategic partner and change agent represent the emerging strategic dimension of the HR function. In a similar fashion, the roles of administrative expert and strategic partner deal with processes, while the employee champion and change agent roles focus on people.
If this strategic turn in the HR function is taking place, one should expect to see a parallel trend in the way in which the HR department evaluates its own performance. …