Role of HR : The Brass Tacks Version

?????????????Humor this thought experiment for a moment. What would happen if the Human Resources function ceased to exist completely – if we woke up one morning and no one had ever heard of this term ‘HR’?

?????????????At a time when jobs across sectors and countries are being transformed, Human Resources is no exception. There are better technology solutions, better consultants for different expertise elements, a more educated and savvier workforce comfortable with self-service, standardized automation for processes – all of which continue to shape the way Human Resources operates today. If we would like to see what total annihilation of the HR function looks like, we do have examples – there are some government departments, some new age start-ups, some family-run businesses where there is no HR department at all. And yet, those systems not only function but can also continue for decades without any trace of hindrance to business growth (as can be seen in short time frames). How is that possible if Human Resources is indeed a strategic partner for businesses?

WHAT CAN KEEP RUNNING WITHOUT HR?

?????????????Let’s unravel this by examining the different duties of human resources. And I don’t just mean organizing birthday parties and Diwali celebrations! Let’s keep those aside for a moment. Paying salaries on time is often the first thing one thinks of, but our counterparts in Finance can not only fully manage payroll processing, but also administer benefits, ensure necessary statutory compliances, and insurance covers for all employees.

?????????????Next – HR is expected to hire talent for the workplace. However, line managers can tap into their networks and find talent. This is commonly seen in expertise functions like banking and technology. In Tier II and III cities, local retailers and distributers can recommend good sales teams. Alternatively, admin departments can work with vendors to administer examinations, which can then be used to select large pools of candidates. Once this process is set, it can run for decades without any pesky Human Resource intervention.

?????????????Some CEOs, when asked how HR teams add value to their businesses, say that their true expertise is in managing industrial relations. This requires understanding labor laws of the country as well as local dynamics and also requires strong negotiation capabilities with unions – it’s not something just anyone can do. As flattering as this may sound, it is also true that over the last few decades, unions have weakened, and many organizations work with large, outsourced service teams. They believe that worker management can be outsourced to contractors, and don’t even have HR departments based out of the factory sites.

?????????????What about learning and development, performance management, and talent management? Well, it is common knowledge that 70% of learning happens on the job, and 20% from peers, and hence one can argue that the workplace provides almost all the learning that an employee needs. Work is rarely as static or as simple as written in the goal sheet but keeps evolving, and hence, managers are best placed to determine the quality of performance. Also – HR or no HR – one needs to first gain credibility with the right internal stakeholders for any chance at career growth. Alternatively, some organizations simply promote based on tenure and loyalty, keeping it simple.

?????????????At this point, you might be wondering about other things that you’ve heard your HR teams speak about. Inclusion and diversity, employee engagement, organization design are all important deliverables, they keep saying right? And yet, it is quite possible for leaders to build an inclusive culture within the organization, and many successfully do so. Family-run businesses without HR thrive on personal relationships, which makes employees feel seen and heard[1]. Technology has made it easy to simply launch a form with a set of questions about engagement, analyze responses and take corrective action. Ask any manager in an organization that regularly changes the organization structure about who leads these changes – and the answer is always the CEO or leadership team, isn’t it?

WHAT DOES HR REALLY CONTRIBUTE

?????????????By now, it is apparent that the delivery of Human Resource practices can and do continue even without a dedicated Human Resources team. Then what truly is the role that HR plays in organizations?

Personally, I believe that there are three critical roles – designing effectiveness, strengthening fairness and managing change.

1.??????Is it effective?

?????????????While organizations can operate all people processes based on what business leaders want, such processes may also lead to wastage of resources – time, effort, money, and talent. For example, it is possible to pay employees annually based on affordability, but it may lead to pockets of under- or over-payment. A good rewards team can help benchmark similar roles and determine the right compensation.

Then there’s promotions. One can promote people based on proximity to bosses or tenure, but it could leave the best performers disgruntled. Worse, the business could be dependent on a single leader with no successors. Even worse, it could even result in incompetent people being advanced to leadership roles. When there are no internal standards, or defined expectations from roles, it can lead to a lot of internal friction.

When people processes are well designed and run effectively, businesses can take healthy and consistent people decisions over time.

2.??????Is it fair? ???????????

In any workplace, it is easy for existing biases to get compounded. For instance, you can hire through references, but you may end up with a team which simply mirrors the boss and his worldview. A documented, transparent hiring mechanism can help companies reach out to the right talent and build a more balanced team.

Providing greater access to senior roles by defining and communicating expectations, and providing training to employees can create a fairer workplace for employees. Everyone expects to be treated fairly, and people are quick to recognize when this doesn’t happen. This can get particularly worse among employees with limited bargaining power, such as workers, low-skilled employees, minority groups and more. Remember the old adage – “Justice must not only be done, but also be seen to be done”?[2] That’s where HR teams can truly shine – by setting expectations, communicating them and holding leaders accountable, demonstrating distributive justice[3] in practice. Jargons aside, doing the right things on time matters to employees, whether it is raising travel allowances when fuel prices rise, communicating role expectations before offering and not after onboarding, etc.

3.??????Is it humane?

?????????????One of the critical ways in which HR can support businesses is by making change humane. This doesn’t mean ‘going soft’, increasing severance costs, retaining poor performers, or even avoiding lawsuits. It means managing change in ways that helps employees preserve their dignity. Change is a natural part of doing business, be it a merger or an acquisition, a large restructuring, or redundancies due to shifts in business processes. How employees are listened to, how leaders provide context, how decisions are shared and timelines communicated, how redressal is handled, how feedback is sought after the change – all of this makes a huge difference to people. Great HR leaders bring in expertise and skill in manage change which can have many ripple effects in the organization.

We’ve come to the end of this thought experiment, and we can all go back to our workplaces, knowing that HR teams are still around. However, the realities described above are not uncommon, and can show up in insidious ways. No matter how technology or business realities change, HR professionals will always be relevant when they deliver effectiveness and fairness, making workplaces more humane.

The famous song by Passenger says it all -

“Well, you only need the light when it’s burning low,

Only miss the sun when it starts to snow,

Only know you love her when you let her go…”

I’d love to hear your thoughts in the comments – what examples have you seen where HR delivers on the “why and how” instead of the “what and when”?

References :-

[1] “Formalizing Relationships? Time, Change and Psychological Contracts in team entrepreneurial companies” Lynn M Martin, Shaheena Janjuha- Jivraj, Charlotte Carey, and Srikanth Sursani Reddy, International Handbook of Entrepreneurship and HRM, Rowena Barrett, Susan Mayson 2008.

[2] https://www.barandbench.com/columns/the-origins-of-justice-must-be-seen-to-be-done#:~:text=Few%20sentences%20have%20been%20quoted,of%20this%20case%20are%20interesting.

[3] https://en.wikipedia.org/wiki/Distributive_justice