a decade ago, the typical HR/Personnel Chief for the big
corporation was awesome. He symbolized the company's standing
and was its face in the HR community, employment market,
management institutes, labour lawyers, labour department,
social service organisations, and, of course, the party
circuit. If Ozymandias had a frown, a wrinkled lip and the
sneer of cold command permanently etched by the sculptor,
the HR chief had the measured drawl, the stiff gait and
the model-like élan in adequate measure to reflect the stature
of the company amidst his publics. He often was in a narcissist
enamor with his wrinkle-free shirt, the contrasting tie
and himself. Wife adored, of course. The children felt "my
He often believed that he was the company - he was a good
model of "companyism" that HBR mentioned some years ago.
The swanky office, the shiny car, the well-dressed chauffeur,
the club and the large retinue of his staff appeared to
be saying. …look on these symbols, ye mighty and despair!
He inspired a dream in young HR professionals of becoming
Boss someday soon for all the pyramidal power, perks and
the prominence. But changes are creeping in to destroy several
such dreams of attaining the power and prominence, even
if the perks remained. The nature of the corporation has
been changing as also its design thus affecting the HR Chief's
traditional role, empire and the sense of well-being. Some
say that this is the curse of the liberalization and globalization,
which has brought in hyper competition and the derived hypertension.
The HR Chief is being hassled by peers and bosses to answer
difficult questions of cost, timeliness, quality, trends,
goals, benchmarks and comparability. "LPG" apart, there
are two other major reasons for the increasing threat to
the traditional role and power of the HR Chief - (a) the
impact of transparency and measurability of people related
information and (b) the emerging new forms of corporations.
The traditional HR Chief had the constituency of "people
business" firmly under control. He nurtured it well, especially
if there were apprehended threats from collectives or actions
by the Labour department. He was privy to "sensitive" information,
which was mostly in verbal form and if in writing, mostly
in the confines of confidential files. He, his large staff
and his function were a monopoly in the company.
information technology along with the ISO/quality manuals
and BPR have encroached upon the privacy and the right to
haphazard accumulation and dissemination of information
on reasons of confidentiality and "professional"/best judgment.
The information is now forced into a system that is fairly
well accessible and organized. If the ERP were in place
and most of the HR systems also on line, the transparency
is greater and so is its accessibility for the concerned.
Thus, in an ideal situation, a line manager can know about
all the vacancies, the job descriptions, the job evaluation
system, the goals for the people under his control, the
achievements against them, training needs, training programmes
available, best employees of the season, productivity trends,
man power cost for a particular department and the like.
Most of the HR Chiefs` information is no longer power. It
is for this very reason that, at times, there is resistance
to open sharing of information and the pedestrian attempts
to magnify "risks and uncertainties" related to people.
process of decentralization and democratization has been
cited as one of the major causes of the fall of both corporate
as well as national regimes. The overthrow of Marcos dictatorship
and the communist governments have been attributed to the
impact of the IT, even in its early stages. Theorists argue
that the new technology is deadly to all forms of
ill-conceived hierarchy, aggrandizement of power and authority.
The wise among the HR Chiefs has realized this and has been
redesigning firms in the name of making them flatter, leaner
and flexible, even if it meant shooting oneself in the foot
- possibly with the hope that even if the limbs are lost
the head will remain.
The comfort of the yesteryears has been that the HR function
was a monopoly and there was - to borrow an economic term
- no "contestability". The HR function was done almost all
under one roof from pre-entry to post-exit of employees.
The "area of darkness" (with apologies to Sir.V.S.Naipaul)
for other functions was the happy hunting ground for the
HR profession till two related developments began, apart
from the IT impact. One is the new forms of organizations
and the other is the connected induction of competition
for the HR function.
is some controversy whether the traditional monoliths will
survive, as we know them today. The aspect that is not contentious
at all is that organizations are getting redesigned very
rapidly and that structures are increasingly becoming open
systems. General Motors, which was the first to have developed
organisational concepts and structures over eighty years
ago and became the model for all corporations, is rethinking
its shape and experimenting with newer organisational models.
Such models may imply outsourcing, joint branding and networks
all of which open competing sub-systems.
believe that the new networks will make corporations look
like a confederation and a web of contracts than a one-stop
vertical monolith. Such a prospect is best exemplified by
Monorail, which sells computers without owning factories,
warehouses, or any other tangible assets, and operating
from small leased premises in Atlanta. Its computers are
designed by freelance workers, sold through the Internet,
with logistic support by Federal Express and all financial
settlements through the Sun Trust Bank. The implication
is that there will be limits to the size of HR function
even in a seemingly big corporation.
related aspect that threatens the traditional HR Chief is
the induction of competition for HR by the prospects of
out-sourcing. The current belief is that hiring, firing,
training, performance management, wage administration, pension
services, and the like will be increasingly handled by specialist
organizations. The proposed changes in the Contract Labour
Act and the recent judgment of the Supreme Court only add
to the inevitable process of dismantling the monopolistic
HR regimes to open competition.
The USA is probably a precursor to what promises to be the
inevitable global trend. It is reported that more than 2
million American workers are getting services not by the
HR departments of their companies but by professional external
organisations. Exult, which was founded less than four years
ago now manages the HR practice of several Fortune 500 companies.
The industry, which has begun rather tentatively, is growing
at a rate of 30 per cent and it is no wonder that Indian
corporates like the Infosys are reportedly in hot pursuit
of this business. McKinsey believes that such competitive
outsourcing can reduce people cost by 30 per cent and also
increase employee satisfaction. This process demolishes
the monopoly of the HR department by indirectly induced
competition and openness.
from competition from the external agencies is there an
enemy for the traditional HR Chief within? There was a debate
in the late 80s whether HR as a function will last very
long at all. Some argued that most of the HR processes will
have to integrate into the line function and hence HRM will
have a shrunken agenda in the corporations of the future.
The prospect of self managed teams and project teams imply
that some of the support functions will be taken over by
the operating teams. That, in fact, is the heart of empowerment
which requires reorganization of communications and decision-making
authorities so as to enable teams to take charge.
is some degree of new accounting, costing and pricing logic
as well in this: That the costs of support function, whether
fixed or variable, must be explicitly committed and tracked
by the operating people who shall also be accountable for
them. This is a departure from the tradition, when the labour
cost was an aggregated sum, usually discovered at the end
of the year and loosely budgeted for the following year
without much accountability. The practice of performance
management system makes the project teams, team leaders,
section heads, shop superintendents directly accountable
and hence require them to be far more "hands on".
collapse of hierarchy and the formation of horizontal teams
imply a different conception of HRM and its practice. That
HR is a service provider for the internal customer has been
a good philosophy and yet the very beginning of what portends
to be a massive reorganization.
specter leaves one wondering whether the HR Chief of the
romantic era will increasingly be like the Ozymandias of
Egypt, mighty at one time and overseeing a desert and a
lost empire. To escape this prospect the HR profession needs
to get to the roots and rediscover a new edifice, new pillars
and eventually a new role for the HR managers and the chief.
new role may call for competitive internal salesmanship,
IT and process discipline and management of multiple external
contracts. Instead of being king he must look increasingly
like a good stage manager.