Professional HR. Evidence-Based People Management & Development

Posted on July 9, 2012 by Paul Kearns

Evidence-Based HR is now incorporated into my latest book “Professional HR. Evidence-Based People Management & Development” and you can now join IHRM, the new Professional Institute of HR Maturity.

BUY THE BOOK NOW

“That’s the state of play in human resources today mindless imitation of what others are doing, little to no systematic evaluation of the effectiveness of management practices and programs, infrequent data-driven diagnoses of the problems HR is expected to address, in short, little of the professionalism now almost taken for granted in medicine, to take just one example.”

From the Foreword to the book by Professor Jeffrey Pfeffer, Thomas D. Dee II Professor of Organizational Behavior, Graduate School of Business, Stanford University, co-author of ‘Hard Facts‘ and a leading advocate of evidence-based management.

Reviews

‘This is an important book that provides a positive road map for the future of the H.R. profession. Its importance lies in its willingness to address the big questions: why has Human Resources been at the crossroads for over a decade? What does it mean to operate as an H.R. professional? How can H.R. apply evidence based practice to be more systematic in its priorities and evaluate the business impact of its activities?

The book, a combination of analysis, argument and anecdote, check-lists and case studies, ranges far and wide in exploring the debate about the role of Human Resources, the nature of professionalism and the utilisation of evidence based practice.

Professional HR is also a refreshingly authentic book that provides a candid insight into the connections between academic research, consultancy activity and H.R. practice. Paul Kearns takes on with insight and courage: snake-oil consultancies selling solutions of dubious value; the academics that gave their blessing to any number of flawed research wheezes; those H.R. practitioners who valued prize winning more than the implementation of processes that “worked”; and the various professional bodies that stood on the side-lines rather than a take a lead in raising and reinforcing standards.

For some, this book – with its willingness to “name and shame” several of the players who contributed to H.R.’s current reputation – will be an awkward reminder of a past that missed opportunities to establish Human Resources as a critical component of organisational success. For the emerging H.R. practitioner who wants to make a positive impact through a combination of a professional ethos and evidence based practice, Professional HR will be indispensable reading.’

Andrew Munro, Director of AM Azure Consulting

‘Kearns’ book is a timely reminder that neither precise, legally enforceable regulations nor reliance on human moral points of failure can address the paucity of moral courage and deliberate systemic myopia of our political and corporate leaders, or of academic experts. What he is seeking is a widening of the purpose of management to include value to society, humanity and stewardship and to resist the corrosive effects of relying on narrow performance measures like profit. Kearns is advocating that his brand of professionalism be central to organisational life. He asks the right questions, itself doubtless a process of testing hypotheses and paying attention to the quality and relevance of data, blending critique of methodology with topical examples and practical checklists. Kearns’ Professional HR, to be sure, is worthy of a wide managerial readership.’

Dr Wilson Wong, Academic Fellow CIPD

‘Professional HR is every bit as ground breaking as his previous book HR Strategy: Creating Business Strategy with Human Capital. Kearns’ new work points out clearly that the lack of professionalism and standards are destroying the public’s faith in business, and in many cases, businesses themselves. He makes it clear that evidence-based professional HR management is the way to stem the tide. This book is a blueprint for training a new generation of true HR professionals.’

Patricia Turnham, Kaplan University, USA

‘Amidst the fallout of a deep economic depression, the malaise organisations find themselves operating within affords a very real opportunity for HR professionals. HR has the chance to become what it has failed to do since its strategic aspirations were first voiced in the 1990′s; the chance to become a value proposition for organisations. This value proposition is about demonstrating that the very best people management is a route to healthy, vibrant and sustainable organisations that produce real value for all stakeholders. Paul Kearns’ book shows how and why HR professionals should take this opportunity and reposition both themselves and their own organisations to succeed in the 21st Century.’

Stuart Woollard, Kings College London, UK

‘In this book Paul Kearns provides a compelling vision for the future of the HR professional and the HR profession. This vision challenges the HR professional to approach their role in a far more reflective and evidence based way. Kearns provides a convincing prescription for how a more professional and mature HR practitioner can deliver on the potential and value of human capital which remains untapped in many organisations.’

Prof. David Collings, Professor of HRM, Dublin City University, Editor, Human Resource Management Journal.

