As a self employed Human Resources (HR) practitioner with 15 years experience, I was recently advised by a business owner that they would never use HR as there was no value in it. Well I trotted out the usual arguments about 'preventing employment disputes', and 'your most expensive cost centre'. But there were adamant, they could not see the value in using an HR professional.
Well, as a committed HR professional (and Scottish born Red-head to boot), I was not going to rest until I had proven to them the value of HR. And that is how the following analogy came about.
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Staff are like cars:
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- Access all levels of the Batcave by turning the activation disk to raise and lower the elevator
- Lookout for villains by turning the activation disk on the top of the Batcave to reveal a working telescope
- Turn the knob on the front of the Batcave to activate the launcher and fire the projectile
- Ships in Certified Frustration-Free Packaging
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1. You need to pick the right model - the sports car looks very pretty, but isn't much good if you need to tow the trailer
2. You need to steer them in the right direction otherwise they go off track, and ultimately are liable to crash
3. You need to service them regularly, or performance will deteriorate
4. A specialist mechanic (or HR Manager) will have much greater success at fixing issues properly than the enthusiastic DIY'er
5. Trade-ins can be very costly if you haven't done steps one to four properly
It is true that the wage spend is the single biggest cost centre in virtually any business. Therefore, HR professionals can have a major impact on the bottom line of the company simply by ensuring that the right models are picked, the steering mechanisms are effective, and the servicing is done properly.
One of the most significant ways HR can impact the bottom line and help keep the momentum going to get out of the recession is through focusing on productivity. Based on international studies, there are seven key drivers of workplace productivity:
1. Building Leadership and Management
2. Creating Productive Workplace Cultures
3. Encouraging Innovation and the Use of Technology
4. Investing in People and Skills
5. Organising Work
6. Networking and Collaboration
7. Measuring What Matters
Well just in case you hadn't spotted it, there is only one thing on that list, Encouraging Innovation and the Use of Technology, which is not under the direct influence of HR.
1. Building Leadership and Management
HR has significant impact in this area by:
o Ensuring that you have correctly defined the competencies required for the leadership roles in your business
o Ensuring that the leaders have the tools necessary to do their jobs effectively.
Whenever you start recruiting for a position, or are looking at how to increase an incumbent's effectiveness in a role, particularly a leadership position, you need to clearly understand the competencies required to do the job. For example, a Finance Manager needs the skills to do accounts, but also needs the competencies of Leadership; Delegation; Attention to detail; Ability to contribute to the strategic direction of the company etc.
All too often I see a great operative being promoted into a management position. As a manager it is very useful to have a good understanding of what your team do, but, ultimately, the role of a manager is to quite different. Managers are required to monitor everyone's progress, identify where the collective effort should be focused, steer everyone in the right direction etc. Unfortunately, this is out with the comfort zone of many operatives, and as a result they may have been a great operative, but are often only an average manager.
By 'defining the right model' up front then you will have a far great degree of success at selecting the right person through an interview process. You will also be able you to identify an individuals development needs (we all have them) to turn them from an average manager into an excellent leader.
2. Creating Productive Workplace Cultures
Bonus schemes to drive the right behaviour and Performance Appraisal system that are user-friendly and add perceptible value are major tools in creating productive workplace cultures.
Unfortunately bonus schemes are often not actually encouraging the behaviour which will create the desired outcome. For example, a bonus scheme that focus's purely on turnover, but ignores profitability will result in lots of sales, but often at discounted rates. You need to clearly understand what actually generates the desired results, and reward that. For example, customer service is rarely seen in bonus schemes, but more often than not excellent customer service is the key to retaining existing clients and getting their referred business.
I often hear managers describing Performance Appraisal systems as an onerous paperwork task, which just wastes their time. It is the job of HR to:
o Critically review any systems and eliminate any negative connotations
o Provide an easy to use, clearly value add, system
o Understand any underlying reasons behind why a system is not being used, and take action accordingly.
Frequently the 'problem' with the system has more to do with a manager's reluctance to have a 'courageous conversation'. Remove the fear through training and support, and you will often see a significant change in the outcomes.
A robust tailor-able Bonus scheme, easy to use Appraisal documentation, and 1 to 5 definitions of 20 different competencies are available to download from http://www.hrtoolkit.co.nz .
3. Encouraging Innovation and the Use of Technology
Though this may not be under the direct remit of HR we can certainly influence this by recruiting the right people and putting in place systems to encourage the right behaviour.
4. Investing in People and Skills
Supporting managers in doing this effectively is the basic fundamental function of any HR professional.
5. Organizing Work
The purpose of an organization structure is to enable communication flow and minimise cross-over between roles. Everyone within an organization needs clearly defined roles, and clear delineation around when tasks pass from one person to the next.
Duplication of work has a significant impact on productivity. Therefore, if the delineation between roles if not clear, you end up with two people repeating the same task which wastes time and decreases productivity.
The actual cost of such duplication can very quickly add up:
5 minutes per day X 5 days X 52 weeks = 1,300 minutes per year (21.7 hours)
6. Networking and Collaboration
Providing opportunities to network is not just the responsibility of the Social club, or the sales team. Training days can be a great opportunity to get representatives from different departments working together.
The opportunities for external networking and collaboration can also be influenced by HR through:
o Encouraging it through the appraisal systems,
o Defining jobs that include a requirement for networking, and not just for sales jobs,
o Creating a culture where you pay for staff to attend networking events, as opposed to criticising them for 'skiving off early' to attend such events.
7. Measuring What Matters
See comments above under section 2. This is absolutely critical to the success of any business.
So what is the value of HR?
HR is the difference between a group average employees filling in their day, and a group of enthusiastic, productive team members wanting to do the best for you and your business.
So help make sure the world keeps going the right way out of the recession by driving your productivity.
Keep Driving Out of the Recession by Focusing on Productivity
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