Abstract
This study examined the quality of human resources (HR) function of a not-for-profit health sector organization in Pakistan using four roles of HR Champions Model presented by Ulrich (1997). We used a survey instrument and conducted semi-structure interviews of 37 HR and line managers. We analyzed quantitative data using conjoint analysis and qualitative data using simple narrative analysis. The findings revealed that the quality of strategic partner and change agent role are the lowest, the quality of employee champion role is the highest and the quality of administrative role of HR is modest. The study highlighted areas requiring attention of HR professionals and researchers to improve quality of HR services.
Introduction
While investigating the evolution of HR function in India, Rao (2014) highlighted that a large number of firms in India have excelled in adapting excellent HR practices in the last two decades but majority of Indian corporations are “treating HR Function as peripheral, administrative and even outsourceable (p. 20).” The story about evolution of HR function in Pakistan is not different from story of HR function in India. With the transition of resource-based economies into knowledge-based economies, organizations have started adapting HR practices to cope with the intense global competition (Qiao, Khilji & Wang, 2009). Similarly, various Pakistani organizations renamed their personnel divisions as Human Resource Divisions (Khilji, 2005) and adapted some contemporary HR practices (Khilji, 2004) to address the rapidly changing needs and values of Generation-Y in Pakistan (Khilji, 2002, 2004). Unfortunately, the impact of past Anglo-Saxon organizational culture (Khilji, 2003) and British colonial administration on HR policies and practices still persists (Jhatial & Ali, 2009) as evidenced by Rao (2014). Consequently, western HR practices are still in embryonic stage (Khilji, 2005) and very few organizations are employing modern HR practices appropriately. For instance, apart from a few multinational corporations (MNCs), there are very few organizations that know, accept and practice “learning organization” as a management practice (Alam, 2009) in Pakistan. Similarly, HR is not adequately directed, appraised and supervised (Abbasi & Berduy, 2008).
Unfortunately, research on employee perceptions regarding quality of HR services in Pakistan is scarce (Jhatial & Ali, 2009). The success of HR function is not dependent upon mere imitation of HR practices (Qiao et al., 2009); instead it depends upon the quality of HR services (Purcell et al., 2003). Moreover, HRM is a governance mechanism consisting of a set of HR practices enabling organizational members to obtain the organizationally desired behaviours from employees (Lepak & Snell, 2001). Researchers (such as, Gilbert et al., 2011; Haggerty & Wright, 2009) argue that high quality HR practices influence organizationally desired employee behaviours. Unfortunately, the inconsistent state of HR function in Pakistan has adversely affected employee perceptions about the quality of HR services. For instance, while investigating the process and outcome of revamped HR systems in banking sector, Khilji (2004) observed a shift in the values of younger employees and their expectations of high quality HR practices. In addition, the globalization, technological advancements and the increased trend of downsizing (some organizations which laid off the employees include: Mobilink, NADRA, Pakistan Railways, Pakistan Steel Mill, Pakistan International Air Lines etc.) affected psychological contracts of employees (Robinson et al., 1994) due to increased organizational reliance on temporary workers (Epitropaki, 2013), lower job security, lack of steady rewards and deficient employee loyalty (Epitropaki, 2013; Sims, 1994). Similarly, modern HR functions in Pakistan are also facing a severe challenge in fully opting for various modern HR practices which are actually colliding with local organizational HR practices like nepotism and corruption. Such inconsistencies continuously question the maturity of HR function in Pakistan and call for the attention of researchers to audit, particularly, those HR functions which are considered to be the most modern within different sectors of the nation. This case study was conducted to fill this gap by investigating the underlying differences in perceptions of two distinct groups of organizational members, that is, HR service providers (HR managers) and HR service receivers (line managers working in departments other than HRD).
Context of the Study
An operationally distinct HR function and contemporary HR practices are more evident in private organizations of Pakistan (Lalani, 2008). In a study on four Pakistani hospitals, Lalani (2007) found that HR function of only one hospital was well established. We selected this organization for this case study. This is a not-for-profit health sector organization headquartered in Karachi. The organization has three basic units: hospital, university and medical college. This organization is operating in various other developing countries including Nairobi and Kenya. This organization consists of more than 9,500 employees.
