HR Is Structured to Produce Programs and Policies Rather than Business Results
Let’s say, as a general manager, you see a leadership deficit in your business unit. Who in your HR function is accountable for improving leadership performance? The organizational development department is not; it creates competency models and assessment tools. The talent management department is not; it runs the succession planning cycle. The performance management department is responsible for appraisals, the compensation department makes pay decisions, and the training department develops and delivers courses. So which department manager will stand up and say, “My department is accountable for growing leaders”?
Today, the answer is “nobody.”
The reason is that today’s HR is aligned by subprofession (e.g., training, staffing, compensation), the same as it was thirty years ago. Let’s call these subprofessions by their new name, Centers of Excellence (COEs). COEs are factories that produce state-of-the-art HR tools. They are not designed to produce business results and often operate as uncoordinated product development units, as indicated by Figure 3-4, which shows the COEs of one institution.
Many companies refer to both first-level (e.g., organizational development) and second-level (e.g., HR metrics) organizations as COEs. If this was an automobile engine, each COE unit would be producing a different engine part. The problem is that there is no blueprint of what
the completed engine will look like or do. Just as it is unreasonable to build parts to an engine without a blueprint of the finished engine, it is unreasonable to build HR tools and processes without a Human Capital Strategy.
How, then, is COE performance evaluated today? Success is defined by external professional standards. For example, success is defined as world-class leadership development rather than as world-class leaders. Performance ratings depend on program quality and by volume of tools and products produced: a fat training catalogue, annual refreshing of the performance appraisal process, or a rich portfolio of recognition programs. More is better. That is why line managers so often complain about volumes of more “stuff” coming from HR. Good stuff, but to what end?
Today’s COE design is based on the assumption that HR business partners will cobble together tools and programs from across COEs to build customized solutions for their business unit. This further assumes that two conditions exist:
(1) Each COE has designed outputs to a common strategic plan, and
(2) business partners have sufficient cobbling skills.
What actually happens is that HR business partners end up being the equivalent of an auto assembly plant with Mercedes carburetors, Toyota rocker arms, and Chevrolet engine blocks. No amount of cobbling expertise can make up for parts that fundamentally do not fit.
USC Center for Effective Organizations’ study describes two prominent organizational characteristics of today’s HR model: the decentralized generalist and the emergence of COEs. According to the study, COEs are designed to provide decentralized generalists with “sources of expert help.” Has this model worked as intended? It has not. The authors summarize ten-year organizational changes in the HR profession:
"There is a significant decrease to which HR practices vary across business units. This finding suggests that while there may be dedicated HR leaders supporting businesses, their role is not to tailor HR practices to those businesses, but rather to work with centers of excellence and HR services teams to deliver common services to their parts of the organization."
COEs are delivering results exactly opposite of what was intended. Rather than providing parts and advice to enable business partners to craft customized solutions, COEs are increasing the production and use of one-size-fits-all programs. The previously cited statistic that only 9 percent of HR leaders feel that human capital practices are connected to organizational performance is starting to make more sense.
Once again: The problem is the HR model. It’s broken
Source : Bradley W Hall, PhD. The new human capital strategy : improving the value of your most important investment—year after year.AMACOM. 2008
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