For brilliant answers

The role of change agent as mediator in the relationship between HR competencies and organizational performance

Choi Sang Long a *, Wan Khairuzzaman Wan Ismail

b and Salmiah Mohd Amin

a

a Faculty of Management and Human Resource Development, Universiti Teknologi Malaysia (UTM), Johor Bahru, Malaysia;

b International Business School, Universiti Teknologi Malaysia (UTM),

Kuala Lumpur, Malaysia

Human resource (HR) practitioners, as change agents, are responsible for easing the impact of changes in their organization and to protect employees against the side effects of these inevitable changes. Sometimes, the change helps to produce a significant increase in performance and the company can boost sales and production without additional cost. Several vital competencies that are reviewed in this paper include business knowledge culture management, effective relationship and human resource development skills. Based on the findings of this study, not all competencies are related to the role of change agent. HR practitioners who are unable to function as change agents will inevitably create a barrier against their becoming a well-integrated strategic partner. Therefore, the role of change agent also mediates the relationship between certain HR competencies and organizational performance.

Keywords: business knowledge; change agent; culture management; effective relationship; HR competency; role

1. Introduction

Human resource (HR) professionals as change agents have the responsibility to ease the

effective changes in the organization and to protect employees against the side effects of

the inevitable changes (Ulrich and Brockbank 2005). Sometimes, the change helps to

stimulate a significant increase in performance and the company can boost sales and

production without additional cost. The change agent facilitates these changes in their

organization and takes part in all the major projects having a potential impact on employees.

The HR practitioner functions most effectively when he or she is part of the leadership team

at all levels, focusing on business priorities, rather than just personnel issues. When this is

functioning properly, the entire enterprise sees the importance of people and the HR

practitioner becomes a contributor at a much higher level and with much greater influence

(Sartain 2010).

Unfortunately, several studies have recently indicated that many HR practitioners in

Asia are still lagging behind as change agents compared to their Western counterparts

(Khatri 1999; Khatri and Budhwar 2002; Selmer and Chiu 2004; Rees and Johari 2010).

Similar problems also arise in countries such as Malaysia, a developing country in

South East Asia seeking to achieve the status of a developed country by the year 2020.

Long and Ismail (2008) found that Malaysian HR practitioners in the manufacturing sector

are still very much focused on traditional roles such as administrative expert and champions

of employee welfare. A study by Yusoff, Abdullah and Ramayah (2009) further claims that

q 2013 Taylor & Francis

*Corresponding author. Email: [email protected]

The International Journal of Human Resource Management, 2013

Vol. 24, No. 10, 2019–2033, http://dx.doi.org/10.1080/09585192.2012.725080

the effectiveness of HR practitioners as change agents is among the lowest in the

manufacturing and servicing sectors of Malaysia. Khatri, Baveja, Agrawal and Brown

(2010) argued that HR practices will have significant implementation problems in the

absence of HR capabilities or competencies. Furthermore, change efforts driven by HR

practitioners on employees are more likely to fail than succeed if the organization

implementing them lacks knowledge of critical HR competencies.

Therefore, this paper addresses this issue by looking into the critical competencies

required of HR practitioners in order for them to function effectively as change agents.

Improvement in this critical role therefore helps organizations to achieve their business goals.

2. Review of the literature

The role of change agent makes the HR practitioner responsible for smooth transitions in

the personnel area during periods of large and/or rapid change in their organization

(Ulrich 1997). The change agent is not just responsible for smooth transitions during times of

change; he or she must also propose changes at the top management level based on the best

market practices. The change agent is always in a precarious position within the organization

and buy-in from management is essential. The change agent must use his or her knowledge

of the employees and essential change management techniques to minimize the cost of

transitions. The top management may require the HR practitioners to support the

change initiatives in the organization. As project leaders, they need to be familiar with

the interests of the employees, so that the initiatives can be adjusted to make the employees

feel more comfortable with the changes that occur (Gomez-Mejia, Balkin, Cardy, Dimick

and Templer 2001).

Csoka (1995) suggests that HR practitioners can add significant value through the

management of the change processes in an organization. Ehrlich (1997) adds that the HR

department must anticipate change and be knowledgeable in its implementation.

