Jul 29, 2005

More on the HR discussion

FCNow points to the Knowledge@Wharton article is your HR department friend or foe?

Some interesting bits from the article:

Dealing with these types of HR departments "is like going to the dentist," says David Sirota, author of The Enthusiastic Employee: How Companies Profit by Giving Workers What They Want (Wharton School Publishing). When people are asked to rate the quality of different functions within their company, he adds, "IT and HR are repeatedly rated the lowest."

HR was seen as a way to advocate for, and protect, employees -- an orientation that became "quite explicit in the 1950s and beyond as part of an effort by management to prevent unionization." But more recently, and especially over the past decade, the threat of unionization is much less widespread even as technological advances have made employees more expendable. The "social contract" between employee and employer -- in which companies provided lifetime employment to its workers in return for loyalty and commitment to company goals -- has ended.

The classic area where HR leaders can provide strategic input is "anticipating a merger," says Walker. "A very well-defined set of opportunities and experiences exists, including assistance in valuing the merger, developing the integration plan, communicating with employees, matching talent, and so forth. Some company HR departments play a key role here. In others, they are still observers, cleaning up the mess afterwards."

Jack Welch, former CEO of General Electric and author of a book entitled Winning, noted in a recent interview that "outside of the CEO, HR is the most critical function in any company. Development of leaders is the ultimate responsibility of every CEO and thus is an integral part of HR. I saw my job as allocating people and dollars to opportunities. I wasn't designing products. I was putting people where I thought they were right for the job. I did that with my partners in HR." HR evaluation systems, he says, "should be rigorous and nonbureaucratic" and monitored as closely as financial reporting is now monitored under Sarbanes-Oxley.

Critics of the way HR has developed over the past decade suggest that HR has become a "handmaiden of management," more concerned with carrying out directives from above than supporting the needs of employees.

The system could be better if it were two-tiered, Kraft suggests. "Somebody has to develop an alternative dispute resolution system or some mechanism that allows employees a voice.... I still view that as a part of the HR function, although it doesn't seem to be happening."

When HR managers "say they want to be business partners," suggests Sirota, "what they mean is they want to work for management. Most companies say employees are our greatest asset, but what they really mean is they are our biggest cost."