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www.economictimes.indiatimes.com | December 19, 2020
If the leadership does not recognize or appreciate the significance and potential of the HR function, it is likely to focus on efficiency, restrict authority and promote operational activities in the HR department.


The Human Resource (HR) function is an integral part of most organisations. The function is mainly responsible for managing and developing human resources, i.e., employees of the organisation. The scope of the function includes activities like recruitment, selection, training, compensation and benefits, performance management, and employee and labour relations. The objective of the HR function is to design and execute these activities such that organisations are able to attract, develop and retain the right employees, and thereby attain performance goals. Employee performance and contribution to the organisation is dependent on the following parameters:

· Attractiveness of the job (e.g., knowledge, skills, ability requirements)
· Opportunities for professional growth (e.g., learning, training, promotion, career path)
· Satisfaction with the remuneration (e.g., salary, incentives, bonus, increment)
· Favourability of the work environment (e.g., values, beliefs, policies, superior and peer relationships)

This is what the theory of HR function confers. However, in reality, several organisations experience a variety of employee related issues at some point in time. These issues include dissatisfaction, disengagement, absenteeism and turnover, and they have a direct impact on organisational performance.

This indicates that the practice of HR function in some organisations may differ from the theory behind it. Let us try to understand possible reasons for this divide.

Focus on efficiency rather than effectiveness
The goals of an HR department are centred on the efficiency of HR processes and practices. Emphasis is on volume of employee related activities and timeliness of their execution, smoothness of the day-to-day operations, minimisation of mistakes and complaints, and implementation of HR policies. Appropriate execution of processes is paramount, and this guides the key result areas, decisions and actions of the department. Limited attention is paid to understanding, tracking or evaluating the impact of HR processes on the organisational culture, and employee attitude, career progression and performance. Although the HR department maintains efficiency of processes, it fails to ensure that they have the desired effect on the organisation in the long-term. The lack of outcome orientation also prevents the HR function to reinvent itself with the changing business environment, evolving trends and emerging workforce.

 
Lack of authority
The lack of focus on effectiveness is also caused to some extent by little authority and power to bring fundamental changes at the level of policies and practices. The HR department’s role is relegated to the execution of HR activities like recruitment, disbursement of payroll, benefits roll out, and exit interviews, and ensuring compliance of executed processes to defined rules and policies. Such activities are more tilted towards management of the workforce. HR department’s role in developmental activities is restricted to organising and facilitating training programmes. Usually, it is not even involved in making decisions about the content, or assessing the effectiveness of training. HR department does not have the authority to provide inputs for HR processes. It does not have the power to design jobs, identify and place right people in the right job, define performance management, enable professional development, and develop an appropriate organisational culture. Other departments perceive it as a weak cog in the wheel of the organisation. This further constrains the prospects of the HR department. It is not expected, and consequently is not able to create a fundamental impact in the organisation.

Absence of strategic HR
Strategic HR implies alignment between business and HR strategy. Organisations practising strategic HR ensure that their HR processes, policies and practices are in line with their strategic goals. Absence of strategic HR leads to outcomes like frequent layoffs. Many organisations do not adopt strategic HR because of the insufficient understanding about its association with organisational performance. Besides, strategic HR involves long-term planning, and repercussions for multiple activities, which makes it complex to quantify, and thus measure. Organisations are unwilling to invest cost, effort, resources and time in something that does not show clear, certain and immediate returns. As a result, HR department opts for a safer approach by considering industry benchmarks for taking decisions on processes, policies and practices. Even if it recognizes value of strategic HR, lack of authority prevents the HR department from exercising it.

Bridging the Divide
Thus, limited focus on effectiveness, lack of authority and absence of strategic HR can be some of the major reasons for the divide between theory and practice of the HR function. There is one common thread binding the three reasons. And that is awareness and attitude of the top management.

Organisational leadership is essentially responsible for the nature of objectives, level of authority and contribution of the HR function. It also determines the choice of people for the HR department, and expectations from them. If the leadership does not recognize or appreciate the significance and potential of the HR function, it is likely to focus on efficiency, restrict authority and promote operational activities in the HR department. Although this form of HR function is able to manage the workforce, it is not equipped to introduce initiatives that can differentiate the organisation and foster a mutually beneficial relationship with employees. It is unable to attract, develop and retain capable employees in a changing industrial scenario, and a competitive job market. It fails to promote employee satisfaction, motivation and engagement, which can adversely impact employee and organisational performance. Uncertain business environment, shuffling in the top management, unclear or inconsistent business strategy, and priority to short-term costs and profits can further debilitate the HR function.

The divide between theory and practice may not be easy to identify in all kinds of organisations in which it exists. For instance, it may not be apparent in small organisations that are in the growth phase, e.g., technology startups. However, the divide may be clearly visible in medium and large sized organisations where the growth has stabilised, and there is limited scope and promise for incremental growth, e.g., IT service organisations. Even when the same HR function is conducted in a consistent manner over an organisational lifecycle, the divide may become evident only at the time of maturity. At this time, it can be structurally, administratively, culturally and procedurally complex and challenging to close the divide, and make any rectification.

Thus, it is crucial to define and execute the HR function in the optimal manner in the very early stages of organisational life. If the top management makes a sincere effort towards developing a sound understanding, mindset and approach towards the HR function from the very beginning, it can go a long way in enabling a competent and committed workforce to contribute to organisational performance.

-Prof. Smita Chaudhry, Associate Professor - Human Resources, FLAME University

(Source: https://hr.economictimes.indiatimes.com/news/hrtech/organization-development/human-resource-as-an-organisational-function-the-divide-between-theory-and-practice/79806801)