The change agent must be able to align different projects and predict their impact on

employees. Employees are rarely able to absorb a large number of changes at any one time,

and the change agent should provide a proper communication plan. He or she can help

employees to understand a change clearly and thus minimize its impact. In the new

results-oriented business environment, competencies play an important role in focusing

attention on the skill base of the HR workforce. These skills provide a standard for

measuring employee preparedness, developmental needs and performance. The HR

department serves as a launching pad for strategic change (Ulrich, Brockbank, Johnson,

Sandholtz and Younger 2008).

2.1. The competencies of HR practitioners

Brockbank and Ulrich (2003) define competency as the ability to add value to the business,

with competency necessarily focusing on the process progressing from changing business

conditions to achieving sustainable competitive advantage. Their HR model divides the

various aspects of competencies into five domains: strategic contribution, knowledge of

the business, personal credibility, HR delivery and HR technology. They argue that

competent HR practitioners will have personal credibility coupled with knowledge and

behavior that ensures that HR practices align with and accomplish business outcomes.

There are several major studies on HR competencies. One study surveyed 3000 HR

practitioners, consultants, line executives and academicians, and reported that line

executives thought that computer literacy was the most critical HR competence;

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academicians argued that a broad and forward-looking knowledge of HRs is the most

important issue while consultants believed that the ability to effect change is the most

important for superior HR performance (Ulrich 1997). Another study, examining 300 HR

practitioners from various sectors, found a set of core HR competencies which consists of

leadership style, management intuition, functional capabilities and personal attributes

(Schoonver 1997). Ulrich, Brockbank, Yeung and Lake (1995) suggest that HR

practitioners need to be more knowledgeable about financial management, external

competitors and customer demands, and possess the ability to work with line managers and

the community effectively. HR competencies have been defined by Khatri (2006) as an

organization’s capacity to acquire, develop and deploy HRs via a dynamic HR architecture

for achieving higher organizational performance in a complex and changing environment.

Several competencies highlighted by these studies are to be dealt with in this study.

The competencies are as follows:

2.1.1. Business knowledge

To become change agents and key players in an organization, HR practitioners must have

a deep understanding of the business or industry of the company they serve. Boselie and

Paauwe (2004) stress that key areas of knowledge include an applied understanding of the

integrated value chain (how the firm horizontally integrates). HR practitioners must fully

understand how their business or agency operates. This includes the organization’s strategy,

how the organization makes money or achieves its primary purpose, its technological

processes, organizational capabilities, etc. Therefore, HR practitioners should develop their

knowledge of such areas as finance, marketing, operations and general management

(Heisler 2003). Therefore, any proposed change by them must not adversely affect any

business-related processes.

2.1.2. Culture management

HR practitioners play an important role in the corporate culture of their organization. By

playing the business partner role with a customer focus, they have a significant impact on

their organizations’ financial performance (Brockbank and Ulrich 2003). Organizational

leaders manage their operations and finances; they must manage their cultures as well

(Clemente 2003). Today managing culture is a central responsibility of HR leaders. What’s

more, it must be an ongoing process if they are to function effectively in today’s ever-

changing markets, meet customer needs and keep pace with the competition. This micro-

environment includes all the internal variables that are within the control of management

(i.e. decisions on staffing, resource allocation and corporate development strategies). Culture

falls squarely in the realm of this micro-environment (Clemente 2003). Apart from

facilitating change, HR practitioners also play a critical role in maintaining whatever good

organizational culture already exists in the organization.

2.1.3. Relationship skills

HR practitioners must be credible to both the business line managers whom they serve and

their HR counterparts. They need to deliver results and establish a reliable track record.

Furthermore, working well with others by building good professional relationships is vital

in functioning effectively. In addition, HR practitioners must have effective writing and

verbal communication skills (Boselie and Paauwe 2004). The findings of a study by

Boselie and Paauwe (2004) concur with the prior research of Kelly and Gennard (1996),

who found that HR directors require professional competency in those social skills that

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allow them to develop effective interpersonal relations with other board directors. This is

also one of the essential competencies for personal credibility stressed by Ulrich et al.

(2008). Change efforts will fail if there is conflict in work or personal issues among the

directors, line managers and HR practitioners. The responsibility of HR practitioners is to

ensure the existence of a harmonious work environment and at the same time facilitate

change for the greater effectiveness of the organization.

