How I understand HR Mechanisms?

This newsletter is aimed at HR professionals who want to contribute to business success and leaders who want to manage their organizations more effectively.

In this third edition, I'd like to delve into how I understand HR mechanisms.

For those who haven't read the first and second editions yet, please do so.

(1) Why I start this newsletter? | LinkedIn

(1) How I understand organization and identify challenges？ | LinkedIn

To deepen my understanding of HR mechanisms, I utilize the following diagram, which I'll explain how I use:

Firstly, I confirm the intention of each mechanism. I understand what each mechanism aims to achieve. Ideally, I'd examine them sequentially from the bottom of the diagram, but often, such case is scarce, so I start with what's available. For instance, I research what a company's Performance Management mechanism aims to achieve.

Next, I understand exactly what is involved in each mechanism. I dissect each mechanism to understand its components, timelines, etc. For example, concerning Performance Management, I delve into elements like goal setting, rating definitions, templates, tools, training content and timing, etc. It's crucial to ensure alignment between the intention and the components of the mechanism, which isn't always the case.

Then, I confirm how each mechanism is operated. I understand how employees perceive, understand, and use each mechanism. For instance, how do employees perceive Performance Management, who decides goals and ratings, etc.? To understand why certain operations are in place, it's essential to delve into the users' understanding. I consider three perspectives: Why, Will, and Can. Does the user understand why the mechanism is necessary, are they willing to use it, and do they have the capability to use it? Deepening understanding in these aspects helps pinpoint why a mechanism may not operate as intended.

In addition to understanding individual mechanisms, it's crucial to grasp the connections between them. Ensuring alignment between mechanisms is vital. For example, if Successor Management aims to accelerate the growth of high-potential talents, but Promotion criteria mandate a minimum of five years' experience at the current position, there's an inconsistency.

From my experience, through understanding HR mechanisms, I've made typical discoveries like unclear intentions, misalignment between intention and content, misalignment between intention and operations, and lack of alignment between mechanisms.

The "Behavior" at the top represents employees' actual actions. I believe "Behavior" is influenced by underlying HR mechanisms. Though not all behaviors can be attributed solely to mechanisms, they do exert significant influence. By understanding mechanisms, I can anticipate behaviors and confirm by observation. Conversely, observing behaviors leads me to investigate corresponding mechanisms. The upward and downward arrows signify this process.

For instance, if there's a lack of initiative towards trying new things, I investigate related mechanisms. It could be that the Performance Management goals don't incentivize innovation, or the Promotion criteria favor those who improve existing processes rather than trying new things. Therefore, understanding mechanisms helps discern the root cause behind observed behaviors.

The "Business Success" encompasses financial outcomes and other aspects. I got inspiration from Dave Ulrich 's stakeholder model. The HR mechanisms provide value to employees. The highly engaged employees in turn provide value to customers. Customers who are satisfied with this value provide value to management, investors and employees in the form of good feedback (financial, reputational, etc.). In this process, value is provided to the community, which in turn provides value to the management, investors, and employees through feedback. This virtuous cycle is the ideal 'business success'.

The arrows between 'Behavior' and 'Business success', some pointing upwards and some pointing downwards, represent the same thing as before. Understand the 'Behavior' that is happening and predict and confirm the state of 'Business Success' (up arrow). Understand the state of 'Business Success' and predict and confirm the state of 'Behavior' (down arrow).

'Business Success', 'Behavior', and the HR mechanisms back and forth to deepen understanding. Then I structure my understanding and formulate proposals. These proposals are then discussed with business leaders, leading to actionable decisions.

Data is crucial in deepening understanding. It offers an objective perspective and becomes vital during proposal stages. On the other hand, alongside data, I value intuition. Un-digitized information and firsthand experiences also hold importance. Incorporating digital and non-digital information, I continuously analyze problems. Then insights derived from intuition often lead to breakthroughs. I am afraid that this is my personal opinion, but while I think it is a good thing that the HR world is often referred to as data-driven these days, I hope that this does not go too far and lead to data supremacy, and that HR people do not throw away the strengths that they have always had in terms of sensitivity, sense and empathy towards the organization. Combining data-driven insights with human sensibilities can lead to better HR strategies.

The diagram itself is based on what I have learnt from Dave Ulrich and various other gurus, which I have created for my own ease of use. While I have the utmost appreciation and respect for them, I think that the diagram itself reflects my own habits of thought. Therefore, I recommend customizing it to suit individual needs rather than using it verbatim.

That wraps up this edition, where I shared how I understand HR mechanisms. I hope this proves helpful to you all. Please note, this newsletter reflects my personal opinions and is not affiliated with any organization.

I hope to write another useful article for you in the next edition. Stay tuned!