Why does HR struggle to impact organisational performance?

This is a question often asked and, from my perspective, one not often answered well.

That’s because there are a number of factors at play here and here are some that come to mind.

You get what you ask for

The first hypothesis that I want to put to you is that the HR function (it’s focus, responsibilities, purpose, activities, relationships etc) is the product of the business owners and/or board and/or senior executive – their philosophies, priorities and perspectives on what HR is and is there for in the context of the particular business setting.

For example, on my first day as HR Manager in one business, my boss, the Manufacturing Manager, said to me “It is great to have you on board, we have missed having someone to get us out of trouble!” “Ouch!” but clearly the focus for the business and the bulk of my activities were going to be on risk management and conflict resolution. That proved to be the case.

What that means is that the business gets exactly what it asks for in HR and, most of the time, that is not what (or not all of what) the business really needs.

The HR hierarchy

Having worked with hundreds of organisations over many years, I have identified 4 tiers of HR (the 4Cs which underpin our consulting model at Ridgeline HR) and these are:

C1:  Commitment – we do what we need to provide direction and meet legal obligations

C2:  Capability – we have implemented systems to assist in HRM

C3:  Competency – we have trained our managers to manage their people appropriately

C4:  Culture – we have strategies which engage and develop our people to deliver results

This leads me to my second hypothesis – 80% of Australian businesses have not progressed beyond C1/C2. Their focus is on compliance and risk management, on record keeping and avoidance of complaints, unfair dismissal claims etc, rather than on organisational development and employee engagement.

What that means for most HR Departments is that compliance is the focus and HR is therefore seen by the business as a compliance cost and not a value adding performance enabler. It is hard to get excited about cost!

I am a human being!

Now to my third hypothesis – we are human beings (not just human resources) and we want to do a good job. We want to have a sense of purpose, we want to feel that we are contributing to and are part of something worthwhile, we want to have dignity and pride in our work regardless of our station and we want to feel valued and recognized for our contributions.

Bearing this in mind, let’s revisit the 4Cs looking at them from an employee’s perspective:

C1: Commitment – I know what is expected of me.

C2: Capability – I am provided with the tools, equipment and systems I need to do my job.

C3: Competency – I receive the training and support that I need to do my job well.

C4: Culture – I understand how I contribute to our success and I am empowered to do it.

Again, I believe that most Australian employees would see themselves as being at C1-C2 because that is where their employers position them and these are the key HR messages being sent to people – comply, do what is expected and we won’t have any problems with you. Not really inspiring stuff, is it?

What this means is that organisations’ expectations and HR messages to its human resources are far too often at odds with our needs and values as human beings – and that is why we don’t get good employee engagement.

And we are not learning

There is a huge body of research which tells us emphatically that the key to productivity improvement, in generating that discretionary effort on the part of our people, in encouraging innovation and discovering new and better ways to work in all sorts of fields is employee engagement.

Yet our current national debate on productivity is centered firmly on employment laws and costs rather than contemporary thinking on what makes a productive business and a great workplace and the importance of good leadership and employee engagement in this regard.

If our national industry leaders don’t get it, it is no wonder that HR Departments struggle to engage with it, let alone deliver it!

Do we have the will?

It is much safer to stay in the compliance space – after all:

  • It is the law or the customer or the government or someone else who makes the rules, isn’t it, and therefore they (not us) are responsible for the rules, right? and
  • If we have told everyone what the rules are and they haven’t complied with them, that is their fault (not ours), right?

Or are we prepared to take on the realities of what our people really think about our organization and do something constructive about it?

Are we prepared to consult with people to inform them, to obtain their input into decision-making and to get them engaged in conversations as part of the culture or will we continue to just consult them as and when required to under employment and workplace health and safety laws?

Are we prepared to invest in their development and wellbeing in a meaningful way as opposed to just doing what we have to in training and workplace health and safety?

I could go on but you get the picture, I’m sure.

So are you in the 80% who need to change and, if so, do you have the will to make it happen?

Things won’t turn around overnight but they will turnaround if you have the will to persist.

There are plenty of good tools and resources around to help and a couple of my favourites are https://www.investorsinpeople.com/https://www.investorsinpeople.com/ and www.engageforsuccess.org. All free stuff – enjoy.

Engage through the CORE

Why is it that some businesses have people who stay with them and consistently perform well?

How do they keep them motivated?