2.1.4. Human resource development skills

Human resource development (HRD) helps employees develop their personal and

organizational knowledge, skills and abilities. HR practitioners must acquire these

skills in order to ensure the smooth implementation of systematic employee training,

career development, performance management and development, coaching, mentoring,

succession planning and organization development. Furthermore, HR practitioners as

change agent must understand the learning process and how to create an environment that

facilitates learning that can aid in the design and implementation of more effective HRD

interventions (Ketter 2006). The focus of all aspects of HRD is on developing a superior

workforce so that the organization and individual employees can accomplish their primary

work goal, which is to benefit their customers. Healthy organizations believe in HRD, and

HR practitioners must play a key role in making this development take place in their

organization (Werner and DeSimone 2009).

2.2. The relationship between HR competencies and the role of change agent

There are a limited number of studies about the relationship between HR competencies

and the HR role of change agent. Huselid, Jackson and Schuler (1997) identifies

professional competencies and business-related competencies as being important for

effective human resource management (HRM). He argues that although professional

HRM competencies are necessary to ensure technical HRM effectiveness, professional

competencies are not sufficient for playing the role of a strategic partner or change agent.

Therefore, business-related competencies are also important because they enable HR

practitioners to understand how business considerations that are unique to an organization

create organization-specific HRM needs. Business-related competencies refer to the

business skills and the experience that staff members have outside their functional

specialty, especially the understanding of the value chain knowledge of the organization.

These competencies should determine HR roles that facilitate the selection and

implementation of change that fit the unique characteristics of an organization.

Buchanan and Boddy (1992) carried out a study on the perceived effectiveness of

change agents. On the basis of their findings, they compiled a list of several important

competencies of change agents such as communication skills, team-building abilities,

setting of clearly defined goals and influential skills.

Lawler and Mohrman (2003) studied the skills of HR managers and their findings

support the view that HR practitioners who want to be change agents need to be expert in

understanding business strategies and the ways to support their implementation. However,

the study also shows that the highest level of job satisfaction of HR practitioners was

experienced when utilizing traditional HR skills, while the lowest level of satisfaction

was found to be in exercising business partner skills. Therefore, HR practitioners cannot

abandon their traditional core activities when executing new strategic tasks. One of the

most important core HR practices is focusing on HRD. Implementation of change in an

C.S. Long et al.2022

organization requires the execution of proper HRD programs (Werner and DeSimone

2009).

A study was conducted by Pietersen and Engelbrecht (2005) on the strategic

partnership role of HR managers in South African organizations. Several business-related

competencies were measured including ‘line management experience’, ‘implementation

of techniques for scanning’, ‘synthesizing and drawing conclusions from business data’

and ‘implementation of monetary techniques for budgetary decision-making’. This study

supports the contentions of Brockbank and Ulrich (2003) that strategic contribution,

personal credibility, business knowledge and HR technology competencies are all

pivotal to HR professionals being an effective change agent. They further stress that the

competency of their strategic contributions is linked closely with culture management.

Long and Ismail (2008) studied 32 HR managers and also found that culture management

skills are pivotal in transforming HR practitioners into change agents.

Ulrich and Brockbank (2005) pointed out that being a change agent represents part of the

strategic partner role. HR practitioners fulfill multiple, and not single roles. HR practitioners

must fulfill both operational and strategic roles. Ulrich and Eichinger (1998) found that one

of the important elements of HR competencies is personal credibility that deals with the

extent to which HR practitioners embody the values of firms and act with attitude in dealing

with organizational change issues and creating results. Personal credibility is particularly

vital in interpersonal effectiveness, relationship orientation, tolerance for stress, change and

ambiguity, creativity and analytical approaches to problem solving (Selmer and Chiu 2004).

2.3. The relationship between role of change agent and organizational performance

According to Ulrich (1997), the roles for HRM professionals are traditionally viewed as

transitional activities, such as operational to strategic, qualitative to quantitative, policing

to partnering, short term to long term, administrative to consultative and functionally

oriented to business oriented. Change agent roles are one of four key roles that HRM

professionals must fulfill in order to make their business partnership a practical reality

(Bhatnagar and Sharma 2005).

However, few concrete studies exist that clarify how the role of change agent works to

achieve the performance improvement of an organization (Bhatnagar and Sharma 2005).

Huang (2000) in his study on 315 Taiwanese firms finds that HR strategies and organizational

performance are significantly related. One of these strategies is to facilitate changes that

enable the organization to be more efficient.

Som (2002) reports in his study of 54 organizations in India that the role of the HR

department is positively correlated with organizational performance, and the HR

department plays a significant role in the adoption of the ‘best practices’ within an

organization. This is to say, HR practitioners need to constantly implement practices that

are the most effective in sustaining the competitiveness of the organization. Therefore, HR

practitioners must remain abreast of the development of the environment and be ever

ready to facilitate change when it is required.