Ulrich’s Model of HR Roles
The notion of resource-based view of the firm that unique, valuable, inimitable and non-substitutable human resource may enable an organization to gain competitive advantage is well-known (Lepak & Snell, 2001; Torrington, Laura & Stephen, 2005). The value of human resources lies in three kind of resources they possess, namely, intellectual capital, social capital and emotional capital. Realizing the importance of human resources, organizations have started investing in recruiting, developing and retaining human capital (Rennie, 2003). Consequently, the demand for expertise on deployment and management of human capital and organizational capability has increased (Edward, 2004) and the organizations have continued developing HR functions. Moreover, HR professionals, who have continuously been rediscovering their competencies, now require to emphasize global insights to maintain its substance and meanings.
HR function or department consists of people, processes and systems used to govern the work inside an organization (Ulrich, 1997). The contribution of HR function to the organization has lead to a serious debate (Drucker, 1954; Stewart, 1996; Wright et al., 2001). The focus of HR function on administrative issues has restricted the strategic level contribution of HRD to the organization (Peter & Williams, 2003). HR pundits insist on an across-the-board transformation in HR functions to cope with the change and cost cutting pressures (Edward, 2004). During recent financial crisis various organizations have opted to eliminate or curtail their HR functions completely or partially to cut costs.
With the advent of business partner role of HR, various HR competency models were introduced in the last decade of twentieth century (Caldwell, 2008, 2011) and business partnership model of Ulrich (1997) is one of such competency models. The competencies facilitate HR professionals in reinventing traditional HR roles to improve the effectiveness of HR professionals as business partner. Caldwell himself questioned the effectiveness these HR roles and competencies across different contexts for four different reasons which included: (a) the degree of change experienced by HR functions; (b) the consistency of implementation of business partner philosophy inside the organization; (c) the level of decrease in transitional HR functions; and (d) the degree of centralization or decentralization of HR function inside the organization. These contextual variations call for researchers to advance research on testing the maturity of HR function across different contexts. Therefore, we found it important to test the business partnership model of Ulrich (1997) in Pakistan’s evolving environment and context.
Ulrich (1997) presented a business partner model to guide HR professionals to cope with the challenges stated earlier. Business partner model requires HR professionals to perform four different roles to become business partner of an organization. First is the strategic partner role that requires HR professionals to participate in the process of defining organizational objectives to align HR strategy with business objectives and to monitor the alignment of HR strategy with changing business objectives. Second is the change agent role of HR focuses on developing mechanisms for shaping organizational culture, processes and systems to cope with business transformations (Ulrich, 1997). Third, Administrative Expert role of HR aims at increasing organizational efficiency through effective HR processes. Fourth, Employee Champion role requires HR professionals to identify and address the needs of employees to maintain the level of their commitment to the organization. The business partner model of Ulrich also requires HR professionals to perform the strategic as well as operational activities by acting as a police man as well as an employee champion to facilitate organizations in availing new business opportunities while retaining focus on existing business practices.
Line Managers and Service Quality of HR Function
Since basic function of an HR is to provide service to other business departments, we are introducing service quality of HR function to fulfil the requirements of business partners including functional departments like marketing, finance and operations. The service quality of HR function requires HR professionals to become sensitive to the requirements of business partners instead of relying on administrative activities only (Lawler et al., 2004). The quality is based on the value perceptions which are better explained by service receivers than the service providers (Ulrich, 2005). Thus HR practitioners must recognize the perceptions of service receivers to direct HR practices to meet the requirements of the receivers (Edward, 2004; Ulrich, 2005). Line managers are on the front line of an organization (Kulik, 2004) deserving high level of HR services to meet HR requirements of their departments (Armstrong, 1999). They also maintain a consistent and direct interaction with HR professionals (Christensen, 2006) to meet day-to-day requirements of their departments like appraisal, promotion and termination (McGoven et al., 1997). Thus line managers appear to be the most important customers of HR services. We conducted this study to compare the perceptions of HR service providers (HR managers) with the perceptions of HR service receivers (line managers).