That brash and intimidating humvee called ‘The American Way’

Posted on July 2, 2012 by Paul Kearns

I have just returned from a week in Pakistan where I taught strategic L&D Masterclasses in Karachi and Lahore. When I received the original invitation, some months ago, I thought really long and hard before I decided to accept but still viewed the impending trip with some trepidation (especially after reading the advice from the UK foreign office). This was one of those trips you do not do just for the money. As an evidence-based manager I wanted to see it and experience it for myself; following the principle of genchi genbutsu that I learned from Toyota. I am really glad I did because this was one of the most rewarding trips of my entire career. Both groups were amongst the most intelligent, most eager to learn, most open-minded and most mature in their thinking of all the groups I have ever worked with anywhere in the world. Maybe ironically, dire political and economic circumstances can somehow bring out the best in people rather than the worst? Oh, I forgot to add, they were incredibly polite and a real pleasure to work with. I can also recommend flying PIA.

Did you just notice something as you read that opening paragraph? Stop for a second and consider the perspective I appear to be taking – did it not sound incredibly patronising? Why shouldn’t the people in Pakistan be better than some of the best people I have worked with; in fact why should they not already be better than me and anyone else in the West? So let me immediately apologise to anyone from Pakistan who I might have already offended. My praise is genuine and does not come from a place of assumed superiority, quite the opposite, it comes from a heartfelt and humble desire to learn with and from the best. It comes from the best traditions of the real gurus in the East – where the Sanskrit term for “teacher” or “master” originates. The real wisdom of the guru surely comes from their humility and acute awareness of their own ignorance whilst trying to contemplate the world around them, in order to make sense of it. This is why those who seek true enlightenment have often travelled to the Indian subcontinent.

Maybe that is why I now feel more enlightened. My trip to this dangerous neck of the woods made me start thinking about what was happening back at the ranch. Having worked in HR for over 30 years, and taught many management classes, I always reacted against the notion of such a thing as a ‘management guru’ and particularly from the country that seems to think it has more than anyone else – America. I am also conscious, particularly these days, that any hint of ‘anti-Americanism’ could get me into trouble because that is associated with those who blindly follow an opposing ideology. Yet that is precisely my point, any ideology that is followed blindly always ends up in intimidation and that is not good from a human capital management perspective. So what is this ideology called the American Way and is that ultimately in America’s interest, never mind anyone else’s?

Here is my take on it. By definition, ideologies are simplistic and dogmatic – the less thinking you have to do the better. The profit motive that supposedly underpins capitalism in the US is the simplest ideology in the world – you invent or make something, if customers like it they buy it, you make a profit, they are satisfied, everyone is happy. If it were that simple though why do gated communities start springing up in the most affluent areas? If the sole motive of profit* is such a great way for us all to get along why does it have to split us apart? If the people you have to employ, to make things customers want, are not 100% behind your philosophy then what are your chances of achieving your own simplistic ends?

The American Way certainly has some great strengths. America welcomes talent and is generally a democratic meritocracy: that fits perfectly with getting the best value from human capital. It has also done a great job, thus far, of providing Americans with great wealth and a very high GDP per head: let’s not mention the US’s huge debts or inequalities though. In short, no ideology can be that simplistic and, the way the world is shifting at the moment, simplistic ideologies are snapping under the weight of changing paradigms. So anyone who has learned their management practice from the American Way needs to think again but the dogma is so deeply-rooted in the American management psyche it tends to want to run over everything that it deems to be in its way. It is the philosophy of ‘my way or the highway’ – it’s just a big, brash humvee. Silly me – I always thought humvee had something to do with humans in vee-hicles. How wrong I was.

One extremely successful company that embodies the entirety of the American Way – its best and worst traits – is Google. It was founded by two very bright people, whose ancestors may have emigrated to the US, who received an excellent education and used their brains to innovate. I truly bless the day Google allowed me to reduce my research time down to a fraction of a second, it could possibly be the greatest innovation of all time, benefitting everyone in the world. I might even go so far as to say I don’t mind a company holding a monopoly and literally ‘printing money’ – as long as that monopoly is not abused. Then I have to keep reminding myself that no social, political and economic system can ever be that straightforward. Google is megalomania. I don’t ever remember being asked whether a Google vee-hicle could trundle down my street and take photographs of me and my house. Worse still, no doubt the CIA do some of their research using Google and I’m now on their anti-American list (read to the end fellas, it ain’t that black and white). I only want the good bits of Google thank you and the only good bits will be the democratically-sanctioned bits – so how anti-American is Google?!

I can even understand how the halo effect comes into play. High profits lead the unthinking to assume that the management at Google must be equally talented and effective but I have seen no evidence from Google that they have any idea what good management means, never mind evidence-based management. In fact techies are famous for their lack of interpersonal and other managerial qualities (Google acknowledge this) so let us think really hard and choose our evidence very carefully before we jump to any conclusions.

