The role of HRM in Organization

The role of Human Resource Department in today’s business organizations is not overemphasized, but is an essential part of any Organizations. All businesses have three major objectives – sustainable profitability, growth and expansion. HRD plays a pivotal role in ensuring that its Organization business perpetually achieves the set objectives.


It is an established fact that human resource is considered as important, a capital, as finance. Every company small or big needs to invest in its HRD. Human being is the driving force behind everything – discoveries & inventions, manufacturing, literature, sports and running all government and private organizations. The companies are pitched in an ever increasing and unyielding competitive environment; they need to have a competitive edge over others to sustain a profitable growth. The economic uncertainty and its volatile behavior has increased odds against Companies in pursuit of their marketing efforts to sell products.

Do all Companies need HRD? A plain answer is yes; but what type of HR services companies need, will largely depend upon the nature of its business.  HR needs of a manufacturing unit where semi-skilled workforce is employed are different than a company providing highly professional services employing highly skilled workforce of engineers, information technology and financial experts.

A conventional HR had a limited function of payroll dispensation, recruitments and terminations. It is all paperwork. The setting in of new technologies has enabled companies to outsource traditional HR functions of payroll, compensation and recruitments functions to outside vendors at a lower cost, but this is not the ultimate goal of HR in our times. The scope of HRD has stretched beyond this, it can positively impact in reducing costs of goods sold, contain turnout, improve quality and increase profits along with their traditional HR services. We are living in an age of specialization. If human resource is considered a capital, why shall not we have specialists in this field also?

The concept of human resource department contributing and improving Company’s profit margins is fast gaining ground in United States. Professor David Ulrich, a leading expert on HR competency models from University of Michigan sees the changing business world proposition as a 20–20–60 proposition. The conclusion is based on survey of executives which showed that 20% are actively using HR department as partners for finding innovative business solutions and another 20% are still restricting HR to administrative and transactional functions. However, the remaining 60% have started expecting HR to become a partner with other departments in improving company’s core competencies and competitive advantages.

The edge of having employees with highest possible skills, capabilities, and capacity to meet growing business challenges is an advantage companies should have; and this edge can be provided by its Human Resource Department. Operating a manufacturing plant (Production), raw material procurement (supply chain) and selling (Market development) need relative education, skills, knowledge and standard operating procedures. Contrarily, Human Resource Departments of Companies which provide technical, accounting, design and projects management services have an altogether different objectives.

HRD identifies Organization’s objectives and redesigns business processes or Organization design, assesses employee’s skills by conducting TNA (Training Need Analysis). There exists a distinct and definite relationship between employee’s performance and level of skill they possess. HRD challenge is to bridge the gap between employee’s current skill level and the desired level. In order to bridge the gap HRD designs courses to raise the skill level and meet the organization’s objectives. It benefits both the Organization and the employee, Organization reaping the fruits utilizing the skills and talents of employees whereas employees get an opportunity to develop their careers.

The organizations having conventional HRD need to shift from a narrower to the broader objectives if their business demands it. This is not a simple shift and cannot happen overnight; it takes some time. HR department redesigns organizational structure, redesigns its business processes, carries out job analysis and redesigns it; and over and above develops competency models. What a competency model is? A competency model identifies areas which are commonly required in the development of skills and abilities of employees, which are considered critical for effective performance of their jobs. The competency models are customized to be instrumental in guiding individual’s work behaviour and professional development. Basically, in simple words the competency allows HR to understand the gaps between where the employees are today and where they want them to be in the future.


There are three competency models for employees – the ‘Leadership Competency Model’, the middle managers or Supervisory Competency Model, and the General Employee Competency Model. In order to understand competency models, let us look at the terminology first – Three terms are commonly used:

  1. Domain 2. Competency 3. Key Behaviours

Domain: It is grouping of associated competencies, for instance the General Employee’s Competency Model has three skills grouped together:

  1. Interpersonal Skills b) Collaboration Skills c) Self-Management Skills. Each skill domain is further broken down into related competencies.

