Case Study 10 Organization and Role of HR THE ROLE OF HR AT INTERNATIONAL AID The case International Aid is a charity that operates as an NGO (non-government organization) providing aid in the form of development projects in Third World countries, especially in Africa The projects may be educational, advice on healthcare, agricultural development or constructional, eg schools or wells They are funded by international organizations such as the World Bank, the World Health Organization and the UK Government, but it is also necessary for International Aid to raise funds itself to finance its headquarters operations and some projects in their early stages Projects are run by a leader from International Aid with other International Aid specialists in the larger projects, although maximum use is made of local nationals as members of the team Currently there are 96 projects in 10 African countries and two in a South American country The total number of International Aid staff working overseas is about 350 The headquarters of International Aid is in Cambridge and employs about 200 staff in operations development and management, marketing and fundraising, public affairs, finance and personnel management International Aid has run into some difficulties in recent years It has had problems in raising sufficient funds itself and it has been more difficult to get funding from the international organizations and the UK Government It has also been criticized for having too high an expense ratio arising from inadequate financial control and, possibly, over-staffing Consequently, a new chair of trustees has been appointed and about half the other trustees have been replaced, with a heavier emphasis on business and management expertise The Chief Executive of International Aid took early retirement and a new one was appointed He Chief of Executive was previously the Group HR Director a large property development firm with extensive overseas interests and his earlier career had been in financial management The new Chief Executive was instructed by the Trustees to take a very hard look at the existing organization structure and the capabilities ofDirector the directors Director of International Operations Director of Operational Planning of Finance Director of Fundraising and Public Affairs of Director each ofofAdministration the major functions and report back with his proposals in three months’ time The present organization was: International project directors Head of Fundraising Head of Public Affairs Financial Accountant Head of IT Head of Personnel Head of Administrative Services The Chief Executive summarized his survey of the organization as follows: ● The Director of International Operations was a very efficient manager but had neglected her responsibilities for ensuring that overseas staff were properly selected, briefed and trained, possibly because in an ill-defined way the Director of Operational Planning was involved in staffing – the distinction between the two roles was unclear, which led to confusion and overlap ● The Director of Finance was technically good but had allowed the department to be overstaffed and needed the support of a qualified management accountant rather than an unqualified accounting administrator who was a glorified clerk ● The Director of Fundraising and Public Affairs did not have enough to and was in any case hampered by an inadequate Head of Fundraising ● The Head of Public Affairs was good at her job but was given little scope by her Director who was essentially a fundraiser The result was that the organization was not presenting itself adequately to the Government and the international funding organizations or the public at large ● The Director of Administration did not have enough to to justify his position and the administrative side of his department was grossly over-staffed; the Head of IT and Head of Personnel were quite capable of carrying out their roles without him ● The Head of IT was effective and could contribute much more given better leadership ● The Personnel Manager was perfectly adequate in her primarily administrative role but was given no scope or encouragement to contribute more, although it was unlikely that even given that scope she could so ● The quality of some overseas staff was inadequate, which has led to questions from funders about the ability of International Aid to deliver on its project obligations ● The rate of turnover of overseas staff was far too high; it seemed that they were inadequately trained or prepared for their duties (the responsibility, oddly enough of the Director of Operational Planning) To deal with these problems the Chief Executive proposed the following new organization to the Trustees (only posts affected by the reorganization are shown): Chief Executive Director of Operations Director of Finance Director of Fundraising Head of Operations Planning* Financial Accountant Management Accountant* Director of Public Affairs Director of HR* Head of HR Services** Head of Organizational Learning* Head of IT Head of Administrative Services * new post ** previously Head of Personnel The reaction of the Trustees to this proposal was on the whole favourable They grumbled that there seemed to be a lot of new posts, but the Chief Executive made a persuasive business case to the effect that they would provide added value They also questioned the creation of a Director of HR responsible to the Chief Executive A number of Trustees objected strongly to the term ‘human resources’ on the grounds that it was a demeaning concept that treated people as mere resources to be exploited by the organization Others asked if this post was significant enough to justify its position as a member of the senior management team, while others wondered what a Head of Organizational Learning was when he or she was at home The Chief Executive was therefore asked to report back to the Trustees with a further justification for this proposal They wanted to know what added value would be provided by it, ie what, specifically, an HR function would contribute The task Prepare this justification for the Trustees Comments This case explores some fundamental issues about the role of HR and, but only incidentally, why it should be called ‘HR’ and not ‘personnel management’ Taking the last point first; the answer is that it doesn’t really matter and some people get over the ‘demeaning’ implications of HRM by calling it ‘people management’ But it has to be recognized that HRM as the name of the process and HR as the title of the function are now common parlance This might not be enough to satisfy someone hostile to the connotations of ‘HRM’ but there are some essential differences in the concepts as set out in Armstrong’s Handbook of Human Resource Management Practice (Table 6.1, pages 126–27), the most important being the strategic and business-oriented nature of HRM, its emphasis on integration or fit, and its belief that employees should be treated as assets, not costs Research carried out by Hoque and Noon (referred to on page 105 of Armstrong’s Handbook of Human Resource Management Practice) found that people described as ‘HR’ tended to be more strategic than those described as ‘personnel’ In this case there are some strong pointers to the need for a strategic HRM approach It can be assumed that the strategic goals of the charity are to plan and deliver more successful projects, to run the charity as a whole as well as individual projects more cost-effectively, and by so doing generate more finance from funders and the public This depends on having highquality staff working on projects and directing their work from headquarters as well as better quality people in fundraising and public affairs The onus for doing this rests with line management but a strategically oriented HR function can make a significant value-added contribution by providing advice and services that support the achievement of strategic goals through recruitment and selection, learning and development programmes (with an emphasis on organizational learning) and talent management In other words, as an HR function rather than one simply providing basic personnel services, it can make a major contribution to organizational success Further reading in Armstrong’s Handbook of Human Resource Management Practice: Chapters 1, and