Human Resource Competencies: A Study of the HR Professionals in Manufacturing Firms in Malaysia

[Abstract] This study examines the vital competencies of Human Resource (HR) professionals in the manufacturing companies of Malaysia. The Human Resource Competency Survey (HRCS) model is used in this study. The competencies that are examined in this study are business knowledge, strategic contribution, HR delivery, personal credibility, and HR technology. All these competencies will be tested to determine whether or not they are significantly related to a firm's performance. The sample employed here consists of HR professionals from Malaysian manufacturing companies in the southernmost state of Malaysia, Johor. This study uses quantitative methods such as spearmen rho correlation and multiple regression analysis to test the variables. The finding shows that the top nine HR competency factors are from the domain of personal credibility and HR delivery. Competencies such as strategic contribution, business knowledge, and HR technology have a significant correlation with firm performance. Furthermore, of all HR competencies, the highest contributions to a firm's performance are business knowledge and strategic combination. [Keywords] HR; Human resources; competence; manufacturing; Malaysia Introduction & Background of Study Human Resource (HR) is emerging as the key concept in assessing the competitive assets of organizations. HR managers and professionals, by virtue of their knowledge of human performance, are well positioned to exercise strategic leadership and contribute significantly to a firm's competitive advantage. This paradigm shift concerning the value of human resources will, therefore, create opportunities for the HR function to develop a more strategic role in a firm's operation (Lawler & Mohrman, 2003). Competing in today's global economy provides additional challenges to the HR function by creating an environment where one must create and sustain competitive advantages. To function constructively and to play more critical roles more effectively, HR professionals must master the necessary competencies, which include mastery of the HR knowledge that comes only from being familiar with the concepts, language, logic, and practices of HR that are the result of research and training. Furthermore, mastery of the above abilities comes from being able to apply the knowledge within specific business settings (Brockbank, Ulrich, & Beatty, 1999). Based on increased interest in the relationship between human resource management (HRM) and organizational performance, many researchers have heightened interest in the kinds of competencies HR professionals should display in order to add value to their firm's performance (Huselid et al., 1997; Teo, 2002; & Boselie et al., 2004). Worldwide socioeconomic developments, such as globalization, increasing speed in the service sector of the economy, changes in workforce demographics, focus on customer loyalty, and emphasis on effective financial performance, challenge the HR function in its role as the creator of added value to the organization (Brockbank et al., 2002). Many high performing companies have HR professionals involved in business at a strategic level. There are four major factors of competencies related to how well an HR professional contributes in a strategic way to businesses in areas such as strategic decision making, culture management, fast change, and market driven connectivity (Brockbank & Ulrich, 2003). Nowadays, competencies are used in many facets of human resource management, ranging from individual functions such as recruitment and performance management to organizational strategic planning and design of organizational structure and culture. HR competencies are said to be a set of characteristics contributing to effective HR performance that enables an organization to carry out its business strategies in a competitive market. However, many HR executives are not invited to the strategic planning table because they have failed to display the required competencies (Barney & Wright, 1998). …