Panayotopoulou and Papalexandris (2004) carried out a study on 229 Greek and

multinational industrial companies of different sectors which examines the link between

HRM orientation and organizational performance. The results of this study, which used

the competing values framework (CVF), show that the orientation of external focus

and control combines to have a strong positive relation with growth/innovation and

organizational performance. However, external focus and control orientation will only be

successful if HR practitioners play several critical roles such as change agent.

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2.4. The change agent role mediates the relationship between HR competencies and

organizational performance

Ulrich and Eichinger (1998) argues that HR practitioners must make the transition from

being strategic business partners to becoming active contributors in their organizations.

Subsequently, Ulrich and Brockbank (2005) have claimed that the change agent role is a

significant element if HR practitioners are to be successful strategic partners. Boselie and

Paauwe (2004) find that competency in strategic contribution is positively correlated with

financial competitiveness. Culture management is one of the main competencies under the

domain of strategic contribution. Ulrich et al. (2008) also support the above findings and

state that the skills that predict organizational performance include competencies related

to culture management, effective relationship cultivation, HRD and business knowledge.

Several other studies have also shown a positive relationship between certain

competencies, such as business knowledge, relationship skill, and culture management and

HR development, and organizational performance (Huselid et al. 1997; Wright, Dunford

and Snell 2001; Ramlall 2006), and Losey (1999) has stated that there is an emerging group

of HR professionals who see the opportunity to turn human capital strategy into a long-

term competitive advantage. They conclude that a significant part of the ability to be

creative and maximize productivity strategically is to possess the necessary competencies

for enabling these outcomes.

Even with previous empirical studies that highlighted the relationship between HR

competencies and organizational performance, Caldwell (2010) argues that there is a

missing gap in those findings. His study shows the importance of the effective linkage of HR

strategy with business strategy, as is mediates the association of HR business partner

development with HR business partner performance. These findings highlight the critical

importance of the HR strategy–business strategy linkage, and raise important issues about

the ability of HR business partners to develop the capabilities required to enable them to

contribute strategically to organizational performance. Caldwell argues that the relationship

between HR competencies and HR roles has also proved to be an area of considerable

controversy. Many HR competency models are explicitly designed with the programmatic

intent of transforming HR practitioners into a new category of people managers with

business knowledge: the ‘HR business partner’. However, the association between HR

competencies, the roles and the desired outcome of this relationship, which is competitive

organizational performance, is not explained.

Base on a model of employee behavior, Werner and DeSimone (2009) stress that an

employee’s knowledge, skills and abilities can produce a given behavior and that employee

behavior in turn has a direct relationship with the organizational competitiveness that is

obtained. Similarly, HR practitioners that possess the right competencies can seek to

promote strategic involvement and play a business partner role, which includes that of

change agent in an organization, while being helpful to the organization as a whole in

achieving their business goals. Alternately, HR practitioner roles (intended behavior) may

mediate the relationship between certain competencies and organizational performance.

Bandura’s (1986) self-efficacy and performance theory explains individuals who

believe in their capabilities and how this belief serves as a self-regulating agent for their

behavior and motivation. Self-efficacy determines the amount of effort, perseverance and

resilience that is put on a task. A study by Stajkovic and Luthans (1998) support Bandura’s

claim and show that self-efficacy is strongly related to task performance and indirectly

improves organizational performance. Application of this theory in the present study can

be described as the increase of self-efficacy among HR practitioners when they possess the

C.S. Long et al.2024

right competencies to enable them to perform certain roles in their organization and thus

bring positive outcomes to their organization. In this scenario, the HR professional’s role

as change agent allows him or her to function as mediator in the relationship between HR

competencies and organizational performance.

2.5. Research hypotheses and conceptual framework

This study would like to explore the linkage between HR competencies, HR role as a

change agent and organizational performance as shown in the author’s conceptual model

(Figure 1). Therefore, the propositions established state the following hypotheses:

H1: All HR competencies are related to the role of change agent.

H2: The role of change agent is related to organizational performance.

H3: The role of change agent mediates the relationship between HR competencies and

organizational performance.

3. Research methodology

In order to obtain the required information, data from firms in the manufacturing sector

were collected. The issues examined in this study and the methodology used require a

fairly large number of respondents to enable an accurate statistical analysis to be carried

out. Thus, only the sectors that have a large population were selected for this study.

