Redesigning the Human Resource Department


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I conduct a program on the Human Resource Business Partner. Here are some slides from the program.

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  • 5 5 A key to this transformation of the HR function is the application of both process reengineering and technologies to enable HR professionals to play a more strategic and consultative role within an enterprise. HR information delivery is key to this transformation and new HR roles in several ways: New kinds of information and new information views are needed to support a more strategic HR role. New responsibilities for HR data maintenance are assigned to employees and line managers requiring new information and new means of delivering that information.
  • Three subsystems in HCAM These distinctions will help to understand how the integration works
  • Redesigning the Human Resource Department

    1. 1. Redesigning the HRRedesigning the HR DepartmentDepartment Business Partner
    3. 3. “What HR people do” Staffing Development Compensation Benefits Communications etc. “What HR people deliver” Strategy Execution Administrative Efficiency Employee Contribution Capacity for Change What isWhat is HR?HR? Over the past few years, a debate has ensued regarding whether or not we should get rid of HR… HR Textbook Answer New Thinking The REAL question: How can HR create value and deliver results? HR Through the Years... 10/01/13 HRinfo4u 3
    4. 4. Basic Personnel Services Basic Personnel Services Control and Compliance Control and Compliance Specialized Expertise Specialized Expertise Strategic Business Partner Strategic Business Partner A very long time ago Not so long ago Recently ASAP High Low Bureaucratic and administrative aspects of dealing with employees Aspects of dealing with unions (1930s and 1940s in US) Dealing with discrimination legislation (1960s and 1970s in US) Taking a business perspective initially in compensation, benefits, recruiting and personpower planning Organizational effectiveness, business planning Apply behavioral science knowledge for recruiting, evaluating, compensation, training Provide strategic business support and assist in developing and implementing strategies Assist in culture change and assist in defining and implementing values Increase employee involvement and integrate supportive subsystems Administrator Enforcer Expert Business Partner The role of HR has evolved and expanded over the years in response to people-related business challenges. An Evolution inAn Evolution in IntegrationIntegration HR Through the Years... 10/01/13 HRinfo4u 4
    5. 5. New Challenges for Human Resources ◦ Continued demand for workforce cost reductions ◦ Managing a global workforce enabled by technology ◦ Realizing the gains of mergers and acquisitions ◦ Improving the effectiveness of Human Capital for sustained competitive advantage HR Today 10/01/13 HRinfo4u 5
    6. 6. HR TransformationHR Transformation Changes in the competitive balance for HR that leads to a refocusing: ◦ Refocus HR practices on the value chain, rather than HR activities. ◦ Change, change, change ◦ How technology changes how our employees do their jobs. ◦ Systematizing and controlling the cost of transactional work through outsourcing or shared services. 10/01/13 HRinfo4u 6
    7. 7. HR TransformationHR Transformation The transformation has been a wrenching experience for HR: ◦ Focus on defined outcomes rather than activities. ◦ A shared body of knowledge. (attorneys, engineers, accountants) ◦ Essential competencies for the profession. ◦ Clear roles within the organization. ◦ Ethical standards maintained by collegial jurisdiction. 10/01/13 HRinfo4u 7
    8. 8. “Only 10% of current HR Contributions add value. The other 90% is transactional nonsense.” Jac Fitz-Enz : Director of Saratoga Institute “HR must re-invent itself ... in mindset, internal workings, image, status, organizational position, and capacity to initiate and manage change.” ‘Work in America Institute: ‘The Partnership Paradigm for Competitive Advantage’ 1995 The HR function...The HR function... perceptions...perceptions... HR Today 10/01/13 HRinfo4u 8
    9. 9. Quality and customer service How does HR affect employee morale, commitment, competence and retention? How well does HR integrate with strategic plans, employee needs and other staff (even HR) functions? Cost How does HR add value and affect profitability, cost, growth, cash flow and margin? Responsiveness How quickly can HR work be done without sacrificing quality? How well can ideas be turned into actions with visible results in terms of employee behavior or benefits to the firm? Today , human resources is challenged with how to create value and deliver results in this dynamic environment. Typical challenges facing HR today HR Today 10/01/13 HRinfo4u 9
