Reinventing HR: Strategic and Organisational Relevance of the Human Resources Function

Strategic and Organisational Relevance

of the Human Resources Function

by

Cecile Schultz and Hugo van der Walt

2015

Copyright © Knowres Publishing, Cecile Schultz and Hugo van der Walt

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First published in 2015

ISBN: 978-1-86922-530-8 

eISBN: 978-1-86922-531-5 (PDF eBook)

Epub ISBN: 978-1-86922-538-4

Mobi ISBN: 978-1-86922-539-1

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TABLE OF CONTENTS

About the authors iii

Introduction iv

Silent revolution iv

HR positioning v

Embedding the function vii

The business case for change viii

The new economy ix

References x

Chapter 1: Research report and findings 1

Introduction 1

Methodology 1

Results and discussions 2

References 10

Chapter 2: Transitional pillars 11

Chapter 3: Foundational understanding: HR competence and

business acumen 13

An overview of HR competencies based upon research and practice 15

HR knowledge 21

Business acumen 23

Talent management 26

HR technology 28

Organisational development (OD) 29

HR metrics, measurements and analytics 31

Strategic HR 35

Innovation 36

Professionalism 37

Conclusion 37

References 40

Chapter 4: Leadership and meaning 43

Leadership 44

Understanding emotional intelligence 50

Understanding social intelligence 51

Meaning 61

References 64

Chapter 5: Relationships 65

Engagement 66

Communication 69

Communities 74

Customers 75

Diversity management 79

Conflict 81

Collaboration (teamwork) 83

References 85

Chapter 6: Workplace socialisation 87

Governance of ethics 91

References 93

Chapter 7: Productivity 95

Productivity management 96

Economics 99

People development 100

Performance management 102

Coaching 104

Mentoring 106

Tutoring 108

Work practices (Job design) 109

References 111

Chapter 8: Organisational transformation 113

Business strategy 113

Leading change 128

References 143

Chapter 9: Personal wellness 145

Key themes 146

Emotional wellness 149

Psychological wellness 153

References 157

Chapter 10: The future 159

Conclusion 160

Index 162

ABOUT THE AUTHORS

Cecile Schultz

Cecile completed her BCom (Industrial Psychology), BCom Hons (Human Resource Management), MCom (Industrial Psychology) and her Doctorate degree in Human Resource Management. Her career started during 1992 at the Department of Foreign Affairs in South Africa where she operated as a Human Resource Officer. She has been employed by the Tshwane University of Technology since 1994 till current. Her passion for HR and Organisational Leadership lead to supervision of post graduate students and several research outputs such as articles and conference papers. She wrote two chapters in Dessler’s Human Resource Management book during 2011. Her involvement with KeyStone Strategic People Solutions widened her horizons of HR or rather People Management. She enjoys her community engagement once a month at the People Upliftment Programme (POPUP) training centre in Pretoria.

Cecile is married to Raymond, and they have two children, Christiaan and Cilé-Mari.

Hugo van der Walt

Hugo started his career in the mining industry in 1981 at Anglo American, in the Human Resources department. He left Anglo American in 1995 to set up his own business consultancy and has subsequently been involved in various strategic initiatives, both in a business and community environment.

Hugo is a founder member and director of KeyStone Strategic People Solutions (KSPS). At KSPS, he is able to live out his passion which is to contribute towards people wellness and effectiveness, as the main contributor to organisational success.

He completed his B.Sc. Honn. degree in Psychology at the Potchefstroom University and Certificate Programme in Industrial Relations (CPIR) at Wits Business School. Currently, he is also a part-time lecturer at the Tshwane University of Technology (TUT) in the Faculty of Management Sciences.

He is also a founder member of the Casa Deo initiative, which specialises in socio-economic development at community level. The Initiative links various community development projects in a geographic area into integrated execution frameworks.

Hugo is married to Charmaine, and they reside in Pretoria.

