Organising and managing employees as customers

In this edition of my newsletter, I look in more detail at the impact of a multi-sided (strategic and people-centric) approach to HR, and in particular what the impact of seeing people as customers, as well as workers, has on the way we manage and organise people and work.

It's a longish read, but you can just focus on part ot it, and you might find it insightful and important enough to read the whole article. Certainly, if you're putting a lot of effort into employee experience (EX), this will suggest much more impactful things you can do.

In previous newsletters, I have defined multi-sided HR as an approach which is both truly strategic and fully people-centric. From a strategic perspective, HR must aim to both add value (AV), by aligning people with business objectives; and create additional new value (CV), mainly be offering new business opportunities based on the potential of people.

From a people-centric perspective, HR needs to progress beyond EX (employee value for money) to again, add value for employees (E-AV) by optimising their contribution; and to create new value for them (E-CV) by enabling each individual to meet their own needs as a real customer of the organisation - understanding that this will result in indirect benefits for attraction, wellbeing and retention etc, but not expecting direct business benefits from our actions here.

Organising people and work

Strategic HR - and here, also organisation design (OD) - focus on supporting and enabling a business by better linking people and work.

Adding value (AV) through strategic OD includes a broad range of activities, but probably most important are 1) creating a better fit organisation, moving away from best practices to the things which will make a particular organisation work; and 2) better aligning people with work, often through using horizontal (eg process, project, agile, product) teams.

Creating value (VC) enables people to create and contribute to work more effectively, and here, I particularly recommend the use of communities and networks, creating work through people rather than just using people to do work.

People-centric organisation design focuses on supporting and enabling each employee to meet their objectives from their employment. These organisational activities are actually quite similar to the strategic ones above, as employers and employees often (but not always) value the same things.

Adding value (E-AV) gets rid of drag by better work design and improves contribution by ensuring appropriate levels of autonomy. Both help employees deliver their expected contributions more effectively. Horizontal teams are one great way of providing this opportunity although other actions such as providing individual tasks and projects and enabling mobility help achieve the same objectives too. Enabling people to craft their own jobs and 'innovation time' type arrangements is also particularly important here.

Creating value (E-CV) can also be enabled through communities and networks, however, here, these tend to be more traditional communities of interest and practice, more like employee resource groups (ERGs) than strategic HR's communities of performance. These groups help people achieve their own personal, life objectives.

Managing performance

Strategic performance management helps ensure everyone can optimise their contribution to business performance.

Adding value (AV) through performance management helps align employees around business objectives, for example through 'SMART' goals or Objectives and Key Results (OKRs). Creating value (CV) focuses more on ensuring people can leverage their potential, finding ways to innovate what they do, rather than just improve it, or do more of it. Many years ago, I suggested the acronym 'MUSIC' for this approach:

• Motivational (set mainly to provide intrinisc motivation)
• Unique (personalised, not standard across a role / level etc)
• Sensory(based on what the person will think, see and do differently to provide priming for new behaviours)
• Individual (developed bottom up not cascaded top down)
• Coherent (not about the business, but not not about the business - set in the context of the business and what it sees as important).

As with organisation design, people-centric performance management is about supporting and enabling each person, helping them meet their goals, from their perspective, rather than from the viewpoint of the business.

Adding value for employees (E-AV) helps ensure that people are actually able to deliver for the business, and contribute fully to business objectives. This will often relate closely to actions we may need to take to support business adding value (AV), but because we're switching perspective, can often uncover many different opportunities as well. For example, E-AV goals may relate to more autonomous activity, individually or as part of a team, or actions across organisational networks.

Helping people create value for themselves (E-CV) focuses on the individual goals people have for their own employment and looking at what the organisation can do to help them achieve this. An example is the approach I started as an HRD at EY, developing performance management into a two-way conversation on the employment deal.

Rewarding performance and value

Strategic reward helps align people around the business. Adding value (AV) rewards people for achieving business objectives, often through merit increases or a bonus. Creating value (CV), as with my comments on performance management, encourages people to think about how they can best deliver for the business, based on their own skills and insights, etc. For example, this might relate to discretionary awards or recognition, and profit sharing will support this too.

Adding value for employees (E-AV) through reward encourages people to act more autonomously or find ways to tackle bureaucracy, ensuring that they're able to deliver for customers and the business. Giving people better line of sight to the impact that they're making, ideally through their own P&L, or approaches such as gainsharing will apply here.

Reward isn't really needed for creating value (E-CV) though as the result of these actions are an employee's reward, and will often be much more meaningful than the pay and benefits we focus on within a traditional reward agenda. However, it still be useful to recognise people for working towards their personal goals.

HR's role

As well as adapting HR and OD practices as outlined above, we will also need to continue developing our capabilities and own organisgic HR ation in order to be both more strategic and people-centric.

Most HR people link strategic HR with being more business savvy, however, I have long argued that whilst this is true for adding value (AV), creating value comes from understanding people - human savvy - including empathy and insights from psychology, sociology, anthropology, cognitive neuroscience and behavioural economics, etc. People-centric HR puts even more focus on these human capabilities.

Transforming HR to be more strategic and people-centric will mean following the same forms and structures used within the updated broader organisation design, for example, teams, communities and networks. People-centric HR, and seeing people as customers, will also often require organisations to provide more time and support for all people, not just business leaders. This does not necessarily need to be part of HR, but probably isn't just about traditional line management either. People and team coaches, community managers and network brokers may all become more common roles, and could be part of HR too.

I'll shortly be writing a series of posts and articles on various HR organisation models and you may be interested in reading these too.

So, does this sound right to you? Anything you strongly agree or disagree with? Anything you'd like to add? - let me know...

Find out more

Find our more in the Strategic HR Academy!

Although this Academy did originally focus on more strategic approaches to HR topics, all courses have now been updated to reflect the growing need for HR to be more people-centric too.

Courses include:

• Organisation design (traditional and modern approaches to managing people and work)
• Process design (what work needs to be undertaken and managed)
• Work and job design (how this work can best be undertaken)
• Performance management re-engineering (creating a best fit approach)
• Reward transformation (innovating your reward agenda for the future of work)
• Strategic partnering (transforming your business through HR)
• HR transformation (organising HR to enable better strategic partnering).

The next monthly study group, enabling you to take one of the above courses starts on 13 May 2024.

2 for 1 offer: book one place and receive an additional place for someone else from the same organisation to also participate in the same study group - taking the same or a different course to yourself.

Jon Ingham

Director, Strategic HR Academy