    10. 10. Workplace Flexibility 1. Collaborative cultures will be the workplace model. 2. Creative employment contracts will support more time off, flexibility in hours and work location, technological job aids and more pay at risk with significant upside potential. 3. Company intranets will become a major tool for communications, training and benefits administration; HR will play a lead role in developing this important tool. 4. Intelligence through knowledge transfer capability will separate the best employees from the rest. 5. Work hours scheduling will become less important as organizations focus on performance and results. 6. Company facilities will become ‘virtual’ through work-at-home, telecommuting and outsourcing. 7. Legislation will lead to greater portability of health, welfare and retirement benefits. Global Business 1. The role of corporate HR will change to that of creator of overall values and direction, and will be implemented by local HR departments in different countries. 2. Technology, especially the internet, will enable more business to enter the global marketplace. 3. HR professionals will have advanced acumen in international business practices, international labor laws, multicultural sensitivities and multiple languages. 4. Megaglobal business alliances will grow, requiring great finesse on the part of the HR professional. 5. The continued emergence of a world marketplace will require the development of an international workforce. Work and Society 1. Family and life interests will play a more prevalent role in people’s lives and a greater factor in people’s choices about work--there will be more of a ‘work to live’ than a ‘live to work’ mentality. 2. Employees will demand increases in workplace flexibility to pursue life interests. 3. Dual-career couples will refuse to make the sacrifices required today in their family lives and more people (not just women) will opt out of traditional careers. 4. Workers will continue to struggle with their need for work/life balance and it will get worse. And the challenges will continue into the next decade. The Future of HR 10/01/13 HRinfo4u 10
    11. 11. Workforce Development 1. Lifelong learning will become a requirement. 2. The focus of training/learning will be on performance improvement, not just on skill building. 3. Employees with varied skills and competencies will be valued more highly than those with a depth of expertise in a single area. 4. Problem solving and decision making will become a required curriculum with practical work problems as the training medium. 5. Training will be delivered ‘just-in-time’ wherever people need it, using a variety of technologies and mediums. 6. As the computer-savvy generation assimilates into the workplace, employees will become much more productive in complex tasks and less dependent on people and departments. Definition of Jobs 1. Organizations won’t pay for the value of the job but for the value of the person. 2. Versatility will be the key factor in determining employee value with strategic thinking, leadership, problem solving, technology and people skills close behind. 3. Compensation systems will be linked to business outcomes. 4. People will be organized in teams focused on a task, not organized around a hierarchy. 5. Positions will be defined by the competencies needed to be performed. 6. Employees will be more independent, moving from project to project within their organization. Strategic Role of HR 1 The focus of the HR function will be human capital development and organizational productivity; HR may be renamed to reflect this. 2. Managers will grow to depend more and more on HR professionals as they realize that people management can be the next strategic advantage in the next decade. 3. A key role for HR will be multi- disciplinary consulting around individual, team business and corporate performance. 4. HR will have a ‘seat at the table’ as part of the top management team and report directly to the CEO in most companies. The Future of HR 10/01/13 HRinfo4u 11
    12. 12. CEO’s want the HR function to focus on workforce strategy & management, but HR is locked into operational daily problems and transaction processing Refocus of HR functions on strategic workforce management Outsourcing/Shared Service Centre Technology enabled HRM Overall increase in added value Decrease in HRFTE/FTE ratio From Transaction to Process & Change Customer Orientation Cost Balancing Cost & Added ValueBalancing Cost & Added Value 10/01/13 HRinfo4u 12
    13. 13. HR activities carried out by line managers Outsourced administrative services HR organization/people focus Target environment (Best practice) Current environment Transition 60% Consultativ e services 20% Administrative services 20% Strategic services 30% Consultative services 10% Strategic services 60% Administrative services + Refocusing the HR FunctionRefocusing the HR Function eate Value - by shrinking Costs and Improving Service Delivery... 10/01/13 HRinfo4u 13
    14. 14. Managing Human Capital as an Asset of theManaging Human Capital as an Asset of the BusinessBusiness Culture and Leadership Human Performance Management Rewards Human Performance Management System that creates human capability -- competence and capacity -- to do the work needed to execute the strategy Rewards The cost to acquire (and retain) the asset Plays an incentive role Culture and Leadership Aspects of the organization that effect the spirit of people -- screen through which people will view and forces that will focus and inspire 10/01/13 HRinfo4u 14
