The definition of value normally originates from the receiver, rather than the giver. As such, in human resource, value proposition begins with a focus on the receivers rather than the givers. To place this into perspective, professionals within human resource are required to exert a value premise that is open to what others want rather than an imposition of their own systems of goals, beliefs, and actions upon others. Within the human resource discipline, this fundamental principle is often overlooked immensely resulting in the imposition of goals, beliefs, and actions to organizational agendas and objectives. This disposition makes HR professionals to focus on desired results, without paying the much-needed attention to the outlook of others within the organization and externally, among the clients. For proper influence to transpire, professionals in HR need to commence with the goals and beliefs of others in mind. Such pertinent considerations as understanding who the receiving stakeholders are, their goals and values, and the importance of these objectives to them is highly fundamental. After the full comprehension of these prerequisites, professionals in HR can subsequently place an investment in HR practices that aid the stakeholders in gaining value as defined by them. This makes the value proposition in HR objective and applicable.
Human Resource value proposition is highly important due to its implications not only for Human Resource professionals but also on its organizational impact. First, the need for HR value proposition stems from the fact that the work of human resources does not begin with HR but commences with the business in question. In the past decade alone, within the profession of human resource, numerous professionals continued to aspire more completeness relative to key business objectives. Such temperaments were seen in business perspectives that culminated in a number of applicable phrases such as strategic players, business partners, players within the business, full contributors among others. While these ambitions within business are apposite and quite frankly anticipated, the fact that professionals in human resource continue to phrase their business acuity in such outlooks is a prodigious concern. This phenomenon has brought about the need for value propositions within the human resource. For example, to understand the phenomenon of a business focus, consider the chief wealth creators of a particular company. In a software company, the critical monetary creator is the senior most systems architect. Within an investment banking firm, the investment banker rakes in sufficient cash for the business. In a company specializing in oil, the petroleum geologists are pertinent moneymakers. Therefore, professionals in HR need to possess an innate line of sight between their activities and the best interest of dominant stakeholders, through having sound value propositions in HR.
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The second importance of value propositions within HR is the fact that definitive business receivers normally reside in the various areas whereby companies serve (Ulrich & Brockbank, 2005). Such areas comprise of the customers who buy services and products and the shareholders who accord the necessary capital. Innately, professionals within the HR department aspire to be business partners; as such, they begin by meeting the demands of the market and must have a line of sight to the marketplace. Such awareness places professionals within HR in a situation that is inherently complex since they have to come up with a line of sight commensurate to the frequency and multiplicity of stakeholders’ demands. Such demands range from internal company clients such as employees and managers to external clients such as the investors and customers. Within most companies, the line of sight of professionals in human resource to the internal customers is highly significant; however, the one to external customers and various stakeholders receives less attention. This underscores the importance of value proposition since through focusing on the knowledge of external business matters, a determination of the utility and relevance of virtually all internal business operations within a company becomes achievable. To understand this, an applicable posit is that the external constituents within a business, which entails the products, services, and capital, ultimately contribute to all the occurrences within a company, through their fiscal infusion. Such realities are a great determinant on whether the human resource has the capacity to create not only human capabilities but also organizational abilities that consequence in product, result, and service generation.
The third importance of values propositions is that they frame human resource as a core source of competitive advantage. Within firms, competitive advantages exist to enable firms to innovate unique products and services that cannot be copied easily by their competitors. Therefore, what such companies do, that is better than their competitors, is highly valued by their customers, employees, owners, or managers. In stark simplification, the creation of competitive advantages boils down to the “wallet test.” In essence, an internal operation passes the wallet test if it greatly inspires shareholders or customers to spend their money on the firm instead of their competitors. A good example here is that product development creates a competitive advantage when the products created woo customers into buying them. On the other hand, marketing creates an innate competitive advantage when it advertises products in a way that inspires shareholders and customers to purchase the products and the stocks of the company. Thus, if human resource is to generate an immense competitive advantage, it must first augment its value creation with substantial results. Consequently, human resource passes the wallet test immensely when it seamlessly incorporates human and organizational capabilities that are substantially enhanced than those of the competitor firms and therefore move shareholders and customers to invest their potential earnings in the overall progress of the company.
