An Empirical study on HR as a strategic Business Partner in the Service

Sector

Submitted for

Subject: Change Management

To: Dr. Sarita Kumari

Submitted by

Rajasekhar Iyer MMS 15

Aswathi R. Nair MMS 100

Semester IV HR
2015-17
 Table of Contents
Sr. No Topic Page No.
1 Introduction Role of HR as a Strategic Business Partner 3
2 Literature Review 6
3 Study Objectives, Scope & Hypotheses 8
4 Research Methodology & Sampling 9
5 Data Analysis & Findings 10
6 Conclusion & Suggestions 18
7 Scope for further study 19
8 References 20
9 Annexure A Questionnaire 21

List of Figures
Sr. No Figure No. Page No.
1 Figure 1.1 - Roles of HR as a Strategic Business Partner 3
2 Figure 5.1 10
3 Figure 5.2 10
4 Figure 5.3 11
5 Figure 5.4 11
6 Figure 5.5 11
7 Figure 5.6 12
8 Figure 5.7 12
9 Figure 5.8 12
10 Figure 5.9 13
11 Figure 5.10 13
12 Figure 5.11 13
13 Figure 5.12 14
14 Figure 5.13 14
15 Figure 5.14 14
16 Figure 5.15 15
17 Figure 5.16 15
18 Figure 5.17 15
19 Figure 5.18 16

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 1. Introduction Role of HR as a Strategic Business Partner

Evolution of the Human Resource function in organizations across the world has been marked by
major milestones down the timeline. HR started off as support function within organizations as
the Administration Department in the early 90s. Gradually, it has transformed itself into a key
department through various stages like the Personnel Management and Human Resource
Management. HR has now acquired a crucial position of being a Strategic Business Partner in the
organization.

Core HR Functions
Recruitment and Selection: hiring and selecting candidates for the organization based on the
needs specified to the HR team by the concerned department.

Compensation: designing the payroll components and standardizing the pay structure for the
organization

Learning & Development: arranging training activities to enable the existing workforce of the
organization to deliver results

Performance Management: keeping a track of the performance reviews and rating of each
employee to decide on the low performers and action to be taken for such cases

Employee Engagement: to keep a check on the employee commitment and satisfaction at

workplace through surveys and activities that help them demonstrate their oneness with the
organization.

Figure 1.1 Roles of HR as a Strategic Business Partner

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Strategic Role
Strategy deals with the designing of a long term plan of action to achieve key business objectives
through optimum and effective utilization of available resources to develop a sustainable
competitive advantage for the organization within the defined market of operations. Strategic
role of any department deals with creating strategies related to their core functions within the
organization to enable the organization achieve its business goals in an efficient ans timely
manner.

"Being a strategic partner" is understood as a long-term relationship to achieve defined

objectives common to all partners. As partners management teams and employees in the various
areas of the organization's operations must not get in the each others' way. Partners do not
hinder one another. Instead, they support each other to achieve common objectives with the
purpose of attaining the overall objectives, including business objectives as well as individual
objectives.

Making HR as Strategic Partner

Make effective use of your Human Resource Information System (HRIS) to handle daily
administrative HR tasks. Employees can make use of the self-service facility online. This
saves time and reduces costs.
Fully involve your human resource in HR system development that is supportive of
business strategy development and implementation. This promotes ownership.
Appoint an HR Head who understands well the strategic partnership relationship between
organizational strategy and human resource.
It is said that someone who is an expert in every aspect of the HR function will 'fit the
bill'. But, you may not easily find someone of this caliber. You may have to identify
someone from within your organization and groom him or her for this important role.
In a knowledge economy, HR has an opportunity to become a strategic partner.
Knowledge and information are required to formulate, implement and review strategies.
Decide to become a knowledge organization.

Strategy Development and Implementation

Full participation of HR people in strategy development and implementation promotes HR as
strategic partner.
Ensure that your HR Manager and HR professionals:
contribute to business decisions
develop business acumen to understand how a profitable business is run
are customer-oriented
learn how to link HR practices to your organizational business strategy

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Functions of HR as Strategic Partner
These are among the important ones:
Recruiting the right employees. Align corporate values to your recruitment strategy.
Well-developed competencies of the workforce, and their relevance to organizational
core business.
Participative culture where HR initiatives fully support the overall strategic plan.
Effective use of information technology.
Effective leadership through appointment of the right HR Head.
Identification of human resource practices that make HR as strategic partner, namely,
serving the business needs of your organization. Discard ineffective HR practices that do
not contribute to the success of your organization.