The list of firms in the manufacturing sector has been drawn from the ‘Federation of

Malaysian Manufacturers (FMM) directory of Malaysian Manufacturers 2009’. From the

directory list, the author selected a sample population from the southern region of

Malaysia (the State of Johor). A total of over 300 firms were chosen from this list.

The author also has sought help from the FMM, Johor Branch in sending the

questionnaires to the HR managers or the person in-charge of HR functions in each of these

firms. The cover letter accompanying the questionnaires explained that in organizations that

do not have a HR department, the questionnaires could be answered by the most senior

manager responsible for HR affairs. If it was so requested, the author met with the respondent

so that the contents of the survey form could be explained.

FMM assists to collect the completed questionnaires on behalf of the author. To enable

the author to meet with the HR practitioners face to face and to distribute survey forms to

them, the author obtained approval from FMM to participate in their quarterly HR sub-

committee meeting for the southern region. During that time, the author was given an

opportunity to explain the objectives of this research.

The completed survey forms were returned to the researcher via email or collected

personally from the respondents by the author. Out of 307 firms invited to participate in

Figure 1. Research conceptual framework.

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this survey, 103 firms responded. However, 14 of the received survey forms were

incomplete and needed to be discarded. That left only 89 forms to be analyzed. Therefore,

the response rate for this study is 29%. This low response rate is to be expected as surveys

using questionnaires often result in a small sample size. According to Fraenkel and Wallen

(2005), a recommended minimum number of respondents for a correlational study is 50.

Therefore, the sample size for this study is at the acceptable level. The information

requested from the respondents is shown in Table 1.

3.1. The instrument

The data collection instrument used in this research is a quantitative methodology with

a survey instrument developed based on the seven competencies adopted in the

Human Resource Competency Study (Brockbank and Ulrich 2003; Ulrich et al. 2008).

A Likertscale was used onthe questionnaire withthe following ratings:1 – stronglydisagree,

2 – disagree, 3 – moderately agree, 4 – agree and 5 – strongly agree. The respondent was

asked how well they performed the competencies identified in the questionnaire. Seven items

in the instrument are used to measure competencies and these are as follows: culture

management, effective relationship and communication, HRD skills, performance manage-

ment, value chain knowledge, HR technology and conflict management.

An example of the survey questions that are used to measure competency such as

culture management is as below.

Table 1. Respondents’ data.

Gender Frequency Percent

Male 37 42 Female 52 58 Total 89 100

Job position Frequency Percent Officer/executive 23 26 Manager 44 49 Senior manager and above 22 24 Total 89 100

Years of experience Frequency Percent 1–3 years 12 13 4–7 years 39 44 . 7 years 38 43 Total 89 100

Education level Frequency Percent SPM/STPM and below 4 4 Diploma/advance diploma 37 42 Bachelor degree (BA) 32 36 Postgraduate degree (master/PhD) 16 18 Total 89 100

Size of organization Frequency Percent , 150 staff 27 30 151–500 staff 30 34 . 500 32 36 Total 89 100

Salary Frequency Percent , RM3500/month 17 19 RM3501–RM5000/month 42 47 . RM5000/month 30 34 Total 89 100

C.S. Long et al.2026

(1) Able to identify and implement organizational cultures that help firms win the

market place and successfully implement business strategies.

Another part of survey question used in this research was adopted from Ulrich (1997)

model. The 10 items in the instrument were used to measure the role of change agent.

A Likert scale was used on the responses, with the following ratings: 1 ¼ to very little

extent, 2 ¼ to little extent, 3 ¼ to some extent, 4 ¼ to a large extent and 5 ¼ to a very

large extent. Two examples of the survey questions that are used to measure the

effectiveness of the HR practitioner’s role as change agent are as follows:

(1) HR ensures that HR processes and programs increase the organization’s ability to

change.

(2) HR spends time on supporting new behaviors for keeping the firm competitive.

Organizational performance was measured by the self-reported rating of the respondents

concerning the indicators of financial and operational performance, sustainability of profits,

staff turnover and the opportunity for staff to grow. A Likert scale was used on the

questionnaire with the same rating scale as above. However, for negative questions, the rating

procedures are opposite. The respondent was asked to choose the number that accurately

represented their organizational performance. There are five items in this section.

3.1.1. Validity and reliability analysis of the measurement scales

The validity and reliability of the measurement scales are shown in Table 2. All variables

that measure HR competencies and change agent are included in this analysis.

