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HR adds value in organisations

Via The Herald : HR practitioners must help our organisations to manage people within a planned and coherent framework that reflects the business strategy. This helps ensure that the various aspects of people management work together to develop the performance and behaviours necessary for business success.

“You’re only effective if you add value. That means you’re not measured by what you do but by what you deliver.” Because let’s face it after many years of hopeful rhetoric about becoming “strategic partners” with a “seat at the table” where the business decisions that matter are made, some human resource professionals aren’t nearly there. They have no seat, and the table is locked inside a conference room to which they have no key.

In this article, the writer will make an attempt to establish WHY some HR people are still without a seat at the table.

The issue of strategic HRM initially came to prominence around the early 1990s, at which time academics developed definitions of strategic HRM as:

The undertaking of all those activities affecting the behaviour of individuals in their efforts to formulate and implement the strategic needs of business.

The pattern of planned human resource deployments and activities intended to enable the organisation to achieve its goals.

Put in simple terms, strategic human resource management SHRM is an approach to managing human resources that supports long-term business goals and outcomes with a strategic framework.

The approach focuses on longer-term people issues, matching resources to future needs, and macro-concerns about structure, quality, culture, values and commitment.

In other words, strategic HRM is the overall framework that determines the shape and delivery of the individual strategies, systematically linking people with organisations by integrating HRM strategies into corporate strategies.

HR is the corporate function with the greatest potential — the key driver, in practice, of business performance. Often times I have come across people who ask the following questions; why are annual performance appraisals so time-consuming — and so routinely useless?

Why is HR so often a henchman for the chief financial officer, finding ever-more ingenious ways to cut benefits and hack at payroll?

Why do its communications — when we can understand them at all — so often flout reality? Why are so many people processes duplicative and wasteful, creating a forest of paperwork for every minor transaction? It’s no wonder that they view HR as an under deliver.

In a difficult economy, companies that have the best talent win. We all know that.

Human resource practitioners should be making the most of our, well, human resource, finding the best hires, nurturing the stars, fostering a productive work environment just as IT runs the computers and finance minds the capital.

HR should be joined to business strategy at the hip. Instead, most organisations have ghettoised their HR departments literally to the brink of obsolescence. They are competent at the administrivia of pay, benefits, and retirement, but in the international labour market companies increasingly are farming those functions out to contractors who can handle such routine tasks at lower expense.

What’s left for HR is the more important strategic role of raising the reputational and intellectual capital of the company.

In my view, one of the major reasons why HR is not at the top table in developing economies is because it is more likely that some human-resource practitioners aren’t particularly interested in, or equipped for, doing business.

And in a business, that’s sort of a problem. As guardians of a company’s talent, HR has to understand how people serve corporate objectives.

Instead, “business acumen” is the single biggest factor that HR professionals may be lacking in the labour market today. This may be attributed to the syllabuses offered by our tertiary institutions that differ in approach to the subject of HR.

Some universities and colleges do teach the subject from a psychological perspective whereas some do use a business approach.

According to a chief executive officer I recently interviewed, there are three questions that any decent HR person in the world should be able to answer. First, who is your company’s core customer?

“Have you talked to one lately? Do you know what challenges they face?”

Second, who are our competitors? “What do they do well and not well?” And most important, who are we? “What is a realistic assessment of what we do well and not so well visa a vis the customer and the competition?”

It is a true fact that in most cases HR pursues efficiency in lieu of value. Why?

Because it’s easier — and easier to measure. Dave Ulrich, a professor at the University of Michigan, recalls meeting with the chairman and top HR people from a big bank.

“The training person said that 80 percent of employees have done at least 40 hours in classes. The chairman said, ‘Congratulations.’ I said, ‘You’re talking about the activities you’re doing. The question is, what are you delivering?’

That sort of stuff drives Ulrich nuts. Over 20 years, he has become the HR trade’s best-known guru (See “The Once and Future Consultant,” page 48) and a leading proponent of the push to take on more strategic roles within corporations.

But human-resources managers, he acknowledges, typically undermine that effort by investing more importance in activities than in outcomes. “You’re only effective if you add value,” Ulrich says.

“That means you’re not measured by what you do but by what you deliver.” By that, he refers not just to the value delivered to employees and line managers, but the benefits that accrue to investors and customers, as well.

It is also more likely that in difficulty situations, human resource forfeits long-term value for short-term cost efficiency.

A simple test: Who does your company’s head of human resource report to? If it’s the Finance Executive, chances are good it is — then HR is headed in the wrong direction. That’s a model that I think doesn’t work.

A financial person is concerned with taking money into the shareholders’ pockets but HR is more concerned with putting investments in.

Can your HR department say it has the ear of top management? Probably not.

“Sometimes,” says Ulrich, “line managers just have this legacy of HR in their minds, and they can’t get rid of it. I felt really badly for one HR guy.

The chairman wanted someone to plan company picnics and manage the union, and every time this guy tried to be strategic, he got shot down.” Say what?

Executives sometimes don’t think HR matters?

There is need for a paradigm shift where HR professionals send a strong message to everyone in their respective organisations that we can’t do anything without HR.

It also signals to HR departments that they’re responsible for more than shuffling papers and getting in the way.

Organisations should view human resources as the caretaker of the largest investment of the company. If you’re not nurturing that investment and watching it grow, you’re not doing your job.

Human resources is crippled. The problem, if you’re an HR person, is educated incapacity. You’re smart, and you know the way you’re working today isn’t going to hold 15 years from now.

But you can’t move to that level. You’re stuck. HR discovers things about the business through the lens of people and talent.

That’s an opportunity for competitive advantage. In most companies, that opportunity is utterly wasted.

HR practitioners must help our organisations to manage people within a planned and coherent framework that reflects the business strategy. This helps ensure that the various aspects of people management work together to develop the performance and behaviours necessary for business success.

Matthias Ruziwa is an experienced and growing Strategic Human Resource Practitioner. He is also an independent arbitrator practicing in the Midlands Province, City of Kwekwe.

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