Chapter 13 - Case study: A change in HR.
Textbook page 318
Answers to case study questions in textbook, page 318
1. What possible problems do you see with this approach for HR management in
other organisations?
As stated in the case study the following is applicable:
GE Fanuc is a manufacturer of factory automation and control products. Headquartered
in Johannesburg with 1 500 employees, the HR department primarily performed
administrative support activities. But when Dawid Ellis, took over as Senior Executive
Director of Human Resources, he and his staff began by restructuring and
decentralising the HR entity so that each functional area of the company has an HR
manager assigned to it. The HR managers were expected to be key contributors to
their areas by becoming knowledgeable about the business issues faced by their
business functional units. Today, HR managers participate in developing business
strategies and ensure that human resource dimensions are considered. For instance,
the HR manager for manufacturing has HR responsibilities for 600 employees. The
idea that the student should identify here is the notion of HR shared services centres.
This could be problematic in other organisations. The reason why organisations follow
this approach is to transform the role of HR by enabling the HR function to be more
strategic at the corporate level and more cost-effective at the operational level. This
however poses numerous problems such as a mismatch that can exist between the
employee expectations of HR services and what services they actually received which
may result in a negative perception of the utility of the HR shared services centre. It is
thus important to think through the implications of change for the role of the HR
function, the impact on employee work processes, and the way in which employees will
experience the HR services. When any company decides to move to an HR shared
approach a number of key questions need to be asked as depicted in table 13.3 in the
book.
Table 13.3 Key questions to consider when adopting HR shared services
centres.
I. Strategic issues
1. What rationale exists for setting up the shared services centre, in addition to cost
savings through synergy? What are the alternatives?
2. Is the HR shared services model really more cost effective when hidden costs
are calculated? What are potential indirect costs and how can they be
measured?
3. Are you going to look at the shared services centres of other firms before you set
up your own? For example, will you engage in market research or benchmark
exercise?
4. If yes, how will you do it? What criteria will you use?
5. What are the perceived benefits and disadvantages of the new service provision
for the stakeholders?
6. How will the shared services centre affect the role of HR strategy in the corporate
Textbook page 318
Answers to case study questions in textbook, page 318
1. What possible problems do you see with this approach for HR management in
other organisations?
As stated in the case study the following is applicable:
GE Fanuc is a manufacturer of factory automation and control products. Headquartered
in Johannesburg with 1 500 employees, the HR department primarily performed
administrative support activities. But when Dawid Ellis, took over as Senior Executive
Director of Human Resources, he and his staff began by restructuring and
decentralising the HR entity so that each functional area of the company has an HR
manager assigned to it. The HR managers were expected to be key contributors to
their areas by becoming knowledgeable about the business issues faced by their
business functional units. Today, HR managers participate in developing business
strategies and ensure that human resource dimensions are considered. For instance,
the HR manager for manufacturing has HR responsibilities for 600 employees. The
idea that the student should identify here is the notion of HR shared services centres.
This could be problematic in other organisations. The reason why organisations follow
this approach is to transform the role of HR by enabling the HR function to be more
strategic at the corporate level and more cost-effective at the operational level. This
however poses numerous problems such as a mismatch that can exist between the
employee expectations of HR services and what services they actually received which
may result in a negative perception of the utility of the HR shared services centre. It is
thus important to think through the implications of change for the role of the HR
function, the impact on employee work processes, and the way in which employees will
experience the HR services. When any company decides to move to an HR shared
approach a number of key questions need to be asked as depicted in table 13.3 in the
book.
Table 13.3 Key questions to consider when adopting HR shared services
centres.
I. Strategic issues
1. What rationale exists for setting up the shared services centre, in addition to cost
savings through synergy? What are the alternatives?
2. Is the HR shared services model really more cost effective when hidden costs
are calculated? What are potential indirect costs and how can they be
measured?
3. Are you going to look at the shared services centres of other firms before you set
up your own? For example, will you engage in market research or benchmark
exercise?
4. If yes, how will you do it? What criteria will you use?
5. What are the perceived benefits and disadvantages of the new service provision
for the stakeholders?
6. How will the shared services centre affect the role of HR strategy in the corporate
