Possible Futures for the HR Function in Different Market Situations

A hypothetical model is made of the possible future prospects for the human resource management (HRM) function - as an internal, specialised function - within organisations. This model is based on two premises. Firstly that the market situation will influence how many and what type of employees have the power to influence organisational financial performance. And secondly that the type and number of employees with the ability to influence financial performance will in turn influence how the HRM process is managed. In order to develop this model the major roles of traditional and current HR function are first outlined and from these, six key areas of possible HR activities are then elicited. Four possible market scenarios differing in the degree to which employees can influence organisational financial performance are then outlined and related to these six key areas of possible HR activities. The results suggest that in four of the six key areas clear tendencies to outsource HR activities can be expected. However in the fifth area, that of the creation and development of High Performing Work Systems, the internal HR function may play an important role, but only within labour intensive organisations operating in highly competitive market situations .In contrast it is suggested that in the sixth area, that of long term organisational development and change, the internal HR function will have a key role across a variety of market and employee situations.