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Assessment & Evaluation

Published September 2008

Reinventing HR

  Edward E. Lawler III

One would think the HR department would be a key player in most organizations: gathering and disseminating information about talent, helping to develop and implement strategy and developing practices and systems that motivate individual employees to ever-higher levels of performance. This is not the case.

Too often, the HR department essentially is an administrative function, handling payroll, benefits processing and formal training programs. Even HR departments that conduct regular employee attitude surveys and do talent assessments frequently have limited connections to the development and implementation of their organizations' business strategies.

As a result, an enormous opportunity exists for the leaders of HR functions to enhance their departments' roles. This is especially true in human capital (HC)-centric organizations whose strategies require that talent provides a competitive advantage. In these organizations, the need exists for a function that makes it a priority to develop and integrate all the elements of organizing and managing talent into a coordinated approach that fits the business strategy.

HC-centric organizations have no choice: Someone must take the responsibility for determining how talent is organized and managed. Three approaches are possible:

• The existing HR function can transform itself and become the go-to unit for human capital issues.
• The company's leaders can replace the existing HR staff with individuals who are up to the challenge and make the new HR department the go-to unit.
• HR's administrative tasks can be outsourced, or with the help of information technology, done by a reduced HR staff.

In some HC-centric organizations, HR is not and never has been a major player when it comes to talent management and organizational effectiveness. For example, in universities and law firms, when it comes to key human capital issues, the line managers simply do not involve HR beyond basic administration. Line managers recruit, select, train, develop and organize the professional staff.

An approach that gives human capital responsibility to line management has some real strengths. However, it can make unreasonable demands on the operating managers' time. And this group usually fails to incorporate the fact- and research-based human capital knowledge that can be brought to decisions involving human capital when an effective human resource management function exists.

What is needed is an HR function that combines administration with expertise in human capital management and organizational effectiveness.

Administrative Demands

The administrative side of HR has been and continues to be an increasingly complex and time-intensive activity. When somebody doesn't get a paycheck or is having trouble with medical coverage, it is hard for HR to say, "We'll get to that later; we're currently working on a new competency model for the organization."

 

 

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