Table 2 shows that a Kaiser–Mayer–Olkin (KMO) test, which measures sampling

adequacy, was conducted for each variable and that the results were acceptable. The results

of these statistical analyses show that all research variables exceeded the minimum

standard KMO value of 0.5.

The results of the Barlett test are significant and show that the variables are correlated

highly enough to provide a reasonable basis for factor analysis. The analysis also shows that

the items for each research variable have exceeded the factor loading of 0.30. According to

Hair, Anderson, Tatham and Black (1998), factor loadings .0.30 are considered to meet the

minimal level; loadings of 0.40 are considered more important and if the loadings are 0.50 or

greater, they are considered highly significant. In this study, the threshold point that is used

for factor retention is 0.3. Factors having eigenvalues .1 are considered significant, as

shown in Table 2. When the eigenvalue is ,1.0, the factor explains less information than a

single item would have explained.

Table 2. The validity and reliability of measurement scales.

Variables Item Factor loading KMO

Barlett’s test of spehericity Eigenvalue

Variance explained Cronbach a

HR competencies

4 0.54–0.69 0.62 57.98 2.02 50.47 0.647

p ¼ 0.000 Change agent 10 0.63–0.84 0.85 447.28 5.14 51.47 0.89

p ¼ 0.000 Organizational performance

5 0.67–0.81 0.82 169.73 3.03 60.60 0.83

p ¼ 0.000

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As for the reliability analysis, Cronbach’s a values of all the variables are above 0.6

except the personal credibility variable. According to Kerlinger (1973), all measurement

instruments should have a reliability value of more than 0.60. These statistical results

confirmed the validity and reliability of the measurement scales used for this study.

4. Results and discussion

Table 3 shows that the highest sum and mean score for HR competencies is found in

effective relationships and communication skills. It received a score of 396 out of a

maximum of 445. It also has the highest mean score per item of 4.45 out of a maximum

mean score of 5.0 (5 points being the maximum score per item). HR competency in

performance management ranks second with a score of 382 and a mean score of 4.29.

Culture management is ranked last with a score of only 280 and a mean score of 3.15.

These findings show a significant development among the HR practitioners in

Malaysia, since effective relationship and communication skills are the foundation upon

which HR practitioners become intimately involved at the strategic level of an

organization. Without this competency, HR practitioners may find it extremely difficult to

mesh with other line managers in the organization. To inspire confidence, HR practitioners

need to develop a relationship of trust with their clients, e.g. management teams and line

managers. This study, however, has found that respondents score lowest on culture

management and value-chain knowledge. This is alarming because these competencies are

pivotal for HR practitioners in making strategic decisions.

HR practitioners should be able to identify and develop those forms of organizational

culture that help firms successfully implement business strategies and win in the

marketplace. If HR practitioners are not able to facilitate management change processes and

adapt to new change initiatives, they will have problems working with key individuals to

ensure that decisions are made quickly and that resources are aligned with the desired

changes (Brockbank and Ulrich 2003).

Table 4 addresses the relationship between HR competencies and HR roles. An

hypothesis is developed. This hypothesis is substantiated by using Spearman’s r correlation

testing.

H1: All HR competencies are related to the role of change agent.

As shown in Table 4, all HR competencies with the exception of HRD skills have a

significant correlation with the change agent role. By using Pearson’s r value it is shown that

the correlation is strong between competencies and the role of change agent. The strongest

correlation is between the competency of value chain knowledge and the change agent role,

with an r value of 0.68 ( p , 0.01). This follows closely the correlation between

competency of culture management and role of change agent, with an r value at 0.60

( p , 0.01). Given the above results, H1 is partially confirmed.

Baird and Meshoulam (1988) find that as an organization grows, its needs change and

that by understanding how an organization changes, senior management and HR

Table 3. Sum and mean scores of HR competencies.

HR competencies N Sum Mean SD

Culture management 89 280 3.15 0.948 Effective relationship skills 89 396 4.45 0.584 HRD skill 89 372 4.18 0.912 Business knowledge 89 292 3.28 1.000

C.S. Long et al.2028

professionals can understand how HRM must change. Furthermore, Baird and Meshoulam

(1988) assertthattheeffectiveness ofHRM depends onitsfit withtheorganization’s stageof

development, and that as the organization grows, HRM practices and procedures must effect

changes to meet those needs. Business-related competencies refer to the amount of business

skills and experience that staff members have outside their functional specialty. This should

determine the HR roles and facilitate changes within the organization that fit the ever-

changing competitive environment. This finding is supported by Panayotopoulou and

Papalexandris (2004) who stress that the change agent role is related to competencies,

such as skills in system analysis, effecting organization change as well as skills in

consultation and facilitation.

