HR Restructures for Relevance

By: Stacey Muscat

Overview

Organizational restructuring involves eliminating layers of management and changing reporting relationships, as well ac cutting staff through downsizing, layoffs, and early retirement buyout programs (Mathis & Jackson, 2010). In today’s global economy, companies are in an intense competition amongst each other to stay on top, and in recent times, to at least stay afloat. Human Resource Managers have the difficult task of keeping a company’s human capital in line with the organization’s “tone at the top.” Alignment of the organizational culture and HR helps organizational performance (Mathis & Jackson, 2010). When an organization decides to restructure, human resource managers have to get everybody on board with the goal. It is difficult to provide top quality at the lowest price, this principle is true even when it comes to employees. It is also difficult to restructure because of limited resources, how people view the value of HR, employee fear, and reducing “personal touch” (Nadel, 2002). The article I found in BNA’s Human Resource Professional Information Center took tactics from different companies on how to successfully restructure and what restructuring HR means for businesses.

Article Description/Connection to Text

The article, To Avoid Irrelevance, HR Must Restructure, Reduce Costs, Be Strategic, Speakers Say, describes the demands the HR department faces and how to implement changes. The demand for HR restructuring continues to grow as the economy becomes more global, but the cuts sometimes undervalue HR.

The article mentions how HR is being pressured to provide high quality service at lower costs which means that they must develop human capital while cutting costs. Row Henson of Peoplesoft says that at a certain point, trying to cut cost so much is detrimental to employer goals, but that it goes unnoticed because HR may still not be recognized as contributing to the bottom line, but since good human resources involves having the right people at the right time, we know that HR must be at the heart of enhancing organizational culture (Mathis & Jackson, 2010) and should not be looked at as an area to reduce the cost of doing business.

Redesigning work often involves having fewer employees who work longer hours and perform multiple task jobs. It may also involve replacing workers with capital equipment or making them more efficient by use of technology or new processes (Mathis & Jackson, 2010). RR. Donnelly had to reduce its HR staff by 40 percent by seeking to make work more efficient and determining which functions could be offloaded. Changes RR. Donnelly made included a new service center for employees and managers seeking routine HR questions. This was strategic; it made the human capital happy because they had a place to get direct answers, and it made HR more efficient because there was no longer the question of whose job it was to answer these questions. Technology came into play redesigning the work at R.R. Donnelly when a web-based portal for daily transactions reduced two to three days worth of work to two to three hours; the use of Web-based information systems has allowed the HR unit in organizations to become more administratitvely efficient (Mathis & Jackson, 2010).

Because HR is not always considered as meaningful to a business, focuses may be in the wrong place. HR cannot focus on its own needs, but needs to focus on the needs of the business. HR is about quality, speed, and cost (Nadel, 2002). The article mentions that HR restructuring can be a mess, but that when HR shows success in contributing to a business, its vitality to business is recognized.

Take Away Points 

I think the importance of HR is being recognized more and more, especially after the economic recession. The HR department in many companies was responsible for the rebuilding of business. I think it is hard for any company to undergo a restructure in their HR department, because it is like the lifeline of the company, even when people believe it is not. It is important for young professionals, no matter which area of study, to realize the value of a strategic and efficient HR department. HR professionals will want to demonstrate the importance of the field, and a future CFO needs to understand that it will be up to his/her HR department to restructure human capital as well as organizational goals when need be.  HR majors currently in school should really graduate knowing how much potential they have to be leaders for a company, not just as people who sit behind the scenes.

Works Cited

Nadel, S. (2002). To avoid irrelevance, hr must restructure, reduce costs, be strategic, speakers say. BNA, 20(43), Retrieved from http://subscript.bna.com/pic2/hr2pic.nsf/id/BNAP-5FKPGP?OpenDocument&PrintVersion=Yes

Mathis, R. L., & Jackson, J. H. (2010). Human resource management. (13 ed.). Mason, OH: South-Western Cengage Learning.