Has HR Practices Come of Age?
Rhetorical, coming after over 3 decades of people practices! Over time HR Practices perhaps has been through several rounds of role variations from regulatory compliance driven to HR strategy & practices to engaged employee self service, mobility, social awareness and now active participation in building competencies & careers. This has been fundamentally HR work for well over this period. As HR capability and product offering improved, HR Practices helped employees take control of their engagement, job role matches, seeking benchmarks for leading practices, maintaining a skill inventory, mapping competencies, keeping scores, seeking 360 degree feedback & personal development.
Classical Approaches to HR Practices
These approaches have been identified through four factors:
1. Role of the HR in helping to establish an appropriate problem identification and resolution mechanism.
2. Role of the employee in receiving a service delivery process that is linked to the business process and a value that is perceptibly realized in an on going organizational model as being employee centric through a mastery of processes.
3. Role of HR in understanding that functional Practices do not value add unless it is inextricably aligned to business strategy, industry knowledge and detailed processes.
4. And finally, the role of HR professional in understanding that the best fit for driving HR engagement is through understanding employee needs, wants and changing preferences in the way they wish to be engaged today.
Classical approaches to HR Practices revolved around a framework depicted below and typically the situation can be interpreted into the following alternatives:
Type A: Traditional HR Practices – Low Emphasis on Industry, Expectation from the employee, and Low demands on functional knowledge and lack of alignment with the business strategy.
Type B: People Oriented HR Practices – High emphasis on expectation from the employee and high levels of functional knowledge, but low degree of knowledge of industry and business strategy.
Type C: HR Driven as an Organization Builder – Low emphasis on expectation from the employee and lack of depth in functional domain knowledge and high degree of knowledge of industry and business strategy.
Type D: Business Processes driven HR Practices – High emphasis on knowledge of Industry and alignment with the business strategy and macro environment factors, but high level of expectation from the employee as well a demonstrated high degree of depth of functional knowledge and competence.
Type A: Type A HR Practices firms or individuals forms the traditional HR Practices dominated by low emphasis on alignment with business strategy, organizational architecture. The orientation is to employ hourly work, based on administrative content that the employee expects to be delivered. This is followed by a low expectation from the employee and limited understanding of the context of the company in relation to its industry, other macro economic factors, competitive factors and consequent delivery capability through an appropriate solution to the employee. Both the employee and the consultant do not emphasize the need for advanced and deep functional knowledge, in this context HR knowledge. The employee is does not articulate a problem in its holistic configuration nor does the consultant perceive a need to evaluate the problem for its non-articulation. A certain degree of self-preservation dominates the management style of both the consultant as well as the employee and expertise is not a consideration for an intervention.
This is Type A Practices and is largely dominated by component solution providers, administrative specialists who have been hired by an organization that believes they know what needs to be done and would like it to be done in a small scale low cost option.
· The employee would like to control the role of the consultant at every stage of the engagement and would use the consultants’ time to get their low priority work objectives out of the way.
Outsourcing of payroll operations as option, retainers of industry professionals or placement consultants as an opportunity came up through this avenue. The employee is keen on a high execution emphasis, retaining thinking, conceptualizing or diagnosis within their domain location. At another level the employee is happy to receive open-ended prescriptive, informative and experiential advice to be used as appropriate by the employee in any context as may become relevant.
Type B - People Oriented HR Practices
Type B: People Oriented HR Practices is driven through a low emphasis on the business strategy and industry knowledge factors but score high on employee expectation. Here the employee could be encountering straight forward people problems dealing with attracting, retaining talent, getting policies and administrative procedures in place and seeking to resolve unapprised, perhaps unknown business issues and problems as being people driven and asking for a solution. The emphasis on functional knowledge not integrated with business or industry realities needs no additional mention. Several HR Practices firms are quite adept in conducting their businesses, doing exactly what the employee has asked for a simple deliverable with the belief that more work would follow. The consultant has inadvertently set low expectation on the overall potential of the job and has been unable to present to the employee a comprehensive perspective with which the issue could have been resolved, if not for the myopic outlook.
· Unfortunately there has been limited value add. The employee realizes after a point in time, that the consultant has obtained information from the employee and has repackaged and returned it. Functional value add has its inherent limitation when not dealt with in a business context.
But, on the flip, Type B consultants are happy to accept engagements that give them an opportunity to work through small and meaningful people dominant problems and bring to bear their specialist knowledge, functional expertise and experience on people issues to provide simplistic solutions. Since the intent was not to drive this solution through understanding of the business or external factors the solution is also functional and singular. But this would also mean such solutions are standardized, can be rolled out into large and densely populated organizations, as they are systemic and derive economies of scale.
· Several HR Practices firms find the transition from this Type B State to the next stage quite cumbersome.
In reality their positioning continues to be specialist boutique offerings and the lack of appreciation and Practices capability on business and external environment factors confines them to this small specialist space. Further the HR Practices firms have been trained to study through a soft focus, exploring through people experiences and figure synergy issues while attempting to pull together business and people needs.
The employee is typically risk averse and is happy to receive product solutions on a quick fix, ready to use basis. Employee Newsletter as means to resolve communication problems, training need analysis because people need to develop, job evaluation to establish equity, HRIS for database management, performance appraisal to evaluate performance and establishing policy consistency of practices across levels and status hierarchies are some forms of such Practices.
