Aligning HR with business

A few decades ago, when the word “personnel” was still used more frequently than “human resources,” HR departments began auditing their policies and procedures. Flow charts were produced, focus groups held and upper management was (in many cases reluctantly) engaged in the process. These new and improved systems, usually much heralded by the HR department and unveiled with ceremony and the promise of a much-improved workplace, were often greeted with cynicism by people outside of HR.

Nothing fuels cynicism like unmet expectations, and generally the ultimate outcome of most HR audits was, at best, a minimal increase in attention paid to these important issues. At worst, they created a deepening sense that HR, despite its best efforts, simply did not know how to truly add value. Why? Because the focus of the audits was on HR policies, procedures and systems themselves, and not on their roles in supporting the larger business context of the organization.

How far has HR come? This varies, depending on the industry, the organization and the individuals in question. HR systems that are seen as effective management tools are truly linked and aligned with business strategy. These systems are conceived of with the full support and input from employees from all levels of the “line” side of the business; the systems are administered in such a way that enables them to evolve and change in sync with the business.

HR audits need to begin with a fundamental review of the business strategy of the organization, and some reflection on what the company stands for in the eyes of all stakeholders: customers, shareholders, the general public and employees. Successful organizations know what they stand for, what they do well, and what systems they need to have in place to deliver on those values. Strong organizations have this information, but it is often not explicitly or implicitly conveyed to employees in what are considered “support” or “staff” functions, such as human resources.

Statements of values and mission must be broken down into a set of core competencies that are well known throughout the organization. If impeccable customer service is a key deliverable for a business, then the support functions in the business must support the front-line providers of the product or the service with a service ethic that is consistent with these core competencies.

HR departments must begin auditing their systems with an understanding of what the business is seeking to do. For a company focused on bringing innovative new products and services to market, for example, the ability to conceive of and apply new ideas needs to be a competency that is reflected in each stage of the HR life cycle for all employees. Jobs need to be designed and evaluated in such a way that position descriptions specifically include and value innovation. Recruiters need to actively seek out this experience in candidates. Compensation systems need to recognize and reward behaviours that underline innovation and creativity.

How can HR professionals ensure they are able to be an effective link between the strategy of their business and the systems that their departments employ? HR practitioners must:

•understand the firm’s product or services;

•be aware of the firm’s position in its market;

•understand the company’s financials and what translates into a stronger bottom line;

•seek out as much information as possible about the future direction of the company so that labour requirements and appropriate skill sets can be delivered as required;

•ensure HR systems are reviewed and tested for efficiency and relevancy on a regular basis (canvass line managers to see if systems are being used to full effectiveness); and

•keep in mind at all times that HR’s role is to shape the product of the organization by contributing strong support.

HR has long been seen as a department that is administrative in nature. HR professionals have always known that we are able to deliver strategic value — indeed it has been proven that sustainable business success is much more difficult to achieve without strong HR leadership.Strong leadership from HR professionals requires that the organization’s business strategy and core competencies permeate each and every system, policy, procedure and project HR undertakes.

Susan Hodkinson is the director of human resources for the law firm Goodman and Carr LLP in Toronto.

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