Creating a business aligned HR Function is more than a re-structure

Given a choice what would you like to change most about your HR Function? Research suggests that most HR Transformations focus on changing structures, refining processes and creating new roles. If that was enough to meet the needs of the businesses HR serves then that would be fine, however, research repeatedly suggests managers, leaders and employees continue to be underwhelmed with what HR is delivering and how it is delivering it.

Despite the introduction over the last 15 years of the HR Business Partnering (HR BP) Model in many organisations, HR is still seen as not making the contribution it has been promising. This may be for many reasons however at CourageousHR we believe it is down to two misjudgements made by HR Leaders:

Too much focus has been placed on the HR BP role itself. This has resulted in a seismic shift in power within HR which has resulted in HR BPs becoming the primary power brokers for HR. The impact is that the rest of HR feels disenfranchised and like second class HR citizens.
It appears that in our haste to prove HR’s value we are potentially compromising the very thing the HR Partnership model set out to offer - a strategic, holistic and value creation service. So, instead we emphasise short-term cost savings and rationalisation in the SSC and CoE, and business knowledge in the HRBP, at the expense of showing what the whole of HR can do with the organisation’s key differentiator; it’s competitive advantage – in other words its people!

The consequence is that the HR ‘whole is less than the sum of its parts.’ In spite of HR’s ‘one team’ rhetoric we tend to find it easier to ‘defend our patch’, to work in our silos and to make our part of the HR Function look good! This means that not only does the business perceive the different roles of HR as separate, but also we fail to inspire and challenge the business to think differently, more expansively and holistically about its people and the potential they offer.

Recognising the inherent tensions within HR and with the business

Human Resources can add significant business value. The HR Partnership organisation, when implemented well, is a systematic and dynamic means of engaging with the organisation and repeatedly delivering business ‘value’.

The challenge for HR is that it is being asked to ‘add value’ whilst retaining its traditional focus of delivering efficiently. This inherent contradiction is being replicated all over organisations and is not peculiar to HR e.g. to centralise or decentralise; to create new products or grow existing ones? These contradictions have no right ‘answer’ and organisations must therefore find a ‘balance’ that best meets its goals at any moment in time. CourageousHR call this tension the Standardisation / Customisation Dynamic.

Impact on Human Resources

The HR Partnership organisation actually emerged in response to this Standardisation / Customisation Dynamic. However, attempts to create, in a diagrammatic form the HR Partnership structure which can sufficiently capture the complexities and fluidity of this relationship based model has tended to fall short as they have concentrated on formal reporting relationships and ‘deliverables’. The existence of these ‘three legged’ and ‘four legged’ models are at best simplistic views as they do not reflect the reality of multiple and non-static reporting lines in organisations (especially multi-nationals). More importantly, these models give rise to a belief that there is one best model or structure for HR and that the role of the HR Business Partners is as the exclusive ‘power brokers’ for HR.

CourageousHR have turned this on its head by instead focusing on the underlying reasons for the emergence of the HR Partnership structure as well as by recognising the dynamic nature of the HR Partnership structure. Our HR Business Alignment Model captures the intricacies and complexities of the three key elements of the HR Partnership structure:

HR Responsibilities, HR Roles and HR Deliverables.

For a fuller description and explanation of our HR Partnership models go to www.courageoushr.co.za/resources.

What does this mean for HR?

The HR Partnership structure simply mirrors the organisation’s need to balance efficiency and revenue generation.

Continue to support the organisation in reducing costs and being as efficient as possible. This can be delivered in direct savings or managing risks e.g. helping managers to make balanced decisions.
Support individual businesses to increase their revenues. This can be delivered through a variety of different approaches such as greater productivity e.g. increasing employee engagement; new products and services e.g. increased innovation; increased customer spend e.g. improved customer service; or entering new markets e.g. appropriate talent.

The HR Partnership structure therefore has an inherent tension as HR professionals have to balance these two competing organisational needs.

HR Roles

The Standardisation / Customisation Dynamic Model also helps define the role of each part of the HR Community.

HR Partners

HR Partners are responsible for ensuring that the needs of their business are represented to the HR Community. While they have a continuing responsibility to ensure that the organisation need for efficiency (standardisation) is met, they are ideally placed to translate their business revenue need (customisation) into ‘people’ deliverables.

Importantly, the Model also demonstrates that if an activity e.g. salary review, is standard across the organisation, there is no requirement for the HR Partner to be responsible for its delivery (they add ‘no extra value’ as it is the same activity for all businesses).

Where there is a potential to increase revenues, HR Partners have a role in helping their business build an investment case and representing that investment to HR. However, they also have a responsibility to ensure that their business does not unnecessarily spend money where the returns cannot be justified or the resources are unavailable.

HR Operations, Centres of Expertise and Shared Service Centres

HR Operations, Centres of Expertise and Shared Service Centres are responsible for ensuring the needs of the organisation are suitably represented to each business. Whilst there is a clear responsibility to support agreed business customised activities, they are ideally placed to use their technical expertise to minimise costs and risks to the business. Importantly, the Model shows that Operations, COEs and SSCs should have responsibility for delivering standardised HR activities directly to the business.

Where there is a potential to increase revenues, Operations, COEs and SSCs have a role in examining whether an organisational investment is justified based on available resources and whether it should be standardised across the organisation. However, if an investment is agreed, they have a responsibility to support the HR Partner and deliver their part of the HR activities.

HR Deliverables

The Standardisation / Customisation Dynamic model also helps quantify HR Deliverables.

Where a deliverable is Standardised

It is specific to the organisation e.g. the recruitment process. Standardised deliverables are typically the responsibility of HR Operations, COE or SSC.

Where a deliverable is Customised

It is specific to a business e.g. a sales incentive programme to a sales team. Customised deliverables are typically the responsibility of the HR Partner, although they may not actually undertake the activity i.e. ‘deliver’ them.

The benefits of defining HR deliverables in this way is that it allows HR Communities to make conscious decisions and establish protocols for who is both accountable for making sure the deliverable happens and who actually undertakes the activity.

Creating One HR is key

HR has the potential to demonstrate it has a distinctive contribution to make to the long-term success of organisations by claiming the ‘people mandate’. However, relying on re-structuring and name changes will not be enough.

The success of HR Partnerships will fundamentally be determined by the quality of HR people (i.e. their courage, capability and credibility) and the quality of the relationships they have with the people they serve. By HR investing in relationships with itself and with others the inherent tensions, ambiguities and challenges we all face in our day-to-day jobs do not become the normal ‘show stoppers’ rather they signify the health and vibrancy of HR and the wider organisation. This is what people will buy and this is what will secure a strategic future for HR.