Thursday, May 29, 2008

HR Operating Model

“Companies now are finding that the HR issues are, in fact, center stage to business competitiveness. The intellectual capital, core competencies and organizational capabilities are all the pieces that are central to success.”
ULRICH – ‘HUMAN RESOURCE CHAMPIONS’, HARVARD PRESS, 1997.

There is a real and frequently voiced view within HR and the broader business community, that HR has not always had the tools to deal with these issues. Where in the past HR has possessed in some part the skills to engage, it has not always given itself the opportunity to do so. Clearly there have been barriers to HR’s effectiveness in the way it was organized and this chapter seeks to examine some of the issues and solutions proposed to tackle these.
Traditionally HR has often held very direct and ‘open door’ relationships with employees. In doing so it has fulfilled an essential gap in the business – the voice or advocate of the employee. It has also filled the role of facilitator and executor of all people related processes, regardless of whether these were necessary or HR was the most appropriate method of delivery. There is now a set of pressures that are emerging that demand that HR is able to respond in a different way to meet them. The pressures come from differing directions:
From the CEO
• Focus on ‘core competencies’
• Companies retrench to focus on core activities
• Creates pressure on HR to ‘prove its worth’
From the CFO
• Pressure for cost reduction
• Benchmarking against sector high performers
• Requirement to demonstrate the ROI for HR activities
From line manager
• Support for them to have the autonomy to manage their teams
• Tools to improve the performance of their teams
• Less labour intensive interaction with HR
From employees
• Improving service to employees
• Modern employees act as ‘volunteers’ and demand high standards of service from HR
• Employees have a new one-to-one relationship with companies

To meet these pressures the HR profession has begun to articulate new ways of creating value through the function. A new model has emerged in recent years that aims to provide HR with the platform on which to deliver its promise. The new model requires HR to position itself to engage with the business at the right levels, in the right ways.
We shall examine the organizational structures that allow HR to tackle the challenges it faces today and the approaches HR leaders have used to deploy these.

The new roles
The above pressures are broadly driven by four themes:
1. Strategic – drive the business strategy forward.
2. Financial – demonstrate functional cost reduction and value.
3. Change – work with and lead the business through change.
4. Performance – improving the performance of individual employees and teams.

HR must organize itself to meet these and demonstrate that it is achieving them. Delivering this clearly has two key components that HR must develop; the skills to achieve and the organizational design to allow it to engage. Prior to this we will consider the new roles and structure that allow HR to take on these challenges.

Source : Transforming HR. Ian Hunter & Jane Saunders.2005

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