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May 5, 2003

Strategic Human ever answered the question be strategic, we cannot do


to my satisfaction. So, I this by limiting our definition
Resource decided to take a stab at of humans.
Management answering the question
(SHRM): What is it – myself. Consider the current interest
in expanding the external
REALLY??? Let’s start with a definition. brand within the firm. We
Theresa Welbourne , Ph.D Human resource strategy is know that brand loyalty is
the result of a set of decisions important, and therefore,
Learning From Students a company makes about the many organizations are trying
humans with whom it does to use branding to build a
Last week, I was invited to business. Hmm, sounds stable base of loyal external
present in the Distinguished easy. Marketing strategy is customers and internal
Professor series at the the set of decisions a employees. These firms
University of Colorado (CU), company makes about how it recognize that all of the
Boulder. The audience does marketing; finance humans with whom they do
consisted of a group of strategy is the set of business see the same
doctoral students who are decisions a company makes advertisements, deal with the
studying HR strategy, macro about finance, etc. But let’s same managers, and are
economics, organization diagnose this a bit and see exposed to the same
behavior, strategy, why there is no much messages. Therefore, to be
entrepreneurship, and more. confusion in the field. strategic, the message should
The CU students were be consistent at all times.
particularly impressive as Who Are The Humans?
they have a very broad range When we talk about humans What Is It About Humans
of prior work experience in human resources, why do That Matters?
(impressive means they are we limit our discussion to only If we agree that the “human”
smart, interesting, fun to hang employees? What about all in “human resource
out with, and they had tough the other humans with whom management (HRM)” should
questions). an organization does be more than employees,
business? It seems to me that then to be strategic, we must
A few weeks before I gave if HR executives are good at consider why humans are
my speech, another professor helping business leaders important to business
spoke to the students about make decisions about success. The mere existence
strategic human resource employees, then why can’t of humans is not enough;
management. As a result of they provide these leaders however, the field of human
hearing my presentation and with assistance and skill capital management does
that of the prior SHRM development for decision seem to lead us down a path
lecturer, I was asked the making with regards to other of thinking that humans are
following question: What is humans? Shouldn’t your assets. According to the rules
HR strategy? human resource strategy be of accounting and financial
focused on ALL of your management, assets need to
The students had been people or stakeholders? be controlled. Control of the
reading all the relevant human asset would then be
SHRM literature, and they did As long as we stay tied to the important for long-term
not think the volumes of notion that “humans” are only business success.
articles and books provided employees, then HRM cannot
an answer. I’m not surprised. be strategic. Leaders make However, I argue that
I’ve been struggling with this decisions, and they need to humans are not the asset.
new phrase for the last 20 consider the effect of their Relationships with humans
years. I’ve asked senior VPs decisions on everyone. If our are the true asset, and
of HRM, senior professors in job is to help develop and relationships cannot be
the field, CEOs, consultants, support leaders who need to controlled (have you ever
and more, and no one has
tried to do this at home and campaigns of both Southwest key group in charge of
quickly learned it does not Airlines and Wal-Mart. These leadership and management
work?). Relationships are two companies are development, HRM can
negotiated and renegotiated consistently ranked as best impact the decisions leaders
and then renegotiated. employers and high growth make about humans.
Relationships take care and firms with repeat business
nurturing, and you have to and high customer service “Research and consulting firm
constantly monitor how you because they constantly Gartner projects HR business
are doing. make relationships with process outsourcing (BPO)
people a high priority. will reach $55 billion in 2005,”
When relationships are according to IOMA’s Human
optimized, you get “above Who’s In Charge Of Resource Department
and beyond” behaviors as a Optimizing Human Management Report.
result. This may be translated Relationships? “Dataquest, Inc. predicts the
into loyalty, engagement, It’s interesting to note that, U.S. HR outsourcing market
trust, and more. Consider the although there is will burgeon into a $58.5
companies listed in Fortune considerable support for the billion industry by 2005, up
Magazine’s “100 Best notion that relationships are from $21.7 billion in 2000.”
