Table of Contents

Table of Contents.................................................................................................................1
1. Introduction......................................................................................................................2
2. Key Concepts..................................................................................................................2
2.1 Work..........................................................................................................................3
2.2 Psychological contract...............................................................................................3
3. Identifying the HR functions supporting growth.............................................................4
3.1 HR Consultant............................................................................................................5
3.2 HR Solutions..............................................................................................................5
Staffing........................................................................................................................6
Industrial Relations (IR)..............................................................................................6
Learning & Development (LD)...................................................................................6
Performance Management (PM)..................................................................................7
Compensation and Benefits (CB)................................................................................7
3.3 HR Operations...........................................................................................................8
4. Conclusion ...................................................................................................................8
5. References........................................................................................................................9
1. Introduction
As the Human Resources (HR) manager of the furniture manufacturer, I will need to
articulate the key HR functions needed for the organization’s growth goals.

This organization is looking to grow over the next 5 years by expanding the current
facilities and introducing new product offerings. These new offerings such as furniture
re-upholstering, restoring, creative design and the use of new materials are totally new to
the organization and may require a new operational framework to ensure its success.

The organization wants to achieve these growth objectives while maintaining the same
customer service attainment levels that it has now.

In order to articulate the key HR functions that drive growth, we will need to look at the
key concepts of HR, which is work itself and the psychological contract between
employee and employer.

2. Key Concepts
The rapid pace of technological change by the personal computer (PC) and the internet
and the intensity of competition have changed the present working landscape. These
changes have resulted in different attitudes to work by the worker and the organization.

It the past, change was slow, the intensity of competition was low and organizations
could develop at their own pace. Workers were rewarded according to tenure and loyalty
to the organization. Workers tended to grow within the organizations they had joined
since they left school and work there till retirement.

The intense competition from low cost manufacturers shook the world order. With the
GATT and subsequent WTO trading framework, wave after wave of challengers took on
incumbent organizations in the 80’s and 90’s. First the Japanese took on western
manufacturers with their low priced products. Then the Koreans humbled the Japanese
with even lower priced products.

Then the Chinese came on with ultra low cost products and the Indians with ultra low
service offerings, destabilizing large numbers of workers thorough the world.
Manufacturers such as Seagate and Thompson shut down facilities in Malaysia and
relocated to China for better labor cost benefits.

With the internet and networked world that we are now in, the worker can be mobile and
work from any location. Thus the growing organization has restructured to take into
account the new paradigms in the workplace. Performance and contribution in building
the organization are the new tenets for companies seeking growth and profitability. Two
key factors drive these two tenets, work/talent relevance and the psychological contract.

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2.1 Work
Work has now moved to a more self managed work style versus the control and monitor
work style of the 20th Century. This is due to the shift from a control mentality to a
committed mentality of the worker who embraces accountability (WEC 2004, p52). This
was the result of corporate downsizing and delayering of the 1990’s, when responsibility
was spread over a shrinking number of workers and managers.

Workers are expected to embrace a continuous or lifelong learning to consistently

upgrade their skill sets and knowledge to remain useful in their contribution to their
organizations.

The core/complementary model of employment is a framework to segmentise workers

into core and non core workers.

This model views core workers as talents valuable to the organisation in terms of critical
skills, expertise and knowledge which enhances the organization’s competitive
advantage. These can be charismatic leaders, process improvement engineers, research
scientists, astute receptionists and high performing sales people (WEC 2004, p66).

Non-core workers are talents needed to ensure the smooth running of the organization
such as project implementors, security guards, gardeners, warehouse personnel, program
code writers who can either be outsourced as contract staff or hired as temporary staff
(WEC 2004, p67).

2.2 Psychological contract

The psychological contract developed from role expectations. This is an unwritten

understanding between the worker and employer which lays out the expectation between
both parties.

The worker expects the employer to fairly take care of the worker’s compensation and
benefits and also to tell and guide the worker on expected deliverables. The employer on
the other hand expects the worker to faithfully deliver the results and be loyal and
grateful to the manager and organization (Robbins, SP 1998, p253).

The psychological contract is recognized as a powerful tool to predict behavior at the

workplace. Thus it is an important framework to use to ensure communications on role
behavior go out as accurately as possible especially during the orientation or on boarding
process (Robbins, SP 1998, p253).

The psychological contract can be grouped into two key aspects, the relational contract
and the transactional contract.

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The transactional contract is one where the worker’s identity is based on their skills and
is paid primarily for the performance of their skills. Switching cost is low and hiring and
firing in this space has low switching cost. These can include sales people, programmers,
accountants and engineers (WEC 2004, p68).

The relational contract is one where the worker’s identity is intertwined with the
organization’s identity and the worker is paid for performance and non cash benefits such
as country club membership, increased job scope opportunities and frequent exposure to
the leadership and other departments of the organization (WEC 2004, p69).

The psychological contract today is somewhere in between these two aspects, depending
on the talent’s value to the organization and on how well the talent values the
organization.

