Human Resource: The New Age of HR Management – 1

Posted: August 16, 2008 in Theories@Work
Tags: , , , ,

In Search of Directions

searchin for the right direction by

Following up on my previous post, a new argument has reared its head. But before that let us take into account my comrade, Muaz Jalil’s, arguments into consideration. Being the most important resource does not mean it has to be “non-expendable”. And humans tend to be a risky resource because they have the free will of walking out of your office any time they wish.

Let us look into what makes a resource “the most important” resource. The importance of a resource depends on it’s availability and substitutability. These two combined create the value (in monetary and all other value terms) for a resource to the company. If a company was situated in the middle of the Sahara Desert it’s most important (and valuable) resource probably would be water. Therefore Muaz is absoultely right in saying that experienced and skilled Human Resource is still the most important resource for most companies. And yes this resource is also the most risky resource of all.

And companies do not like risks. They do not like it at all.

And this is where Naser, another friend of mine, comes in with his thoughts. He feels HR today has the purpose of making each and every employee dispensable.

Why shouldn’t they?

It is the task of every function to reduce the riskiness of a company and increase it’s profitability. If we look at the recent trends at high performing companies globally we shall see a steady move towards outsourcing core resources. AMD is apparently in the process of outsourcing their chip making factories, their core business. And they are being applauded for it, because it reduces operating cost, increases efficiency and, above all, it reduces risk.

Human Resource, being the most important and risky resource, should come under constant scrutiny and changes to reduce its significance. The function of HR, in the 21st century, should move. HRs role of obtaining, developing and retaining talents should now change. To what, you may ask.

The new role of HR should be in making talents dispensable, breaking down work practices to make work roles generic. so that anything that can be outsourced, is outsourced.

Because only then you shall enough money for those who are actually indespensable and can never be replaced.

  1. somz says:

    All organization strive to attain the competitive edge through their people, process & product. And the one that drives process & product is the people. I always wonder the paradox that organizations face – the more you train your employees to have that edge, the more they become hot targets for head-hunting. While reading through your blog I was wondering all the while your take on the unavoidable presence of indispensable resources of a company. Your last statement addressed that!

  2. drabir says:

    Comments on the same post from facebook

    Mohammad Muaz Jalil wrote
    at 5:25pm
    This time i cannot oppose the view but hey i still have something to say (nothing new). What Drabir says is interesting; it seems in a way HR’s chief role is to make labor homogeneous (perfect substitutability). Ain’t this any economist’s chief dream (economists have a knack for assuming the most outlandish of stuffs).

    I mean if individual employees are dispensable then whats the harm. I mean if i am dispensable (FYI I AM NOT) then it would imply so are others (since no ‘one’ individual is important by assumption). Therefore it should logically follow that perfect substitutability implies low barrier to entry in to the job market. If u lose jobs dont worry others are too and so u can get their job and they can get yours.

    This is Efficient Allocation of Resources ———- Obviously in the long run (in the short run you might have nightmares, suffer depression, zero income, family issues……all of which can be summed up under the heading : Adjustment Period or Frictional Unemployment?!)

    Naser Chowdhury (Standard Chartered Bank) wrote
    at 8:40pm
    I think this statement might put things in better perspective: Whose interests is HR supposed to serve – The company or the employees? I feel the answer to this rather simplistic question might help solve most arguments.
    Take both perspectives into consideration:
    a) hr values human talent and keeps its employees interests above all else: would anyone ever have put anything resembling that if some pundit consultant hadnt claimed that keeping employees happy increases productivity and profits?

    Naser Chowdhury (Standard Chartered Bank) wrote
    at 8:45pm
    b) hr makes employees dispensable: the purpose of hr is to manage it’s human resource in a manner as to maximize the company’s welfare.if this is true (duh!) Then it’ll only invest in employee welfare as long as it serves the company’s interests. Making any employees indispensable is not in the company’s best interests. Period.

    Monwar Hussain wrote
    at 10:58pm
    The ‘fungibalizing’ argument is also present in Thomas L. Friedman’s ‘The World is Flat’, where Wipro CEO Nandan Nilkeni (sp?) discusses that tasks that are fungible will be made fungible. He, however, stops at one point, the human point, where is can not really be made fungible. Ultimately, that makes HR’s desired goal utopian. Hence, HR’s striving to retain or dispense with minimal loss, and hence also its striving to measure and motivate.