Method
We used case study method to obtain data on the perceptions of HR and line managers about the quality of HR function in the case organization. Thomas et al. (2011) distinguished between three different types of case studies: (a) descriptive case studies; (b) interpretive case studies; and (c) evaluative case studies. Since this study aimed at evaluating the service quality of HR function in a Pakistani case organization, we opted for evaluative case study design that involves description and interpretation but its basic objective is to use data for judging the merit of any programme, event or evaluation. This type of case study is also possible with survey studies. We collected data using three different methods: first, we used survey questionnaire developed by Ulrich in his book “HR Champions”; second, we conducted face-to-face interviews with each respondent; third, we used organizational policy documents and surveys placed on official website and intranet of the organization. We also obtained authorization from Vice President HR of the organization and received an authority letter from the head of Training and Development Division along with a list of 50 line managers (10 HR and 40 line managers) with contact details. We used purposive sampling for identifying the key persons who could provide us required information and selected representative sample by selecting at least one respondent from each department of the organization. The majority of respondents include Head of Departments. The data collection process lasted two months (July and August in 2009) and we were able to collect data from 37 line managers (9 HR and 28 line managers). The response ratio is 74 per cent (i.e., 37 out of 50).
Data Collection Instruments
Results
Quantitative Data Analysis
We used conjoint analysis that is used extensively in marketing research to determine the preferences of customers towards the attributes of a selected product/service (Cattin & Wittink, 1992). First, we generated an orthogonal design in SPSS by creating four different cards (1 = Strategic Partner (SP); 2 = Change Agent (CA); 3 = Employee Champion (EC); 4 = Administrative Expert (AE)). Then, we entered respondents’ responses in the data file based on orthogonal design. Further, we used SPSS syntax to run conjoint analysis. We performed conjoint analysis three times, that is, on the scores of HR line managers, non-HR line managers and on the scores of overall respondents. The conjoint analysis produced utility estimates for each role of HR business partner based on the respondents’ scores which facilitated us in comparing managers’ perceptions about quality of HR function (Table 1).
HR Roles and Utility Estimates
The first column in the Table 1 represents the four roles of HR business partner, second column contains utility estimates based on the perceptions of HR respondents, third column represents utility estimates based on perception of non-HR line managers and the last column represents the utility estimates based on the perceptions of all line managers. According to the utility estimate based on perceptions of HR line managers the quality of “Employee Champion (EC)” role of HR is the highest (0.28). However, there is no difference in the quality of “Strategic Partner” (SP = 0.17) and Administrative Expert (AE = 0.17) role. However, the quality of Change Agent (CA) role of HR is the lowest (−0.61).
The second column describes the utility estimates based on the responses of non-HR respondents. The perceptions of line managers also demonstrate that the quality of employee champion role (0.25) is also highest. However, the non-HR managers’ perceptions represent that the quality of “Administrative Expert (AE)” and “Change Agent (CA)” is low and negative (−0.07). Moreover, the quality of “Strategic Partner (SP = −0.11)” role of HR is the lowest.
The utility estimates based on the perceptions of overall respondents demonstrate that the quality of Employee Champion role of HR is the highest (0.26) and the quality of Administrative Expert (0.013) is medium. However, the quality of Administrative Expert (0.013) and Change Agent (−0.23) is the lowest.
Results of Qualitative Data Analysis
HRD helps by recruiting, training and developing high quality faculty and staff. HR policy assists supervisors/department heads in recruiting and selecting suitably qualified high caliber faculty and staff for vacant positions in a timely manner.
He further explained how recruitment and selection department facilitates the organization in recruiting high quality faculty and staff:
The department achieves this by helping the institution assess its immediate and long term resource requirement and ensuring that it has an appropriate number of qualified employees to fulfill these requirements…
The head of compensation department described:
We keep our managers informed about how our (HRD’s) customers feelby tracking changes via proactive internal and external marketing surveys.
We found that the response of a non-HR manager heading a university department was in accordance with the responses of HR managers whose comments have been shared earlier:
A great example is in form of hiring and promotion criteria. … HR assists us to hire quality faculty members, technical questions come from our side while behavioral questions come from HR…. In Pakistan, qualification criteria are set by PMDC (Pakistan Medical and Dental Council). HR would not go for any candidate if he does not fulfill these criteria. … Similarly a person is not promoted until and unless he does not fulfill criteria of PMDC and our organization itself.
