HR will need to have better guidelines in place for individuals in this new atmosphere (Kahnweiler 25-26).
However, there are and will always be two main components that the HR department of any organization will cover. The first is comprised of management, leadership and employee motivation and the other is the traditional realm of HR practices which include performance appraisal, training, recruitment and selection, as well as compensation management (salry and bonuses). In this regard payroll is usually located within the HR department in some respect and there is a certain amount of crossover between HR and the Finance area of any company in this regard. (Lajara, Lillo, and Sempere 38)
However, fundamentally HR is concerned with the human element and the return on investment (ROI) regarding that element has become a primary concern of the business world. Measurement of that return is not as clear-cut as it is in finance. In the business world ROI is composed of the following four elements:
1. The inflow of returns produced by that allocation; 2. The offsetting outflows of resources required to make the investment; 3. How the inflows and outflows occur in each future time period; and 4. How much what occurs in future time periods should be "discounted" to reflect greater risk and price inflation. (Boudreau, and Ramstad 26)
Transferring this ideology to the resource of human beings in a company is a little more difficult. If you invest an allocation into a staff member of x amount of dollars worth of education, what is the inflow and rate of return on that investment? How is this related to future periods and what indeed is the knowledge-based discount to the rate of inflation on the investment? While seemingly ludicrous when applied in this way, many agencies' budgets cannot make the intellectual crossover to understand and equate the performance outcomes regarding staff training and development.
In HR we do not have decision support frameworks as elegant as ROI, and simply applying ROI logic to HR investments is not the answer. The ROI components are not available for most HR decisions, and the ROI framework really does not focus on the right questions for HR investments, because it was developed for financial investments. (Boudreau, and Ramstad 27)
But again we come back to the paradigm shift that has taken place and there are certainly more viable means of ascertaining whether or not an investment in employee education has a payoff to the organization that is fundamental to the long-term profitability and sustainability of that organization.
This returns us to the concept of TBL, the Triple Bottom Line. By linking together profit, people and environment when deciding what a company is setting out to accomplish, there is a greater investment in what might be now called ecosystem of profitability. By training, educating and appreciating staff, greater staff retention and staff loyalty and involvement is usually the result. There are many steps required to make this realization such as, an analysis of capabilities within the organization, a review of leadership practices and key leadership competencies and the values of the agency must also be clearly defined. But one key concept that is germane to the entire success of the company is an ongoing and open dialog between department, personnel and HR. In researching the importance of the aforementioned steps to realization, Colbert, and Kurucz discovered the following:
In every case dialogue was described as highly important: dialogue with stakeholders to negotiate and appease; dialogue to integrate stakeholder needs and to search for win-win value creation; or dialogue to broaden the company's strategic frame of reference, and to enroll stakeholders in a new organizational direction. (Colbert, and Kurucz 27)
Communication is the key tool for HR to use in not only distributing information, but in...
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