Guest blog by Caroline Dunk from cda
People costs often represent at least half of total operating costs – particularly in service organisations, where staff play a key role in delivering a brand or customer experience to customers.
Given the cost and importance of the people resource, one would expect HR to play a key role in the strategic management of the business. And yet, in many major organisations, HR continues to operate primarily as the guardian of a range of disjointed day-to-day processes, often aimed at an outdated or short-term employment agenda.
The situation is complicated by our ability to chase the latest management fad at the expense of getting the basics right. For example, for many organisations the priority is to develop a competent group of managers who have the skills and tools that they need to lead and manage their people, rather than introducing overly complex HR processes.
A set of relatively simple changes to the way that HR is positioned and delivered can deliver significant and sustainable improvements to business performance.
There are five simple questions that can be used to assess where your organisation sits on the ‘HR Innocence – HR Excellence’ scale and identify the priorities for change.
1. Is HR fully represented on the Top Team?
Score 4 or higher if these apply: There is a dedicated, specialist HR Director at Board level. There is HR input to business strategy and business planning. HR thinking has a medium and longer term focus.
Or score your organisation low if: HR is covered by a Board director with primary responsibility for another area (e.g. Finance). HR reacts to decisions made without any strategic framework/input. HR thinking has a short term focus.
2. Are there focused, joined up HR policies and processes?
Award a high score if you have answers such as: HR policies and processes are regularly reviewed and updated to reflect the strategic objectives of the business. HR processes and policies are linked and co-ordinated to deliver the strategic agenda.
Low scoring answers would be: There are fragmented, conflicting approaches to different HR processes. HR often reflects an outdated or unduly operational agenda. There is a lack of communication, and conflicting ‘fiefdoms’ and priorities within the HR team.
3. Is there a clear, unavoidable message about what’s important?
If you can say: There is a clear message about the organisation’s values and priorities, provided to staff through aligned recruitment, performance management, development and reward processes – then you’re towards Excellence on the scale.
On the other hand: If there are conflicting messages and priorities (e.g. training programmes focused on customer service are undermined by remuneration schemes rewarding sales volume) or employees feel they can ignore the organisation’s strategic agenda – then you’re towards Innocence.
4. Are there competent, effective managers and leaders?
Score above 3 if you’re in an organisation where: Managers competently lead and manage their people on a day to day basis. HR and training professionals advise, support and coach managers and leaders.
Alternatively, score low if: Managers are unskilled in the key leadership and management skills and feel able to opt out of key people processes (e.g. performance management). HR professionals are closely involved in executing day to day people management processes (e.g. recruiting on behalf of managers).
5. Is HR’s contribution measured as part of the wider business scorecard?
Example of a high Excellence scoring answer: Key HR metrics are reported and discussed at the most senior level and used as an input to strategic planning.
Score 2 or 1 if: There are no clear, meaningful, reported HR metrics (e.g. employee motivation, capability, performance).
The score in the end reflects your organisations commitment to HR and their competence in this area. Scoring under 10 is a real cause for concern and under 20 indicates there are real improvements to be made. Achieving ‘HR Excellence’, a score of 25, or thereabouts, is commendable but the key to real HR success is to ensure this is sustainable and maintained. As people management is continuous and presents an ongoing challenge for many organisations these questions should be asked regularly to ensure HR not only gets on but stays on the strategic agenda.