INTRODUCTION

Modern management, much of which dates back to the 19th century, has reached the limits of improvement. In fact, the foundations of ‘modern’ management were laid by people like Daniel McCallum, Frederick Taylor and Henry Ford, all of whom were born before the end of the American Civil War in 1865. Managers today face a new set of problems, products of a volatile and unforgiving environment. Some of the most critical: How in an age of rapid change do you create organizations that are as adaptable and resilient as they are focused and efficient? How in a world where the winds of creative destruction blow at gale force can a company innovate quickly and boldly enough to stay relevant and profitable? How in a creative economy where entrepreneurial genius is the secret to success do you inspire employees to bring the gifts of initiative, imagination and passion to work every day? How at a time when the once hidden costs of industrialization have become distressingly apparent do you encourage executives to fulfil their responsibilities to all stakeholders?

(Hamel, 2009:1)

Organisations are scrambling to keep up with ongoing demographic, social, environmental, technological and political changes. Trying to recreate what worked in the past is futile. The situation is further complicated by a workforce that challenges traditional authority and hierarchies, and by the need to establish a balance between control and autonomy. Ulrich, Ulrich and Goldsmith (2010:265) describe the difficulties faced by organisations in attempting to align individual aspirations and abilities with organisational purposes. Information overload and centrifugal goals cause employees and organisations to spin away from their basic sense of purpose and direction.

This is the framework in which the HR function needs to find its strategic and operational relevance. It is required to step up and be accountable, and it can no longer afford to be pushed into back offices, hiding behind silo activities and transactional processes for which it is attempting to remain pertinent. The time to impact organisational life is now. The time to rise as a profession is now, and not only become relevant but become trendsetters in the arena of people management. The time to not only facilitate change, but to own it, is now.

Silent revolution

Revolutions – huge and dominating events in world history – have always been accompanied by radical, visible change. The current revolution, though, is silent. There is no major, focused event taking place, yet change is everywhere. Traditional authoritarian relationships are being challenged along with familial and societal life, organisational fields and religions realms. The amount of knowledge available to all is phenomenal; social networks and informal communication channels are continuously expanding their reach and influence. Today, however, not much physical change is visible on the surface. This revolution is arising out of knowledge, partnerships and collaborative connections that are being forged largely outside formal structures and processes. These interfaces span international borders and are creating cultures based on expressions of freedom and near radicalism reflected in the defiance of all existing structures governing societal and organisational life. Nothing is taken for granted. Meaning, in the context of a broader understanding of existence, has become an uncomfortable process driver. Mission and value statements, which used to decorate office walls, are now examined for internal validity and alignment with broader societal realities and responsibilities.

HR positioning

It is of interest to note that the term ‘Human Resource’ was first recorded in 1961 and Human Resource Management (HRM) appeared by mid-1980’s replacing its precursor, ‘Personnel Management’. The birth of HRM as a discipline was necessitated by the need to ensure legislative compliance following on the pressures from the Civil Rights Movement. Ever since HRM has been drifting and driven reactively by external forces; it has not been able to proactively define its own future. Human Resources Development (HRD) developed as a separate discipline to HRM for unknown reasons. It is by radically reinventing itself within this silent revolution into a socio-economic dynamic, and then an agent for change, guiding and supporting organisations through transformation as the only future certainty.

From within, ‘people’ as common denominator, the ‘HRM’ and ‘HRD’ functions need to be consolidated into a professional discipline acknowledged and respected as ‘People Management’. In this regard main activities (professional streams) and accompanying outputs need to be identified. HR has gone through many transformations and this has added to its current professional confusion. Increasing pressure from executive management has forced the profession to justify its existence through the identification of HR metrics. This is foreign territory for a function with a traditional specialisation in soft skills. But merely putting down metrics within a fundamentally dysfunctional system will not solve the current challenges of the HR function.

Furthermore, the term human resource is no longer relevant as the human component of organisations is now, at last, regarded as people. Not personnel, not staff and most definitely not resources. The research contained in this book – the harvest of a multitude of interviews over the last three years – and our own experience, honed over the last fifteen years, support our conviction that the HR function be correctly designated as People Management (PM). HR is expected to coach managers on people issues.

HR, in many organisations, is at a crossroad. On one hand HR is in crisis, increasingly under fire to justify itself and confronted with the very real prospect that a significant portion of its traditional responsibilities will be outsourced. Outsourcing of traditional HR functions such as payroll and recruitment, as well as the creation of HR self-help system platforms, add to the disquiet. On the other hand the current trend in organisational behaviour (OB) is not capitalised on and is implemented by external consultants. Its insecure positioning results in the HR function becoming increasingly isolated.

