Core Viewpoint - The article emphasizes the importance of demonstrating the true value of HR departments, shifting the perception from a cost center to a strategic driver of business outcomes through the HR value chain model [3][4]. Summary by Sections HR Value Chain Concept - The HR value chain is a structured tool that connects HR activities to significant business outcomes, helping to illustrate how HR contributes to organizational performance [6][8]. - Originating from research by J. Paauwe and R. Richardson in 1997, the model outlines a three-stage process: HR management activities, HR management outcomes, and organizational goals [6][8]. HR Management Activities and Metrics - HR management activities include daily functions such as recruitment, compensation management, and training [8]. - Efficiency metrics are used to measure these activities, reflecting the efficiency of HR functions but not necessarily their impact on business outcomes [9]. HR Management Outcomes - HR management outcomes are traditional key performance indicators (KPIs) that reflect employee performance, influenced by both HR practices and line management [10][12]. - Positive HR outcomes are aimed at achieving higher employee retention, satisfaction, and attendance rates [10][12]. Organizational Goals and Business Outcomes - The final component of the HR value chain is organizational goals, which are strategic objectives that add value and ensure long-term sustainability for the company [13]. - Examples of these goals include market share, profit margins, and customer satisfaction [13]. Levels of HR Organizations - Different levels of HR organizations (Level 1, Level 2, Level 3) reflect varying degrees of maturity in aligning HR activities with business contributions [14][16]. - Advanced HR teams focus on the impact of talent policies on business performance, ensuring that investments in HR lead to measurable improvements in innovation and profitability [16][17]. Practical Application of HR Value Chain - To implement the HR value chain model, organizations should align HR strategies with business objectives, assess existing HR activities, identify gaps, prioritize strategic activities, and update KPIs to reflect HR's impact on business [17][18]. - Regular reviews and updates of the HR value chain are essential to maintain alignment with changing business priorities [18].