HR Business Partnering Sascha Michel


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A critical review of HR Business Partnering by Sascha Michel

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HR Business Partnering Sascha Michel

  1. 1. HR Business Partnering 1
  2. 2. Table of Contents1. Introduction. Pg.32. Hr Business Partners: raising the bar for HR Pg.43. A ‘ticking bomb’ and erosion of the HR function. Pg.54. References. Pg.9 2
  3. 3. Introduction With ever increasing financial uncertainty, changing business models, globalisation andhighly segmented and demanding customers, Human Recourse (HR) professionals areconfronted with the challenge of reducing bureaucracy, creating value and delivering results,while at the same time driving enhanced employee performance, involvement andcommitment, aligned with business strategy (Ulrich, 1997; Ulrich and Brockbank, 2005). Tocompete, organisations will need to harness and retain top talent, in turn creatingorganisational efficiencies, responding to the speed of change, and innovating and developinga leadership brand and culture of strategic clarity (Ulrich et al., 2008). Traditional models of HR are transactional, centralised and bureaucratic. In emergingcompetencies of organisational flex and rapid change, require an entirely new approach toHR, focusing less on the administrative and functional side of HR, and leaning more towardsan empowered suite of HR roles and responsibilities. HR reinvented in this way, could helpto align business strategy across the whole organisation, moving away from traditional andfunctional HR orthodoxy, decentralised, and contributing to front line management, byresponding and learning much faster than might have been experienced before. While this shift into a new paradigm of strategic HR seems obvious, one cannotunderestimate the challenge of executing successful change within existing cultures, andcreating a shared mindset relevant to the organisational context. The potential for change isusually led by deeply rooted capabilities evident in prevailing cultures and inherently the‘way things are done around here’. Organisations and people are complex. One cannotpresume that a prescribed model promoting simplicity in redefining HR can be aligned andintegrated in every context as a ‘one size fits all’ approach. Success may be possible, butthrough a deeper understanding and evaluation of the business context, leading to a more‘hybrid’ approach, and then dissecting pertinent parts of the HR business model most suitableto the given situation? Notwithstanding the cultural issues of implementation, a ‘model within a model’, coupledwith outdated HR and Line management capabilities, could add further complexity and slowdown progress, where support in specific competencies and skills could help to deliver 3
  4. 4. change in strategic direction (Ulrich and Allen, 2009). This paper critically evaluates boththese challenges as well as the valuable application of the HR business partner model whenorganisations embark on a radical reorganisation of the HR function from the traditional‘back office’ to the strategic front line. HR business partners: raising the bar for HRThe Ulrich HR business partner model suggests a framework for less on the ‘doing’ andadministration of HR, and more on delivery of outcomes, strategy execution and capacity forchange, adding value, by building a competitive organisation defined along two axes:processes versus people, strategic versus operational focus (Ulrich, 1997; Ulrich andBrockbank, 2005, Ulrich et al., 2008). Ulrich (1997) outlines 3 distinct areas, which coulddeliver strategic value, namely shared services, centres of excellence and business partners;multiple roles are defined as the strategic partner, administrative expert, employee championand the change agent. Strategic partners translate business strategies into HR priorities andadministration experts reengineer organisational processes into ‘shared services’ (Ulrich,1997). Employee champions deliver increased employee contribution, commitment andcompetence, while ‘change agents’ manage transformation, ensuring capacity for culturechange (Ulrich, 1997; Francis and Keegan, 2006).Moving from old bureaucratic forms of ‘personnel management’ to a more flexible andintegrated model, could allow greater maneuverability and deeper insights into the ‘peopleside’ of business. Redefining and introducing new roles, brings new strategic and businesscompetencies, when in the past centralised, specialist administrators and technicianssupported, but less so in the delivery of strategic HR and operational decision making(Becker et al., 2001). This quasi ‘distributed HR effect’ means that HR professionals canhave quicker access to knowledge and transference of strategic HR issues, while empoweringa culture of collaboration between departments and shared expertise in helping to engineersuccessful strategies. This model suggests that people are the key drivers of value creationand a focus on intangible competitive advantage can deliver value to shareholders andstakeholders alike. However it must be noted that, Intangible, non imitable advantage, iscreated and delivered more so in knowledge based areas of work, where as a much valuedrecourse, employee competencies drive competitive advantage. 4