Finance, supply chain management and IT have managed to remain relevant to operational requirements. Their functions have evolved into value added propositions to the executive and operational staff. HR, on the other hand, is – for a variety of reasons – no longer seen to add relevant value and so finds itself unable to influence or impact an organisation’s strategy. This is a huge paradox.

The most expensive component of a business is its people, and this is also the point where an organisation is most vulnerable to the proper execution of its objectives. Yet the people in a business do not feature in its strategic and operational priorities. Tangible equipment and systems are seen as a far higher priority than the people that man and operate them. Therefore, the correct designation of HR as People Management will re-position the matter into its proper perspective, and will correctly allocate all people aspects to the department of People Management. The opportunity exists for the HR discipline to step out of a reactive ‘human resources’ mind set and reinvent itself as ‘People Management’ – owning and managing all the current and evolving people related concepts and processes in terms of corporate strategy and organisational life.

Embedding the function

Once the HR function has reached agreement on its core function and contribution to the organisation, and has clearly identified current and envisaged trends within business development, it will need to be reinvented accordingly. With People Management as the overarching theme, its main activities (professional streams) and accompanying outputs will need to be identified. In the process, the HR function must be prepared to shed its current and historic perspectives which arise out of their ever shrinking models based on a silo mentality.

Therefore it is necessary for the HR function and its activities to become institutionalised. Institutionalisation refers to the process of embedding something (for example a concept, a social role, a particular value or mode of behaviour) within an organisation, social system or society as a whole.

The only way in which the HR function can become embedded in organisational life is through its correct and relevant positioning. It must own all people related concepts and processes such as relationships, transformation, productivity, change, diversity and wellness. In a strategic and organisational context these are major issues, and over time their relevance will increase significantly. Yet, none of these is being adequately addressed within organisations. The design and execution thereof is left to consultants, who stand outside of any accountability and relationships.

Unless the members of an organisation are part of the change, and own the change, it will have no effect on organisational culture. This is an area of specialisation which requires vision, courage, persistence and skill. It is an area into which the HR department’s capacity needs to be expanded. Effecting change in organisational culture is a very rewarding experience, especially if the current culture is totally dysfunctional.

In his book Good to Great (2001), Jim Collins refers to the critical relevance of culture in his definition of a culture of discipline. Herewith a quote from the book which illustrates the point that culture can positively impact performance (2001:13):

All companies have a culture, some companies have discipline, but few companies have a culture of discipline. When you have disciplined people, you don’t need hierarchy. When you have disciplined thought, you don’t need bureaucracy. When you have disciplined action, you don’t need excessive controls. When you combine a culture of discipline with an ethic of entrepreneurship, you get the magical alchemy of great performance.

(Jim Collins, 2001:13)

HR must be transformed from a reactive department with a transactional and administrative focus to a proactive department with streamlined and simplified processes that are integrated and connected to the business needs, with the emphasis on service consistency and adding value. Its perspective must be holistic and futuristic, owning change and innovation from a sense of coherence and self-efficacy.

The HR department must develop a local and a universal positioning. Local positioning refers to immediate operational requirements and challenges, and universal positioning to international benchmarking practices and visionary dynamics.

The business case for change

Kim and Mauborgne (2005:6-7), state that corporate strategy is heavily influenced by its roots in military strategy. The very language of strategy is deeply imbued with military references – chief executive officers, headquarters, troops and frontlines are some examples. Described this way, strategy is about confronting an opponent and fighting over a given piece of land that is both limited and constant. In so doing the distinctive strength of the business world – the capacity to create uncontested new blue ocean market space – is denied.

The changes in organisational life, although silent in major developments, are affecting management and the way in which businesses are being run. Different strategies regarding the volatility of the people component of business are attempted but to no avail. Trends such as re-engineering, engagement, empowerment and leadership development leave no sustainable impact because the operational environment keeps changing. Nothing is fixed. The organisational model of control through hierarchy and coercion is imploding and requires a new paradigm. Business strategy needs to release innovation, collaboration, meaning, engagement,