The Effectiveness of an HR Operating Model depends on 10 dimensions

?? HR is not about HR, but about creating value so the classic Ulrich model remains relevant and dominant today.

After analyzing the 9 models of HR function from 9 leading consulting firms ( 埃森哲 , Academy to Innovate HR | Enterprise 德勤 , Gartner , Josh Bersin , KPMG , 麦肯锡 美世 普华永道 ), any effective HR function has 10 dimensions that make up the HR value logic and Human capability defined as Talent, Leadership, Organization and HR - delivers value to all stakeholders in today’s changing business context, thus building the case for HR functional excellence from a value logic - according to a new interesting research published by The RBL Group researchers - using data from 3 comprehensive recent research studies with tens of thousands of individuals in and out of HR and thousands of organizations that define the HR value-added approach to functional excellence.?

?What's an effective HR Operating Model?

Researchers suggest that any effective HR function has 10 dimensions that make up the HR value logic, as highlighted in above figure and researchers show also the question for each of the ten dimensions and RBL contribution on how to answer these questions.

?? They found that HR design (dimension #4) is necessary but not sufficient for HR value added and that while using different labels, HR design has commonly accepted approaches.

?Difference between RBL proposal HR model VS Other 9 HR Functional Models by 9 consulting Firms

RBL Researchers highlighted 3 major difference between these 9 model and their own research:

1?? They believed that the nine operating models use a host of research approaches - some did not report their research - from case studies to targeted interviews to surveys of senior HR leaders to participants in training programs. We are confident that our ideas come from a rigorous research base that guides actions.

2?? While most approaches used the term “customers” of HR, the primary customer is the employee, and HR is designed to increase employee experience (measured by satisfaction, productivity, and retention). Little mention is made of defining HR success through value created for external customers and investors or of including customers and investors in designing and delivering HR practices.

3?? Almost all consulting firms discuss a mostly similar design of the HR department (or operating model) using different terms to highlight how HR expertise -specialized knowledge- can be applied to business problems

?Connection of the business context and the HR function.

Researchers call this the HR value creation logic because it has an?outside-in logic?with HR actions designed to create value for stakeholders.

?? This logic defined what stakeholders receive from Human Capability (talent, leadership, organization, and HR department) initiatives, which defines the effectiveness of the HR function.

?The 6-Step logic for HR Value Creation

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The researchers offer a 6-step logic to improve HR value creation for any organization:

??Adopt Integrated Framework of 10 dimensions

?? Measure and Identify gaps

?? Prioritize Goals and investments

?? Take Action and Track performance

?? Share, Engage and Reinforce

?? Define Business Case and opportunity

?Every organization changed their HR Operating model

An interesting research called "HR Operating Model Report 2023" published last month by The Talent Strategy Group found that nearly 2/3rds of HR organizations made changes to their design or operating model within the past two years. This indicates a widespread dissatisfaction with the current functioning of HR operating models and a search for more effective solutions.

?? Researchers believed that it’s not new HR operating models that are needed but more clarity and discipline in operationalizing the current model.

?Align HR Department structure to Business Strategy and Structure

Researchers believed that the HR department structure or design should match the business structure or design.

?? If a business is centralized (single business), HR is likely to be organized by function (staffing, training, compensation, organization design) for the entire business.

?? If a business is completely decentralized (essentially a holding company), then each business would have its own unique HR functional experts.

?? Since most businesses are some version of both centralization and decentralization (called a multi-divisional firm, allied/related, conglomerate, or diversified), HR’s most common design response is to have specialists (centers of expertise, experts) who have deep expertise and then transfer or adapt their knowledge to HR generalists who work in the business, geography, or functional organization units.

??Finally, RBL researchers conclude that HR as a department operates like any professional service firm that?turns its knowledge and expertise into its client’s success. By improving on these ten dimensions explained in this study, HR leaders will help create human capability (talent, leadership, organization, and HR department) that will then be used to deliver stakeholder value.?

Thank you?? The RBL Group ?researchers team for these insightful findings: Dave Ulrich?Norm Smallwood?Joseph Hanson? Joe Grochowski Ernesto Uscher

George Kemish LLM MCMI MIC? Marc Effron

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