Redesigning the HR

Department
Business Partner

"INFORMATION RESPONSIBILITY, THEN,

BEGINS WITH CORRECTLY IDENTIFYING THE
INFORMATION YOU NEED TO EFFECTIVELY
CARRY OUT YOUR JOB, AND EXTENDS TO
INSURING THAT THE INFORMATION FLOWS
TO PEOPLE IN OTHER AREAS WHO STAND
TO BENEFIT FROM IT, AND IN A FORM IN
WHICH THOSE PEOPLE WILL READILY
UNDERSTAND IT.
...INCREASINGLY, HOWEVER, THE MEASURE
OF THE EXECUTIVE WILL NOT BE HIS ABILITY
TO INTERPRET DATA, BUT HIS ABILITY TO
DEFINE AND EXPLOIT INFORMATION."
PETER DRUCKER
"ACROSS THE BOARD"
DECEMBER 1991

01/24/17

HRinfo4u

What is
HR?

HR Through the Years...

Over the past few years, a debate has ensued
regarding whether or not we should get rid of
HR

HR Textbook Answer

New Thinking

What HR people
do

What HR people
deliver

Staffing
Development
Compensation
Benefits
Communication
s
etc.

Strategy
Execution
Administrative
Efficiency
Employee
Contribution
Capacity for
Change

The REAL question:

How can HR create value and deliver
results?
01/24/17

HRinfo4u

An Evolution in HR Through the

The role of HR has evolved and expanded
Integration
Years...

over the years in response to people-related

business challenges.
Business Partner

High

Strategic
Strategic
Business
Business
Partner
Partner

Expert

Administrator
Basic
Basic
Personnel
Personnel
Services
Services

Enforcer
Control
Control
and
and
Complianc
Complianc
ee

Aspects of dealing
with unions (1930s
and 1940s in US)
Bureaucratic and
administrative
aspects of
dealing with
employees

Low

A very long
time ago

Dealing with
discrimination
legislation (1960s and
1970s in US)

Not so long
ago

Specialized
Specialized
Expertise
Expertise

Apply behavioral
science knowledge for
recruiting, evaluating,
compensation,
training
Taking a business
perspective initially in
compensation,
benefits, recruiting
and personpower
planning
Organizational
effectiveness,
business planning

Recent
ly

Provide strategic
business support
and assist in
developing and
implementing
strategies
Assist in culture
change and assist
in defining and
implementing
values
Increase employee
involvement and
integrate
supportive
subsystems

ASAP
01/24/17

HRinfo4u

HR Today
New Challenges for Human Resources

Continued demand for workforce cost reductions

Managing a global workforce enabled by technology
Realizing the gains of mergers and acquisitions
Improving the effectiveness of Human Capital for
sustained competitive advantage

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HRinfo4u

Changes

in the competitive balance for

HR that leads to a refocusing:
Refocus HR practices on the value chain,
rather than HR activities.
Change, change, change
How technology changes how our employees
do their jobs.
Systematizing and controlling the cost of
transactional work through outsourcing or
shared services.

HR Transformation
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HRinfo4u

The

transformation has been a

wrenching experience for HR:

Focus on defined outcomes rather than

activities.
A shared body of knowledge. (attorneys,
engineers, accountants)
Essential competencies for the profession.
Clear roles within the organization.
Ethical standards maintained by collegial
jurisdiction.

HR Transformation
01/24/17

HRinfo4u

The HR function...
perceptions...
Only 10% of current HR Contributions

HR Today

add value. The other 90% is

transactional nonsense.
Jac Fitz-Enz : Director of Saratoga Institute

HR must re-invent itself ... in mindset,

internal workings, image, status,
organizational position, and capacity to
initiate and manage change.
Work in America Institute: The Partnership Paradigm for Competitive Advantage
1995

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HRinfo4u

HR Today
Typical challenges facing HR today

Quality and
customer service

How does HR
affect employee
morale,
commitment,
competence and
retention?

Today , human resources is

challenged with how to create
value and deliver results in this
dynamic environment.