Here are a few essential elements at the CORE of successful employment relationships:

Clarity

To get the right results, you need to be clear about:

  1. The plan – business goals and values provide the foundation for alignment of people with business needs
  2. Competencies – the skills and behaviours which drive your recruitment, selection and training activities
  3. Roles – the tasks that people are to perform and the results that are expected
  4. Resources – the systems, tools, information and relationships needed to succeed
  5. Communication – ongoing and open dialogue to ensure continuing alignment of people with business needs.

Opportunity

People want to do a good job and generally welcome opportunities to:

  1. Be involved – to be asked for their opinion and to have the opportunity to make a contribution
  2. Grow – to develop skills and experience new opportunities for expanding and applying their knowledge and expertise
  3. Comply – to understand what is expected of them in results and behaviour and do it and
  4. Succeed – to deliver the results expected

Recognition

Recognition of people’s value to the business is critical for ongoing motivation and delivery of results as well as in meeting legal obligations in managing people. These include:

  1. Remuneration and benefits – ensuring that people receive pay, benefits and conditions of employment appropriate to the role that they perform, the contribution that they make and its worth in the marketplace and having regard to obligations under legislation and awards.
  2. Ongoing feedback – investing the time to have regular reviews against personal goals, recognition of achievements and areas for improvement
  3. Rewards – personal incentives (ensuring that statutory obligations re minimum rates and conditions are still met) or other forms (public recognition, gifts or gift vouchers, development opportunities, etc)
  4. Correction – despite best efforts, sometimes a relationship doesn’t work and underperformance needs to be addressed promptly, sensitively and legally.

Equilibrium

People like equilibrium – a sense of balance and assurance in:

  1. Life – balancing our family and personal needs and our working life is as a key driver in attracting and retaining good people
  2. Respect -mutual respect between the employer and the employee and the capacity for open and honest communication
  3. Team – people want to belong and to have a sense of being part of a collective in which they are respected for who they are and what they contribute
  4. Security – the knowledge that the business is successful, my job is safe and I will be able to provide for my needs and those of my family.
  5. Sustainability – people’s confidence in the business commitment to continuous improvement and good corporate citizenship.

Focus on these core elements and you will optimize your prospect of having motivated people in your business and a great return on your investment in people.

When do I hire a HR Manager?

This is a question that I am commonly asked by SMB owners, often when the business is a little out of control because it has grown to the point where the owner cannot personally supervise everything that is going on anymore.

My initial response is that you are asking the wrong question up front and you should first ask: “What is the best way to manage the growing number of people in my business?”

Firstly let’s break that down into component parts which I call the 4Cs of people management:

C1: Commitment

This is the base level of people management and is fundamentally about ensuring that the business  has a plan providing clear direction and understands and is compliant with its legal obligations as an employer in relation to such things as:

  • Wages and conditions of employment
  • Workplace health and safety
  • Equal opportunity, discrimination and harassment
  • Privacy

C2: Capability

This is about building the processes for managing people which include or add to what you have done in compliance but also facilitate:

  • Effective conversations about team and individual performance and development
  • Skills analysis and learning and development activities that are aligned with business needs
  • Reward and recognition that has meaning, is properly aligned and is affordable, providing the right return on investment
  • Targeted recruitment and retention of the right employees and fair and effective management of the exceptions.

C3: Competency

Having put the systems in place, you need to develop the abilities of your people to apply them and comply with them in a consistent and competent manner by:

  • Training your leaders and managers in the application of the processes with their teams and individual team members
  • Educating all of your people about the processes and their roles and obligations
  • Ensuring that you practice what you preach and both require and allow your managers to do their jobs and
  • Incorporating the leadership qualities you need in your criteria for selecting your managers

C4: Culture

This is when it all comes together – you know that you are compliant with your legal obligations, you have people management systems that work and your leaders and managers are really driving improvements because you:

  • Have a clear vision and business strategy with measurable goals for improving business performance and “your people get it”
  • Understand the competencies that you need and your investment in training and development delivers improvements in performance
  • Engage your people in improving business performance and recognize and reward them for their contributions and
  • Have leaders and managers who ensure that your people are on board, contributing and continuously improving their capabilities and performance.

The truth is that your specialist HR resource needs (ie the skill set required) will differ depending on where your business is in the above hierarchy.

At levels C1 – C2, there is a greater emphasis on administration, compliance and risk management whereas at C3 – C4, there is a much more strategic focus on organizational development, engagement and leadership.

What will not change is that you need your managers and leaders to be on board every step of the way because they are the real people managers every day.

That leaves us with a different but much better question: “How do I best support my managers to do their jobs better?”