Want to Be More Strategic? Here Are Obstacles That HR Must Overcome

I don’t know about your organization, but regardless of whether it reports to the CEO or not, HR is generally considered an overhead department.

It processes paperwork, manages benefits, attempts to train the un-trainable, places ads, pre-screens employees, administers programs, and generally serves as a dumping-ground for programs and projects unworthy of line management. As Rodney Dangerfield might say, “It don’t get no respect.”

And, you can probably guess why: earning management respect means delivering a valuable (read “dollars”) service. If HR wants to play a strategic role in managing human capital, there are a series of obstacles it must overcome.

Obstacle #1 — Victim Mentality

When I start workshops, I ask for reasons why employees succeed or fail in the organization. HR people cite reasons like no training, no help, and lack of management direction. However, when I ask the same question of line managers, they cite poor planning skills, learning deficiencies, bad decisions, and so forth.

Do you see the difference? Where line managers see unskilled employees, HR sees only victims. HR’s victimization opinion serves as a HUGE mental roadblock to progress.

As long as HR cannot, or will not, recognize the importance of their front-end role in screening employee and manager skills, they can never be strategic.

Obstacle #2: Not Quantifying Poor Performance

When the list of reasons is exhausted, I ask how much bad employees cost. Few people in either group know the answer, so the numbers usually range all over the ball park.

Consider this: we already know about 20 percent of the people do about 80 percent of the work. Other studies have shown low employee performance costs between 10-50 pecent of annual payroll.

But these are generic numbers and you need specific ones. Why not get with a friendly line manager and work out the hard-dollar costs of the bottom performers?

If HR wants to claim human expertise, it must be able to put hard numbers on performance.

Obstacle #3: Clinging to Old Ways

Finally, I ask what the company is doing to screen-out these low performing candidates. Usually the room goes very quiet as eyes dart left and right.

Yep. They don’t know what to do. But they suspect if they draw attention to an employee problem, someone in the C-suite will probably expect them to fix it …then what?

Forget about job-outcomes. You already have considerable experience making hiring and promotion decisions based on candidate accomplishment stories. Do I have to ask how that is working for you?

Still got your 20/80 performance mix, right? Hiring and promotion competencies must person-related, not job-related. Controlling human performance requires defining and clarifying specific human skills, and not what the job is supposed to produce at the end of the day.

For example, suppose a manager needs someone who can conduct weekly employee meetings to ensure compliance with safety rules. HR needs skills to identify the specific human skills required, and find someone who has them. In other words “job safety objective” = learning (safety rules) + planning (activities) + interpersonal skill (delivering workshops). Now, you have something to measure.

Focusing on employee skills is a critical concept, it tells you what to measure; otherwise, you won’t be able to control employee quality.

Note: it’s not necessary to do this for every job. Professionals can usually classify virtually all jobs into one of 12-15 “families” (e.g., a group of jobs that require similar KSA’s — knowledge, skills, ability — to perform). Families help simplify the job immensely. Now it’s time to discuss measurement tools.

Obstacle #4: Every Tool Looks Like an Interview

Unstructured interviews are known for having virtually zero predictive validity. As you might imagine, different KSA’s lend themselves to different measurement tools.

Choices include structured behavioral interviews, realistic job simulations, “smart” application blanks, work samples, web-tests, pencil and paper tests, case studies, analysis exercises, in-baskets, job previews, planning exercises, smart application blanks, technical knowledge and skills tests, and so forth. They all do something different.

There is one notable exception: hiring tools do not include workshop surveys! Workshop surveys are intended to measure differences between people — not predict job performance.

After you have done studies showing scores predict job performance (e.g., using construct, content, or criterion validation) you are ready to proceed. Then you can administer pre-screen tests as follows: more tests for complex positions and fewer tests for simple positions; cheap tests early in the process, expensive or time consuming tests later; and, requiring candidates to clear one set of test hurdles before taking the next.

Throughout the process, scores are validated based on job construct, content, or criteria; adverse impact is monitored at every stage; action is taken to minimize adverse impact without compromising quality; and, single test scores are never be used to eliminate a candidate.

Obstacle #5: Resistance to Change

Your staff does not think they need any help or training? Either get them to recognize their role in early-skills measurement, or get new staff.

In my experience, career HR staff are often the most resistant to change. They think they have learned all there is about selection, adamantly cling to old technology, and resist new ideas.

You don’t have the budget? That will probably not be problem once you calculate the costs of doing nothing. Line managers are quick to fund programs that help them produce more.

You want to do the work yourself? There are only a few thousand people in the U.S. who are qualified to implement this kind of project — and they probably don’t work in your HR department.

Are you (or your legal staff) wary of tests? You might want to know anything used to screen applicants is a test, even interview questions. And don’t forget, bad tests and interviews are what led to the 80/20 employee problem in the first place.

That’s too much work? Well, you could always explain to management why they should continue paying expenses associated with poor employee performance. Try implementing the project one small bite at a time.

What’s the cost? Usually less than one employee’s semi-annual salary, and recaptured within 3-4 months.

Can I use web-based tests? Maybe later. Assuming you know how to identify the good ones, web-based tests usually are band-aid fixes, like building one plank at a time. Taking control over your employee workforce requires both a blueprint and strategic plan.

You can’t get management’s attention? You might want to try the financial analysis thingy, starting with a cooperative line manager.