H2: The role of change agent is related to organizational performance.

The above results also support H2 as the role of change agent is significantly correlated with

organizational performance, with r value at 0.57 ( p , 0.01). This result supports a study by

Denison and Misha (1995), which stresses that HR professionals need to focus on shaping

organizational culture. An organizational culture that is marked by flexibility, adaptability

and external focus is positively related to sales growth and organizational performance.

The same study shows that internal control and external focus are positively related to

profitability, sales growth and overall organizational performance. Therefore, Denison and

Misha (1995) highlight the importance of the HR professional’s role as an agent of change

who helps a firm to adapt to the external business environment and is therefore an important

factor in the improvement of organizational performance.

H3: The role of change agent mediates the relationship between HR competencies and

organizational performance.

Table 5 shows important results of the testing mediating model. Firstly, step 1 regression

analysis shows that competency of culture management and business knowledge correlate

significantly with organizational performance before the inclusion of change agent role

into step 2 (b ¼ 0.42, p , 0.01; b ¼ 0.58, p , 0.01).

As shown in step 2 (after the inclusion into this step of change agent role), the previous

relationship between culture management and organizational performance changed to

insignificant (step 2: b ¼ 0.10, p . 0.05). Furthermore, the inclusion of change agent role

in step 2 of the process reveals that the change agent role is a mediating variable in the

relationship between culture management and organizational performance (b ¼ 0.52,

p , 0.01). In terms of explanatory power, the inclusion of change agent role in step 2

explains 33% of the variance in the dependent variable (a significant change compared to

step 1, which is 16%). This result confirmed that the change agent role does act as a

Table 4. The results of Pearson correlations analysis among variables.

Variables 1 2 3 4 5 6

Culture management 1.00 Relationship skill 0.39** 1.00 HRD 0.15 0.44** 1.00 Business knowledge 0.44** 0.30** 0.28** 1.00 Change agent 0.60** 0.40** 0.17 0.68** 1.00 Organizational performance 0.41** 0.14 0.07 0.58** 0.57** 1.00

**Correlation is significant at 0.01 level (two-tailed), *Correlation is significant at 0.05 level (two-tailed).

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mediator in the relationship between competency of change agent role and organizational

performance.

Table 5 also highlighted that after the inclusion into step 2 of change agent role, the

previous relationship between business knowledge and organizational performance

changed but remained significant (step 2: b ¼ 0.35, p , 0.01). However, the effective size

of such relationship between variables decreased. Furthermore, inclusion of change agent

role in step 2 of the process reveals that change agent role is a mediating variable for

relationship between culture management and organizational performance (b ¼ 0.34,

p , 0.01). In terms of explanatory power, the inclusion of change agent role in step 2

explained 39% of the variance in the dependent variable (a significant change compared to

step 1, which is 33%). This result also sends a signal that the change agent role does act as a

partial mediating variable in the relationship between competency of business knowledge

and organizational performance.

The findings of this study confirm that the HR role of change agent has a significant

mediatingeffectontherelationshipbetweenHRcompetencyandorganizationalperformance

in the studied organizations. However, out of four HR competencies tested, only culture

management and business knowledge fit into the mediation model. HRD and relationship

competencies show no correlation with organizational performance as shown in Table 4.

Therefore, these results only partially support H3.

In the context of this study, however, HR competencies are elements that must be

possessed by HR professionals if they are to contribute strategically to the improvement of

organizational performance. In the earlier discussion on the direct effect of certain HR

competencies on organizational performance, it was found that competencies such as culture

management and business knowledge are positively related to organizational performance.

The results that test H3 show that HR role of change agent mediates the relationship between

HR competencies (culture management and business knowledge) and organizational

performance. This supports the claim by Panayotopoulou and Papalexandris (2004) that the

above-mentioned HR competencies are closely related to the change agent role and its

bottom line impact. The linkage between all these variables is shown by the CVF by

Panayotopoulou and Papalexandris (2004).

Caldwell (2010) also claims that there is a possible weakness in HR competency

models in predicting business partner performance. Although many studies argue that HR

professional’s competencies can influence organizational performance (Huselid et al.