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 2. Literature Review

HR as a business partner helps the other business units in the implementation of their business
models. This support can come in through support for learning and growth related to relevant
capabilities required by the business units for successful implementation of their models. In the
strategic role, HR executives are involved in the strategy formulation for the organization with
the top management. Here, rather than just implementing and supporting strategies, HR is
involved in strategic decision making. (Khan M D, 2014)
The core skills that HR needs to be a strategic business partner include business understanding,
strategic planning, organization design and cross-functional experience skills. Besides these, two
other types of skills requires are Interpersonal Dynamics which includes interpersonal,
management, leadership and team skills and Managing Outsourcing which focuses on mergers,
acquisitions and divestitures. Being a strategic partner, HR should focus on talent development
through rotation, use of specialized expertise and measure the impact of HR programs in terms of
cost and outcomes. (Khan M D, 2014)

An HRBPs goal must be to become a credible activist, who is respected and listened to both
because of their knowledge of the business and because they have the confidence to translate this
knowledge into actions. To become a credible activist, successful HRBPs need to broadly and
deeply understand the businesses they support in everything from finance to operations and must
know the businesss strategy and needs. Key strategic HR business partnering would include
taking an investment-based service approach, succession planning & talent management,
forecasting & contingency planning and brokering knowledge through HR knowledge
specialists. (Njemanze, 2016)

Traditionally, strategic role of HR was mainly (a) need-driven wherein HRs role is to assess and
address skill deficiencies i.e. gap closing, (b) opportunities-driven where HR seeks to manage
cultural change through updates on the developments in the world of business by enabling the
company to acquire abilities & patterns of behaviour making it more efficient today or providing
a source of competitiveness for the future.(c) capabilities-driven which focuses on delivering
organizational capabilities in times of crises. (Mitsakis V F, 2014)

An HR business partner works closely with other business leaders to put in place its strategy,
steer its implementation, and make the best use of the organizations people. Organizations are
considered as living entities. As such, they consist of the head and the heart, which are the two
significant elements just like for humans. The business leader is the head of the organization
while the HR leader is its heart. A perfect balance in the organization is possible only when
these two elements (head and heart) work in perfect rhythm. The inclusion of HR into the

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strategic role is a two-party game between the business and the HR leaders. The more aligned are
their objectives, interests and capabilities, the tighter will be the bond. (Saha J)

The premise of HR being a strategic business partner is that HRs first priority is to help in
delivering business results by enabling the organization to align people with the business goals.
But studies point out that only in a very few organizations are HR, in fact, strategic business
partners. Understanding business, getting people aligned to the business, and being strategically
proactive is a requirement of every function. Hence, HR, differently, needs to facilitate change
in mindsets, be obsesses about development and renewal of people, build appropriate
competencies and attract and build a diverse workforce. (Bhattacharya P)

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 3. Study Objectives, Scope & Hypotheses

Objectives:
This study was conducted with the following primary objectives in mind:
To understand HR as a function in the service industry
To understand the strategic roles of HR in the service industry
To analyse the findings of the study and arrive at practical suggestions

Scope:
The study aims to focus on the companies from the service sector in India. Service sector
comprises of organizations like banks, IT solutions & services, consultancy firms etc.
Organizations with a defined HR team and job roles will fit in as apt sample subjects for the
study. This study aims to analyse the role of HR across all major functions like compensation,
succession planning, training, engagement etc.

Hypothesis
While the study has very little scope for statistical analysis, simple mathematical analysis of the
collected data has been provided. Trend analysis of the open ended questions has also been done.
The basic hypothesis for this study would, hence, be as follows:
H0: The role of HR in the service industry has significant strategic focus
H1: The role of HR in the service industry lacks strategic focus

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 4. Research Methodology & Sampling

Research Design:
The project objectives were accomplished by means of an exploratory research. The idea was to
understand and enlist the existing practices in various organization of interest. The research was
based on identifying various qualitative aspects of HR practices and analyse them for a strategic
intent. No major quantitative aspect was taken into consideration although the survey responses
have been recorded on a 4-point scale for ease of analysis.

Data Collection & Sources:

To gather the information for this study, a primary research was conducted. The data was
collected mainly through online circulation of questionnaires. Data from some subjects were
collected over telephonic interviews due to restrictions on sharing data online. The points of
contact who acted as sources of information listed in this study include HR managers and
Functional Heads of HR at the selected organizations.

Sampling:
For the purpose of this study, the convenience sampling approach was taken. Companies from
the service sector were identified as subjects for the study based on availability of reliable and
relevant contacts. In total, 10 companies were shortlisted for data collection of which responses
could be gathered only from 6. Of the remaining companies, some declined to budge information
in line with the study focus while few contact sources did not respond after repeated reminders
and requests.

