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20(2) 135–138
Strategic Value Contribution Role of HR © 2016 MDI
SAGE Publications
sagepub.in/home.nav
DOI: 10.1177/0972262916637274
http://vision.sagepub.com

Humaira Naznin1
Md. Ashfaq Hussain2

Abstract
This article aims to challenge the perceived lack of a strategic value of human resource (HR) function and seeks to focus on the
devolution of HR from its transactional role to strategic effectiveness. Utilizing a range of secondary resources, this article aims to
critically analyze the shift of HR from transactional to a strategic role and its value contribution role in business. HR needs to over-
come conventional resistance and act as the driver of an organizational strategy through aligning the HR strategy to the business
strategy, adopting workforce planning and measuring an organization’s competencies. The paper contributes to the evaluation of HR
management from viewpoint perspective and offers help to HR practitioners in understanding the changing role of HR.

Key Words
HR Function, Business strategy, Devolution, HR Integration

Introduction managers better understanding of their responsibility in

In today’s competitive and complex business environment,
the role of human resource (HR) is constantly changing.
With its increasing alignment to core business and inte-
gration to the bottom line, HR is a reflection of the cons-
tant changing nature of its functions. Being responsive
to globalization, demographic and technological changes,
and turbulent, competitive and complex environment of
business, HR itself has been changing dramatically. A
transformational journey from the conventional role of
‘administrative expert’ (Ulrich, 1997 cited in Reilly, 2006,
p. 8) to the evolving and fostering function of strategic
HR partner critically describes the value contribution
of HR function. More precisely, HR goes strategic and
becomes more business integrated. This intended reorien-
tation would help HR not only to play a critical role in the
overall strategic planning of the business, but also to act as
a messenger to clarify and direct employees about the
desired goal of the organization.
Devolution of HR Function:
Shared Partnership with Line Managers
A recent major change in HR function is its building a
shared partnership with line managers. By providing line
specific HR issues, such as absence control, team develop-
ment, discipline, induction, health and safety, recruitment
policy and performance management, HR aims to enhance
employee engagement and open communication between
line managers and employees. These, indeed, lead to low
turnover and high morale—keys to organizational perfor-
mance and competitive success. In this regard, by replac-
ing the traditional supervisory role of line managers and
empowering them to act as ‘leader, enabler and facilitator’
(IRS Employment Review, 2003), HR is playing the strate-
gic role of an ‘objective adviser’ (IRS Employment Review,
2003). This devolving HR function to change management
directs itself to be more aligned to business.
Although this shared partnership of HR with line man-
agers aims to have them (line managers) greater ownership
and create a teamwork environment, this devolution of HR
responsibility often appears inappropriate to line manag-
ers. Research suggests that many line managers lack people
management skills, often complaint about the burden of
workloads and many of them are unwilling to consider this
devolved people management tasks as a part of their job
role (Reilly & Williams, 2006, p. 17). Such reluctance
could have an impact upon the operational level of the
business and could raise the level of conflict between HR
and line managers. In this regard, the role of HR should be

1 Senior Lecturer, BRAC Business School, BRAC University, Dhaka, Bangladesh.

2 Assistant Secretary, Ministry of Foreign Affairs, Government of the People’s Republic of Bangladesh, Segun Bagicha, Dhaka, Bangladesh.