We found that the majority of non-HR respondents working in hospital unit of the organization doubted the strategic level contribution of HRD. For instance, non-HR respondents stated that:
HR participates in top level decision making but available contribution is still to be seen. They must analyze how to achieve the objectives and then align their policies with those objectives.
These professionals also disclaimed the influence of HR in strategic decision-making process. Some views included:
Influence is a ‘way ahead’ and more interaction with managers and employees is needed on strategic part.
HR has no influence in long-term planning. It is the clinical side that dictates and sets the requirements. HR is also playing a passive role regarding Lahore Project.
From the responses of a few managers, we found that the support service departments were suffering from the issues which are, in our perceptions, strategic in nature. For instance a line manager replied:
Career planning is a great issue… People particularly junior staffs do not see career path ahead….
A manager who was heading sport service department reported:
I have been working as assistant manager pharmacy since 8–9 years. Now I am appointed as a manager. My responsibilities changed but there is no change in my compensation and benefits…
We observed that annual employee turnover ratio inside the organization was relatively high (14 per cent) but we did not find any planning for staff retention. The organization employed more than 9,600 employees and turnover ratio described that on average 1,344 employees leave the organization each year. A non-HR manager shared his concerns regarding high turnover as follows:
HR must devise a strategy to retain staff. … Here workload is high. When a technician leaves, it affects the quality of our services. Each new employee needs time to be trained, which is another cost.
Though, the earlier stated examples convey some negative meanings about the strategic role of HR function but almost all of our respondents and organizational archived data consistently reported about three distinct changes within the organization which were lead by HR function. These changes included: (i) appointment of HR Head as Vice President of the organization; (ii) restructuring of HRD itself; and (iii) implementation of HRMIS, that is, People Soft. We are quoting the response of an HR manager acknowledging the appointment of Vice President HR as an example:
As per presidents’ vision, two main positions, Head of HR and Head of Finance, play major role in Strategic Decision Making of the organization. The creation of a special post of Vice President HR, almost a year ago, is the greatest example of the strengthening of HRD inside organization. Previously HR director was heading HR department. But, now Vice President HR is heading the organization after the President. This is the change that came from within HRD.
Vice President HR currently leading all functional areas of the organization was hired from Canada only a couple of months before we started our study. Prior to this transition, a director was heading HR department. Overall, the respondents were appreciating this change and kept some expectations from new Vice President. The first initiative that the new Vice President HR took was the restructuring of the HR department.
Previously, HR has been playing the role of specialist, but, now the role has been shifted towards the role of ‘generalists. We have divided HR personnel into three different “Unit-based” teams: 1) Medical College; 2) IETD, 3) School of Nursing’.
The respondents also appreciated the implementation of “People Soft”, a Human Resource Information System. For instance, a non-HR respondent remarked:
Electronic attendance sheet is a good example of the decentralizing of organizational processes.
The non-HR managers also appreciated these changes but they also expected new Vice President HR to shape organizational culture. For instance, a non-HR manager commented about the administrative style prevalent within the organization in following manner:
Change of management style is necessary. We expect attitudinal changes from VP…
Even an HR manager agreed and complained about bureaucratic style of management:
We are living in bureaucratic type of management styles which influences response times of the processes. A number of persons need to be called upon for almost every type of work. This requires changes in form of quick response requirements and structural changes.
During the discussion about change agent role of HR function, the majority of HR and non-HR line managers appreciated the role of training and development division for introducing some innovative research and education programmes, like “Early Child Development”, web-based trainings, “lunch and learn”, failure causes analysis, root cause analysis, orientation etc. In order to uncover the areas neglected by HR function, we asked respondents to describe their future expectations from HRD which included measures to control organizational politics, change of management style, cultural change, job rotation, leadership development, salary structure, staff retention through pay increments, flexible working hours, pick and drop services for female staff.
HR as an Administrative Expert
We found that the procedural delay was one of the major hindrances in ensuring administrative efficiency of the HR function. For instance, a manager directing a clinical department presented a document regarding the hiring of two doctors. We found the signatures and stamps of almost eight different authorities but the case was still pending. He explained:
HR response time is very lengthy. There are almost 8 to 9 steps for hiring. Look at this application (Sowing a form for appointment of a doctor…) that we have processed for the recruitment of two doctors for our department. The application moves from manager to Chief, then to director of the department. After that it is forwarded to CEO, then COO and then to PVB.