  5. 5. Becker et al (2001) affirm that value has shifted from the physical to the intellectual, withpeople being the main source of competitive advantage, acting in a new economic paradigms;characterised by speed, quality, short cycle times, highlighting the importance of intangibleassets such as brand recognition, knowledge and human capital. Ulrich’s model tries to buildthe case for establishing and integrating the HR function as a key strategic component. Ulrich(1997) highlights the need for integration and value creation, by not only devolving strategicfunctions, but by also creating efficient transactional cost control centres of shared expertiseand knowledge. The value from separating shared services and centres of excellence from thestrategic and transformational, means that organisations could in effect benefit from; businesspartners who are free to enable and execute strategies, increased profitability and efficiencies,doing more with less, and cutting costs by outsourcing payroll and transactional services(Ulrich, 1997; Ulrich et al., 2008).This flexible but evidently competing model of centralisation versus decentralisation, as adelivery model, may also suggest an underlying desired outcome that ‘the ability to executestrategy may be more important that the strategy itself’ (Becker et al., 2001, Pg.9). Withshared expertise and devolution of HR to the line, global organisations are better positionedto align themselves with different national cultures, and have the ability to create shared bestpractise and a global mindset, whilst still being able to act locally, responding much quickerto customer needs (Ulrich, 1997). With new responsibilities and an increased perception ofstatus and prestige, HR business partnering succeeds in raising the bar for HR professionals(Francis and Keegan, 2006). However, the persuasive rhetoric and an essentially deliverycharacteristics of the model do little to warn against possible implementation challenges. Thevery impermeable nature of organisational culture, changing business models and paradoxicalrole ambiguities could create tension. Can HR business partnering realistically ever fullydeliver on strategic formulation or should more be said about evaluating viability set againstdifferent organisational culture and context? 5
  6. 6. A ‘ticking bomb’ and erosion of the HR function Ulrich’s (1997) persuasive rhetoric is that organisations need to measure results in termsof business competitiveness, with a move from employee comfort and consolidation tocultural and strategic transformation. While this alludes to a new direction for HRprofessionals, this does raise the question around its potential disruptive nature, without anyrecommendation or empirical diagnostics for assessing suitability when dealing withimpeding cultures or different business contexts. Culture change is not easy; is complex,timely and costly. This is in counterpoint to Ulrichs overarching rhetoric of HR needing to beagile and effective while doing more with less (Ulrich, 1997). As HR business partners findthemselves at the cultural epicenter of the organisation, impacting on operational andfinancial performance, one cannot delineate from these critical cultural elements, which bindstructural models and drive organisational performance (Losey et al., 2005). HR practitionersneed to understand the prevailing culture before implementation, while levels of solidarityand acceptance from line managers, partnering with HR colleagues could determine higherlevels of success (Hennessy, 2009). Ulrichs unitarist model could do more to help reduce thelikelihood of failure, by providing empirical evidence for successful implementation, andprescribing solutions to possible challenges, one may encounter in dealing with thesecomplexities In a survey carried out of HR business partnering in 40 UK companies, two thirdsadopted the model to support strategy and performance, a third gave headcount reductionsand cost saving, and when this was the case, a lower proportion reported success than for thereasons Ulrich intended, namely raising the game of HR and delivering increased value(Hennessy, 2009) Ulrich’s model suggests a ‘one size fits all’ approach, whereas it is likelythat a hybrid of forms might be more suitable when dealing with integration challenges,possible by selecting only those parts which are aligned with prevailing cultures andstructures. Ulrich and Allen (2009) in latter years agreed that to successfully align withstrategy and to fundamentally transform the identity and culture, the model ‘within anexisting business model’, in part might only be suitable to structure. For example if thestructure is centralised, HR should be centralised, similarly if it is decentralised. Ulrich andBrockbank (2005) as cited in Caldwell (2008) argue that the implementation of HR businesspartnering has rarely followed a single model, and there is growing concern regarding the 6
