Mar 18, 2009

HR and Finance not a "us vs. them"

There are various reasons why I think this cfo.com article "Memo to CFOs: Don't trust HR " is a flawed argument.

The biggest reason why I think so is because it reinforces the old mid 20th century silo mentality of organizations.

Real life alas is not to simple and uncomplicated. If we reflect on why the financial system collapsed we could say that the financial world and the people management processes were both inherently flawed.

The other reason why the article is flawed is that the professor of HR obviously is mixing up things or choosing his arguments in front of an audience that takes his pronouncements as face value. He obviously should know that employee satisfaction is not equal to employee engagement which has been researched to give rise to organizational performance.

Think of it this way, if a Finance professor addresses a gathering of HR professionals today and says the following "CFOs avoid systems that should make it easy to spot accounting problems" Well, we wouldn't know whether he is saying the truth or not, would we?

The other issue I have is that this argument paints functions as stereotypes. The large organizations that can afford it have great HR as well as great Finance people. However the large majority of organizations that make up the bulk of industries have mediocre and average HR and Finance people. In such organizations HR people don't look at data and Finance people are merely glorified accountants. In most of these organizations (specially in the US) the HR manager reports to the CFO.

So I guess the good Prof is also angling for some consulting work by reaching out to his potential buyers.

Ultimately HR and Finance people do similar roles. They reach out and acquire resources (people and money) from the market. They deploy it. They develop it and invest in it.

Ultimately they can learn a lot from each other, while being cognizant of the differences in their approach and the resources they deal with and not become clones of each other.

4 comments:

  1. Fascinating piece, Gautam. Thanks for sharing.

    Though it's dangerous to pick apart a talk that only appears in snippets in a magazine article, my reaction to his argument is similar to yours: I think it's flawed.

    For example, consider these two statements:

    - "But there is no evidence that engaging employees impacts financial returns."

    - "You want people who are excited, enthused, and understand how to contribute to what you do, as opposed to those who simply want to find a good place to hide out."

    Both are statements about engaged workforces. One says there is no evidence to support investing in one. The second says that that's what you should want.

    Yes, my crap-detector is sensing a whiff of something smelly here. You may be right that this was more of a consultant's sales pitch than otherwise.

    Terry

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  2. Gautam ,

    Yes I agree that this looks like sales pitch.

    But still some fact remains that HR is found to be weak with numbers , and the argument that HR doesn't contribute to bottom value and HR schemes are more fad than essence ,though a old argument - is because of HR not really representing their contributions in concrete numbers.

    What do you say ?

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  3. hi can anyone plesae tell me that if one of the leading kpo in india calls its employees and ask them to put thier papers giving economic slowdown a reason. is offering just 1 month salary in lieu , is it fair can't employee raise this issue for alleast compensating with 3 month salary.

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  4. for info - another response to the article worth reading :-

    http://intellectualcapitalconsulting.blogspot.com/2009/03/here-we-go-again.html

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