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Many HR professionals seem to be asking “Are we there yet?” when it comes to being viewed as a contributor to their organization’s success.
University of Michigan’s Ross School of Business professor David Ulrich examines how they can create value, then lays out a road map that guides them to understand the changing business settings that define work; internal and external stakeholders; various HR outcomes or targets; investments in the function, practices and people; and analytics to track and monitor HR investments.
At professional conferences, HR practitioners continue to lament that corporate leadership views their role more as an administrative service or compliance function than as a business partner.
Over the last few decades, HR professionals have made enormous progress in their professional stature and in their contribution to the overall success of the business. But the journey ahead should drive them to seek ways to continue to deliver value rather than determine if they “have arrived.”
There are four steps in the HR journey ahead:
One mega-message for HR’s direction—the creation of value.
Context: Understanding the changing business setting that redefines work.
Stakeholders: Recognizing and serving both internal and external stakeholders who are the recipients of HR work.
Individuals as evidenced through a formula for productivity that is competence *commitment* contribution.
Organizations as defined by their capabilities more than their structures.
Leaders whose thoughts and actions embody the firm’s brand.
HR departments where strategies and structures need to be designed to deliver value.
HR practices that need to be aligned, integrated and innovative.
HR professionals who must have the competencies to respond to future demands.
HR analytics where HR investments can be tracked and monitored.
The logic around the next step for HR is simple. We begin with a direction: HR should add value. This direction needs to be connected to both the business context that shapes decision making and specific stakeholders around whom business strategies are created. Out of this context, HR defines targets for HR work: individual abilities (talent), organization capabilities (culture) and leadership. Finally, HR budget and people investments redefine the HR organization that makes all of this happen. But, the simple logic requires more detailed assessment to accomplish the journey.
While many HR decisions require insight and judgment, improved HR metrics help HR move toward professional respect and decision-making rigor. Some insights include:
Avoid a means/end inversion. The end goal of HR is to create value; improved HR analytics are a means to helping codify and make value happen about the next generation of HR metrics. Effective HR metrics means doing more predictive than descriptive analytics.
Avoid measuring what is easy and focus on measuring what is right. Just because something can be measured does not mean it should be.
Keep measures simple and focused on decisions. Too often, the desire to quantify HR leads to more HR data than insight. Turning valid data into thoughtful decisions should be the focus of HR analytics.
Keep ownership and accountability of HR analytics with line managers. Line managers are the ultimate owners of HR work; they have final accountability for what is done and how well it is done.
July 18, 2013
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