  7. 7. efficacy of the more generic and context-independent competency frameworks propoundedby advocates of business partnering. It seems that selecting HR business partnering for theright reasons, suitable to the business context, notwithstanding possible tensions, can help todrive more realistic expectations of success Ulrich’s unitarist approach evidently creates a number of tensions, not only betweenemployee goals (Acceptance) and organisational ones (Alignment), but also betweencentralisation and decentralisation, functional versus transformational, delivery versusstrategic and lastly role ambiguities. Ulrich takes for granted that employee well-being andorganisational goals can always be aligned (Francis and Keegan, 2006). Can we realisticallyexpect an HR individual to have the necessary capacity required to take on new capabilitiesand changing multiple HR roles? A paradox exists between employee and management roles,especially where they can move from one side being the operational and employee function,to more strategic partnership and cultural change. Caldwell (2003) highlights these tensionssuggesting that Ulrich’s prescriptive vision might be unrealistic and not fully deliverable and,‘…may be a form of pragmatic post rationalisation intensified role ambiguity and conflict inthe face of new uncertainties’ (Caldwell, 2003, pg. 988). This also raises the question aroundwhere to position these new business partners’ roles? And is it simply a delivery model ratherthan a strategic one? If businesses start to associate the model with ‘delivery characteristics’ then this couldlead to HR being be eroded and fractured as a function, as non strategic transactionalfunctions i.e. shared services, centres of excellence and change agent are potentiallyoutsourced to reduce cost. It could be argued that even the strategic roles could be inheritedby existing line managers. Caldwell (2004) warns that one has to be careful and balancetensions between devolution and bottom line performance as not to lose credibility andinfluence, which with too much progress could also be a radical devaluation of the HR roleitself. If HR responds to strategy formulation by developing supporting processes andcapabilities rather than influencing strategy from the top, then this also suggests a morereactive delivery model, rather than a co-creator resolving strategic dilemmas (Losey et al.,2005) Is HR business partnering simply a system of prescribed role definitions, in whichexisting management, not just HR personnel, could take on new responsibilities, whilefunctional areas are outsourced to deliver value? It is clear that any attempt in delivery ofstrategic HR is fraught with danger and one has to be prepared for any amount of ‘mess’; 7
  8. 8. assessing resistances in prevailing cultures, understanding the business context and structure,while not underestimating role tensions and the potential fracturing or erosion of the HRfunction itself. Summary In summary, this paper explored the critical dynamics between a flexible, collaborativeand visionary model and a possible disruptive, transformational and ‘messy’ one. HR’sinvolvement as a strategic partner is encouraged, hoping to evolve business strategy andcreate shared cost control centres of transactional processing, ready-made for outsourcing.Nevertheless, a word of caution was raised, assuming that Ulrich’s unitarist ‘one size fits all’approach struggles to achieve perfect strategic fit for all organisations, cultures andstructures. Integration of this culturally sensitive model in certain context could provechallenging and unsuccessful, alongside tensions of centralisation and decentralisation,functional versus transformational and multiple role ambiguity, leading to further erosion ofthe HR role itself. What could be seen as a resurgence of status and prestige for HRprofessionals, could by its own demise and progress, dissolve from intended strategicfunction, in favour of a delivery model promoting cost reduction and outsourcing, and asupport role in response to business strategy (Francis and Keegan, 2006, Caldwell, 2004). 8
  9. 9. ReferencesBECKER, B. E., HUSELID, M. A. & ULRICH, D. (2001) The HR scorecard : linking people, strategy, and performance, Boston, MA, Harvard Business School Press.CALDWELL, R. (2003) The Changing Roles of Personnel Managers: Old Ambiguities, New Uncertainties. Journal of Management Studies, 40(4), 983-1004.CALDWELL, R. (2004) Rhetoric, facts and self-fulfilling prophecies: exploring practitioners’ perceptions of progress in implementing HRM. Industrial Relations Journal, 35(3), 196-215.CALDWELL, R. (2008) HR business partner competency models: re-contextualising effectiveness. Human Resource Management Journal, 18(3), 275-294.FRANCIS, H. & KEEGAN, A. (2006) The changing face of HRM: in search of balance. Human Resource Management Journal, 16(3), 231-249.HENNESSY, J. (2009) Take your partners and advance. People Management, 15(3), 24-27.LOSEY, M. R., MEISINGER, S. R. & ULRICH, D. (2005) The future of human resource management : 64 thought leaders explore the critical HR issues of today and tomorrow, Alexandria, Va.Hoboken, N.J., Society for Human Resource Management ;John Wiley & Sons.ULRICH, D. (1997) Human resource champions : the next agenda for adding value and delivering results, Boston, Harvard Business School Press.ULRICH, D. & ALLEN, J. (2009) Grow your own. People Management, 15(25), 32-34.ULRICH, D. & BROCKBANK, W. (2005) The HR value proposition, Boston, MA, Harvard Business School.ULRICH, D., BROCKBANK, W., JOHNSON, D., SANDHOLTZ, K. & YOUNGER, J. (2008) HR Competencies: Mastery at the Intersection of People and Business, Society for Human Resource Management.   9