Type C - HR Driven as an Organization Builder
Type C: HR driven, as an organization builder is several steps in the meeting expectation hierarchy but severely impaired by low employee demands and prioritization. More importantly there is clear lack of emphasis on depth of functional knowledge, expectation on expertise or prioritization of integrating business knowledge with HR strategic drivers. While the critical drivers are deep understanding of the business strategy, competitive forces that shape strategy, economic and influencing environmental factor as they relate to a Practices intervention. The consultant has moved up the value chain in driving their engagements through strong and appropriate alignment with the business strategy, demonstrating intervention capability that can typically go beyond singular HR issue resolution mechanisms. The solution structured could be multipolar, inter functional and integrated across organizational boundaries. The employee here has an opportunity to leverage the consultant’s business strategy, process knowledge in consonance with HR functional domain knowledge.
For Type C consultants the critical issue is that the consultant does not bring in an integrated solution focus to the employee given an inability to combine business factors with functional solutions.
· Lack of expertise to visualize the problem at both the strategic, operational and process level operates acts as a constraint while constructing customized solutions.
Jobs that deal with restructuring, organizational design and structures resolved by consultants who lack an integrated approach, roles and task descriptions, process maps that links business processes with that of HR processes are some examples of such disconnect possibilities.
Employees who have used non-HR professionals to manage their HR functions and processes are quite adept at using HR as an organization builder given their strong line orientation and limited internally focused HR process outlook. The employee is also neither appreciative of the value of the intangible product nor is willing to manage the uncertainty that an intervention could bring in. Employees of this category would at best seek Practices support to enable them to maintain their basic HR processes to be streamlined and maintained while their operating managers are performing roles of employee champions or a change agents. Consultants who have looked at the strategic thrust and initiatives of the organization obtain this role through collaborating with specialist HR Practices firms to bridge the knowledge gap specifically from a functional point of view only.
Type D - Business Processes driven HR Practices
However in contrast, Type D consultants who are Business processes Driven HR Practices specialists, perhaps are the ones who would be expected to complete the missing link? The business performance barometer drives them. Revenues, profitability, cost management and enhancing shareholder value is their role.
· HR intervention is simply an enabler, not an end in it.
Their role goes beyond defining a limited scope of work driven by compulsions of solutions available within their reach and has the capability to bring in appropriate intellectual resources to enable action. Simplistically put the consultant approaches a problem with the knowledge of the industry, the relevant macro economic factors that impact the company and deep functional domain knowledge necessary to provide an integrated solution to the employee.
Critically an awareness of the processes that enables all of it to stitch together is critical. Their ability lies in providing an outside in perspective, applying theory and its relevance to application and are deeply concerned with the employee’s problem and are concerned with doing. Concurrently the emphasis from the employee is high on the need for an appropriate engagement and is willing to partner to enable alignment of the work with the business strategy of the firm. At this level the work defined is approached through understanding business processes as they impact the supply and value chain of the organization and that which on impact would cause a performance swing.
· A employee-centered approach is strategy centered, driven by high quality delivery and aims for early and appropriate resolution of the problem.
Fundamentally in Type D situation, both the employee and the consultant understand the need to align business strategy and processes with an advanced degree of detail to enable any HR intervention. The possibility of providing integrated solutions becomes possible. This would consequently mean functional HR capability is quite secondary to the business processes learning while enabling a solution for the employee.
Absence of knowledge of business processes would mean implementation of a half-baked HR solution that misses all the relevant links to key performance indicators, performance orientation and achievement of the business model assumptions. Solutions like E enabled HR, performance metrics that drives the appraisal system or a competency framework, not theoretical, but that which has been derived through understanding and drawing from the business competencies is some examples of Type D. In today context even compensation and benefits that was hitherto the domain of tax and regulatory considerations is viewed in the context of a Compensation Strategy that is derived from a basic competency framework which by itself is a sub set of the business processes and consequent goals and targets.
Driven by business process competency draws its conclusions by looking at value add through content and process. Content depth is necessitated through elaborate yet precise articulation of organization vision, dreams, and its focused mission statement, guiding principles and values at a philosophical platform. Concurrently it draws a business strategy, figures a business model and writes a business plan with concrete statements and position that the company wishes to take in a pre determined time horizon. The document is meant to outline a game plan that spells out key objectives fundamental to the achievement of the business strategy. Content draws its inspiration from its theoretical constructs, validated assumptions, environmental data and knowledge that make for competitive advantage.
· But clearly it stops here for the moment.
Following through now is the Business Process Competency Framework, an architecture designed to map business processes to varying degrees of detailing and accuracy. This is meant to act as a compass to define all that has to succeed thereafter – Roles, tasks, goals, targets, performance indices, position equivalencies, benchmarking and other definable and not so definable parameters and focus areas. Technology, systemic procedures, certification standards are those that can follow through as enablers.
Process engineering that has studied the value chain provides the necessary insight into actionable target points for further functional strategy delineation. This in turn leads to articulation of structures, reporting relationships, span of control and other design elements that are necessary to make the processes work together seamlessly.
· Review environment, market & industry scenario relevant to the industry and the employee
· Review organizational strategy and Critical Success Factors
· Define processes to be mapped in the context of the systemic architecture
· Define Structures
· Determine process improvement opportunities
· Conduct pilot implementation of redesigned processes
· Implement processes, both at the strategic and functional level
Consequently, HR Strategy follows with reasonable degree of accuracy given assumptions that would make the business strategy work outlined in the operational process maps. Functional process mapping whether defined as recruiting, training, development, career planning or compensation and reward systems or through themes that focuses on building leaders, managing motivation, attracting talent or developing knowledge specialists is secondary to the end output being those that emanate from the business process maps.
Effectively HR Practices has the opportunity to integrate its work with business strategy and processes consultation and the employee in turn has the ability to expect work contribution that brings integrated value and an optimized solution. Perhaps coming of age does happen.