A competency is a set of knowledge, skills, and abilities that are directly related to effective job performance. HRD based on their experience and evaluation clusters all these success indicators to develop training models for each group. Each competency is further divided into “Key-Behaviours” setting a future goal for employee. The employee is required to successfully demonstrate that competency after going through training. A competency model is a complete subject beyond the scope of this article. HRD will manage in house training of employees in the above mentioned skills or arrange training by an external source; it will all depend on the mandate given to HRD by the Organization.

HRD also lays out a long-term development process for its own staff to learn everything from financial basics to strategic workforce planning. The technology available to HRD today relieves its staff of doing more routine HR work and focus on building capabilities. The Organization approach should be to enable its HRD capable of functioning in today’s business environment.


Learning is a natural instinct of human being, human or human brain is born to learn, loves to learn and knows how to learn. Quran testifies it in the verses about creation of Adam and the knowledge bestowed upon him:


Remember when your Lord said to the angels: ‘Verily, I am going to place mankind generations after generations on earth.’ They said: ‘Will You place therein those who will make mischief therein and shed blood, while we glorify You with praises and thanks (exalted be You above all that they associate with You as partners) and sanctify You?’ Allah said: ‘I know that which you do not know.’

Allah taught Adam all the names of everything, then He showed them to the angels and said: ‘Tell Me the names of these if you are truthful.’ They (angels) said: ‘Glory be to You, we have no knowledge except what You have taught us. Verily, it is You, the All-Knower, the All-Wise.

He said: ‘O Adam! Inform them of their names,’ and when he had informed them of their names, He said: ‘Did I not tell you that I know the unseen in the heavens and the earth, and I know what you reveal and what you have been hiding?

We all learn through what we do daily. In it we make mistakes and then learn by trying over, again and again, this learning from our mistakes by correcting them is a natural and integral part of learning process. Our learning, thinking, and remembering is a set of naturally inter-related physiological, electrical, and chemical processes simultaneously taking place in our brain. If we don’t use our brain or we don’t practice what we have learnt, we tend to forget or become rusty.


The industrialists, giant corporations and entrepreneurs in west, primarily in their own interest, then in the interest of their employees as a duty to their community/nation are investing huge resources in HRD to lift its capabilities and build capacities of their workforce. We in Pakistan are lagging far behind and we shall revisit our approach towards HRD importance in the fast changing world of competitiveness.


Organizations as entity also learn with time, the investment in Human Resource is not in any way waste of time and money, rather it saves time and money. The experience in west, we shall take advantage of, because all hard work and research has been done by west and we have just to adapt and implement their success models in accordance with our needs. We learn what we practice. When we are practicing our brain is growing. Our emotions affect the learning process. Individuals or groups/organizations in self-doubt and fear lose their ability of learning, thinking and remembering, contrarily confidence and keen interest helps us learn, think and remember.


HR can add significant value to a business by supporting and enforcing strategies to build organizational capability to progress and reach the set milestones. This is a role that cannot be automated, shared as a service or outsourced. It comes from an intimate knowledge of a business’s strategy and the existing capabilities of the organization. HR has a great advantage in this area, because of operational data it gathers, analyses and executes to fulfill Organization mission, uphold its values and culture paving the way to ultimate objectives.


The people who has envisioned the short and long term objectives of their organization need to be supported by people (Workforce) which should be trained and equipped to implement the strategic vision. This is the real role of HR, and even though some people remain skeptical of its bottom-line importance, in fact its relevance cannot be underestimated. Every organization that envisages a certain growth model or intends to build a formidable organizational structure need to invest in HRD; not a conventional but a multi-functional dynamic ‘Human Resource Department’ capable of play a key-role in achieving the objectives of organization.


All what we see around us in this planet today owes to the centuries long, unending thinking process supported by untiring physical hard work of our forefathers to meet challenges of their survival. The primitive man withstood extreme weathers, natural disasters and protected himself from wild animals through all the ages. The life of human being has undergone a massive change – from a cave dweller to the modern life style with all amenities of comfort and entertainment. The force behind it, is none but the human resource, so develop it.