Cost

Responsiveness

How does HR add

value and affect
profitability, cost,
growth, cash flow
and margin?

How well does HR

integrate with
strategic plans,
employee needs
and other staff
(even HR)
functions?
01/24/17

How quickly can

HR work be done
without sacrificing
quality?

How well can ideas

be turned into
actions with visible
results in terms of
employee behavior
or benefits to the
firm?

HRinfo4u

The Future of
HR

Workplace Flexibility

1. Collaborative cultures will be

the workplace model.
2. Creative employment contracts
will support more time off,
flexibility in hours and work
location, technological job aids
and more pay at risk with
significant upside potential.
3. Company intranets will become
a major tool for
communications, training and
benefits administration; HR will
play a lead role in developing
this important tool.
4. Intelligence through knowledge
transfer capability will separate
the best employees from the
rest.
5. Work hours scheduling will
become less important as
organizations focus on
performance and results.
6. Company facilities will become
virtual through work-at-home,
telecommuting and
outsourcing.
7. Legislation will lead to greater
portability of health, welfare
and retirement benefits.

And the challenges will continue

into the next decade.

Global Business

Work and Society

1. The role of corporate HR will

change to that of creator of
overall values and direction,
and will be implemented by
local HR departments in
different countries.

1. Family and life interests will

play a more prevalent role in
peoples lives and a greater
factor in peoples choices about
work--there will be more of a
work to live than a live to
work mentality.

2. Technology, especially the

internet, will enable more
business to enter the global
marketplace.
3. HR professionals will have
advanced acumen in
international business
practices, international labor
laws, multicultural sensitivities
and multiple languages.
4. Megaglobal business alliances
will grow, requiring great
finesse on the part of the HR
professional.
5. The continued emergence of a
world marketplace will require
the development of an
international workforce.

01/24/17

2. Employees will demand

increases in workplace
flexibility to pursue life
interests.
3. Dual-career couples will refuse
to make the sacrifices required
today in their family lives and
more people (not just women)
will opt out of traditional
careers.
4. Workers will continue to
struggle with their need for
work/life balance and it will get
worse.

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10

The Future of
HRWorkforce
Definition of Jobs

Strategic Role of HR

Development

1. Lifelong learning will become a

requirement.
2. The focus of training/learning will
be on performance
improvement, not just on skill
building.
3. Employees with varied skills and
competencies will be valued
more highly than those with a
depth of expertise in a single
area.
4. Problem solving and decision
making will become a required
curriculum with practical work
problems as the training
medium.
5. Training will be delivered just-intime wherever people need it,
using a variety of technologies
and mediums.
6. As the computer-savvy
generation assimilates into the
workplace, employees will
become much more productive
in complex tasks and less
dependent on people and
departments.

1. Organizations wont pay for the

value of the job but for the
value of the person.
2. Versatility will be the key factor
in determining employee value
with strategic thinking,
leadership, problem solving,
technology and people skills
close behind.
3. Compensation systems will be
linked to business outcomes.
4. People will be organized in
teams focused on a task, not
organized around a hierarchy.
5. Positions will be defined by the
competencies needed to be
performed.
6. Employees will be more
independent, moving from
project to project within their
organization.

01/24/17

The focus of the HR function

will be human capital
development and
organizational productivity; HR
may be renamed to reflect this.

2. Managers will grow to depend

more and more on HR
professionals as they realize
that people management can
be the next strategic
advantage in the next decade.
3. A key role for HR will be multidisciplinary consulting around
individual, team business and
corporate performance.
4. HR will have a seat at the
table as part of the top
management team and report
directly to the CEO in most
companies.

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11

Balancing Cost & Added Value

CEOs want the HR function to focus on workforce strategy & management,
but HR is locked into operational daily problems and transaction processing

From Transaction
to Process &
Change
Customer
Orientation
Cost

Refocus of HR functions on
strategic workforce
management
Outsourcing/Shared Service
Centre Technology enabled
HRM
Overall increase in added
value
Decrease in HRFTE/FTE ratio

01/24/17

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12

Refocusing the HR Function

Create Value - by shrinking Costs and Improving Service Delivery...

