HR Business Partners

Ian Hunter, Jane Saunders, Simon Constance

• Publisher: Routledge
• Year: 2016
• Print ISBN:
  9780566086250
• eBook ISBN:
  9781317120605
• Topic: Business
• Subtopic: Business General
• Index: Business

This book highlights the changes and challenges to the role of the HR Business Partner, overviewing the emerging service delivery models for the HR function (in particular the development of shared services and outsourcing options) and what this means for the HR Business Partner (HRBP) in the modern enterprise. The purpose of this book is to provide a conceptual framework and practical advice, based on real life case studies and recent research, into how HR Business Partners best add value to the organization. The authors have extensive experience of working in the area of HR restructuring (having been HR Directors in blue chip organizations and senior advisers in leading consultancies) and have consistently come up against confusion and contradiction about what is the new role of the HR Manager/Business Partner in supporting business managers in the delivery of strategic and tactical objectives. Theory and conceptual models are used to underpin this book but it has been written as a pragmatic, hands-on guide that will help its readers think through how best they might fulfil the role of the HRBP. The book contains checklists, case study examples and self-assessment tools. It is supported by supplementary material (updates, further case studies, templates and tools) which are available via the authors' website.

CHAPTER 1 The Evolution of HR

This book addresses the key challenge facing the HR profession in the early twenty-first century. Arguably the most important issue for HR, rather than the oft-quoted ones of changing demographics and employee commitment, is how the HR function should organize itself to tackle the questions that the modern world and business environment asks of it. If the HR function gets it right the opportunities are as endless as the creativity of the HR professionals in the function. Should it fail to rise to the challenge, many commentators believe that the writing is on the wall for HR’s status as an activity that deserves a place at the boardroom table.¹

The space in which HR has traditionally operated has changed. This book explores a model that will keep HR at the top table and assist its leaders to deliver opportunities for improving organizational and people performance – the key sources of competitive advantage and success for organizations in the future.

The business, working and commercial environment in both the private and public sectors has altered dramatically in the last 20 years. Firms experienced the dot.com bubble, where the certainties of what made a successful business model seemed to fundamentally shift, and then did not. Technology and the pace of working life have moved up several gears, placing demands on employees, in terms of expanding the scope of their roles and compressing the time they have to make decisions. Knowledge is frequently referred to as the last remaining source of competitive advantage.² In the broader business environment, globalization is a reality that has an impact on every organization, both public and private.³ Even if it does not affect us in terms of direct competition from other new international entrants to the marketplace, globalization forces upon us a culture of benchmarking with the ‘best in the world’. Executives from the US and Europe are taking leading roles in running British companies and, more significantly, public sector organizations. Operating performance comparisons are no longer set against local competitors or providers, but against countries that have seemingly unassailable competitive advantages in areas like labour costs and technology. The bar for assessing individual and organizational performance is continually rising.

What has not changed though is the fact that people are still the engine which drives an organization to grow, excel and ultimately succeed or fail. Even the great (certainly infamous) managers of modern times (for example, Gerstner at IBM and Welch at GE) cite the performance of their people as being the key to success.⁴

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Admiral Insurance is a company that has sought to exploit the aftermath of the dot.com boom and tackle the entrenched market leaders, and it has been highly successful. Prior to a flotation that saw a majority of employees acquire in significant holdings in the company, in an interview with The Sunday Times, Henry Englehardt, CEO of Admiral Insurance, talked about what had made the company so successful. He simply said: ‘The trick in this business is good people … the numbers don’t do it for themselves’.⁵

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For HR professionals Englehardt’s statement may seem a truism. HR professionals invest their careers in bringing that quote to life and yet, amongst all the change, there is a feeling that HR still has not been able to deliver what is self-evident. Commentators on the activities of HR functions have been building a consensus that HR is ‘heading towards a precipice’, and that it is time ‘to sort the men out from the boys in the HR function’.⁶ Even senior practitioners comment that HR still has to raise its game.

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‘We have really started to link people processes to business results … It’s only the capability, or lack of it, of the HR Business Partners that means we aren’t maximising the linkages’ – HR strategy director, global investment bank

‘HR is apologetic and insecure’ – HRD, major insurance company

‘The first way to an easy life is to be crap. If you’re skills aren’t relevant, then neither are you and the business will get on without you’ – HRD, global software organization⁷

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Changes in the competitive and working environment have required the HR function to rethink how it organizes itself to meet these new challenges. This book seeks to explore the impact of these challenges on the HR function and to outline a model that allows the function to place itself at the centre of maximizing its organization’s effectiveness as it delivers for its stakeholders. At the heart of this new challenge is the concept of HR Business Partnering (HR BP).

In examining the HR Business Partnering model, we shall review the theory behind the role and how that sits with the evolution of thinking around how HR organizes itself. The role of HR strategy will be examined with a strong focus on practice. We shall also address the issue of transformation: how to move a function to the model outlined. Much has been written and spoken about the rise of HR shared services, HR outsourcing and HR Information Systems (HRIS) and we shall assess the interaction of the HR BP and these three aspects of HR operations. Finally, the skills required, development paths available and approaches to career management are reviewed in order to provide a pragmatic approach to implementation.

