On the right track?: Human capital management in the Philippines

As Philippine companies increase their pool of higher skilled workers, the management of human resources (HR) as a function needs to evolve to better leverage on the companies' human-based capital towards a sustained competitive advantage that can lead to overall superior performance. In this article, we discuss how the HR function (in terms of the strategic mission, activities undertaken, and role in business strategy) can drive company performance and future directions in the ongoing evolution of the HR function on a journey to better company performance. We conducted a study in collaboration with the University of Southern California's Center for Effective Organizations and leading Philippine online recruiting solutions provider Jobstreet. Our results show that an HR strategy revolving around the provision of business partner services and strategic partner services was associated with better company performance. No relationship was found between an HR strategy involving the provision of basic administrative services and superior company performance. Higher company performance was also observed for those undertaking value adding HR activities, i.e., developing HR systems and practices and strategic business partnering. When the HR function is fully integrated with the business strategy, companies were found to perform better. Findings from this study consistently support the value of HR, when seamlessly interconnected with core businesses in terms of strategy and activities, in generating better performance outcomes for the company.