Corresponding author:
Humaira Naznin, Senior Lecturer, BRAC Business School, Room # UB20505, Building 2, 66 Mohakhali, Dhaka 1212, Bangladesh.
E-mail: humaira.naznin@bracu.ac.bd
136
based on shared partnership with line managers, rather than
simply shifting their administrative responsibilities to line
managers. Understanding the rationale of the shift of task
and skills of the line managers, HR should take the lead or
often play a subordinate role. Moreover, if line managers
are linked too much with paper-based people management
tasks, internal communication between management and
employees will fall down. Again, if HR is very much com-
mitted to daily people management task, it will lose its
effectiveness in higher value contribution. Therefore, an
optimum balance between efficiency and effectiveness of
both HR and line managers is required.
The devolution of HR function leads to its integration
into the organizational strategy, and this vertical integra-
tion of HR with other disciplines of business involves HR
professionals’ direct participation in the strategic plan-
ning and implementation of organizational mission, values,
culture, strategy and goal. This kind of direct involvement
of the HR leader with core business planning reveals the
emergent acceptance of HR as a value contributor in busi-
ness. In this respect, the experience of Mike Okinski,
ex-head of HR at Price Waterhouse Europe, a manage-
ment consulting firm, in cultural shift is noteworthy (IRS
Employment Review, 1998). The company undertook the
changed culture programme of creating a completely global
business with a common set of values and codes of conduct
for all the staff across the country. In this case, the HR
function of this firm played the central role in creating,
developing and implementing the firm’s integrated ‘value’
programme. Introducing revised career path, new appraisal
and reward system, the HR leader not only established
culture change of the organization but also acted as the
formulator of the strategic decision-making process itself.
This reveals the true contribution of HR function in inte-
grating and turning strategy into reality.
New Competencies of HR
Sustaining Strategic Agility
A shift from transactional to a more strategic role contri-
butes to the re-engineering of HR function. HR does not
make strategy but has greater contribution to the imple-
mentation of a strategy. The continual change of HR
function is apparent in Dave Ulrich’s model that catego-
rizes four roles of HR: strategic partner, functional expert,
employee advocate and HR leader (Ulrich, 2005). Of these,
the latest role of HR leader has increasingly become
critical to business function. Playing an active part in
understanding the overall strategy and having an in-depth
knowledge about both internal and external business
factors, an HR leader contributes to the integration of
the strategy to HR policies and practices both vertically
and horizontally and maintains the organization’s agility.
Ulrich called this ‘sustaining strategic agility’ (Ulrich,
Brockbank, & Johnson, 2009, p. 27), and IBM is an
Vision 20(2)
example of this sustaining strategic agility. IBM, with
more than 350,000 employees, found it almost impossi-
ble to have sustainable agility, and hence its HR leadership
focused on three tasks. First, the HR leader performed
future need analysis and then made two- to three-year fore-
cast on required skills and people to maintain a competitive
performance. Second, playing an active role in defining
and implementing a strategy, rather than just facilitating
strategic planning meetings, the HR leader led the overall
global transformation of the organization. Third, an inno-
vative talent retention strategy helped to maintain very low
turnover. It was the belief of IBM that when employees
know their job well and are confident about their future
with the company, they are more able and willing to adjust
to change quickly. And, here lies the successful execution
of sustaining the strategic agility of IBM.
Integration of HR and Business Strategy
Another changing role of HR function is aligning HR prac-
tices to strategy, which means that each investment of the
HR discipline must reflect the strategy and ‘realities of
the customer’ (Ulrich et al., 2009, p. 29). More precisely, in
today’s organizations, all HR activities, including selection
and recruitment, training and development, and reward and
compensation systems, are designed and practised in such
an effective way that these must exhibit HR’s align-
ment with business strategy. An excellent example of such
aligned and integrated HR practice is Apple (Ulrich et al.,
2009). Apple’s core strategy is growth through product
innovation, and in order to align this strategy of innovative
product, HR practices of recruitment, salary and training
are designed to meet the requirement of creativity and
diverse thinking. Thus, Apple’s successful adoption of inte-
grated HR practices shows the strategic value contribution
role of HR and its greater impact on business performance.
In fact, Dave Ulrich’s model of HR function leads to an
emerging change in HR function, and many organizations
adopted this model to align their HR function with business
goal. An example of this is the AA, a car insurance and
breakdown coverage firm, which introduced the new role
of business partner not only to align HR structure with
operational business strategy but also to develop people
management strategies, as Ulrich defined the role of busi-
ness partner is ‘diagnosing organisation, re-engineering
processes, listening and responding to employees, and man-
aging cultural transformation’ (Suff, 2008). The three new
senior business partner roles of the AA successfully contri-
bute to corporate, policy, reward and operational efficiency
of the organization and establish HR’s contribution to
support the operational strategy of the organization.
Why Does HR Lag Behind?
Although today HR goes more strategic and has already
established its valued contribution in business, a number of
Naznin and Hussain 137
weaknesses in HR function are still apparent. HR practi-
tioners, especially senior HR leaders, often fail to ‘speak
the language of the board’ (Suff, 2004), and the senior
