Why we hate HR

1
Why we hate HR

• In knowledge economy, companies with best talent
  wins.
• Why does HR do such a bad job finding, looking
  after and developing talent?

For 20 years, HR talked about becoming strategic
partner with a seat at the table.Why has it
failed?
2
How the world sees it (1)

• Necessary evil at best. At worst, dark
  bureaucratic force
• Blindly enforces stupid rules
• Resists creativity, stops constructive change
• HR - function with the greatest potential
  (driving business performance). Yet
  consistently under-delivers
• Put themselves into a ghetto, not integrally
  aligned with business strategy (- ct. Finance,
  IT).

3
How the world sees it (2)

• Good for retaining high quality workers - 40
• Job training favourable - 58
• Gives few opportunities for promotion - most
• Takes an interest in my well-being -
  50Source Hay Group survey (2005)
• Good at administrivia of pay, benefits,
  retirement

4
How the world sees it (3)

• Corporations are outsourcing these functions to
  specialist external contractors.
• So what is left for HR?
• Raising the reputation and the intellectual
  capital of the business
• Just what HR is NOT good at

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WHY? (1)Problem with HR

• HR not the brightest bunnies- ambitious
  business students not join HR- may be
  intelligent, not BUSINESS people
• Transferred from other departments not good
  enough, a low-risk parking spot
• Joined for good intentions but wrong reasons-
  To help people, like working with people-
  HR is about doing good. Its about finding the
  best and brightest people and raising the value
  of the firm
• Gap between ability job needs is wideningFew
  HR staff today have higher degree than 1990 (SHRM)

6
WHY? (2)Problem with HR

• What is best academic study for successful HR
  career? (SHRM survey)- Interpersonal
  communications skills 83- Law 71- Business
  ethics 66- Change management 35- Strategic
  management 32- Finance 2

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WHY? (3)Problem with HR

• HR managers are not interested in doing
  business
• As custodians of company talent, HR must
  understand business objectives
• Business acumen is the single biggest factor
  that HR professionals in US lacks today

8
Three questions HR professional must answer

• Who is our companys core customer?Have you
  spoken to one recently?What challenges do they
  face?
• Who is the competition?What do they do well?
  Badly? Why?
• Who are we?What do we do well? What do we do
  badly - vis-à-vis customer competition
• How many HR staff can answer those questions?
• Source Anthony Rucci, Exec VP Cardinal
  Health Inc

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2. Cost before value

• More interested in the activities (training, etc)
  than the outcomes
• You are only effective if you add value.You are
  not measured by what you do but by what you
  deliver.
• HR can say how many people trained, how satisfied
  trainees were. Rarely links training to
  performance
• David Ulrich (Professor, University of
  Michigan)

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3. Evaluation

• Rarely prove the benefit of training to
  performance
• Or if employees feel more engaged in the
  company
• Rucci 12 questions to measure engagement, -
  including
• Staff understand company strategy?
• See a connection between that and their jobs?
• Proud to tell people where they work?
• Rucci correlates answers with survey of 2000
  customers, monthly sales data brand-awareness
  surveys
• I dont know if our HR processes are having an
  impact. But I know employee engagement has
  impact

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Is HR working FOR you? (1)

• Covering backWhy conduct appraisals?Protecting
  itself against employees if have a
  confrontation with an employee, - I documented
  this problem.
• Defence against increasing number of employment
  laws.
• Protector of corporate assets, makes sure a
  company not run foul of law HR says NO a lot.
• Favours standardisation and uniformity(in
  workforce increasingly complex and diverse)

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Is HR working FOR you? (2)

• One-size-fits-allBureaucrats hate exceptions
  fear of accusations of bias exceptions are hard
  work take time expensive
• BUT .....exceptional staff drive the business
• Keep best staff by rewarding them for being
  exceptional, by not treating them like everyone
  else
• Correct message We value high-performing
  employees, will reward you, want to keep you

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Is HR working FOR you? (3)

• By contrast
• HR benchmarks salaries- function-by-function,
  job-by-job
• Compares pay with competition- to pay the least
• Object to glowing appraisals- risk inviting
  exceptional salary increase

14
Short-term cost v long-term value

• Many HR managers report to Head of Finance.
• Finance worries about taking money out of the
  company
• HR is interested in putting investment in.

15
How business leaders see HR

• Tea-and-sympathy image
• Lesser function- plan company trips- manage
  the trade unions
• How do business leaders behave- TALK soft
  (training, development, commitment)Employees
  are our greatest asset - ACT hard - improve
  the bottom-line.
• Would listen if HR proved its worth

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Case Hunter-Douglas

• BeforeDepartments with highest turnover had
  damage rates of 5.
• 70 of employees left within 6 months- not
  feel respected / no say in decisions / lack of
  connection
• New mentoring programme matching new workers with
  experienced workers. Mentors got special
  uniform
• After6-month turnover dropped to 16.
  Attendance improvedProductivity and damaged
  goods rate improvedProven improvements to the
  bottom line

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HR business strategy (1)

• 2005 surveyHR professionals said 23 of time
  was spent being strategic partner- same as in
  1995.
• Outside HR managersHR is far less involved in
  strategy that HR thinks it is

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HR business strategy (2)

• Why HR disconnected from strategy?
• HR brings strong technical expertisebut no view
  of future or how organisations will change
• Difficult to align HR with strategyStrategy
  changes very fast. Hard to change pay structure
  quickly
•  Source Lynda Gratton, Professor, London
  School of Economics

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HR business strategy (3)

• Risk
• 94 of large employers will outsource at least 1
  HR activity
• By 2008, many will outsource learning
  development, payroll, recruiting, health and
  welfare, global mobility
• HR replies - this frees us from the
  administrative minutia
• BUT .
• Outsourcing takes away what HR does well.What is
  left? What HR is weak atEducated incapacity
  - You know the way youre working today isnt
  the way you will work in 10 years. Trouble is,
  you havent the capacity to move up to the next
  levelSource Jay Jamrog, HR Institute

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HR business strategy (4)

• Professor Boudreau, USC HT is a unique
  organisation in the company. It discovers
  things about the business through the lens of
  people and talent. Thats an opportunity for
  competitive advantage.