As the title shows, this is not another thankless critique of HR. It is somewhat more constructive. An organizational effectiveness call-to-action. A “get on the bus” invitation for all internal stakeholders as opposed to a rule-of-thumb pointing “this way” hitchhikers guide for the human resource department.
Much has been written in the past 20 years about the transformation of Human Resources (HR). Not surprising, given its essential role in making a business work. Recently, things have become considerably more tense between “the business” and “the department”. Some might consider it to be downright dysfunctional.
Before we all jump on or off the bandwagon, let us first reflect on how HR, the original function of organization, has given birth to the modern enterprise. HR has advanced so far from its origins that the practice has done a complete 180˚ – from fitting people into the business to now developing organizations that are fit for people. Follow the economic evolution and you’ll see HR in the earliest days providing people with care, welfare and protection. Along came union relations and personnel policy adherence. Most recently, human capital administration and now, activating the ‘talent’ we know as knowledge workers.
Our particular bias is that HR is the first strategic discipline – since work, ideas, plans, innovation and outputs of any kind are all products of people. They require thoughts and actions. Nothing happens without the human kind of resources.
We write In Praise of HR to put some optimism back into the boardroom. As the fundamental activity of ‘organization’ (people working together in a common pursuit), everyone needs to just get on board and be part of the solution versus facing-off as competitors. Businesses that continue to distinguish between people engagement and profit motivation have no future of effectiveness.
People are the Strategy
The burning platform is for HR to deliver value, solutions, results or some variation on these themes to ‘earn a seat’ at the table. Regrettably, and somewhat contradictory to these latest demands, HR professionals are expected to provide transformational results while maintaining a traditional relationship to the business.
Simply stated, everyone inside and outside of HR is beginning to recognize that people are the strategy. Competitive advantage is gained by the engagement of knowledge workers. In such a dynamic economic and information environment, management initiatives that do not proactively enable human performance actually serve to limit them. Not to mention the wealth of potential contribution from people yet to be realized.
Deeply seated in this recent transformation is a new scope of expectations for anyone who manages someone. HR outcomes are operating outcomes (since people are the strategy). Human resource objectives are shared commitments. This is the contemporary relationship between HR and the business – improving decisions that depend on or impact people.
The chart below illustrates how internal stakeholders may currently be interacting with HR professionals and where transitions are occurring (or expected) into new types, levels or depths of relationship.
|Present and Future Relationships|
|Customers who are end-users of an HR “service”||Stakeholders who are participants in the overall activity of the business|
|Supporters of internal client requests||Experts who know the operating requirements and present staff capability|
|Activities that satisfy service delivery||Outcomes that measure success as goal achievement (how people’s ability to apply knowledge and skills leads to results)|
|Partnerships that align functional goals and objectives||Ownership that distributes responsibility for people and performance outcomes|
|Transactional requests that seek solutions for predetermined needs||Consultative discovery that seeks understanding and insight to tailor solutions|
|Segmented where interaction happens within distinct units of activity||Integrative to combine plans, priorities, expertise and leverage effort across boundaries|
|Participate in the change and development process||Facilitate the change process, enlist participation, engagement and commitment to action|
|Formulas that pre-determine choice selection||Principles that replace default positions where discretion is required (and beneficial)|
|Competing with internal stakeholders on accomplishing shared objectives||Collaborating to align purpose and competing interests by creating synergy (the ‘third alternatives’)|
|Succession that breeds ‘holding-on’ retention practices and behaviour||Mentorship that keeps institutional knowledge and experience circulating within the business|
The Organizational Effectiveness Equation
Whether we are talking about the HR function or the human capital assets themselves, we are in common pursuit of a model that creates “a pattern of interrelationships among the elements of the system which would make it most effective in the service of a given goal.” People are squarely at the centre of the organizational effectiveness equation:
Effectiveness = Achieve the Objective + Maintain the Internal System + Adapt to the Environment
Achieving the Objective recognizes the business-drivers and ensures the right capability is always in place and in reach.
Maintaining the Internal System constantly positions the organization for growth, change and responsiveness by building flexibility and agility.
Adapting to the Environment demands systems of engagement and learning for constant flows of knowledge, information and action.
Each of these new interactions are ways to drive engagement and create organizations that are truly fit for people. In all cases, it requires more cooperation and less distinction between “the business” and “the service” of human resources.
 John Boudreau and Pete Ramstad (2007). The first chapter of their book (Beyond HR: The New Science of Human Capital) is entitled “The Essential Evolution: Personnel, Human Resources, Talentship.” They call for a shift from a focus on the services that HR provides to the decisions that HR informs and supports. Specifically, they argue “the mission of the HR function is to increase the success of the organization by improving decisions that depend on or impact people” (p. 9)
 Huselid, M. A. (1995). The impact of human resource management practices on turnover, productivity, and corporate financial performance. Academy of Management Journal, 38, 635–672; Pfeffer, J. (1998). The human equation: Building profits by putting people first. Boston: Harvard Business School Press; Pfeffer, J., & Veiga, J. F. (1999). Putting people first for organizational success. Academy of Management Executive, 13, 37–48; Welbourne, T., & Andrews, A. (1996). Predicting performance of initial public offering firms: Should HRM be in the equation? Academy of Management Journal, 39, 910–911.
 Becker, B. E., & Huselid, M. A. (2006). Strategic human resources management: Where do we go from here? Journal of Management, 32(6): 898–925.
 Argyris, Chris (1964). Integrating the Individual and the Organization. (p. 125)