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Writer's pictureP2B Consulting

Business Directions In HR: New perspectives

The low percentages of engaged employees represent a barrier to creating high performing cultures around the world. They imply a stunning amount of wasted potential, given that business units in the top quartile of Gallup’s global employee engagement database are 17% more productive and 21% more profitable than those in the bottom quartile. 85% of employees worldwide are not engaged or are actively disengaged in their job. 

Organisations expect HR to hold leaders accountable for fiduciary and strategic risks, just as a CFO would be expected to hold leaders accountable for a risky pattern of using corporate funds or resources. The way the HR department has been engineered in terms of its business processes, authority, placement, role on various committees decides further the depth of their role in Strategy. The extent of involvement of HR for strategy depends on proximity, capability and information. With reference to metrics and analytics there are three categories of information and analytics that HR uses: efficiency, effectiveness and impact 

  1. Efficiency measures the relationship among resources that HR uses, and the pro-grams and practices that it creates. Efficiency measures form a foundation for HR credibility; 

  2. Effectiveness measures the relationship between HR pro-grams and their effects on those that receive them; Effectiveness measures provide tangible evidence of results at the program level 

  3. Impact measures the relationship between the effects of HR programs and the pivotal elements of business success; Impact provides a view of where results have their greatest effect. 


Worldwide, shifts are happening in the following areas, which are affecting the current processes and people capabilities. These need to be re-wired at functional level. But, how? 

  1. Link it with a simple financial index of financial health of the company (not just ROCE, PAT, but other key financial ratios too) and arrive at a financial performance index). Discounts to be given for acquisition cost and other costs which are not direct operational, as the ownership of such decisions are mainly on senior management and they should have a direct link on this, rather than other employees. Therefore, clearly identify who is senior/middle/junior level of management. 

  2. Avoid Group Thinking or “Yes Sir” Syndrome 

  3. Focus on Team: Stardom Vs Team. A study of 20 General Electric top executives who moved to high positions in other companies revealed. That in every situation where star performers moved from a larger company to a smaller company or between companies of similar sizes, they experienced a measurable drop in performance that lasted anywhere from 2 to 5 years. The truth was that the company-specific factors - resources and capabilities, systems and processes, internal networks, leadership and training - have a direct impact on the success of its employees. The study on good-to-great corporate transformations provides one simple insight: there is no miracle moment. Instead, a down-to-earth, pragmatic, committed-to-excellence process - a framework - kept each company, its leaders, and its people on track for the long haul. The comparison companies in the study - firms with virtually identical opportunities during the pivotal years – did buy into the change myths described above and failed to make the leap from good to great.

  4. Reduce the gap of ‘Learning’ at Senior Level: The gap in learning contributes to three major organisational dynamics: (a) The organisation’s inability to listen to its internal/external customers, (b)assumed preparedness for its growth, and (c) though unbelievable, faulty strategic plans for building a high-performance organisation. Bosses are key drivers for leadership development. The unique lessons learned from bosses are: (i) Accountability, (ii) Managing and motivating staff and (iii) Developing others. 

  5. Other continuous measures: 

  1. Conduct a Systematic People Management Audit: Define Expectations: Survey business leaders for their wish list of HR capabilities and work with them to identify the best ways for HR to provide value. HRBPs should then take the lead in working with the HR org to deliver these resources or to build these capabilities if they are currently aspirational. Adjustments should be made to HR structures if they will benefit the business. 

  2. Have a People Development Budget 

  3. Build a People R&D Centre: How people are thinking – their organisation, systems and processes, managers and leaders? What is happening around the world – best practices? (not to immediately implement, but take cognizance of the same); If new businesses are being planned what kind of structures are meaningful – benchmark processes, etc. This centre would be the supporting centre for building process documents, provide insights and be the ‘reflective mirror’ of the Organisational Capability. 

  4. Re-design HR Matrices with a focus on value to Business: Developing HR success metrics that advance business strategy (e.g. succession plan readiness) rather than cost efficiency measures (e.g. HR staff-to-employee headcount ratios) that rarely create value. 

  5. Do a Role Auditing: “People are most satisfied with their jobs (and therefore most motivated); when those jobs give them the opportunity to experience achievement." Even small wins can boost one’s confidence tremendously. 

  6. Build a Formal Communication Audit g) Re-design Compensation Structure: We must be able to build different compensation structure within the company, based on business needs. 

Skills required for effective Strategic HR Business Partner: What drives and worries line managers? How does HR support its clients in theory and in practice? Is HR proving its value in ways the business recognizes? Exposing the entire HR org to core business concerns of the company (e.g. competitive environment, executive strategies); Assigning HRBPs and business leaders’ joint accountability for achieving business goals; HR talent and capabilities to keep pace with evolving business needs are critical to help HR to really become a Business Partner. 

  • Business understanding, Strategic planning, Organization design, and cross-functional experience skills. They are all critical to the credibility and capability to engage in business decisions and to deliver organizational-level designs. Organization design is fast becoming an essential HR capability. 

  • Interpersonal Dynamics: team skills, interpersonal skills and leadership and management skills. 

