Balancing HR Costs with Effective Outcomes: A Crucial Aspect of Firm's Success

The provided content discusses the importance of Human Resource (HR) department in an organization. The HR department has been developed by the firm to ensure suitable business performance, but it also leads to a high cost factor. Despite this, the HR department plays a crucial role in retaining skilled employees and enhancing the operations of the firm in a competitive market, ultimately assisting in achieving business goals and objectives.

ADVANCED
CRITICAL WRITING

Why do companies need HR
In the globalization era, businesses are required to employ HR department within firm so
that they can attain growth and success. HR department is necessary to be maintained within
business because it helps in managing and operating the business functions such as recruitment,
selection, training and development. It is essential for firm to integrate HR practices within
business as it helps in gaining competitive edge over rivals (Acedo, Barroso and Galan, 2016).
The essay argued that there are certain people who believes that firm needs to follow flat
structure and does not require any specific HR department as it helps them to minimize cost and
improve work efficiency. For instance, people assumes that line manager and other head of
departments play a significant role and thus they can carry out HR functions effectively in order
to manage their team. While, there are other group of people who believes that it is necessary for
each and every organisation to maintain their particular HR department in order to carry out
effective HR functions. However, the changing structure of management is the current need of
firm and thus they need to follow it so that they can attain desired goals (Armstrong and Taylor,
2014).
As per the view of Decenzo and Robbins (2015), HRM plays a crucial role in the current
competitive environment and thus they need to analyse the concept of soft and hard HRM.
Through assessing the contribution of workers in the current market, it has been evaluated that
HR department aims upon identifying and evaluating the strategic planning for workers in order
to create crucial impact on business growth and development. Further, through applying Harvard
model of HRM helps firms to enhance its overall process and involve workers in strategic
planning process. This particular model assists business to carry out effective HR activities so
that long term consequences of firm and focuses upon improving the performance and growth
aspects. However, Dezdar and Sulaiman (2009), argued that in the current changing perspectives
it helps firm to identify the needs and preferences of employees. Main objective of HRM is to
involve different strategies that helps firm to optimize business cost, manage health, welfare and
safety of employees in order to protect resources of firm and attain competitive edge over rivals.
The arguments regarding the requirement of HR department within firm is not new within the
economy. However, different businesses possess diverse arguments in regard to maintain HR
department as it helps in contributing growth and success in market (Zheng, Yang and McLean,
2010).
1

Schuler and Jackson (2008), argues that maintaining HR department within firm is a
costly factor and therefore business focuses upon avoiding it so that they can minimize their cost.
However, they lays emphasis upon line manager and other department heads to focus upon
maintaining efficient manpower in regard to provide best working environment to employees.
Further, there are several researchers that analyses that firms are saying no to HR department in
order to focus upon maintaining its cost. However, Storey (2007), argued that businesses needs
to maintain its outcome and performance therefore, they need to implement HR department so
that it focuses upon carrying out effective HR practices such as retaining workforce for long
term, recruiting skilled people and providing them effective training to workforce. All such
factors requires proper HR department within firm and thus they need to focus upon managing
human resources so that competency can be attained in competitive market (Wu and Lee, 2007).
Human resource management is one of the signification and most critical aspects of the
business operations. Different perspectives have developed for analysing and understating the
influence of HR on the business operations. Present era of conceptualization has developed
significant doubts regarding the effectiveness and efficiencies of HR for business growth.
According to Davies, (2011) changing business practices has influenced companies to adapt with
the changing requirements in an effective manner. Line managers and supervisors of the
employees are in direct contact with the changing needs and policies for the business. HR helps
companies in developing policies and managing strategic aspect for employee motivation but
analysing the needs and requirements of the business objectives is the challenge for the sector.
The arguments however was contradicted by Dezdar and Sulaiman (2009) stating that HR
executives develop an in-depth and well defined understanding ability the working practices and
aspects for the employees which helps them in analysing the challenges and issues faced by the
employees.
The strategic concept of HRM is a well developed business model which helps in linking
the strategic goals and objectives of the company with the employees working in the
organization. Gallicano, (2009) analysed that strategic HRM practices has helped business in
creating a new spectrum of working and attaining business goals and objectives. This strategic
aspect analyse the internal and external factors of the overall business operations to attain a well
defined result for the organizational growth and development. Hence, this has been analysed that
companies has accepted the HR practices as integral part of the business which has helped the
2