HR organization/people focus
Current
environment

Target environment
(Best practice)

10%

Strategic
services

Strategic
services

30%

Consultative
services

20%

Transitio
n

60%

Consultativ
e services

HR activities carried
out by line managers

60%

Administrative services

20%

Administrative
services

01/24/17

Outsourced
administrative services

HRinfo4u

13

Managing Human Capital as an Asset of the

Business
Human Performance
Management

System that creates human

capability -- competence and
capacity -- to do the work needed
to execute the strategy

Rewards

The cost to acquire (and retain) the

asset
Plays an incentive role

Human
Performanc
e
Manageme
nt

Culture
and
Leadersh
ip

Culture and Leadership

Rewards

Aspects of the organization that

effect the spirit of people -- screen
through which people will view and
forces that will focus and inspire
01/24/17

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14

Managing HR as a Business
Managing HR operations as a business means managing human capital
just as we would any tangible or physical asset. All assets, such as
machines, require investment to maintain and increase their efficiency
and effectiveness.
Compensation and
Benefits Costs

Assets
Physical
Capital

Human
Capital

Technology
Capital
HR Programs and Service
Delivery Costs

01/24/17

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15

HR

organizations face the same

dilemmas as the businesses they
support:

Build strong functional/product expertise

while aligning around customer segments.
Design in flexibility without adding cost.
Connect the front and the back of the
organization and have them work together
seamlessly.
Deliver complex solutions through the
formation and dissolution of teams.
Get the benefits of both centralized
infrastructure and decentralized decision
making.

Organizational Design
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16

fundamental principle of
organizational design is that a change in
strategy requires a new set of
capabilities and a realignment of the
core elements of the organization.
There are some basic design choices but
the uniqueness of each organization will
determine what type of design is
appropriate.
Organization design has become a core
competence for HR.

Organizational Design
01/24/17

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17

 The

shift in the work of HR was brought

about by a number of factors:

The fear of massive systems failures leading up to

Y2K spurred the installation of Enterprise
Technology Systems like SAP.
The economic slowdown in 2000 exposed HR
departments as ill prepared to help during the
restructurings, downsizings and mergers that
resulted.
HR became an easy target of cost reductions. The
1990s saw numerous programs that were not
evaluated or measured.
Other functional areas began to outsource
repetitive, transactional, back office work and
pushed HR to do the same.

Models of HR Design
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18

The

most common organizational design

used in response to these changes is the
business partner model.
Its hallmark is a close alignment of HR
staff to the lines of business.
It developed in response to the fear that
HR was too centralized and disconnected
from the business and too inwardly
focused.

Model #1
The Business Partner
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19

There

are 3 components:

A customer facing front end. Business

partners who are generalists.
A product focused back end. Small specialist
groups that produce programs, policies and
provide decision support.
An operational service center. Reduce costs
and improve quality by systematizing
transactional work.

The Business Partner

01/24/17

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20

The

business partner focuses on

diagnostic, consultative and organizational
development work.
Each line of business has a team of HR
partners.
The partner is best positioned to
understand the needs of the business and
can build relationships by being located
with them.

The Front End

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21

These

specialist groups are the centers of

excellence or the practice groups.
They provide specialized services (comp,
training, diversity) and may or may not
deliver the services.
Usually they depend on the business
partner to bring them in and to roll out
the programs.

The Back End

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22

By

taking employee centered work away

from the generalists, it should free time to
focus on management focused work.
The service center can be centrally
located, outsourced or provided through
multiple vendors.
It processes transactions: payroll,
benefits, generates data, answers
questions.
Based on the philosophy that employees
can and should take care of their own
needs.

The Service Center

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23

Each

part of the model has its own

mandates and sets of measures.
The staff members in each part have their
own skill sets.
The challenge is how to pull them
together so that the customer who sees
HR sees one function and expects to
receive seamless service from all three
parts.