There are different roles for HR i. A customer-facing front end a) Focus is on diagnostic, consultative, and organization development work b) Retains broad scope of responsibility for work in areas like employee relations and staffing as well. c) Each line of business (or region, or function) is given a team of HR business partners, with every manager down to some specified level assigned a dedicated HR person In many firms the business partners are matrixed to both the manager they support as well as to a senior HR leader to further this connection to the business. ii. A product-focused back end a) Small specialist groups that produce programs and policies and provide decision support. b) They are called practice groups, centers of excellence, or centers of expertise (CoE) c) The CoEs are comprised of some combination of resources in specialized areas such as compensation, benefits, employee relations, learning and development, talent management, staffing, diversity, and workforce planning. iii. An operational service center a) This is to reduce costs and improve quality by systematizing and reducing transactional work. b) It expected frees up their time to focus on higher-value, management-focused work. c) It may be centralized internally, outsourced, or provided through multiple vendors. d) Its mandate is to process transactions, administer payroll and benefits, answer queries, resolve low-intensity employee relations issues, and generate data. e) Availability of enterprise technology systems is critical for its success f) The staff members in each part require different sets of skills for success. 

Few major conflicts for each role: A The challenge, then—as in any organization with such disparate parts—is how to pull them back together in the eyes of the customer who perceives HR as one function and expects to receive seamless service. 

A Many specialists complain that they do not work enough with clients directly. 

A The business partner uses them selectively as a shadow resource and coach. 

A They are frustrated that their full capabilities are not utilized, and that they lack the satisfaction of working with clients and seeing projects to completion. 

A In most organizations employing the business partner model, the HR leader has made clear that the business partner owns the relationship. 

A The tension between the front end—the generalist staff tightly allied to their lines of business—and the back end, which includes the specialized centers of excellence focused on enterprise programs. The front-end business partners are designed to have a different set of priorities than their counterparts in the centers of excellence. 

Multiple case studies bring out the following insights:

  • A market marked by uncertainty, turbulence, hyper-competition, and non-linear growth made it imperative for organizations to bring changes in its organizational strategy, HR strategy, and work culture in response to new challenges. As an organisation grows into multiple territories, it would be a challenge to maintain the pace of innovation and convey a sense of empowerment. There is a risk of the organisation losing its dynamism and becoming more bureaucratic. 

  • Listening co internal and external customers is critical to bring in desired timely change 

  • Benchmarking with close competitors and identifying areas where they need to build strength and building appropriate cultural fit changes are critical for transformational change. 

  • Sometimes culture which was a strength earlier - teamwork and respect for co-workers – need to review as it could be changed into a consensus-style culture, which may prove to be a sharp disadvantage in a fast-growing business context.

  • Tough decisions on laying off personnel/units which are not performing are critical for business growth. However, Timing for re-organisation or aggressive cultural shift is critical, which otherwise will not bring expected results. Though some changes shall be required, it may impact employee morale too and therefore if a concerted and unified change from Board room to shop floor is not drawn, it would not be successful. Laying off decisions, without proper manpower planning for next two years keeping the business scenario in loop will be disastrous. Use “FFT” principle to make it sustainable: Fair, Firm and Transparent. 

  • Developing workplace well-being and developing a psychologically healthy work environment for its employees is a time-consuming process and the organisation should have the patience in building the same. 

  • The changes also brought in a lot of confusion among the employees, with media reports frequently carrying quotes from disgruntled employees. A section of employees began feeling alienated. Therefore, if things do not fall in place, as expected, doubts will soon be raised regarding whether the CEO had gone 'too fast too soon,' and more importantly, whether he would be able to steer the employees and the organization through the changes he had initiated. Therefore, deliberating on the entire process involving all key stake holders, including Board/Union is critical to ensure that enough pros and cons have been deliberated and plans are in place to mitigate any such eventualities. 

  • Success of organisational change in one unit or one group company may not be easily translated into another company within the same group or another company. Only lessons can be used while implementing. However, many times, leaders miss this learning process and try to get the person who have implemented in the earlier company to repeat his/her miraculous actions in the new company. It may not work always. Similarly, reassuming the role of CEO may not solve the underlying problems of an organisation. 

  • There are instances when a CEO has decided against a cost cutting strategy to shore up profits. Instead, he focused on human resource (HR) management to turn the ailing company around, including a systematic succession strategy to retain the organisation’s talent. However, keen appreciation of different organisation and business context is critical before embarking any journey of organisational transformation. 

  • A wholistic vision on People process with a purpose aligning to the organisation’s multiple business Units are critical to build sustainable value: Systematic process of recruitment and selection had helped organisation in picking the right person for the right job; training and development processes are so formulated to impart the right measure of technical and managerial skills to its employees; compensation packages are developed to provide incentives for superior performances and align the employees’ and the share holders’ interests; and Policies directed towards providing support to the employees so that they could take care of their families. 

  • Focusing on managing the creativity in employees and reducing the hassles that employees faced while at work – including appropriate day care and health care centers, recreation facilities and flexible working hours for its employees – are critical while developing policies. Most of the times, HR Policies are drawn from an operational perspective and not from a Purpose driven process. 



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