How quickly can it be done? Like I said earlier, organizations have a lot of people-inertia. Depending on your turnover and growth, you will probably see changes with the first few hires; however, it will take a few years for you to stabilize the workforce. Take comfort in knowing the amount of work to maintain a professional system usually declines with time while the quality of your employees improve.

What if I reorganize? Once you have control over people skills and job requirements, you can intelligently move people into jobs which they are able to perform.

What about performance appraisals? You can use data from your job families to build employee-specific PA forms (instead of generic ones).

How will it affect the succession planning pool? You will have a deeper and more qualified pool than you have now.

What about diversity? Do you want diversity of people or diversity of skills? A professional process will ensure highly skilled people come from all demographic backgrounds.

Will I interview fewer people? That depends on how your system is constructed. Look at it this way, instead of hiring candidates and waiting to see if they perform, you will control employee quality by screening out weak employees before they get on the payroll.

Is every employee a guaranteed success? No, hiring will always be an odds game, only you will have significantly fewer failures.

Will managers resist? Sometimes when someone they like is rejected, but mostly they will appreciate having less of their time wasted interviewing weak candidates.

Finally, how will this help me earn a seat at the management roundtable?

Easy — management will recognize your critical role in managing employees to reduce costs and bring performance under their control. Now that’s worth something!

R. Wendell Williams, Ph.D., is Managing Director of rww.

The Four Opportunities HR Must Seize Today to Succeed Tomorrow

A lot of time is spent fretting over the role of human resources, both what it does today and what HR will be tomorrow.

I’ve always thought the role of HR was pretty simple — find great talent, hire great talent, nurture and grow great talent — but too many people (even a lot in HR themselves) don’t necessarily see HR as the go-to place when it comes to an organization’s talent.

That’s why this new study from The Conference Board and McKinsey & Company, titled the State of Human Capital 2012, is so important, because it lays out four (4) specific opportunities that human capital (HR) executives must seize if they are to effectively manage the global talent pool in an unpredictable business environment. They include:

1. Look ahead: anticipate and plan for the human capital of tomorrow – “From the increased presence of the highly connected Millennial generation to the proliferation of the virtual office, tomorrow’s workplace will look very different from today’s.”
2. Secure a steady, reliable pipeline for today’s skilled workers, and tomorrow’s leaders – “The war for talent continues, spurred by relatively high growth in emerging markets and the mismatch between worker skills and jobs in most regions of the world.”
3. Develop strategies to re-energize your employees about what they do, and about what the organization stands for – “An engaged workforce can drive financial performance. Studies have shown that employees who are truly engaged are more likely to stay and contribute to the organization.”
4. Ensure that the HR/HC function becomes more agile than the organization as a whole – “Organizational agility is an essential response to the volatility of today’s business environment. An MIT study shows that agile organizations grow revenue 37 percent faster and generate 30 percent higher profits than non-agile organizations.”

Why HR has struggled

“In today’s global marketplace, particularly in such a hostile and unpredictable business environment, it is imperative that human capital executives and departments place themselves at the heart of strategy development conversations,” said Rebecca L. Ray, Ph.D., Senior Vice President of Human Capital at The Conference Board, in a press release about the report. “Human Capital functions need to break out of their comfort zones, take risks and become a true business partner.”

Although I found the four opportunities that HR must seize interesting, the most intriguing part of the study to me were the listing of reasons why HR has had such limited progress in achieving the tangible results that it needs to deliver. See if you find any of these reasons oddly familiar:

• A lack of capability. From the report: “Human capital professionals are still unable to confidently and assertively solve business issues with line leaders and define the subsequent HC (human capital) implications.”
• A support function mindset. From the report: “Human capital staff continues to have a support-function mindset, a low tolerance for risk, and a limited sense of strategic ‘authorship.’ These attributes often result in relatively low status among executive peers, no budget for innovation, and a ‘zero defects’ mentality that means they rarely takes chances.
• An inability to relate the ROI or business impact of their function. From the report: “The difficulty many human capital professionals experience in talking the business language of ROI prevents them from gaining buy-in for innovation, no matter how much it is needed.”

“A real struggle to make a strategic difference”

“Right now, human capital departments are struggling to deal with a global talent shortage, adapt to a changing workforce, and develop new, flexible working models to meet the needs of tomorrow’s workers,” said Bryan Hancock, a Partner in McKinsey & Company’s Atlanta office, in the press release about the study.

He added: “Human capital departments and executives are also facing a real struggle to make a strategic difference in their organizations. Only by partnering with other parts of the organization will they be able to address critical business issues with long-term, systemic impact on human capital.”

Members of The Conference Board can download a copy of the report here, and if nothing else, it is a sobering reminder of what you probably already know: HR needs to be a more business-oriented partner that is willing to take prudent risks and tackle the human capital needs that are going to be the key to driving our organizations ahead tomorrow.

But if you manage to get your hands on a copy of this report, be forewarned; it is a pointed and unvarnished detailing of the why HR doesn’t function right in most organizations, and what needs to be done to fix that and get things on the right track.

Don’t dig into it unless you want to be confronted by these uncomfortable truths — and, if you are finally ready to do something about them.

John Hollon is Vice President for Editorial of john, and follow him on Twitter at http://twitter.com/johnhollon