WHO WE ARE

Orion Partners LLP are the leading European adviser on HR transformation. We specialize in defining and implementing HR BP programmes, HR outsourcing arrangements, HR Shared Services and supporting the assessment and selection of HR Information Systems platforms.

Fully independent, we act as an impartial guide through the myriad of options open to clients. We offer an objective assessment of suppliers and solutions related to a firm’s individual needs. We work alongside client staff to implement a solution capable of delivering the intended results. And, significantly, we work directly with the HR team to help develop the skills and confidence necessary to operate in a new environment.

Out specialist team offers a collective source of expertise unrivalled in the market. With blue-chip HR practitioner and international consulting firm backgrounds, we have direct experience of formulating and managing some of the most high-profile and complex outsourcing and Shared Service deals currently in operation.

WHERE IS HR TODAY?

Current thinking and practice about its role, purpose and structure reveals that HR has been on a transformational journey over the last 30 years. Although there is no one recognized map to this challenging trip, a number of common milestones can be identified that mark significant changes in the perception and focus of the function, both in the UK and in all other industrialized nations.

HUMAN RESOURCE MANAGEMENT – THE BEGINNING OF CHANGE

Prior to the early 1960s, Personnel was seen as an administrative function (for example, payroll or time-keeping administration). With the industrial unrest and rapidly changing labour legislation of the 1960s and 1970s the role of the Personnel function as a ‘policeman’ of labour relations in the workplace rose to prominence.⁸ It was not until the early 1980s that a new approach to Personnel started to develop. This period saw the rise of Human Resource Management (HRM).

Human Resource Management as a distinct managerial approach drew on two themes in the 1980s that still resonate in HR’s goals and aspirations today. The first of these was an attempt to link HR activities to business outcomes. The second is the Harvard model which sought to acknowledge the complex interactions between all the parties involved in people management. The common thread between the two themes is the desire to refocus the activities of the Personnel function onto supporting the delivery of business strategy. By doing this, HR can fulfil better the aspirations of organizational stakeholders and exploit the potential of putting people management at the heart of business success.

Though initially unsophisticated in its approach, Charles Fombrum, Noel Tichy and Mary Anne DeVanna attempt to link the key policy and activity areas of HR to delivering the business strategy.⁹ They sought to map out the links that HR could use to channel behaviour in a way that was supportive of the organization’s strategy. In this model employee performance is directed by the appropriate Personnel interventions, from the start of the employee’s relationship with the company at their selection, through to the influences on their pay packet.

Figure 1.1 Fombrum, Tichy and DeVanna’s model of the HR cycle¹⁰

Whilst this model contained little analysis of how the mechanics of each activity affected employee performance, it was an important signpost to the direction of future thinking and a dramatic shift from the prevailing reactive nature of the profession where Personnel managers typically responded to requests made by their customers rather than actively seeking to anticipate and shape requirements.

This alignment of employee workplace action and behaviour placed HR processes at the heart of the search for competitive advantage.

The second model that emerged in the 1980s to assist the change in HR’s aspiration shifted its focus to the employee as a ‘human resource’. Here staff were seen as having a potential to develop and express individual needs.¹¹ This approach was developed at Harvard University as an element of the MBA programme by academics such as Professor Michael Beer. It clearly opens avenues for a more sophisticated analysis of how the Personnel function might have an impact on the business’s strategy. Once it is acknowledged that employee interaction occurs on an individual level, involving ‘actors’ such as senior managers, line managers, Personnel staff and colleagues, a more robust model of directing employee performance can be developed as the influences on these parties can be more accurately assessed and implemented.

This Harvard School of HRM moved the focus away from HR processes and systems and into a model that sought to manage through developing high commitment amongst employees. Through this form of engagement, each individual could be harnessed to drive business performance as the commitment of the employee was aligned with the goals and strategy of the organization for which they worked. Whilst still crude, in that it assumes that employees across all sectors and level wish to be ‘committed’, it once again proposed that people management can directly drive business performance.

As a result of the development of these models and research into their practical application, particularly in the United States, the means for HR to effect an organization’s performance opened up. Executive expectations about what HR could provide were widened. As HR professionals applied these theories in practice, they found themselves moving away from a skill set and career path that had been rooted in manpower planning, reactive industrial relations management and administration. As practitioners moved to align HR activity with the organization’s objectives, HR professionals needed to be able evaluate different solutions and identify the drivers and stakeholders which had the best impact. The need to prove quantifiably that HR added value to the bottom and top line of the balance sheet was a new challenge. Traditionally the career path of most HR professionals and the job descriptions they had been fulfilling had not provided them with the toolkit to do that.

HOW STRATEGIC ARE HR PROFESSIONALS TODAY? THE CASE FOR CHANGE

The changing nature of the HR role in its approach to supporting the business has been identified, but what about the activities of those who lead the profession? If HR is looking to make the case for the role of people management in improving business performance, the position a...

Table of contents

• Cover Page
• Half Title Page
• Title Page
• Copyright Page
• Contents
• List of Figures
• List of Tables
• Acknowledgements
• 1 The Evolution of HR
• Part 1 The HR Business Partner Model in Practice
• Part 2 HR Technology – the Business Partner Toolkit
• Part 3 Completing the Jigsaw
• Index
• About the Authors