Table 5. The mediation effect of the change agent role on the relationship between culture management/business knowledge and organizational performance using hierarchical regression analysis.

Variables Step 1 Step 2 Step 1 Step 2

Independent variable Culture management 0.42** 0.10 Business knowledge 0.58** 0.35** Mediating variable Change agent role 0.52** 0.34** R

2 0.17 0.34 0.34 0.40

Adjusted R 2

0.16 0.33 0.33 0.39 R

2 change 0.17 0.06

F 18.22** 22.31** 45.64** 29.15**

Notes: Dependent variable: organizational performance. **Level of significance ¼ p , 0.01. *Level of significance ¼ p , 0.05. Bold figures signify beta value after inclusion of mediating variable.

C.S. Long et al.2030

1997; Wright et al. 2001; Boselie and Paauwe 2004; Ramlall 2006), the effectiveness and

the degree of influence on the success of the organizational performance rely to a large

extent on the role played by the HR professional in the organization. Competency alone

cannot have an immediate impact on organizational performance, as HR professionals

must be given authority, support and trust from top management to execute policies and

organize teams that will function under their supervision. However, without the necessary

competencies such as culture management and business knowledge, HR professionals

may have to be satisfied with a mere secondary administrative role in their organization.

They may never be given a chance to play a strategic role in the boardroom.

5. Implications for practice

Based on these empirical findings, this study has offered insights into the HR competencies

and the roles of HR practitioners as change agent in Malaysian manufacturing companies.

HR professionals need to be flexible in their mindset. They should be positive and have a

strong desire to contribute to their organization’s performance. One major finding of this

study is that HR professionals often lack competencies related to business, such as culture

management. HR practitioners should make themselves available to participate in

operation-related meetings whenever the opportunity arises. Becoming involved in

operational issues may be a huge challenge for HR practitioners, as it involves knowing the

process flow and technical know-how of product realization, but it is essential. Having this

knowledge will allow them to offer possible changes to the operational processes, changes

that may improve the efficiency of the organization.

Furthermore, understanding the core business model, such as being familiar with

internal and external customers, knowledgeable with respect to competitors, products,

technologyandsourcesofcompetitive advantage make anHRpractitionerthe‘equal’ofany

other line manager. Thus, there is no reason for the top management not to accept them as a

crucial participant at board meetings.

The findings of this study support the claim of Ulrich et al. (2008) that HR practitioners

should begoodcommunicatorsandhaverelationshipskillsthatare significantlyrelatedwith

their change agent role. All change agents must possess the ability to get everyone affected

by the project to become involved and to ensure their ongoing support and commitment. The

influence HR practitioners have on the business is magnified when good communication

skills supplement other qualities. HR practitioners gain and maintain credibility when they

are able to articulately and persuasively communicate ideas (especially change initiatives).

Individuals who lack credibility are likely to be viewed as impetuous or arrogant, which will

definitely take them nowhere. Therefore, relationship building is a crucial skill in HR. It is

critical in all professions, but particularly so in the HR role as a change agent. Without the

trust of line managers, the HR professional is usually allocated to transactional roles that

have little impact on the central value creating activities of the firm.

6. Implications for research and limitations

The findings of this exploratory study are revealing, though merely indicative, as they based

upon a small sample of 89 HR professionals employed in manufacturing companies in a

southern state of Malaysia. Therefore, the findings cannot be generalized to reflect all HR

professionals in Malaysia. Further exploration is certainly needed to determine the extent to

which these outcomes might reflect the respective job roles and competencies of HR

professionals in different geographical areas and different enterprises. Further research in

this area might include non-HR managers. Information from company CEOs, for example,

The International Journal of Human Resource Management 2031

might be obtained regarding their perceptions of the competencies of their HR practitioners.

This information would be valuable, especially when taking into account the gaps in

perception of both HR practitioners and their CEOs. This type of research would help HR

practitioners look more perceptively into the possible expectations from their CEOs

concerning their competencies and their role as change agent in their organizations.

7. Conclusion

The literature review and results of this study show that HR practitioners need to have

specific competencies to enable them to be an effective change agent. All these competencies

must relate significantly with the role of change agent. Lack of these specific competencies is

the main obstacle for HR practitioners in their effort to become change agents in their

organization. Their inability to function as change agents will inevitably create a barrier to

their becoming a well-integrated strategic partner and will also hinder their ability to help

their organization achieve its business objectives.

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