STRATEGIC HUMAN RESOURCE CHALLENGES
Today's human resources managers face three basic strategic challenges. One is the need to support corporate productivity and performance improvement efforts. With the globalization of the world economy, competition has soared, and with it the need to continually improve organizational performance. Second, employees play an expanded role in employers' performance improvement efforts. Indeed, all the elements we associate with high performance organizations like Toyota's - such as high technology team based production are largely useless without extraordinarily high levels of employee competence and commitment.
The third challenge ( stemming from the first two) is that employers see that their human resource units must be more involved in designing not just executing the company's strategic plan. It used to be just the company's operating (line) managers who had heavy input into the company's strategic plan. The president and his or her staff might decide to enter new markets, drop product lines, or embark on a five year cost cutting plan. Then the president would more or less entrust the personnel implications of that plan (hiring or firing new workers, hiring outplacement firms for those fired, and so on) to the human resource manager.
Today's stress on gaining competitive advantage through people renders such arrangements inadequate. Instead, top management needs the input of the human resource team in designing the strategy since it is team charged with hiring, training and compensating the firm's employees. Human resource managers will therefore need an in-depth understanding of the value creating proposition of the firm [in other words, a basic functional understanding of how the firm makes money] what activities and processes are most critical for value creation as defined by customers and capital markets? Who in the firm executes these activities successfully? Human resource professionals need to understand the basics of strategic planning and of the basic business functions such as accounting, finance, production, and sales, so they can take (as human resource advocates out it) their seat at the table when top management is crafting the firm's strategic plan.