Two crucial aspects HR should focus on - measuring value addition and stop taking undeserved blame

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I was just a college pass out when the most famous (now) critic of HR Mr. Keith H. Hammonds opened up his thoughts on HR professionals and HR as a function to the whole world. I was shocked when I came across this article later, started doubting my decision making skills – did I make right choice by choosing HR as my career? But as time flew I forgot about this like any other young graduate fresh out of college. But now after having spent good time in HR, I strongly feel his criticism is not all true, but there are genuine issues we still need to address and improve on, tragedy is after 8 years of his article we still look the same in few of the areas he wrote about.

It is extremely crucial now that we focus on these areas to sustain this extremely dynamic world where the war for best talent is getting fierce day by day and taking an ugly, brutal shape. The two critical aspects HR should focus on are – creating more value, measuring that value and stop taking undeserved blame.

Does HR really add value? What kind of value is that and how can we measure it?

World called HR and still calls a necessary evil, a bureaucratic setup which kills flexibility and innovation. Few organizations saw and continues see HR as the living system which keeps everything intact, which adds life to organization, which prepares and leads them in to future. As a matter of fact most of the successful companies today have most successful HR department. So then why there are divergent perceptions, where does HR fit in to the pyramid of value addition? Take an example of a mother, who is a “home maker” ( not mean to say mother can’t earn, it is strictly about a home maker) , she ensures everything is in place at home and makes everything available for the family, she guides, consoles, sets up guidelines and code of conduct at home, brings up children, takes very key decisions, helps in decision making, the only thing that misses here is she going out and earning money, it is done by the “father”. So a home maker mother does not earn money on her own but helps the whole family to earn it. I think in an organization’s scenario HR does the same job of home maker (excluding HR consulting, where money generation is directly related), while HR does not earn money on its own it helps the whole organization in doing that. HR helps the organization deliver by delivering in its own area. In business return/Money/Tangible value takes the ultimate priority, where in a family set up there are much more things attached to it than just return/Money/tangible value addition, that is how I think people start perceiving HR as a cost center, non-value adding function. The other side of the coin most of the HR professionals perceive their function as supreme and argue that without HR an organization cannot survive or it will not exist, the fact of the matter is HR exists because of business, and ultimate decision making rests with the business itself, HR for sure will play a key role, but cannot decide what to be done over and above business’s decision, when I say business I meant the one who funds, runs the business with an objective. Coming back to the point - work of HR and its value addition touches every aspect of an organization like the mother at home, so you cannot fit HR at a particular level and spot on the pyramid. It is everywhere. So the parameter for measuring HR value addition should always be what impact its presence will have on the organization rather what felonies its absence can cause.

So when HR is everywhere obviously it becomes extremely difficult to measure its value addition, however we all know what major areas in  HR  makes it as the living blood for the whole system. They are Talent Acquisition, Training & Organization Development, Performance management, HR operations.

Adding bodies or pumping in Talent?

Talent acquisition attracts a great deal of attention whenever somebody wants to evaluate HR effectiveness, but traditionally for years the way we measure recruitment effectiveness by number of positions filled, time taken to hire, source mix  which does not reflect the real value addition of recruitment function. Parameters mentioned earlier reflects activities performed by recruitment team not the value, take an example of driving a car – if you drive a car with a speed of 100 Km per hour and reached a place in 30 mins, that is a great driving performance, not the real value, you will know value when you compare with what is that you wanted to achieve by driving, if you have reached a different destination that of you wanted to reach the effort is mere waste. Hence while measuring the value of recruitment we should get in to the very purpose of recruitment, why do we recruit people? to add great talent in to organization so that we deliver a great service/product. If this is not met, you probably are not recruiting the talent your organization wants, now how can you measure the value here, would you attribute every product success or profitability of the organization to recruitment? Answer is no, there are much more critical aspects which contribute to success and profitability. It is wise to take the data of employees recruited in a year and analyze – what percentage of people left early, how many non-performers you have from this group (for both cases they could be various other reasons why people leave, can’t perform – you would know those reasons for sure – so do not include them while measuring the value of recruitment), how many of these employees are star performers, what percentage of these have been already identified having potential to move in to the next level or perform more difficult job, take feedback from manager against each role he filled in his team, as to check is he able to get the what he wants from this resource, he might have recruited one with an aim of adding a new skill, if that skill is not added, your recruitment failed of course there is a contribution from that respective manager too for that failure. After having done all this exercise identify those areas where recruitment team needs to focus for next year, pat on their back for the areas they have done well.

Performance management – shake its fundamentals; make it fairer, understandable

I have a fundamental problem with the whole idea behind performance management, the entire HR fraternity is in love with bell curve and forced ranking may be because it looks to be scientific and more because it serves various purposes, like it helps identifying and cleaning up bottom-line, it also helps manager to satisfy their vengeance. So essentially with the model what are we expecting from employees, we are clearly telling look folks only 20% of you will make it in to the top performers so you must compete and do better than your colleague. But imagine what happens to the whole team performance, what happens to the organization, that’s where organizations fail and also results in your best guys leaving. Imagine if everybody on Indian cricket team competing to do better than the other rather striving for team’s success, will we ever win? just imagine Sachin Tendulkar and Virat kohli competing to score a run more than the other, that will result in one guy not giving strike to other, will we ever win. Might looks funny but this exactly what happens on the floor, employees look really amicable and helping each other but majority of them will not share the big ones he is working on because he does not want to give share in the salary hike/bonus to his colleague. It is time we re look at the overall philosophy of performance management and change it in a way that drives team’s performance, like let the whole organization decide what are the most valuable deliverables they had for this year – award all of those who are in those projects, couple it with 360 degree performance management for every employee , so that everybody knows and cognitive of the fact that his colleague’s feedback has value so he/she better cooperate and co-exist to succeed, not in way of Quid-pro-co, any way each feedback should be justified with examples and tangible activities. Take feedback from every employee on performance system at the end every performance management cycle. Improve, innovate it consistently.

Training or capability building?

I think this is the most difficult part when it comes to measuring value, like the recruitment most training departments traditionally measure the activity rather than value, you speak to any L&D professional they talk about how many employees participated in a training program, what percentage of total employees they covered in a year, how many hours each employee spent in training which is again a transactional piece. It is like a person going to most sacred place 1000 times and remain as what he was before, you might visit amaranth 1000 times in your life time but what is the use if it does not make you a better human being? Measuring the value of training department should start from asking are we doing the right kind of trainings that organization really needs?Do an objective analysis do not do trainings that does not add value , over a period of time it will reduce the importantance of whole training function altogether, after every training we ask for feedback asking how was the trainer, environment, facilities provided rather asking the important question – where do think this training will help? Which part of your job you will be able to perform better after this training?

Let us go back to the point of how do we identify right set of trainings to be delivered over the next year, take an example of a software firm having a product, at every release which part of the product you will find more bugs? UI side, Database? That is the area you exactly need to focus and get your resources trained. Track individuals who attended training whether he/she able to contribute in a better way in the areas he got trained, does he still needs someone helps even after getting trained? If this happens on a large scale it is time to look at the whole training function and start fixing it.

HR is not changing at the speed the environment it operates in changing, we need to catch up with the pace and keep reinventing ourselves, after all said and done sometimes HR role looks like a wicket keeper in cricket , you catch 99 balls and drop one, the whole stadium stands up and says his wicket keeping skills are bad, the only way to stop this undeserved blame is keep updating ourselves and being proactive before business comes back to us.