HR value proposition aligns pertinent practices with the requirements of both external and internal stakeholders within a company. Through such successful alignments, human resource augments values as defined by these stakeholders. Here, a good example is when an oilfield service company has dropped its markets from say 23 percent to 19 percent in a $15 billion overall market. In such a case, the HR leadership and the senior team in management recommends a large-scale survey of customers to come up with the reason behind the drop in market share. Another importance is that through having a value proposition within the HR department, HR professionals are directed to acquire skills and personal knowledge that is necessary for linking HR activity to the value of stakeholders (Ulrich & Brockbank, 2005). The failure of HR in making this linkage allows interferences to transpire between the practices of HR and the demands of stakeholders. Such interferences may be the lack of external customer and shareholder knowledge, contemporary processes in HR or even the business strategies within the company. Such interferences are normally broken through sound value creation and propositions within the HR department that ultimately aligns stakeholder values to the objectives and goals of the business. Ultimately, through focusing on the stakeholders, the HR department is able to propose pertinent values that apply to the business
The human resource department should consider five pertinent elements in their quest for value propositions. All business organizations operate in the intricate context of business realities that are external in nature. As such, these external business realities are pertinent considerations within the process of business value creation (Ulrich & Brockbank, 2005). Presently, external business realities that have the ultimate effect on the owners and external customers include the dynamic and deep-seated changes in technology, regulatory and economic environments, and the critical alterations in human demographics. All these current external realities are present in the increasing context of the growing business globalization context (Ulrich & Brockbank, 2005). As such, actions in human resource within a firm have to influence and reflect external realities in business as experienced outside the firm. Moreover, professionals within the human resource department must lucidly discuss these realities, connecting them with their day-to-day business operational activities. Knowledge and understanding of business realities enable the placement of HR practices in context. This placement commensurately ties the practices to competitive challenges, relating them to the concerns facing line managers. Ultimately, these contextual aspects provide a proper rationale for the occurrence of a transformation. As such, as an element of consideration in the value proposition, HR professionals should be conversant with both how their actions aid firm progress and the realities of the external world.
The human resource department must also consider the stakeholders in delivering value or in the development of applicable and sound value propositions for the company (Ulrich & Brockbank, 2005). Since the definition of business value originates from the receivers of products and services, who are essentially the customers, employees, line managers, and investors, among others, stakeholders are pertinent to core value propositions. Human resource is successful if and when the stakeholders of the company are perceived and if that perception accords immense value to the company. Conferring what matters to stakeholders has its prime focus on the outcomes of the human resource rather than on their actual activities. Therefore, in considering stakeholders, a focus on investors who value market capitalization as well as shareholder returns is highly pertinent and essential in the delivery of values. Following the focus on investors next comes shareholders and customers, who represent the ultimate determinants of relevance within pertinent organizational outcomes. Firms succeed the moment money flows in the proper direction dictated by a wallet-to-wallet structure. Moreover, the creation of value within internal stakeholders is pertinent as it accords the much-needed craft in business strategies through the alignment of activities and the demands of customers and investors.
Overall, value proposition rests upon companies that consider their employees to be their most valuable assets, subsequently, making human resource their extreme value. In an outwardly general sense, HR serves in the motivation of employees to not only attain top performances structures but also maintain the culture of an organization in the high performance of duties. Presently, HR is becoming a prominent role in its overall functionality of developing and building an organization that is both culturally and monetary sound. As such, HR provides value through various ways among them in harnessing the power of people and performance, talent acquisition and retention, planning, and legal protection, among others (Kokemuller, 2017). Through talent acquisition, top talent is hired and retained, forming a foundation of high performance within the operational structure of the company (Wallace, Lings, Cameron & Sheldon, 2013). HR creates this value through the management of systems that attract, recruit, train, hire and motivate important company employees, leading to their assimilation and ultimately, an immense value for the company. Through planning also, value is procured in HR strategies that are proactive in nature. Such strategies include the assessments of company strengths, weaknesses and the prognostications of its opportunities and threats.
Ultimately, to attain proper value propositions, the professionals in HR need to treat the various processes and models of value in a global sense that reflects efficiency, agility, and ample competitiveness (Frow et al., 2014). Through focusing on globalization, the value chain for the company becomes augmented, and this results in a competitive nature within the business organization. On the other hand, value propositions lead to profitability through cost and growth. As such, these two variables act as benchmarks to the commitment in rapid growth, cost efficiency, and the overall proposition of values within appropriate business structures.
References
Ulrich, D., & Brockbank, W. (2005). The HR value proposition . Boston, Mass.: Harvard Business School Press.
Wallace, M., Lings, I., Cameron, R., & Sheldon, N. (2013). Attracting and Retaining Staff: The Role of Branding and Industry Image. Workforce Development , 19-36. http://dx.doi.org/10.1007/978-981-4560-58-0_2
Kokemuller, N. (2017). How Does HR Add Value to an Organization? . Smallbusiness.chron.com . Retrieved 6 November 2017, from http://smallbusiness.chron.com/hr-add-value-organization-50980.html
Frow, P., McColl-Kennedy, J., Hilton, T., Davidson, A., Payne, A., & Brozovic, D. (2014). Value propositions. Marketing Theory , 14 (3), 327-351. http://dx.doi.org/10.1177/1470593114534346