    15. 15. Managing HR as a Business Assets Physical Capital Human Capital Technology Capital HR Programs and Service Delivery Costs Compensation and Benefits Costs Managing HR operations as a business means managing human capital just as we would any tangible or physical asset. All assets, such as machines, require investment to maintain and increase their efficiency and effectiveness. 10/01/13 HRinfo4u 15
    16. 16. Organizational DesignOrganizational Design HR organizations face the same dilemmas as the businesses they support: ◦ Build strong functional/product expertise while aligning around customer segments. ◦ Design in flexibility without adding cost. ◦ Connect the front and the back of the organization and have them work together seamlessly. ◦ Deliver complex solutions through the formation and dissolution of teams. ◦ Get the benefits of both centralized infrastructure and decentralized decision making. 10/01/13 HRinfo4u 16
    17. 17. Organizational DesignOrganizational Design A fundamental principle of organizational design is that a change in strategy requires a new set of capabilities and a realignment of the core elements of the organization. There are some basic design choices but the uniqueness of each organization will determine what type of design is appropriate. Organization design has become a core competence for HR. 10/01/13 HRinfo4u 17
    18. 18. Models of HR DesignModels of HR Design The shift in the work of HR was brought about by a number of factors: ◦ The fear of massive systems failures leading up to Y2K spurred the installation of Enterprise Technology Systems like SAP. ◦ The economic slowdown in 2000 exposed HR departments as ill prepared to help during the restructurings, downsizings and mergers that resulted. ◦ HR became an easy target of cost reductions. The 1990’s saw numerous programs that were not evaluated or measured. ◦ Other functional areas began to outsource repetitive, transactional, back office work and pushed HR to do the same. 10/01/13 HRinfo4u 18
    19. 19. Model #1Model #1 The Business PartnerThe Business Partner The most common organizational design used in response to these changes is the business partner model. It’s hallmark is a close alignment of HR staff to the lines of business. It developed in response to the fear that HR was too centralized and disconnected from the business and too inwardly focused. 10/01/13 HRinfo4u 19
    20. 20. The Business PartnerThe Business Partner There are 3 components: ◦ A customer facing front end. “Business partners” who are generalists. ◦ A product focused back end. Small specialist groups that produce programs, policies and provide decision support. ◦ An operational service center. Reduce costs and improve quality by systematizing transactional work. 10/01/13 HRinfo4u 20
    21. 21. The Front EndThe Front End The business partner focuses on diagnostic, consultative and organizational development work. Each line of business has a team of HR partners. The partner is best positioned to understand the needs of the business and can build relationships by being located with them. 10/01/13 HRinfo4u 21
    22. 22. The Back EndThe Back End These specialist groups are the centers of excellence or the practice groups. They provide specialized services (comp, training, diversity) and may or may not deliver the services. Usually they depend on the business partner to bring them in and to roll out the programs. 10/01/13 HRinfo4u 22
    23. 23. The Service CenterThe Service Center By taking employee centered work away from the generalists, it should free time to focus on management focused work. The service center can be centrally located, outsourced or provided through multiple vendors. It processes transactions: payroll, benefits, generates data, answers questions. Based on the philosophy that employees can and should take care of their own needs. 10/01/13 HRinfo4u 23
    24. 24. The ChallengeThe Challenge Each part of the model has its own mandates and sets of measures. The staff members in each part have their own skill sets. The challenge is how to pull them together so that the customer who sees HR sees one function and expects to receive seamless service from all three parts. 10/01/13 HRinfo4u 24
    25. 25. The ChallengeThe Challenge The experiences of those who have tried it show that there are obstacles: ◦ Who owns the client? ◦ Assembling teams ◦ Delivering OD services 10/01/13 HRinfo4u 25
    26. 26. Who Owns the Client?Who Owns the Client? Tension between the front end and the back end, including the centers of excellence. The business partner determines when the specialists are brought in. ◦ Specialists are brought in too late ◦ Full capabilities are not used ◦ Client satisfaction is limited. 10/01/13 HRinfo4u 26
    27. 27. Who Owns the Client?Who Owns the Client? HR’s place at the table is not secure and neither are HR people. HR people are not capable or not sure they want to be generalists. The measures of success are fuzzy: ◦ Your client? ◦ Your colleagues? 10/01/13 HRinfo4u 27
