Do We Need HR?

Repositioning People Management for Success

Paul Sparrow,C. Cooper,Kenneth A. Loparo

• Publisher: Palgrave Macmillan
• Year: 2016
• ISBN:
  9781137313775
• Topic: Business
• Subtopic: Gestione delle risorse umane
• Index: Business

Written by a leading team of authors with contributions from top HR professionals, Do We Need HR? is an important book which addresses issues surrounding the role, structure and challenges for HR departments and how the field may be affected by new types of organizations, networks and methods of working.

chapter 1

Introduction: HR Looking out and Looking in

1.1 Where to start?

Our previous book, Leading HR,¹ was written principally for those with the responsibility of leading HR functions who wanted to have business influence. This book is written for those who have business influence and who want to understand the people and organizational challenges that this influence will create. We put people management into its rightful general management context. We have structured this book into eight chapters. After introducing its rationale in this chapter, we take seven contemporary themes – predominantly business-driven, but one purposefully driven by broader societal questions – and analyze the organizational and people management challenges that each creates.

Why have we written this book now? In our original work, back in 2010, we argued that rather than starting with defined structures and delivery models or prescriptions for high-performance work practices, and then trying to shoehorn these into the organization strategy, HR needed to be about “reversing the arrow.” Its starting point needed to be an understanding of the organization’s business model (and the alternative models that might also be debated), and its own analysis of the organizational implications and people management problems that such a model would create: the risks and opportunities to be managed, the journeys to initiate and the solutions to develop. To be able to do this, HR needed to bring to bear its own specialist skills and unique insights – be these coming from people with useful skills in labor economics, social policy, organizational psychology or any other educational background that could be identified with a particular skill, discipline and insight. It then had to trace the underlying strategic performance drivers that enabled the business model. These are the intermediate business outcomes that facilitate effective performance and it is these outcomes that we focus this book around – the need to be able to identify how you create innovation, customer centricity, lean management, collaborative and partnered performance. Each of these performance challenges in turn has been looked at and understood by a range of disciplines, such as operations management, marketing, services management, economics, strategy, and research and development (R&D). But HR leaders need to be able to “read” this general management literature and show how the delivery of each performance outcome is highly dependent on the people and management aspects of organization effectiveness. Armed with this business insight, they must then be able to deliver on two important conversations. They must understand how to build the strategic competence of the organization – which back in 2002² was defined as the ability to be agile, open to the environment and capable of picking up those weak signals indicative of the need for change, which must then be selected, filtered, stored, recalled and interpreted so that the organization can make wise decisions. However, to be able to influence the taking of wise decisions, the HR Director must have the personal capability and credibility to engage the Board on these issues, which meant having the rhetoric skills of business dialogue, but also being part of what we called a Golden Triangle between the Chief Executive Officer (CEO), the Chief Financial Officer (CFO) and the HR Director. This board engagement was not achieved with HR acting in a servant context, akin to the role of a consiglieri, but rather as an expert equipped with all the above understanding. We argued, in fact, that you could have all the best benchmarked HR practices that you could wish for, but if the HR function was not able to deliver on its business model insight, then these practices would come to naught. In order to demonstrate this business model insight, HR needed to be able to evidence performance drivers, to help build the strategic competence of the organization and to ensure that there was boardroom engagement with its own analysis of the strategy.

Only having once delivered on the above should we move into the more functional aspects of HR, and although this of course then triggers a very wide range of processes, there were two dominant strategies that needed to be put in place. The first was to be able to reconfigure the talent systems – deep and troubling questions were being asked of talent. The second was in essence to be able to market the strategy to employees (and indeed beyond to society) in ways that were meaningful and persuasive; in other words, to be able to show what it was that employees needed to engage with.

Only at the final stages of this reverse-engineered contribution to the organization, and only as an afterthought, should it then be possible to think about metrics that might be used to evaluate the performance of the HR function. And only then should decisions about how to organize and structure the delivery of HR be made.

