The formulation of the organization’s human resources strategy begins with basic questions concerning how employment will be structured, what corporate culture will be fostered, how careers will unfold in the organization, what sort of employees will be sought, and so forth. Within this general category of tasks we include both organization-wide human resources strategy and the tailoring of that strategy to specific business units, regional units, functions, or divisions.
Especially important in terms of organization-wide strategy are answers to the questions: How consistent should human resources policies and practices be throughout the enterprise? Where are distinctions in policies and practices (across locales or employee subgroups) desirable? How much latitude should particular organizational units be given in formulating their own human resources strategies?
After the broad outlines of strategy have been set, questions about general policies arise, such as: What will be the broad base of compensation and performance management throughout the organization or in particular units? What tasks will be outsourced, and will the outsourcing be done via labor contractors or independent contractors? What training will be done in-house, and what will be outsourced, and to whom? It is hard to draw a line between strategy and policy, and we will not make any attempt to do so: In this category we will include any human resources related activity that sets rules for the management of human resources that apply broadly to groups of employees.
Formulating strategy and general policies, it seems to us, is a managerial task of the utmost importance. It is fraught with ambiguity; there is no checklist of what to do or what to think about. The outcomes are noisy-how do you know if you’ve succeeded? Results often take a long time to be realized. Interdependencies with other parts of business strategy are tight.
At the same time, dependence on local environmental conditions can be important, so the local environment must be well understood by those who formulate human resources strategy and policies. Finally, the tasks here strongly mix guardian and star elements. Poorly aligned or inconsistent human resources policies and practices can be devastating for an organization. At the same time, the ability to see beyond conventional wisdom, to put together a human resources system that works especially well, is as potent a competitive weapon as one can imagine.
– Implementation of Strategy and Policies. In this category we have in mind tasks that involve nontrivial judgment in fitting general policies and procedures to specific cases. Performance evaluation of individuals and teams, crafting job designs, decisions on whom to hire (and where specifically to look, although this could be construed as part of policy formation), decisions on whom to promote, decisions on training for individuals, specific layoff decisions, and the like all fit here.
Ambiguity in these tasks is not particularly high if a well-formed set of human resources policies and practices is in place; however, outcomes are noisy and feedback can be substantially delayed. Interdependencies with other parts of the business can be substantial; decision-makers should have a fairly well-developed “big picture” of the organization or, at least, of the specific function involved. Because of reputation and social comparison effects, these tasks are predominately guardian roles, although especially when it comes to recognition of talent and accurate placement of individuals, some star aspects are involved.
– Record Keeping, Compliance, and Personnel Service Delivery. Here we have in mind those tasks that, unfortunately, have come to dominate many line managers’ perceptions of what the human resources Department does: compliance reports; keeping employee records; filling out forms for benefits and payroll; and so forth, on down to buying the beverages and pizza for the regularly scheduled employee beer blast.
There isn’t a lot of ambiguity here and performance is fairly easily monitored. The job is a mix of some guardian and mainly foot-soldier tasks: Screwing up compliance reports can get the firm in trouble with legal authorities, and a bad benefits office can reduce employee morale pretty quickly, but management that isn’t completely asleep or complacent can usually avoid the big disasters in this realm.
This enumeration of the tasks involved in doing human resources management helps clarify a root problem with how human resources is traditionally organized. In the traditional organization, this bundles together all these tasks, a small fraction of the activities account for a huge proportion of the value added by the function, by creating potential upside and/or helping the organization avoid downside disasters. In contrast, most of the activities conducted, measured by time expended or paper consumed, are the routine foot-soldier tasks, perceived as adding little value by managers and employees. Complying with rules and filling out forms imposed by central human resources regarding job searches, performance appraisal, or compensation and benefits – or being required to have a human resources representative present during a sensitive conference with a subordinate are frequently not viewed as helping matters very much. And employees, once they are hired, often interact with the human resources department only when they have a problem or concern, so they may not have an especially positive view of the function either.
In any event, it is not altogether surprising that a function that is perceived as responsible for explaining benefits programs, processing change-of-address forms, complying with governmental regulations, and enforcing policies that limit managers’ discretion on how they can treat employees-or that is touted as the “conscience” or “kinder, gentler side” of the corporation-is unlikely to be viewed as a hard-charging, tough-minded, strategic business partner.
In addition it’s easier to measure how well the human resources department is doing in terms of filling out forms and delivering routine services; it’s a lot harder to measure how well it does at formulating and implementing a human resources strategy.