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How to Help Your HR Department Add Value to Company Performance

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Like every other company owned asset or process, the HR department would also play a role ascribed to it – and that means it would respond to expectations and try to deliver according to what it perceives its role to be.

Many business organizations have outstanding HR managers who help bring in and retain people crucial for business. The same people also make huge contributions towards growth of the company. But, at some point or other, people in HR department are seen as little more than gate keepers and primarily as a cost center.

Though everyone knows that the HR is vital for a company retaining its competitive advantage by assuring access to needed talent, few senior management actually accept or make the role of HR clear to the human resources department.

In a modern workplace and in a competitive environment, there are a few things that senior management needs to do to help HR departments use their resources for empowering business.

The first thing is to change the company's attitude towards HR, and make the human resources department understand its role in the new order of things. The human resources department is no more concerned only with gate keeping, but with realization of company objectives: motivation building, employee engagement, and talent retention are more important than ever before.

The senior management is no more the people to whom the HR sells ideas. Well, they need to do that - but the role of the senior management in HR processes is that of "investors" while the people who participate in HR processes are actually those to whom the HR needs to sell their ideas.

Senior management needs to establish that HRD is the ultimate source of revenue even though they may not be at the frontline. The role of HRD in traditional settings is often akin to that of a traditional homemaker, who is taken to be a non-contributing member of the family - until the day, the homemaker dies or chooses to leave.

If things are not transparent then specific human resources solutions need to be linked to specific business results.

While this may be impossible in the case of all processes, they may well be done in the case of a majority of processes. The question is whether anyone cares at all about linking HR processes to business results and measures them, or whether it's all disorganized.

Another challenge faced by HRD that actually seeps down from high up in organizations is the propensity to view training programs and HR efforts as isolated events complete in themselves. In many companies, senior management still hold beliefs that the HR can do nothing more than "arrange" or "organize" things, and few see HR as stepping stones to increased business performance.

One of the biggest challenges for the development of HRD to meet the needs of new economies is that the HRD itself is used to view the organization as a client.

While that might help in some cases to hold the HRD accountable for things it does - such an attitude does not make the HRD a strategic resource partner, and does not help it to focus on solutions to keep increasing the organization's performance in continuity.

Let's give an example of what happens when the HRD sees the organization as a client. In such a case, HRD would always view something as important as employee performance appraisal as inessential, and inconsequential for anyone else but the employee whose performance is being appraised. The linking of employee performance appraisal to improving business performance of the organization never takes place.

To really create value, with the support of senior management, the HRD has to understand that their real focus should be on improving business performance and gaining company objectives, and not confined to maintaining employee files. Maintaining those files is of no use unless positive action is taken to improve employee output.

To have a successful HRD, the processes by which the company adds economic value needs to be identified and the HRD needs to make a measurable impact (whether direct or indirect) on those processes.

At the end, though it's not really so simple as stated here, companies gain either by decreasing costs of production or costs of delivering services, they gain by increasing the supply of services and products which are in demand, they gain by reducing production or delivery of services which do not have demand, and they gain by increasing the prices charged for delivering products or services. If the HRD is successful in supporting any one or more of these activities beyond maintaining employee files - it has value to the company. And it is the job of the senior management to see that the HRD provides that value.