management struggles to see how the traditional transac-
tional role of HR could be reinvented strategically. HR
function often becomes the victim of traditional percep-
tions of senior management. Even HR’s role in strategic
decision-making and involvement in business planning are
seen as ‘additional’ by senior managers, and they think that
HR involvement is likely to be ‘executive’ with some trans-
actional ‘reactive’ works (Anonymous, 2002). This view of
senior management needs to be changed, and it is possible
only when HR function would widely become a key in
adding value to competitive advantage of the business.
Therefore, HR needs to be recognized to reflect both
operational and strategic goals and needs.
It may be mentioned that the transactional function of
HR is not contradictory to its transformational strategic
role; rather both of these should be focused. To become
more strategic, HR does not need to abandon its admini-
strative duties. What is more important is to successfully
operate at both transactional and strategic levels. An outline
about how to strengthen HR function at both of these levels
is drawn below:
• The devolution and strategic transformation of HR
needs to be exercised carefully. The devolution of
key areas of HR’s responsibility to line managers and
also devolution of too much responsibility to line
managers can imbalance both operational and strate-
gic HR roles. Hence, the efficiency of an HR expert
in some core transactional function should not be
replaced or compromised under any circumstance.
For example, if recruitment of right talents in the
right place is missed, the organization would fail
to create talent pool, and this would ultimately bring
its deficiency in gaining sustainable competitive
advantage.
• In the devolution of transactional HR functions, line
managers should be given enough assistance in
developing their leadership skills, and aligning their
activities to the overall goals and missions of the
organization is a core strategic role of HR profession-
als. In this regard, it is essential for HR professionals
to help line managers understand what and where
they lack in terms of driving motivation, recognizing
the potentials and required development of employ-
ees, and how they grasp the changes in business
effectively.
• HR practitioners should get to know more about the
motives, drives and needs of an external customer. In
aligning strategy with the customer, they should
focus more on each system, practice and activity that
communicates message about present and future
customer direction and requirements. They should
do this while they design and deliver training
programmes, develop criteria for recruitment and
promotions, formulate and implement measurements
and rewards and structure organizations for business
success.
• HR needs to reinvent its strategic function. This reori-
entation means a ‘transition’ (Craig, 2009) from a
strategic server of the business to a proactive and
trusted adviser inherently related to the workforce
planning of the organization. Workforce planning is
a framework articulating the organization, people
and operational strategy. In fact, workforce planning
could be the balance sheet of an HR leader and
hold a seat for HR at the strategic planning table.
Since today’s business world is all about competitive
advantage, human capital is the only sustainable
source of gaining competitive advantage. And it is
high time for HR to persuade its strategic meaning at
the top-level meeting using workforce planning as its
strategic tool. In this regard, HR professionals need
to be more dynamic and proactive in bringing short-
term and long-term objectives together. Besides, in
designing a workforce plan, another role of HR func-
tion is to take account of the external forces, such as
demographic, environmental and behavioural change
of generation Y, in order to satisfy diverse customers,
because getting to know the external customers
of the business is one of the best ways to broaden
strategic perspective and credibility.
• HR needs to overcome the conventional resistance of
being a part of the organizational strategy. Therefore,
HR has to identify the true strategic value that it can
contribute to business and should also measure its
impact on the bottom line of the organizational strat-
egy. To make this happen, HR needs to ‘measure
the organisation’s competencies, leadership’ (Norton,
2001), culture, external customers’ needs, alignment
and learning. These issues must be linked with the
organizational strategy. After measuring these issues,
HR can provide a framework explaining the strategic
drivers of an organization, and this will allow HR
to make its own strategic position with the top
management.
Thus, the perceived lack of a strategic value of HR func-
tion is its propensity ‘to come to the game’ late (Craig,
2009). Today, the biggest contribution of HR function is to
get to the heart of the business, be an integral part of the
business strategy and recognize business levers with a
wide range of strategic functions. This alignment between
HR and business processes can be a source of value crea-
tion for the organization and hence can be used to link
financial business outcomes (Ulrich, 2000). Finally, if HR
measures itself from a business perspective and the value
that it brings to an organization, the senior management
will change their traditional negligence to HR. Instead,
they will welcome HR to be a core contributor of the
138
business strategy, realizing how HR can affect the bottom
line from a business viewpoint.
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Authors’ bio-sketch
Humaira Naznin (hnaz357@gmail.com) is currently a
Senior Lecturer of Human Resource Management at
BRAC Business School, BRAC University, Bangladesh.
She is primarily engaged in qualitative research and her
research interests include strategic HRM, international
HRM, gender leadership, migration and labour market.
Md. Ashfaq Hussain (ashfaq351@gmail.com) is presently
working as an Assistant Secretary to the Ministry of
Foreign Affairs Bangladesh. He formerly served as a
lecturer in Human Resource Management at Leading
University, Bangladesh. His research interests are Strategic
HRM, migration, climate change and leadership.