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Sunday, July 31, 2005

fastcompany cover

HR

Why do Human Resources departments get such bad press?

I've rubbed shoulders with HR types all my working life - as book publicist, tourism promoter, construction press officer, brow-beaten copywriter - and I've rarely seen one treated by management as a bona fide member of the work force.

Fast Company's August cover story isn't going to improve things, Why We Hate HR - or if that link doesn't work, try this keyword link with access code FCAUGUSTHR.

It's a no-holds-barred attack, putting the questions we've always wondered about and dissecting the trade's Achilles Heel(s). Author of the piece is Fast Company's deputy editor, Keith H. Hammonds, and he doesn't mince words.

  • Why are annual performance appraisals so time-consuming -- and so routinely useless?
  • Why is HR so often a henchman for the chief financial officer, finding ever-more ingenious ways to cut benefits and hack at payroll?
  • Why do its communications -- when we can understand them at all -- so often flout reality?
  • Why are so many people-processes duplicative and wasteful, creating a forest of paperwork for every minor transaction?
  • And why does HR insist on sameness as a proxy for equity?

    Here's where Hammond sees the trouble with HR:

    In a knowledge economy, companies that have the best talent win. We all know that. Human resources execs should be making the most of our, well, human resources -- finding the best hires, nurturing the stars, fostering a productive work environment -- just as IT runs the computers and finance minds the capital. HR should be joined to business strategy at the hip.

    Instead, most HR organizations have ghettoized themselves literally to the brink of obsolescence. They are competent at the administrivia of pay, benefits, and retirement, but companies increasingly are farming those functions out to contractors who can handle such routine tasks at lower expense. What's left is the more important strategic role of raising the reputational and intellectual capital of the company -- but HR is, it turns out, uniquely unsuited for that.

    Here's why:

    1

    HR people aren't the sharpest tacks in the box.

    Some are exiles from the corporate mainstream: They've fared poorly in meatier roles -- but not poorly enough to be fired.

    For them, and for their employers, HR represents a relatively low-risk parking spot.

    The really scary news is that the gulf between capabilities and job requirements appears to be widening: As business and legal demands on the function intensify, staffers' educational qualifications haven't kept pace. In fact, according to a survey by the Society for Human Resource Management (SHRM), a considerably smaller proportion of HR professionals today have some education beyond a bachelor's degree than in 1990.

    And here's one more slice of telling SHRM data: When HR professionals were asked about the worth of various academic courses toward a "successful career in HR," 83% said that classes in interpersonal communications skills had "extremely high value." Employment law and business ethics followed, at 71% and 66%, respectively. Where was change management? At 35%. Strategic management? 32%. Finance? Um, that was just 2%.

    The truth? Most human-resources managers aren't particularly interested in, or equipped for, doing business ... business acumen is the single biggest factor that HR professionals in the U.S. lack today.

    There are three questions that any decent HR person in the world should be able to answer:

    1. Who is your company's core customer? Have you talked to one lately? Do you know what challenges they face?
    2. Who is the competition? What do they do well and not well?
    3. Most important, who are we? What is a realistic assessment of what we do well and not so well vis à vis the customer and the competition?

    Does your HR pro know the answers?

    2

    HR pursues efficiency in lieu of value. Why? Because it's easier -- and easier to measure.

    We should see them pushing to take on more-strategic roles within corporations - but human-resources managers themselves typically undermine that effort by investing more importance in activities than in outcomes.

    "You're only effective if you add value," comments one HR guru. "That means you're not measured by what you do but by what you deliver." By that, he refers not just to the value delivered to employees and line managers, but the benefits that accrue to investors and customers, as well.

    3

    HR isn't working for you. Want to know why you go through that asinine performance appraisal every year.
    Companies are doing it to protect themselves against their own employees. They put a piece of paper between you and employees, so if you ever have a confrontation, you can go to the file and say, "Here, I've documented this problem."

    Human resources departments benchmark salaries - function by function, job by job - against industry standards, keeping pay -- even that of the stars -- within a narrow band determined by competitors. They bounce performance appraisals back to managers who rate their employees too highly, unwilling to acknowledge accomplishments that would merit much more than the 4% company wide increase.

    Human resources, in other words, forfeits long-term value for short-term cost efficiency.

    A simple test: Who does your company's vice president of human resources report to? If it's the CFO -- and chances are good it is -- then HR is headed in the wrong direction because that's a model that cannot work: A financial person is concerned with taking money out of the organization. HR should be concerned with putting investments in.

    The article is supported by killer side-bars such as five ways for HR to Do it right and a collection of silly HR tricks.

    I can't wait to read the defensive howls in issues to come.

    But the saddest most telling aspect of the article is that Fast Company risks losing not one ¢ent of punitive reduced advertising as result of Hammond's detailed razor job.

    No one who's likely to be offended will have anything to do with bottom-line performance.


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