A recently appointed manager heading the university library also stated:
According to my personal experience the operating efficiency is not very good. HR was not prepared for the position that I am working for. I haven’t found office yet. It’s not my office where I am sitting. There is no computer, no printer & no telephone yet….
Normally, the screening of applicants is the responsibility of HR department but a manager heading the engineering unit of the organization criticized:
When we need personnel and we ask them, they send all CV’s to my office instead of screening all the stuff, themselves…
The HR managers heading recruitment and selection department also admitted:
We are stuck in paperwork and record keeping…
Similarly, the manager working in training and development division also explained:
We have limited training staff and limited technological support. Thus we need more apt use of technology to reduce redundant activities.
Nevertheless, HR professionals also believed that the automation of HR processes would enable them to overcome such issues. For instance, an HR manager explained:
We are trying to cut down unnecessary quotient processes. We have recently implemented “People Soft” HRIS inside our organization in order to reduce costs, eliminate unnecessary data and to increase time efficiency. The examples of process improvement include quality circle, medical process, employee checklist, (no) clearance in case of leaving. These processes would be implemented in a couple of months.
We found that the majority of non-HR line managers did not like the administrative style of HR function. Such conclusions can be drawn from the comments of non-HR line managers given next:
“HRD is policeman.” “HR is working as a dictator.” “HR behaves in negative manner.” “When we make individual selection in our departments, HR jumps into.”
“Employee Champion” Role of HR Function
The Employee Champion role of HRD can be analyzed by inquiring the employees about the extent to which their personal and professional need have been satisfied. Thus, we asked respondents to share the initiatives which HR has taken to address their personal and professional needs. The respondents pointed towards some interventions which included orientation and induction, lunch and learn programme, communication skills course, maternity leaves, insurance, low-cost food, education, medical benefits, paid leaves, provident fund scheme, personal as well as car loans, life insurance (85 per cent coverage) etc. Further, we asked professionals to highlight the areas requiring further attention of HR function. As natural, competitive salary and increased incentives was the most frequent highlighted need of both HR and non-HR managers. For instance, one manager stated:
HR must also ensure that compensation is according to the market rate.
When we questioned HR professionals regarding compensation, one HR professional explained:
We conduct ‘yearly compensation survey’ in order to ensure that our compensation strategy is market-based.
However, another HR manager accepted:
In certain areas compensation is below market, but we feel that it must be compensated.
A non-HR manager also criticized unequal distribution of budget and remunerations:
There is discrimination among the departments. ... If I’ll fight for the employees of my department, they say that they have no budgets.... HR must cut budget from other areas to increase salaries. They can cut cost from the tours of top management.
Again, when asked, the HR professionals accepted:
The benefits are fixed. There is need to invest more on HR equally at every level.
The managers also required for increase in annual increments and medical insurance. Some commented:
Increase in medical care provided is 10% while annual inflation increase is 15%, every year increment remains 10% low.
Medical reimbursement has not been reviewed since last 5 years despite that inflation is souring day by day.
Previously, medical facilities were provided to all the family but now they have changed and restricted to wife and kids only. But, in our society parents are also our responsibility.
The lack of succession planning is the second mostly reported need of employees. We have already discussed about the lack of succession planning in support service departments including sports, pharmacy, transport and university departments. The manager of nursing department highlighted the need of flexible working hours to fulfil staff requirements of the department. She stated:
Many outstanding nurses are sitting home because they don’t find flexible shifts.
A non-HR respondent heading a university related department of the organization reported about work abuse in the following manner:
There is gross violation of HR policies in university areas. University staff is being abused... People take personal works from the staff….
A manager also complained about the ignorance of ergonomics at the workplace despite that the ergonomics is an essential part of employee orientation and induction inside the organization. However, a non-HR manager, who had covered the light with a paper, that was shedding light directly into his eyes, passed some harsh remarks:
I don’t see any application of ergonomics. You can see this light. …. It’s gonna make me blind.
