Can HR as business strategist co-exist with HR as ombudsman? (Guest Commentary)

Splitting the HR function a solution for serving two critical needs
By Fred Pamenter
|Canadian HR Reporter|Last Updated: 12/06/2004

Human resource professionals continue to struggle to be members of the strategic management group. Some have been quite successful at achieving senior management status. The vast majority, however, continue to look enviously at the strategic management group with little hope of being invited into that inner circle.

Part of the difficulty is the ambiguous role that HR plays in many organizations. It vacillates from being a contributor to management initiatives to being perceived as the ombudsman of the “people.” The vacillation may not be due to any conscious actions of the HR professional but rather due to the circumstances of the moment.

Some HR professionals have tried to distance themselves from the image of being the champion of the “people.” They have tried to convey that first and foremost they are bottom-line focused in the same manner as the CFO or the head of sales. In days of yore the role of the personnel professional was seen much more as being a representative of the people. This was the context for much of their work. It was also in this context that they acquired the image of not being a key member of strategic management. This label has haunted them ever since regardless of how the profession has become more business oriented.

In the past couple of years the business community and the public in general have been shocked by a number of high-profile corporate scandals. Although outright fraud seemed to underlay the most infamous of the scandals, many cases where income statements had to be restated resulted from managers “pushing the envelope” too far in their attempts to satisfy the critics.

Most business leaders have felt the uncomfortable pressure of external forces: financial analysts, financial institutions and other shareholder bodies, as well as by the financial media. This pressure has been augmented by the continual reduction of the time span of their focus until the centre of attention is now on quarterly results rather than on even annual performance.

At times these pressures tempt management to take actions that are primarily short term in nature. Aside from “pushing the envelope” to the limit, calculations are made to see if programs provide value-added to the organization in the short term. If that can’t be achieved then programs are either scrapped or minimized.

In this context, one needs to look at what HR professionals bring to the table. Many HR initiatives are long-term in nature. The value to be achieved is likely to happen months or maybe years into the future and is often difficult to measure. For example, what is the time line for adding value through management development programs? The same question arises for succession planning. Often, the value gleaned from performance appraisal programs is not immediate but extends to some time in the future.

For operating management fighting in the trenches of the marketplace, it is hard to see the value of a six-figure training and development program when they are unable to gain approval for a new piece of equipment or the addition of more sales representatives.

I recall an associate describing the HR function as the organization’s conscience. A similar incident occurred at a roundtable of HR professionals where one of the participants argued vigorously that the HR role was not all about adding value but also ensuring rights and fair treatment for employees.

A bifurcated role

These concepts superimposed onto the pressurized business environment that organizations operate in raise the question as to whether HR should cease to try to operate solely as part of the management structure of an organization. Maybe the function should be divided into two streams with one being part of the organization’s management team, and the other reporting directly to the board of directors.

The part of the function operating as part of the management team would be involved in the day-to-day operations of the business and would be attuned to the organization’s strategy and focus on value-added initiatives.

The other part of the function reporting to the board of directors could:

•champion programs necessary for the long-term health and growth of the organization;

•perform the role of an employee ombudsman during this era of diminishing strength in the union movement;

•report on violations of corporate values which it becomes aware of through its communication network; and

•report to the board as the conscience for the organization when actions detrimental to the organization were being carried out.

Undoubtedly this approach strains the concept of sound organization structure but it responds to two critical needs. The first is that the organization needs bottom-line and business oriented human resource input and management. The second is that the organization focussed on the profit initiative needs an internal conscience to act as a control factor to avoid the insidious takeover of greed.

Fred Pamenter is managing partner with Pamenter, Pamenter, Brezer and Deganis Limited, a Toronto-based HR consulting and executive search firm. He can be contacted at (416) 620-5980 or PPBDconsulting@aol.com.

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