organisations in enhancing the growth and development aspects for the business units (Swart,
Mann and Brown, 2012).
Kerzner (2010) contradicted the current scenario by evaluating that leading global
companies are adopting flat structure to minimise the level of control and interference for the
business units. This has helped the business in attaining high and valuable results. Companies
such as McDonald's, Sainsbury, People solution are the leading example for the same. However,
it has also been analysed that HR resources of the company has helped businesses in developing
competitive edge within the economy. Wilson and Eilertsen (2010) analysed that effective HR
policies enhances working conditions and culture within the business which creates irreplaceable
environment for the business. Researches revealed that working culture is the integral part of the
business and cannot be replicated by the rival firms. Contribution of HR in developing
organisational culture is high and effective. This developed strategic growth and development
aspects of the business.
The significant aspects of HRM has been evaluated by the roles and responsibilities the
segment has undertaken for the success and growth of the business (Holland and Pyman, 2011).
The scope of HRM has enhanced from the basic functions such of planning, staffing, organising
and controlling to wider aspects of strategic planning, communicating, strategy formulation and
conflict handling. The integrated functional aspects of HRM has thus helped in structuring the
business operations in a well defined manner and attaining business objectives significantly to
develop high growth measures in the economy (Abel and Gabe, 2011). The critical functions of
HR manager helps the business unit in developing a well defined growth in the economy. HR
outcomes for the business is attained in the form of employee productivity, high rate of
retentions and high employee motivation. This aspect of the business has been defined as
irreplaceable and crucial by Ellinger, and Ellinger (2014). In addition, HR helps the business in
adding value by seeking and selecting the efficient and valuable employees for the business.
Thus, the modern concept of HR has defined the segment as value generating sector for the
business which contradicts the notions which defines human resource management as the cost
factor for the business (Holland and Pyman, 2011).
Through assessing the overall argument it can be assessed that HR department plays a
crucial role within firm in order to gain growth and success. Business also requires to assess the
needs and demands of workers and develop effective strategies to attain effective working
3

environment. The arguments regarding modern practices of worker management has been
developed by the firm so that suitable business performance can be attained. However, HR
department leads to high cost factor to business, but they need to maintain it in order to gain
effective outcome so that business performance can be obtained. HR department helps in
retaining skilled people within firm and enhance the operations of firm in competitive market.
Hence, it can be clearly stated that HR department is crucial aspect of firm as it assists in
attaining business goals and objectives.
4

REFERENCES
Books and journals
Abel, J. R. and Gabe, T. M., 2011. Human capital and economic activity in urban
America. Regional Studies. 45(8). pp.1079-1090.
Acedo, F.J., Barroso, C. and Galan, J.L., 2016. The resource‐based theory: dissemination and
main trends. Strategic Management Journal. 27(7). pp.621-636.
Armstrong, M. and Taylor, S., 2014. Armstrong's handbook of human resource management
practice. Kogan Page Publishers.
Davies, A., 2011. Workplace Law Handbook. Workplace Law Group.
Decenzo, D.A. and Robbins, S.P., 2015. Fundamentals of human resource management. John
Wiley & Sons.
Dezdar, S. and Sulaiman, A., 2009. Successful enterprise resource planning implementation:
taxonomy of critical factors. Industrial Management & Data Systems. 109(8). pp. 1037-
1052.
Ellinger, E. A. And Ellinger, D. A., 2014. Leveraging human resource development expertise to
improve supply chain managers' skills and competencies. European Journal of Training
and Development. 38(1/2). pp.118 – 135.
Gallicano, T. D., 2009. Personal relationship strategies and outcomes in a membership
organization. Journal of Communication Management. 13(4). pp.310-328.
Holland, P. and Pyman, A., 2011. Corporate universities: a catalyst for strategic human resource
development? Journal of European Industrial Training. 30(1). pp.19 – 31.
Kerzner, H. R., 2010. Project Management-Best Practices: Achieving Global Excellence (14).
John Wiley & Sons.
Schuler, R.S. and Jackson, S.E., 2008. Strategic human resource management. John Wiley &
Sons.
Storey, J., 2007. Human resource management: A critical text. Cengage Learning EMEA.
Swart, J., Mann, C. And Brown, S., 2012. Human Resource Development: Strategy and Tactics.
Routledge.
Wilson, W. J. and Eilertsen, S., 2010. How did strategic planning help during the economic
crisis. Strategy & Leadership. 38(2). pp.5–14.
Wu, W. W. and Lee, Y. T., 2007. Selecting knowledge management strategies by using the
analytic network process. Expert systems with Applications. 32(3). pp. 841-847.
Zheng, W., Yang, B. and McLean, G. N., 2010. Linking organizational culture, structure,
strategy, and organizational effectiveness: Mediating role of knowledge management.
Journal of Business Research. 63(7). pp. 763-771.
5