We also sense a smell in that portion of the building because the carpet was wet due to rainy water. The manager further explained:
This office is in the basement of this block. When it rains, the water enters in the office and all the carpet becomes wet.
Discussion and Conclusion
Various Pakistani organizations have renamed their personnel divisions as human resource divisions (Khilji, 2005). We found that our case organization also followed the similar pattern as its HR division was previously known as “Personnel and Administration Department.” The quantitative results our study demonstrated that the quality of change agent and strategic partner role of HR is the lowest. The qualitative results of our study also demonstrated similar results. The issues including the lack of influence, lack of career planning, prevalence of traditional administrative style etc. require yet greater attention of the HR professionals to strengthen strategic and change agent role of HRD. Strategic partner role of HR requires HR function to participate in the process of defining organizational objectives (Ulrich, 1997) to develop and implement business strategy (Lawler & Mohrman, 2003). HR executives have been striving for strategic partner role within the organization to offer innovative business solutions (Singh & Latib, 2005). We found that HR lacked strategic partner role in the organization as HR professionals in the case study have traditionally been emphasizing more on administrative activities. Peter and Williams (2003) stated that the organizational emphasis on short term and operational activities restricts strategic contribution of HR to the organization. However, the recent changes like appointment of Vice President HR, restructuring of HR function and implementation of People Soft, reported as well as acknowledged by both HR and line managers demonstrated the role of HR function inside the organization has started evolving. Moreover, these changes were also initiated by HR function which provides evidence for increasing participation and influence of HR in strategic decision making to offer innovative business solutions. Although, we also agree with Khilji (2005) that these HR practices are still in embryonic stage yet we also believe that the case organization is one of the very few organizations which are adapting appropriate HR practices (Abbasi & Berduy, 2008).
The lower quality of HR as administrative expert is depicted from the lower values of utility estimates (0.013). The qualitative findings further explain that employees do not like the administrative role of HR due to certain reasons, for example, procedural delays and the prevalence of bureaucratic style which provide the evidence that the impact of British colonial administration on HR policies and practices still persists in today’s HR divisions of Pakistani organizations (Jhatial & Ali, 2009).
Despite the existence of administrative issues, and low quality of strategic partner and change agent role of HR, the employee perceptions demonstrated that the quality of employee champion role of HR is the highest (0.23). The complaints which our respondents recorded were related with increase of compensation and benefits which is natural. The policy documents also provided evidence for the coverage of a wider range of benefits for employee like maternity, education, car and home loans, health insurance, medical reimbursements and treatment concessions etc.
These findings call for further research to investigate the direction in which HR practices in Pakistan organizations are pointing, that is, whether there is convergence, divergence or cross-vergence.
Managerial Implications and Future Research
Implications of the study start with overall view of quality of service provided by HR department of the organization. The findings of the study may be best utilized if evolution of HR services of the organization is assessed by collecting data at multiple points and by making the comparison of the results obtained. Particularly, the value of the study could be further strengthened by adapting the survey as regular practice to analyze current focus of HR and need to shift from an operational to the strategic HR roles. Second, comparison of comparison of HR professionals' perceptions with the perceptions of non-HR professional’s offers strong implications to determine the degree of alignment between the perceptions of two key internal organizational members. The findings of the study can also be used to develop conception of line managers about role of HR function and to improve understanding of line manager's expectations. This study also shows the way forward for HR professionals of other organizations to replicate the study to assess and improve the quality of HR function in their respective contextual settings. This survey can facilitate HR professionals in unifying the four functions of HR to achieve organizational efficiency and effectiveness also highlighted by Ulrich (1997).
This study adapted case study method to investigate the issue. The researchers in future may be more interested in determining the factors affecting the quality of service provided by HR function of the organization. This study can also be replicated to assess the quality of HR function in other organizational settings both within national as well as cross-national contexts to advance the debate of convergence, divergence and cross-vergence. The researchers used business partner model of Ulrich (1997) consisting of four roles of HR function to carry out this research. However, Ulrich et al. (2012) presented a renewed form of this model consisting of six HR roles. The researchers may use this latest version of business partner model to advance the research on the issue. The researchers conducted face-to-face interviews with the respondents to collect the data. However, the use of focus group may be a more appropriate data collection method in future research.