1.2 Is this the world we created?

In our previous book we set out a challenging agenda. Much of this challenge remains today. Our prognosis for the future of HR functions was also disconcerting.

Much of the transactional work that had been farmed out to HR service providers was often carried out by these providers to questionable quality and, even when it was managed effectively, it still often presented HR functions with some difficult decisions. As HR service providers took on responsibility for more and more of the outsourced activities, these providers were driven by their own competitive and business development logics. In order to develop their own business, which operated across several client HR functions, the way in which they made technical and service investments was not always aligned with the interests of each and every HR function. They were scaling up their own activities, becoming fewer in number, and were creating what are called “multi-tower” solutions, combining service support for the likes of HR, information systems and finance. The increasing power of information technology and sophistication of e-enablement meant that these service providers were moving up the value-chain of services, adding more activities and expertise, and being able to provide these services direct to line managers if necessary. This expansion of services slowly encroached upon the activities of the internal HR function – transactional activities that most of course were more than happy to divest, though some sought to bring back, but nonetheless services which still had an impact upon the reputation of the internal function if they were not delivered effectively. Everyone has been on a learning curve. HR functions have asked questions about provider performance (typically around their reliability, skills levels, insight into the business, and the quality of their communication back to employees and managers). They have had to manage the expectations of staff around the use of technology portals as the main point of entry into a relationship with HR. They have had to deal with challenges around the lack of face-to-face contact and sense of depersonalization in this relationship. They have had to try and shape user behavior, manage how they take up self-service offerings and avoid managers following advice lines that are too narrow. Quality needed to be assured without fragmenting the service levels across business units or geographical lines. The speed of response was also critical and this was dependent on technology, systems performance and often massive investments in IT. This e-enablement of many HR processes naturally led to HR functions continuing to standardize their HR. Before the processes were standardized, we had to assume that they had first been optimized. Whether this was the case or not, the consequence was that e-enablement in practice cemented the way things had to be done, either discouraging HR functions from making too many adaptations and refinements to their processes on the basis of subsequent learning, or tempting them to think that tweaking processes was a useful endeavor.

It also put a breakpoint into the development of HR expertise between the lower end and more outsourcable delivery of transactional work (much of which does not require too much HR training) and the more specialized expert knowledge needed to design the HR processes required for things like resourcing, talent management and learning and development, compensation and benefits, engagement, organization development and international mobility, much of which is the bread and butter of line consulting firms. It placed an even bigger career break within the HR function – creating challenges in moving people across these siloed areas of expertise and then into more business-friendly and business-relevant HR activity. Working in these centers was not necessarily an attractive staff proposition, even though the centers represented an important piece of the jigsaw that made up a powerful HR function.

The next learning curve has been around the specialist (and supposedly more strategic) expertise that remained and was parceled up into “centers of expertise.” But if truth be told, these still reflected the old “functions” of HR. Nearly every organization had the same centers of expertise in their structure, such as resourcing, talent management, organization development, and compensation and benefits. Faced with a set of common HR functions, line managers began to ask some challenging questions of HR functions:

What was strategic about such functional knowledge, the strategists have asked?

Why should freeing up time from transactional activity and punting it into these areas of expert knowledge make a function any more strategic?

Were these centers just the arbitors of internal business processes (the processes around which HR was delivered for sure, but just processes nonetheless)?

Of course, standardizing around common centers of expertise meant that you could focus on “best practice” around many of these activities – such as assessment centers, selection, reward, the categorization of people on performance-potential matrices and so forth. But good process is only what was expected; no one rewards you just for carrying out your basic functional activity.

Again, the learning curve has seen HR spend time specifying how to parcel up its expertise, thinking about the clarity of the proposition and the governance of this expertise. It has created questions about the availability of expertise, as well as the level of skill and the level of business acumen needed within these centers:

Did people in your expertise centers need as much business acumen as the people with business acumen working outside the centers, such as business partners?

Were there questions about resource alignment and the need to think about the costs associated with any instability of expertise and demand, when to use the expertise and how to engage its services?

These questions reinforced the need to ensure quality assurance ...