Companies To Work For.” an organization’s true asset, With the current wave of
They all have processes in in most companies, no one customer relationship
place to improve employee department, person, or group management and employee
relationships. For example, tends to be held accountable relationship management
top-ranked Edward Jones for the total stakeholder technology support, executive
provides all employees with relationship strategy. Finance coaching, outsourcing, and
substantial training, Vision is in charge of relationships more, the time for relationship
Service Providers honors co- with shareholders and management is here or close
workers who have passed potential investors; marketing for every business.
away, Adobe Systems offers and sales are in charge of
frequent job rotations and relationships with customers; If HRM Does Not Take The
Friday night beer bashes, and managers and HRM are in Lead, Who Will?
J.M. Smucker lets employees charge of relationships with If HRM does not start down
taste test new products. At employees; purchasing and the relationship management
Qualcomm, sick days are manufacturing are in charge path, someone else will, and
based on an honor system, of relationships with vendors, as “old” HRM continues to be
and “90% of the staff looks and the list goes on. But no outsourced, one must wonder
forward to coming to work.” one group is in charge of what will be left for today’s
assuring that there is one HR executives? Relationship
With employees, my research coherent stakeholder strategy management is an
shows that above and beyond for a business. Thus, the true opportunity that can be
behaviors include more asset – human relationships – seized by HR executives who
teamwork, submitting is often mismanaged. are truly strategic and who
suggestions and new ideas, understand what is needed
helping another team However, it seems that the for their businesses to
member when it’s not part of HRM department could be in succeed today and remain
the job, and more. With the perfect position to fill this competitive as the business
customers, above and void. Why can’t HRM take on landscape continues to
beyond behavior means the role of REAL human evolve and change.
sticking with a vendor even relationship strategy (note
when their prices go up. that I changed the term from
Consider the effect of the resource to relationship to
relationship management reflect the key asset)? As the
In these studies, she demonstrated
the direct effects of leadership and
human resource management
Author strategies on firm survival and
financial performance (e.g. stock
price growth, earnings growth, etc.).
Her research has been featured in
popular publications such as Inc.
Magazine, The Wall Street Journal,
Business Week, The New York
Times, and Entrepreneur Magazine.
Her work has been published in
Theresa Welbourne several books and in journals such
prpro@chartermi.net as the Academy of Management
www.eepulse.com Journal, Journal of Management,
Human Resource Planning,
Executive Talent, Compensation
and Benefits Review, Journal of
Applied Psychology, and Journal of
Theresa M. Welbourne, Ph.D. is the High Technology Management
founder, President and CEO of Research. She is currently writing a
eePulse, Inc. as well as an book (publisher is Jossey-Bass) that
Associate Professor of Organization summarizes all of her research to
Behavior and Human Resource date.
Management at the University of For more information, please
Michigan Business School. contact eePulse, Inc. at 734-996-
Prior to summer, 1999, she was on 2321.
the faculty of the Human Resource
Studies Department (from 1992 to
1999) and the Entrepreneurship and
Personal Enterprise Program (from
1993 to 1999) at Cornell University.
She received her Ph.D. in Business
from the University of Colorado,
Boulder in 1992. Prior to that, she
spent approximately ten years
working in the field of human
resource management as a
practitioner and as a consultant. Dr.
Welbourne’s expertise is in the area
of employee management in high
growth and high change
organizations. Her particular focus is
on understanding how various
human resource, communication,
leadership, and rewards strategies
affect the longer-term performance
of organizations and the employees
within those firms.
As CEO of eePulse, Inc., she leads
a technology and research business
that is delivering web-based Pulse
surveys powered by the company’s
proprietary software called
Measurecom™. The measurement
and communication tool was
developed based on Dr.
Welbourne’s research and
consulting. She conducted a number
of studies with initial public offering
firms and large firms undergoing
large-scale interventions.