Development of Instrument:
The study was aided by a questionnaire consisting of 26 questions revolving around the various
functions of HR in an organization. These questions were framed with an intent to elicit
information related to the extent of strategic focus that HR had in the organization being
surveyed.

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 5. Data Analysis & Findings

A total of 10 organizations were approached for the purpose of this study. These included
reputed organizations from the IT service and Banking sector.

Data in the following analysis include responses from 6 companies namely:

Tata Sons
Tata Consultancy Services
Infosys
SBI Life
Nomura
State Street Syntel

The following charts show a detailed analysis of each item from the questionnaire.

Figure 5.1

Figure 5.2

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Figure 5.3

Figure 5.4

Figure 5.5

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Figure 5.6

Figure 5.7

Figure 5.8

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Figure 5.9

Figure 5.10

Figure 5.11

13
Figure 5.12

Figure 5.13

Figure 5.14

14
Figure 5.15

Figure 5.16

Figure 5.17

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 Figure 5.18

Findings
100% of the total population are in agreement that HR is completely aware of the core
business concerns.
83% are in agreement that HR participates in defining organizational objectives and
business goals however 17% have disagreed and hence HR needs to have active
participation in defining organizational objectives in these organizations.
83.5% are in agreement that HR plays a crucial role in aiding the accomplishment of
business goals however 16.5% have disagreed and hence HR needs to have active role
in accomplishment of business goals.
All the surveyed organizations have their HR practices and policies aligned to business
objectives to a considerable extent.
83% are in agreement that HR is consulted by the top management on strategic issues
and their resolution however 17% have disagreed and hence steps to involve HR on
strategic issues have to be implemented.
83% are in agreement that HR plays a key role in formulating the leadership bench of
your organization however 17% have disagreed, hence HR needs to play a key role in
succession planning.
100% of the total population are in agreement that succession planning is done for key
roles in top management.
100% of the total population are in agreement that succession planning is done for key
roles in middle management.
83% are in agreement that HR develops contingency plans to support business
strategies based on crucial market developments however 17% have disagreed, hence
HR needs to play an active role in developing contingency plans to support business
strategies.
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 83% are in agreement that employees are given compensation or benefits in line with
market practices however 17% have disagreed, hence HR needs to evaluate the
compensation and benefits taking the people in loop who have disagreed.
83.5% are in agreement that the compensation structure or benefits given to employees
align with business objectives however 16.5% have disagreed and hence HR needs to
take the people who have disagreed into consideration and take notice of their
disagreement.
100% of the total population are in agreement that organization follows a unique
Employee Value Proposition.
83% are in agreement that the organization follows a dedicated T&D practice however
17% have disagreed, hence T&D team needs to assessed on their operations.
100% of the total population are in agreement that the organization follows talent
management as a core HR strategy.
100% of the total population are in agreement that the organization regularly takes up
employee engagement activities and surveys.
100% of the total population are in agreement that the organization has a structured
performance review and management program.
50% are in agreement that parameters for performance monitoring are revised regularly
as per market developments however 50% have disagreed, hence HR needs to pay
immediate attention on the parameters whether they are being revised regularly.
50% are in agreement that performance review involves all the key stakeholders
affected by employees direct performance however 50% have disagreed, hence HR
needs to pay immediate attention on the disagreement and should involve all key
stakeholders.
For all the queries except 2 the response in favor of agreement is more than 80%.

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 6. Conclusion & Suggestions

We can conclude that since around 80% of the response is in agreement the HR plays a
crucial role as a strategic business partner in service sector.
Major disagreements have been in case of Performance monitoring and review hence we
can conclude that the HR lacks involvement in these areas.
The HR takes up regularly employee engagement activities and surveys taking
appropriate and timely feedback from employees.
Training & Development is followed as a dedicated practice.
HR has awareness of core business concerns and defines organizational objectives and
business goals clearly.
HR is majorly involved in succession for key roles in middle and top management.
HR sees to it that compensation & benefits are in line with market practices and align
with business objectives.
Unique Employee Value Proposition (EVP) is followed by the organisation.
Talent management as a core HR strategy is being followed by organisations in service
sectors.

Suggestions
Disagreement in terms of performance monitoring and reviews needs to paid immediate
attention.
The participants who disagree should be taken into loop and their views should be
considered while altering the policies for the same.
New methods of performance appraisals to be adopted and to do away with orthodox
methods.
Inclclusion of all key stakeholders affected by employees direct performance to be
involved in the performance review of the employees.
Regular feedback and interaction of the HR with the employees will help them to get
consistent information on the current scenario.
Market development to be constantly monitored and plans and policies to be altered as
per the same.
Compensation & Benefits should be in line with market practices.

