The Need for HRM Will Never Go Away - Adequately Fulfilling it is Another Matter

Achieving effective HR management (HRM) that truly accelerates business performance and profitability is a journey. A journey for business and leadership as well as for those assigned the HR responsibilities.

HR management is a complex endeavor — the intricacies of which few fully understand. Our company has been deeply involved in this arena with hundreds of businesses in California for the past 20 years — and the overall progress in moving the HR/Business relationship forward has been slow in our experience.

Some things definitely are better. The Institute for Corporate Productivity (i4cp) in April 2009 conducted its first HR Organization Structure Pulse Survey of some 500 companies of all sizes. Looking at how HR is structured based on company size, two-thirds of respondents reported HR heads report directly to the CEO today. A positive sign, because it hasn't always been that way.

Support to the HR profession (and therefore business) has made tremendous strides. The Society for Human Resource Management's (SHRM) 2Q 2009 Research Quarterly does an excellent job of laying out the business case for optimizing knowledge management in companies. Not as a "nice to have" but as a critical business imperative and key component of effective business planning. This report should be required reading for HR professionals and executive management. After all it is a "business report" on issues critical to them both.

In one of our recent articles on managing change more effectively (by Merit Business Partner Kevin Weitz) the point is made that senior leaders are much more aware today of the importance of effectively addressing the "people issues" inherent in change initiatives. This too is an encouraging sign, but there is still a great deal of work to do at the next level to ensure that mid-level managers and supervisors receive more support and the training and development required to ensure change becomes part of business culture and operations. Even so, it sounds like HR is making progress as an influence in business.

Any Idea How We Are Doing?

So how much progress do you think HR professionals have made in the last few years — being business partners, being strategic, being part of business decision making and shaping business strategy?

Well, HR researcher Edward Lawler III and his colleagues at the Center for Effective Organizations in the Marshall School of Business at the University of Southern California may be "keeping us honest."

In mid-June, Books@Work (Workforce Management) reviewed Lawler and co-researcher John Boudreau's recently released 2007 survey results and book (Achieving Excellence in Human Resources Management: An Assessment of Human Resources Functions). The research is the only long-term analysis of its kind — updated every three years since 1995.

The Research Says…

The latest results are in and the title of the Books@Work article tells it all — "HR Stagnation." Oh — there are a number of reasons why this study shows little progress since 1995, covered fully in the book, but the authors go on to suggest that most companies don't understand or want strategic HR, and that HR's desire to be strategic may be unattainable in the vast majority of businesses. If the latter point is actually true — it exacts the opposite results that most business leaders say they want and contrasts sharply to what forward-leaning companies are achieving.

Actually it is through HR planning and actions; talent management, knowledge management, succession planning and change management; and helping create business sustainability and nimbleness in uncertain times, that successful companies are creating their positive results. And that represents the integration of strategic HRM and business planning.

Where Do We Go From Here?

Granted this latest survey doesn't sound very positive, but only business leaders and HR professionals can do anything about it, once they decide how they want to think about the results.

Late in their book, according to the review article, Lawler and Boudreau quote a senior HR leader as saying that it is "easier to find an organization that understands and supports strategic HR than to try to change on organization that does not." As more jobs open up with recovery, any number of strategic HR leaders will be moving on, given this outlook. Companies take heed.

Our belief is that the lack of synergy around HRM as a business strategy is partly rooted in business leadership's evolved desire for quick fixes and instant relief from issues spawned by the lack of effective HR management and practices in the first place. And quickly fixing something you don't completely understand or have failed to do well to begin with (realize it or not) is a short cut to nowhere. There has never been a substitute for doing the right things right. Understanding and paying attention to people issues is an example. Incorporating strong HR management into the way your business operates is another.

Looking ahead, hopefully more progress will be made in realizing the importance of strategic HR thinking and its contribution to business success. It will be interesting to see if the current economic demise and its apparent root causes and contributors, that have had to do with companies taking their eyes off of the ethics, fair rewards and moral responsibility targets, will shape a new interest in creating a more integrated role for HR in business. The question to HR professionals is "Have you earned it?" and to business leaders, "Will you support it?" It certainly takes both to make it happen.

I just know that having all new MBA graduates swear to uphold a strong code of ethical business conduct isn't going to take care of everything.

We are interested in your feedback or comments about how HR is progressing in your company. Our business is based on helping organizations be more successful by helping create strong HR/Business cultures that can lead to better business performance. We have 20 years of experience providing HR expertise, from the strategic to the tactical levels. If you have questions or want to explore how putting our expertise to work in your company can add to your overall success — give me a call at 925-867-4400, x225.