Human Resource: Role of HR In Building Business Leadership

Published by MBA Skool Team, Published on May 19, 2013

The Article has been authored by Arvindh Kumar P S and Abirami R from Vanguard Business School

We are in an era dominated more and more by the service industry and less by the manufacturing industry. This scenario is a complete reverse of what was happening exactly few decades back and this paradigm shift laid the foundation for garnering attention towards Human Resource Management. The reason is easy to understand, service sector was aligned more towards humans rather than machines and hence there came the requirement to manage humans effectively to get the best out of the new business model.

One of the major emphasis today is to create effective leaders. It is a need these days to inculcate leadership skills in employees for an effective organization. HR  plays an important role in developing leadership skills within an organization. Good leadership requires the right attitude and behavior.

Leadership is lifting a person’s vision to high sights, the raising of a person’s performance to a higher standard, the building of a personality beyond its normal limitations.

—Peter Drucker

Before understanding the role of HR in business leadership, let’s decode the responsibilities of the HR in any organization. There are varied number of responsibilities that are associated with this job -  Recruiting and Retaining the best talent,  Organization  Structure, Employee Relations, Training & Development, Performance Management and Compensation Design based on skills.,. HR is comparable to an all-rounder in the cricket field where in he should be the master of more than one required skill set. The above trait will help him immensely in steering the business towards the path of glory. 

Let’s discuss the functionalities in a more vivid manner so that we get the whole picture which would help in understanding the context better.

Recruitment acts as the quintessential responsibility of the HR department. The motto is to hire the right person for the right job. This involves the capability to identify the talents of the individuals and to make sure that the individual’s skill set matches with the required job description. If they are able to do it to the perfection then they are adding value to the organization which would help them in the long run.

Encouraging and Motivating employees will ultimately improve the work environment as it brings in a more positive attitude towards work. It involves evaluation of individual performance and then rolling out of rewards and benefits scheme based on their respective impact on the jobs. Monetary benefits can satisfy employees only to a certain extent and sometimes it may backfire as well. So, it is the responsibility of the HR to find ways to keep the energy levels in sync and guide it towards the proper functioning of the organization.

Planning for future also falls inside the purview of the responsibilities of HR in an organization. It mainly takes care of the staffing needs by taking into account the current strength and the expected future business. Forecasting should be in such a way that the staff members should neither be too many nor too few as both of them would have devastating effects on the organization.

Problems that are haunting today’s business leaders are creating and maintaining competitive edge, providing better and innovative work environment, decision making with the available information and managing the growth properly.

Companies today are faced with the business challenges that force organizations to build new capabilities and explore new horizons. Hence, it is the responsibility of HR to play a crucial role to thwart all these following challenges.

Technology has a huge say on how the organization or business model works. Managers are given the huge responsibility to identify the viable technology from the available set of option for their business model. As the technologies are susceptible to change the decisions of managers can either make or break the business.

Constant Change posts a real threat for organizations as they need to adjust and embrace themselves to never ending changes in market conditions, technology, trends, consumer behavior etc.,. This means that they should be on their toes seeking emerging trends better than their competitors and developing agility to find new ways of doing the business.

Globalization is gathering a lot of pace as organizations are looking for constant expansion and global presence. It puts the managers in a tedious situation as they need to quickly learn and manage the diversity, ambiguity and complexity of the new markets. Managers are also made to think globally and act locally which is easier said than done.

Intellectual Capital determines the organizations ability to travel and sustain their path towards the success. Managers are left with the challenge to identify, attract, develop and retain those individuals who can bring about a positive change in the organization.

Profitability through growth puts the major focus on revenues which is going to speak volumes about the success of the business. Companies that are looking for growth need to seek new customers, new products and new markets. Also managers should be more focused and needs to be aware of mergers, acquisitions and joint ventures which can steer growth rapidly.

Apart from these, the problems that are haunting today’s business leaders are creating and maintaining competitive edge, providing better and innovative work environment, decision making with the available information and managing the growth properly. HR needs to align their roles towards the business requirement which would help them to serve the organization in a better manner. So lets discuss the newer responsibilities of HR for building business leadership

HR professionals should act in sync with the senior management and they should provide the link between the business and organizational strategies. They should in turn challenge the senior team so that credible initiatives are taken at the end of the day for the common good. They should adapt themselves so that they are aligned more towards the strategic role which is difficult but not impossible to achieve.

(i)         As part of the strategic role HR should be very much responsible for defining the organizational architecture. There are two well known models for designing the architecture namely Jay Galbraith’s star model and 7-S framework by Mckinsey & Company. HR can go for either of the models but the most important thing is that they should communicate the same across the organization.

(ii)        HR must conduct a detailed audit to look for those critical components of the company that needs change.

(iii)       Last step is to identify the ways to incorporate the changes and to systematically evaluate their effects on the organization.

Treat people as if they were what they should be, and you help them become what they are capable of becoming.

-Johann von Goethe

HR must be an employee champion which means he should find ways to get the best out of the employees. HR should make the employees feel that they are part of the family so that employees will stay committed and contribute towards the common goal. They also need to spread the importance of positive morale towards work and help the senior managers in achieving the same. Also, HR should act as the representative and voice of the employees in the bigger forums which may help in boosting the morale of the employees.

Only thing that is permanent in any organization is change and HR needs to understand it and act accordingly. Simply it means that they should be the change agents who should build the organization which is capable of withstanding changes. Also, HR plays the protagonist role in bringing culture related changes which is a multi-step process

(i)        First is to clearly define and clarify the concept of cultural change.

(ii)       Communicate why the cultural change is critical to the organization.

(iii)      Identify the gap between the present and the proposed culture by evaluating them.

(iv)      Last is to identify find alternative approaches to creating culture change.

Succession planning is becoming critical for any organization irrespective of their size and it comes under the responsibility of the HR management. Succession planning program is a multi-layered process in which each step is carried out with special attention. It includes the following

Step 1: Talk to the top management to identify the need for succession planning management or talent management in your organization.

Step 2: Need to build a model for Succession planning and management based on the business needs.

Step 3: Get the blueprint inclusive of the roles, goals and responsibilities done in a clear manner.

Step 4: Look to address all the questions surrounding the succession planning and management model.


HR is under enormous pressure from the top management to showcase the importance and the need of the HR activities. The activity may be innovation, culture change, employee engagement or quality management and the intensity of the pressure exerted determines the organization’s culture. The partnership between the business or line managers and HR acts as the cornerstone for the organization to thrive and survive in this ever-lasting rat race. The times have changed and the responsibility of HR needs to be aligned accordingly to close the glaring gap with the changing business model. In this way, HR can aid greatly in building the business leaders who can steer the business towards the success path.

The Article has been authored by Arvindh Kumar P S and Abirami R from Vanguard Business School

References :

A New Mandate for Human Resources – Dave Ulrich, Harvard Business Review, January 1998

Aligning Human Resource and Business Strategy – Linda Holbeche

Effective Succession Planning- Ensuring Leadership Continuity and Building Talent from Within - William J. Rothwell

Views expressed in the article are personal. The articles are for educational & academic purpose only, and have been uploaded by the MBA Skool Team.

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