3. Identifying the HR functions supporting growth

In order to grow the organization, the committed worker needs to focus on their roles and
contributions to deliver the required results. Skilled, motivated and performance
orientated workers should be able to deliver those results (Khatri, N 1999, p520). As
such HR functions as a strategic partner to the business managers in achieving those
results (Khatri, N 1999, p516).

The HR team is organized into three functional groups (Viewpoint 2002) as follows:
1. HR Consultant
2. HR Solutions
3. HR Operations

The HR Consultant role is that of a strategic partnering role to the business units, giving
inputs and executing HR programs within the business units and acts as the interface in
communicating the business unit’s feedback and requirements to the HR Solutions teams
(Khatri, N, Budhwar, PS 2002, p169, 182).

The HR Solutions are the teams who focus and are experts in the following core HR
functions that deliver the expectations of the psychological contract. These are the
experts in staffing, industrial relations and labor laws, training & development,
performance management and compensation and benefits.

The HR Operations team support the personnel requirements of the employee, namely
payroll execution, pension and health plans implementation, leave applications. They
basically maintain the record keeping and administrative aspects of the employee.

We will now elaborate as to why the following functions are important how they will
support the growth strategy.

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3.1 HR Consultant

The HR Consultant’s role is in providing support on HR programs and policies to the

business unit leaders to achieve their goals and objectives. They need to have credibilty,
sound business acumen and leadership skills (Sheehan, C 2005, p. 198)

The HR Consultant takes the lead in exploring the directions and requirements of the
growing business unit to ensure that the new workers required will be of the right fit and
the proper programs are in place to ensure performance of these new workers (Goodge, P
2005, p33).

They also lead HR program implementation in the business units by getting program buy
in from the various unit leaders or managers and in implementing those initiatives, for
example self service online learning, team member on boarding process and
compensation plans.

This is a pivotal role especially during the organization’s strategy formulation and
implementation phases. They influence the strategic decisions of the senior management
teams with their knowledge of worker skill set availability in the market, the costs of such
skill sets and other details such as internal worker role reassignment options and timeline
details for on boarding to meet the strategy’s implementation requirements.

For example, if the organization wants to offer re-upholstery as a product offering, the
HR Consultant can provide inputs on the kind of skilled workers available, their
compensation expectations in terms of pay and benefits, retention risks in terms of job
hopping and job enrichment.

And if the organization needs a proposal on the cost benefits of going into the re-
upholstery business, the HR Consultant then interfaces with the HR Solutions in
assessing and developing this new business unit’s job scope and head count requirements
based on the unit’s performance expectations in terms of revenue, profitability and
output.

3.2 HR Solutions

The HR Solutions are grouped into their own specialized roles which focus on the core
drivers of worker performance as elicited by the psychological contract. These are the
experts in staffing, industrial relations and labor laws, learning & development,
performance management and compensation and benefits.

These specialized teams work within their scope and then team up together in
collaboration with the HR Consultant and business unit leaders to formulate the HR
solution for the business unit.

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Staffing
Using the re-upholstery business as an example, Staffing specialists will formulate the
various roles and headcounts needed and generate job descriptions jointly with the HR
Consultant inputs. The Staffing specialist will then create the cost of talent acquisition
and the retention outlook based on current and forecasted market demand for the
respective skill sets needed (Goodge, P 2005, p33).

They will also generate the structured interview questionnaire and hiring steps such as
telephone interviews, face to face interviews and site tours for potential hires to be used
by the hiring manager to ensure that the talent is hired with role and organization fit in
mind, aligned to the expectation of the psychological contract (Khatri, N 1999, p517).

These specialists know or know how to find what is available in the market for talent.
They network intensively with other recruiters to ascertain talent availability from the
schools and industry and seek to understand the motivation of talents and how these
talents can fit into the organization. In this example, the Staffing specialist can go to a
variety of recruitment agencies to ascertain the available talent pool for experts in the re-
upholstery business or ask internal employees on where such expertise can be found.

Industrial Relations (IR)

The IR specialist will bring to bear the current legal and social framework that exists for
the respective roles required by the new business requirement. In the re-upholstery
example, the IR specialist can present current and future scenarios of union activity,
workers and governmental legalistic stances in the workplace and any collective
agreements in the market that have been made for re-upholstery workers. These inputs
will be used by the HR Consultant and business unit heads in the design of the
organizational culture needed for this new re-upholstery business.

Learning & Development (LD)

The LD specialist creates the training and learning assessment programs to ensure that all
talents within the organization are equipped with the appropriate skill set and knowledge
to deliver on the performance expectations. In the re-upholstery example, the LD
specialist creates the training program with the inputs of the HR Consultant and the
current and future trends of the role requirements. The career path or the development of
the talent within the business unit or role will be mapped out and appropriate training
programs recommended.

It is here customer service expectations are ingrained into the talents. The training
programs will have a focus on customer experience and what is expected from the talents
in delivering that experience to the customer. Best of breed practices from the existing
business can be embedded into the talents by workshops and programs designed by the
LD specialist.