    For the Sahara company, water will still be the second most important resource. I mean, bakoron-e jeorkom ‘hosh’ ba ‘akar’ ujjo (silent) thaake, sherokom human factor taao ujjo rakhi amra, but that doesn’t necessarily decrease it’s importance.

    Drabir bhai, have a read of this if possible: I think your argument will only be fulfilled once that happens. Until and unless that, the macro level premise remains that all activities within the human realm are for and by humans, hence humans will remain the priority. The whole organization is technically HR, core HR just delivers, theorizes and activates. I, for example, ‘look after’ GP’s Performance Management Process, but it is ‘done’ by 2500 regular employees and their appraisers. So all these people are doing their part, their way, be it making talents more dispensable, or rather, motivating the individual. It’s a dilemma, of course, just like I am facing one in describing what is going on in my home rationally or supernaturally. I can of course stretch a great deal to fit the rational explanation, but if I add in a little bit of the supernatural, it starts to make so much more sense. Just like that, HR can always try to make people fungible, but in the final analysis I do not see the increasing marginal utility worth it, hence the change in direction to more ‘traditional’ methods.

    Monwar Hussain wrote
    at 11:27pm
    “in the short run you might have nightmares, suffer depression, zero income, family issues……all of which can be summed up under the heading : Adjustment Period or Frictional Unemployment?!”

    Heartless economists! Cheh!

    Naser Chowdhury (Standard Chartered Bank) wrote
    at 12:25am
    GPs HR talking about the marginal utility of employees…touching 😛 there goes my last bit of faith in HR!! Lol!

    Monwar Hussain wrote
    at 12:30am
    Dhur beta, sheta koi nai to! Ami koisi manush ke fungible kora ta ultimately worth it na, purely economic viewpoint theke to botei, aaro all-around viewpoint guli thekeo.

    Anyway, I happily assume you were joking! 🙂

    Drabir Alam wrote
    at 10:05am

    Monwar, the ideas I’m talking about are neither radical, nor new. They are in practice right now in most of the organizations we work for. Your reference to GP is particularly ironic because GP is going through this exact exercise right now. Through job evaluation. role analysis and new work structure a company receives a list of people who are not, as you put it, “fungible”. An output of the same process is a list of people who are.

    And for further clarification, my argument applies only to the absolute bottom end of the organizations. My last statement, I think is enough to state that I believe some people will be indispensable for the company and can never be replaced. By focusing your resources more on these people you not only reduce your risk, but also your resources are efficiently distributed.

  3. Saad says:

    HR has one simple role…. to manage the resource called Human Beings as cost effectively as possible. If you accept this one idea then everything is easy to figure out. Let us start by talking about the “indispensables”. Any smart company or rather its management knows that spending behind retaining and motivating all the people within the company is just too expensive. So, you carry out your exercises and they tell you which roles are the key ones and which people are the right people. Then you simply allocate a good sum to retain them and carry out your generic activities for the others. So, as a good HR practitioner you must first understand that not everyone is important. Yet you must realize that everyone is dispensable and again not everyone can be done with at the same time. Its a fine line.

    Let us now look at the hot HR topics such as talent sourcing, culture development etc. These are smart tools to ensure that we are dispensable and cost effective. Say you join an organization and the culture is literally crap. After a certain time you would want to leave. Now what if you are important to the company? The company would want to retain you. Now lets get you to work in a company with good culture. You would be self motivated to perform, less prone to leave and at the same time more people would want to join your company making you more easy dispensable. With talent and development its the same idea. Through employer branding you ensure that you have fresh recruits ready and willing to fill any vacancies and through development you ensure someone is ready to take over a key role if the current job holder leaves.

    So, HR does all of these things to ensure that attrition, replacement and work continues simultaneously without creating much of a buzz. And at the end of the day it is all done for cost effective management of the resource called Human Beings so that not too much is taken from the share-holders for managing their assets by the resource called Human Beings.

  4. Anamika(Editor HR Today) says:

    HR though has come into picture but only because of it Recruitment need.HR was developed to create bridge between the management and the employees but it generally seen being partial to the management side.Recruitment is not only function which HR has to cater too .A company with skilled employees but with no motivation and performanse appraisal will lead to focus more on recuritment and recruitment.

    I am looking forward for a day where HR is not considered as a additional burden but is considered as a essential and most indespensable part for Indian corporates.

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