The Challenge
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24

The

experiences of those who have tried it

show that there are obstacles:
Who owns the client?
Assembling teams
Delivering OD services

The Challenge
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25

Tension

between the front end and the

back end, including the centers of
excellence.
The business partner determines when
the specialists are brought in.
Specialists are brought in too late
Full capabilities are not used
Client satisfaction is limited.

Who Owns the Client?

01/24/17

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26

HRs

place at the table is not secure and

neither are HR people.
HR people are not capable or not sure
they want to be generalists.
The measures of success are fuzzy:
Your client?
Your colleagues?

Who Owns the Client?

01/24/17

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27

majority of staff is dedicated to the line

which reduces the ability to move people
quickly when needs arise.
There is always work to be done but is it
worthwhile work.
HR needs to be able to reconfigure itself
quickly. As more work becomes project
work, flexibility will be key.

Assembling Teams
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28

No

matter how much transactional work

gets shifted, there is still transactional
work to be done; high level transactional
work, but non-the-less.
Rolling out a program, recruiting for a
senior level position, dealing with a
complex ER issue, leaves little time for OD
work.

Delivering OD Services
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29

Centralized

OD teams, located at the COE,

but high level OD people want ownership,
a fundamental problem.
Outside expertise is another solution
especially for complex projects, but
ownership is again an issue.
The personal relationships between
generalists and OD specialist seems to be
the only solution.

Delivering OD Services
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30

Front

end people have different priorities

than back end.
Generalists go native especially to
maintain their credibility.
How are HR initiatives funded, especially
across business lines.

Problems with the Model

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31

It

has the same basic shape as the

business partner model but the heavy
loading is in the middle, not the front end.
Business partners are small teams with
mixed skills centered on the work of
organizational assessment, design,
development and talent management.

Model #2
The Solutions Center
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OD may be integrated into the team.

The front end staff acts more like a

customer relationship manager (CRM).

Competencies include:

Influence
Relationship building
Political savvy
Organizational agility

Model #2
The Solutions Center
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High ratios: 1 to 500 or more.

The CRM can only manage the client

relationship, diagnose issues, configure

specialist teams and coordinate but not
manage projects.
The extra hands from the partner model
are now in the middle, rather than the
front end.

Solutions Model
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34

Front

end teams now must use other

parts of HR for delivery and support.
This makes it easier to redeploy assets
and ensures the CRM does not try to do
the work herself.
The COE is lighter as well with true
specialists that do not deliver work.

Solutions Model
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The

middle is drawn from both sides with

teams of semi-specialists around
functional areas like recruiting and ER.
These can be organized into teams since
they are not owned by the line units.

Solutions Model
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Ability

to configure teams around multiple

dimensions that mirror the complexity of
the work rather than the business
hierarchy.
Broader and deeper analysis of HR issues
and trends.
Alleviation of client ownership issues.

Solutions Model
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The

ability to assign resources against

what is most important and the flexibility
to reallocate them as priorities change.
Recognizes the reality of HR work. There
is a need for skilled doers.

Solutions Model
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The

design of the HR team is a key

element to making any model work.
There are at least three issues:
Job rotation
Governance
Communication

The Plan
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Well

planned rotation will break down

barriers and create better peer
relationships.
Joint hiring and talent discussions also
helps create interdependence.
A shared talent pool makes everyone
accountable.

Job Rotation
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Most

companies are federations with weak

centers. The line of business that makes
the most money get the most votes.
Conflicts among the lines of business
must avoid the appearance of victory.
Creative and thoughtful governance is
another way to knit the organization
together
Steering committees

Governance
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Downward

communication inevitably
leaves staff feeling disconnected.
Multiple dimensions or work is more
appropriate to vertical teams than to
horizontal teams.

Communication
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Boudreau

makes the point that HR can be

thought of as having two components:
A professional practice
A decision science centered on talent
management and organizational capability.

A Decision Science
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How

to link the 2 components together

would require the service center to be a
source of data not just a way to save
money and free up generalist time.
Technology and analytics could be used to
forecast leader profiles and bench
strength needs against projected business
goals.

A Decision Science
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Comments?
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45