There are a variety of ways in which HR can create value but the main one, at the organisational level at least, is creating organisational capabilities.
Ed Lawler adds some useful detail to the definition of this type of creating value, suggesting that the strategic part of HR’s role needs to be bifurcated again, splitting into business partnering and above that, organisational effectiveness - contributing to business strategy based on considerations of human capital, organisational capabilities, readiness, developing HR practices as strategic differentiators.
But creating value doesn't always need to act at this strategic, organisational level. It can be something each HR professional does within their own role too, for example by spotting the opportunity to bring a wonderful talent into the organisation, even if there isn't a specific opportunity available at that time; or using a one-off development opportunity to leverage someone's potential, even if this involves throwing someone in at the deep end.
In fact, whilst the steps in the HCM value chain are very clearly distinguished, the levels in the value triangle are much more blurred - it's often difficult to be clear whether something is adding value or creating value etc, and it's generally not that important either. They critical thing is that each function and practitioner always thinks about how they can generate more value within what we do. Eg if we're asked to do something which is adding value, we need to be asking ourselves how can we do that and create some value at the same time as well?
Ed Lawler adds some useful detail to the definition of this type of creating value, suggesting that the strategic part of HR’s role needs to be bifurcated again, splitting into business partnering and above that, organisational effectiveness - contributing to business strategy based on considerations of human capital, organisational capabilities, readiness, developing HR practices as strategic differentiators.
But creating value doesn't always need to act at this strategic, organisational level. It can be something each HR professional does within their own role too, for example by spotting the opportunity to bring a wonderful talent into the organisation, even if there isn't a specific opportunity available at that time; or using a one-off development opportunity to leverage someone's potential, even if this involves throwing someone in at the deep end.
In fact, whilst the steps in the HCM value chain are very clearly distinguished, the levels in the value triangle are much more blurred - it's often difficult to be clear whether something is adding value or creating value etc, and it's generally not that important either. They critical thing is that each function and practitioner always thinks about how they can generate more value within what we do. Eg if we're asked to do something which is adding value, we need to be asking ourselves how can we do that and create some value at the same time as well?