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In line with the organization’s need to maintain current customer service levels in its
growth plan, the LD specialist can duplicate the best practices from the existing business
by interfacing with the business unit’s team members (Shimko, BW, Swift, MS 2000,
p.623). The specialist can observe and document the behaviors and responses that drive
the individual customer attention, generate a training program complete with role playing
workshops for the behaviors to be duplicated by the talents in the new business unit.

The socialization program or the orientation and adaptation process into the organization
is also designed by LD to ensure that the new talent sees the reality within the
organization and that the talent makes the necessary adjustments to their new role and
organization’s culture. This is to ensure the talent fit is successful in line with the
psychological contract (Robbins, SP 1998, p607).

Performance Management (PM)

The PM specialist creates the performance assessment programs to ensure that all talents
within the organization are performing to or beyond expectations and what needs to be
done to ensure compliance to the performance metrics.

In the re-upholstery example, the PM specialist confirms with the HR Consultant on the
metrics to be measured such as output, attendance and timeliness, works with business
analysis team within the organization to capture such data and to generate the dashboards
or reports to the business unit leader for action.

It is here that customer service monitoring systems are designed. Practices such as
service level audits, mystery customers, customer feedback forms are established to get
feedback on the execution of the customer service training. Such feedback can be
measured and made a metric on the performance dashboard or plan of the team or
individual.

Compensation and Benefits (CB)

The CB specialist creates the compensation plan of base salary, incentives and bonuses
and the retention plan in terms of stock grants, health plans, pension plans and other
market job level benefits such as allowances for housing and transportation, work hours
and work flexibility and perks in terms of company expenses such as company car and
business class travel, and standard of hotel accommodations.

These specialists know or know how to find what the market rates are and compensation
plans for the specific job categories. They network intensively with other CB specialists
and exchange or share notes on retention plans and perks across the jobs and functions.

In the re-upholstery example, the cost of these talents are communicated to the Staffing
specialist who will then create the cost of talent acquisition and the retention outlook
based on current and forecasted market demand for the respective skill sets needed.

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The compensation plan can be designed to factor in the customer service performance
levels based on the metrics as designed by the PM specialist above.

3.3 HR Operations
The HR Operations team manages the administration of the employee records, confirms
what are work and off days, employee leave, compensation, benefits, health plans and the
verification of reimbursements of health and learning expenses. They work together with
finance on the payroll for each employee.

This function can be moved to a self service function where the talent can manage their
own records (except on the compensation and benefits plan) including leave and
submission of reimbursements. The payroll function can be outsourced to finance or
automated as an e-pay slip delivered to the employee’s e-file. To be successful in this
area requires investment in IT infrastructure which could be minimal depending on the
infrastructure available currently.

This team collaborates with the HR Consultant and HR Solutions team to implement the
HR solution for the business unit. In the re-upholstery example, the cost of any additional
equipment such as work attendance user interfaces, timeline and cost of implementation
of the benefits and compensation plan will be provided to the HR Consultant to feedback
to project and business unit managers.

4. Conclusion
With the HR Consultant as the primary strategic HR partner to the business units, the
strategy of the organization can be executed well by business unit leaders in collaboration
with the HR Consultants, the HR Solutions and HR Operations functional teams
(Shimko, BW, Swift, MS 2000, p.623).

Within this framework, the psychological contract is leveraged to favor both the
employer and the talent as it ensures expectation and fit for both parties are recognized
and agreed upon mutually. The committed talent will be well motivated to perform at or
beyond expectations.

And the organization will be very well geared to maximize its growth plans from talents
acquired using this framework.

As such, over the next five years of the growth plan, customer service levels can be
maximized and operational efficiencies optimized just by executing on these key HR
functions.

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5. References
Goodge, P 2005, Ready for HR partnering?, Human Resource Management International
Digest, vol. 13, no. 4, pp. 32-36, viewed on 4th June 2006, Available from Emerald
Fulltext.

Khatri, N, Budhwar, PS 2002, A study of strategic HR issues in an Asian context,

Personnel Review, vol. 31, no. 2, pp. 166-188, viewed on 4th June 2006, Available from
Emerald Fulltext.

Khatri, N 1999, Emerging issues in strategic HRM in Singapore, International Journal of

Manpower, vol. 20, no. 8, pp. 516-529, viewed on 4th June 2006, Available from Emerald
Fulltext.

Sheehan, C 2005, A model for HRM strategic integration, Personnel Review, vol. 34, no.
2, pp. 192-209, viewed on 4th June 2006, Available from Emerald Fulltext.

Shimko, BW, Swift, MS 2000, Choose an HR Star for competitive edge, Management
Decision, vol. 38, no. 9, pp. 616-625, viewed on 4th June 2006, Available from Emerald
Fulltext.

Robbins, SP 1998, Organizational behavior, 8th edition, Prentice-Hall Inc, Upper Saddle
River, New Jersey.

Viewpoint 2002, Re-engineering HR delivery at IBM, Human Resource Management

International Digest, vol. 10, no. 6, pp. 9-12, viewed on 4th June 2006, Available from
Emerald Fulltext.

WEC 2004, Organizing work and managing human resources BUS143301, 1st Edition,
World Education Council.

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