American management education guru Dave Ulrich says in his latest book Why the Bottom Line Isn't, that the HR profession "has been on a journey toward impact for many decades". But it has never really made it to the organisational sharp end, into the domain of strategic management, the boardroom and a "real" leadership role.
Urlich now predicts an extended role for HR managers. But the profession needs to recognise that it has a leadership role to fulfil in building capable organisations and engaging employees while providing management with quality HR services. This, he suggests, requires a strategic HR focus.
HR's changing fortunes may simply be a reflection of the changing organisation. As former Carter Holt HR manager and now NZIM Auckland's chief operating officer Kevin Gaunt puts it; "traditional employment relationships are changing and people are a major source of competitive advantage".
For Gaunt, the three most important issues facing the HR industry are adequate leadership, delivering on "managing for performance" and building "capable" organisations. "There are a lot of HR practitioners out there but not many true HR leaders," he says. HR leaders need to bring the strategic view to the management table, explaining how to create and maintain an organisation that can deliver the business strategy and plan."
To be effective however, HR managers must be seen as "credible" by other business managers. They need to be more than HR experts. They must have an excellent knowledge of how the business works and know what the key internal and external drivers of the business are.
Delivering on managing for performance means being able to deliver "actual performance improvement from performance management systems that truly impact the bottom line", says Gaunt. HR has seen itself as a business partner, working with management to effectively link people with the strategy and business plan by using performance management systems. "However, these systems often fail to deliver performance improvements because managers focus on implementation and assume that the system will deliver the required results. It doesn't happen unless everyone involved has the skills and the understanding to give good performance feedback and to coach for improvement. Organisations have to build coaching skills into their culture."
By drawing all this together HR managers can help create an organisation that has the capability to deliver the business strategy and plan. An effective HR leader will communicate the needs and influence the management team on the required development direction. The HR leaders need to know how to help identify the organisational capabilities required and then embed the behaviours into the culture.
"This requires a focus not only on measuring performance of people against business objectives but also on measuring how aligned they are with the core behaviours the organisation needs to be capable of achieving its objectives," says Gaunt. "Adequate HR leadership is critical because these issues are not understood by many managers and there needs to be a competent voice on the management team to articulate the need."
Shaun McCarthy, Wellington-based chairman of Human Synergistic International in New Zealand and Australia, is unequivocal that the three most important issues facing HR right now are the inter-related ones of leadership, culture and performance. "In practical terms this means HR must focus on performance management and leadership development and on understanding how these are either drivers or barriers to performance within the organisation's culture," he says.
He ranks performance management as his top priority explaining that done well it has the potential to impact dramatically on leadership and culture. "True leadership is about managing performance--or more importantly, improving performance, and a good performance management system can provide managers with the tools to lead," he adds. …