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 7. Scope for further study

This study was on the role of HR as a strategic business partner in service sector.
It would be very interesting to conduct another study within the same area of research,
with the incorporation of more industries and more companies, which will give more
integrated result to the topic and better utility
The study concentrates only on the service sector. While a comparative study of other
sectors and in other cities would be an interesting study to analyse the regional variations.
It will be an interesting piece of information for the Human Resource Department.

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 8. References

Bhattacharya, P. Competencies for HR HR leaders in the next decade. Retrieved on

January 12, 2017 from http://www.greatplacetowork.in/storage/documents/-
Competencies_for_HR-_Prasenjit_Bhattacharya.pdf

Khan, D., M. (2014). HR as a Strategic Partner: A Critical Review. Retrieved on January

15, 2017 from http://www.macrothink.org/journal/index.php/ijhrs/article/viewFile/5129/4125

Njemanze, I. (2016). What does being a Strategic HR Business Partner look like in
practice?. Retrieved on January 20, 2017 from http://digitalcommons.ilr.cornell.edu/cgi/-
viewcontent.cgi?article=1109&context=student

Saha, J. Singapore Human Resource Institute. From HR to Strategic Business Partner.

Retrieved on February 10, 2017 from http://www.shri.org.sg/downloads/-
pub_art_strategic_partner.pdf

Mitsakis, F., V. (2014). Human Resources (HR) as a Strategic Business Partner: Value
Creation and Risk Reduction Capacity. Retrieved on February 5, 2017 from
http://www.macrothink.org/journal/index.php/ijhrs/article/viewFile/5285/4344

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 9. Annexure A Questionnaire

1. The HR plays a key role in formulating the leadership bench of your organization
Strongly Agree
Agree
Disagree
Strongly Disagree

2. Succession planning is done for key roles in top management

Strongly Agree
Agree
Disagree
Strongly Disagree

3. Succession planning is done for key roles in middle management

Strongly Agree
Agree
Disagree
Strongly Disagree

4. HR develops contingency plans to support business strategies based on crucial market

developments
Strongly Agree
Agree
Disagree
Strongly Disagree

5. HR is completely aware of the core business concerns i.e. competitors, customers,

business propositions etc.
Strongly Agree
Agree
Disagree
Strongly Disagree

6. HR participates in defining organizational objectives and business goals

Strongly Agree
Agree
Disagree

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 Strongly Disagree

7. HR plays a crucial role in aiding the accomplishment of business goals

Strongly Agree
Agree
Disagree
Strongly Disagree

8. HR is consulted by the top management on strategic issues and their resolution

Strongly Agree
Agree
Disagree
Strongly Disagree

9. HR practices and policies align with the organization's business objectives

Strongly Agree
Agree
Disagree
Strongly Disagree

10. The areas of focus for HR while executing business strategies include:
______________________
______________________

11. The employees are given compensation or benefits in line with market practices
Strongly Agree
Agree
Disagree
Strongly Disagree

12. The compensation structure or benefits given to employees align with business objectives
Strongly Agree
Agree
Disagree
Strongly Disagree

13. The employee benefits that focus on driving business include:

______________________
______________________

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14. The organization follows a unique Employee Value Proposition (EVP)
Strongly Agree
Agree
Disagree
Strongly Disagree

15. The EVP of your organization includes

______________________
______________________

16. The organization follows a dedicated T&D practice

Strongly Agree
Agree
Disagree
Strongly Disagree

17. The organization follows talent management as a core HR strategy

Strongly Agree
Agree
Disagree
Strongly Disagree

18. The talent attraction & retention approaches used by the organization include the
following activities:
______________________
______________________

19. Has there been any major instance in the past when an HR policy/plan/approach has
significantly benefited the business in times of crisis or aid the achievement of business
goals? Elaborate.
________________________________________________________________________
________________________________________________________________________

20. The organization regularly takes up employee engagement activities and surveys
Strongly Agree
Agree
Disagree
Strongly Disagree

21. Employee engagement activities in the organization include

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 ______________________
______________________
22. The organization has a structured performance review and management program
Strongly Agree
Agree
Disagree
Strongly Disagree

23. The parameters for performance monitoring are revised regularly as per market
developments
Strongly Agree
Agree
Disagree
Strongly Disagree

24. Performance review in the organization is conducted

Annually
Half Yearly
Continuous basis (Project/Assignment wise)

25. Performance review involves all the key stakeholders affected by employees direct
performance
Strongly Agree
Agree
Disagree
Strongly Disagree

26. Any HR related process or policy you would suggest to add in your organization
________________________________________________________________________
________________________________________________________________________
__________________

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