Knowledge that Transforms

Leading in HR means building organizations that consistently and predictably outperform their competitors. In order to understand how HR can best contribute to enhancing firm performance, more than 60,000 pages of information from 200 firms in multiple industries over ten years were analyzed. These firms varied in size, and we complemented these broad extensive analyses with focused, in-depth exploration of issues of special interest. Only four foundation practices (focused strategy, execution, performance culture, and fast and flat organization) and four secondary practices (securing talent, committed leadership, industry-transforming innovation, and growth through mergers and partnerships) were found to be necessary to produce extraordinary returns to shareholders. Specifically, success required performing well in all four foundation areas, plus at least two of the secondary areas—we call this the 4 + 2 formula for sustained business success.

The Society for Human Resource Management has conducted research to determine how the HR profession is perceived by other, non‐HR executives. The results present a mixed acceptance of HR professionals. The author contends that successful HR professionals today and in the future must be competent, curious, courageous, and caring about people—the four Cs. Each area is broken down into separate components, and examples from various companies' HR roles are used to demonstrate how each quality works to make the HR function an inherent valuable asset.

Within small businesses, organizational leaders are themselves often responsible for the HR function, an area where they typically have limited training and experience. Not surprisingly, small business leaders have raised concerns about the quality of HR programs in their firms and the fact that HR consumes scarce managerial time. While professional employer organizations (PEOs) emerged in response to such concerns, much controversy exists as to whether and how small businesses benefit from PEO utilization. Using a survey of more than 740 small businesses, we examine the relationship between PEO utilization and two key small business outcomes: managerial time required by HR activities and satisfaction with HR outcomes. Our results indicate that firms not using a PEO reported significantly lower levels of satisfaction with HR outcomes than firms that used a PEO for a limited set of transactional services and firms that used a PEO for both transactional and strategic HR services. Among firms using a PEO, satisfaction with HR outcomes was significantly higher among firms that obtained a broader set of transactional and strategic HR services. Firms that used a PEO also reported that HR consumed significantly less managerial time relative to leaders in firms that made no use of a PEO. However, there was no significant difference in the time demanded by HR between firms that used a limited set of transactional services and those that used a broader range of transactional and strategic services. Implications for the role of PEOs and their use within small businesses are discussed.

Although scholars agree that complex relationships between organizations' actual human resources (i.e., human capital stock) and means of leveraging these resources may influence performance, little empirical work has tested such propositions directly. We collected two primary data sets from privateand public-sector organizations in Israel. The multiplicative interaction between perceived human resources capital and distinctive value derived from that HR capital was significantly related to various measures of perceived and objective organizational performance. Having higher levels of human resources capital was strongly associated with performance only when top managers perceived that these resources provided distinctive value in terms of being highly valuable, inimitable, rare, and nonsubstitutable. We discuss the implications of these findings for research on strategic human resource management and the resource-based view of competitive advantage, as well as for practical efforts to develop firm-specific human resource capital that is inherently distinctive.

UPS is the world's largest package delivery company and a leading global provider of specialized transportation and logistics services. One of the company's missions is to maintain a financially sound company, with broad employee ownership, that offers a long-term competitive return to shareowners. This ownership culture is demonstrated through ownership guidelines for managers and supervisors as well as several employee stock programs. The ownership culture is vigorously promoted throughout UPS by a variety of communication channels. Employee ownership is core to the UPS culture, and it translates into a strong work ethic, with employees engaged in growing the business and committed to the company's success.

With escalating expectations and opportunities for HR professionals to add greater value comes the mandate for greater knowledge about the fundamental driving forces of business. Business leaders and employees increasingly assume that HR professionals have foundational knowledge of HR concepts and practices. But to create competitive advantage from that knowledge, HR professionals must be fully versant about external business realities that directly or indirectly influence how to apply that knowledge. We examine four of the most central categories of external business knowledge: advancements in technology, the causes and effects of economic and regulatory turbulence, the dynamics of business globalization, and changes in population demographics. With knowledge about these fundamental business drivers and their supporting data, HR professionals will be more able to make credible and accurate strategic contributions to business discussions and to proactively build more centrally relevant HR practices.

The authors of each article in this special issue of Human Resource Management offer a personal perspective about the future of HR. In this concluding article, we cull common themes that emerge from these thoughtful syntheses. We have identified eight major trends these observers believe will affect HR in the future. Three themes shape a new reality for HR (what it is), two define the impact of HR (what it means), and three suggest the profile of the future HR professional (who it is). No one can fully characterize the future, but with the help of the authors in this issue, we can begin to envision it. The themes proposed in this article propose that the reality, impact, and professionalism will change as HR evolves.

Changing organizational critical success factors, new expectations for human resources, and the changing roles and capabilities of HR professionals are discussed here. The authors envision that today's top HR job encompasses: enabling capable and courageous leadership; building a very strong and adaptive organizational culture; strengthening organizational productivity and performance; fostering creative innovations, products, and solutions; and building exceptionally high customer loyalty. They explain why and show you how this is done.

Over the past several decades, there have been some significant advances in psychological science, specifically in our knowledge about important questions to address with respect to the development and use of assessment tools. This article focuses on developments in research and guidelines for practice in five selected areas that, if applied, will lead to more informed use of assessment tools. The five areas that we discuss are validity generalization, statistical significance testing, criterion measures, cutoff scores, and cross-validation.