    28. 28. Assembling TeamsAssembling Teams A majority of staff is dedicated to the line which reduces the ability to move people quickly when needs arise. There is always work to be done but is it worthwhile work. HR needs to be able to reconfigure itself quickly. As more work becomes project work, flexibility will be key. 10/01/13 HRinfo4u 28
    29. 29. Delivering OD ServicesDelivering OD Services No matter how much transactional work gets shifted, there is still transactional work to be done; high level transactional work, but non-the-less. Rolling out a program, recruiting for a senior level position, dealing with a complex ER issue, leaves little time for OD work. 10/01/13 HRinfo4u 29
    30. 30. Delivering OD ServicesDelivering OD Services Centralized OD teams, located at the COE, but high level OD people want ownership, a fundamental problem. Outside expertise is another solution especially for complex projects, but ownership is again an issue. The personal relationships between generalists and OD specialist seems to be the only solution. 10/01/13 HRinfo4u 30
    31. 31. Problems with the ModelProblems with the Model Front end people have different priorities than back end. Generalists “go native” especially to maintain their credibility. How are HR initiatives funded, especially across business lines. 10/01/13 HRinfo4u 31
    32. 32. Model #2Model #2 The Solutions CenterThe Solutions Center It has the same basic shape as the business partner model but the heavy loading is in the middle, not the front end. Business partners are small teams with mixed skills centered on the work of organizational assessment, design, development and talent management. 10/01/13 HRinfo4u 32
    33. 33. Model #2Model #2 The Solutions CenterThe Solutions Center OD may be integrated into the team. The front end staff acts more like a customer relationship manager (CRM). Competencies include: ◦ Influence ◦ Relationship building ◦ Political savvy ◦ Organizational agility 10/01/13 HRinfo4u 33
    34. 34. Solutions ModelSolutions Model High ratios: 1 to 500 or more. The CRM can only manage the client relationship, diagnose issues, configure specialist teams and coordinate but not manage projects. The extra hands from the partner model are now in the middle, rather than the front end. 10/01/13 HRinfo4u 34
    35. 35. Solutions ModelSolutions Model Front end teams now must use other parts of HR for delivery and support. This makes it easier to redeploy assets and ensures the CRM does not try to do the work herself. The COE is lighter as well with true specialists that do not deliver work. 10/01/13 HRinfo4u 35
    36. 36. Solutions ModelSolutions Model The middle is drawn from both sides with teams of semi-specialists around functional areas like recruiting and ER. These can be organized into teams since they are not owned by the line units. 10/01/13 HRinfo4u 36
    37. 37. Solutions ModelSolutions Model Ability to configure teams around multiple dimensions that mirror the complexity of the work rather than the business hierarchy. Broader and deeper analysis of HR issues and trends. Alleviation of client ownership issues. 10/01/13 HRinfo4u 37
    38. 38. Solutions ModelSolutions Model The ability to assign resources against what is most important and the flexibility to reallocate them as priorities change. Recognizes the reality of HR work. There is a need for skilled “doers.” 10/01/13 HRinfo4u 38
    39. 39. The PlanThe Plan The design of the HR team is a key element to making any model work. There are at least three issues: ◦ Job rotation ◦ Governance ◦ Communication 10/01/13 HRinfo4u 39
    40. 40. Job RotationJob Rotation Well planned rotation will break down barriers and create better peer relationships. Joint hiring and talent discussions also helps create interdependence. A shared talent pool makes everyone accountable. 10/01/13 HRinfo4u 40
    41. 41. GovernanceGovernance Most companies are federations with weak centers. The line of business that makes the most money get the most votes. Conflicts among the lines of business must avoid the appearance of “victory.” Creative and thoughtful governance is another way to knit the organization together ◦ Steering committees 10/01/13 HRinfo4u 41
    42. 42. CommunicationCommunication Downward communication inevitably leaves staff feeling disconnected. Multiple dimensions or work is more appropriate to vertical teams than to horizontal teams. 10/01/13 HRinfo4u 42
    43. 43. A Decision ScienceA Decision Science Boudreau makes the point that HR can be thought of as having two components: ◦ A professional practice ◦ A decision science centered on talent management and organizational capability. 10/01/13 HRinfo4u 43
    44. 44. A Decision ScienceA Decision Science How to link the 2 components together would require the service center to be a source of data not just a way to save money and free up generalist time. Technology and analytics could be used to forecast leader profiles and bench strength needs against projected business goals. 10/01/13 HRinfo4u 44
    45. 45. Comments?Comments? 10/01/13 HRinfo4u 45