What conclusion would you draw from the The New York Times (12th March, 2011) article entitled “Google’s Quest to Build a Better Boss”? Here, in my humble but evidence-based opinion, are some of my own tentative conclusions. Its head of HR, Laszlo Bock, does not know how to build better bosses, presumably even after many years of working in the field called HR, which is supposed to be good at managing and developing people. What does that tell me about the profession of HR – is it all smoke and mirrors? Maybe. It is more likely that the problem has always been one of measurement, how do you measure what makes a good boss? Apparently nobody in HR knows, that is presumably why Bock recruited Prasad Setty (a mathematician) to crunch some ‘HR analytics’.

‘HR analytics’ is a new piece of HR jargon, invented in America to pretend that they are evidence-based, that does not stand up to the slightest scrutiny. It is based on the very old ideas of HR measurement ‘guru’ Jac Fitz-Enz, who received SHRM’s blessing, despite causing HR to veer off the road a long time ago. It has yet to climb out of that ditch because of its inability to admit it was wrong. The same psyche is compelling Lee Webster, SHRM’s HR standards director, to jump into the driving seat of America’s ANSI humvee and take over the chair of ISO committee TC260 on international HR standards. This is the downside of the unthinking American Way. HR at Google is the disease run rampant in my view. Should Google shareholders be afraid of what Bock is doing? Yes. Are current American HR practices a threat to the best aspects of the American Way? Most definitely. Maybe the CIA ought to be investigating its own HR department first for signs of un-American activities? It gets even worse – we are actually witnessing the birth of the next big HR fad.

According to the NY Times article “D. Scott DeRue, a management professor at the Ross School of Business at the University of Michigan, applauds Google for its data-driven method for management.” I don’t think an evidence-based management professor would be applauding Google; they would be advising serious caution. Even if Google were good at this the professor should be saying don’t try and copy Google. GM tried to do that with Toyota and look what happened to them because they did not (and still do not) fully understand Toyota’s Eastern philosophy. So what is already being endorsed and disseminated in the headlines as leading edge practice (without any evidence of profit) could actually be worst practice. Such American management practices can so easily become a deadly virus. They already are. Go now and check your competence framework and calculate the damage it has already done. Better still, go back and check every single, non-evidence-based, ‘HR best practice’ you have ever copied from all of your similarly non-evidence-based HR peers.

Alternatively, take a trip to Pakistan and meet some of the thoughtful people there who do not pretend that they know all the answers; who did not bat an eyelid when I said, on day one, that we were going to throw HR best practice out the window and who did not have to rise to the challenge of thinking for themselves because they already do. They readily accepted my advice that unless you can see the sense in something yourself you will not be able to get anyone else to. More importantly, although most of them worked in commercial companies that had to make a profit, I sensed that they go to work for a much higher purpose than pure profit. That might not be the American Way, it might not even be the highway but it is certainly the most intelligent way.

*See ‘The Value Motive’ for a more humane alternative

A phenomenal shift in HR and L&D performance is coming

Posted on June 20, 2012 by Paul Kearns

Are you behind or ahead of the professional curve?

One of the earliest posts in this series laid down a fundamental tenet of evidence-based management (EBM) – the bell curve – and the need to show an improvement in performance. To justify our salaries HR and L&D professionals have to produce evidence that our work produces a positive shift in the performance curve of the human resource. It should also be obvious, to any HR or L&D readers, that they themselves are already inhabitants of the bell curve for the entire profession. Unfortunately the current version of that curve is a phenomenon, an aberration – it is in negative territory (see the curve on the left in the above chart).

The simplest employee performance curve – say from 1 to 10 with goalposts placed at 3 and 8 – will not normally have a minus scale because anyone performing that badly would have been fired. Yes, we all know executives who seem to be exceptions to that rule but, leaving aside the issue of management failures, performance curves usually start on the right side of zero. In HR and L&D we should expect any practitioner to be getting no lower than the minimum acceptable score of 4 and this is exactly how we should be viewing SHRM’s current efforts. ASTD do not seem to be following SHRM’s lead and the CIPD is still looking for insights. However, if we ever do set internationally recognised standards we will eventually start to see a normal curve form; as long as the standards are enforced.

In the absence of any international standards the only other standard that can be set is the simple question – where is your evidence? Anyone in HR and L&D that does not have evidence of the performance benefits they bring to the organisation is, by definition, producing a negative ROI – their costs outweigh their benefits. Measurement is the key to professionalism so the sooner we have some credible standards, against which HR and L&D professionals can be measured, the better. SHRM’s first attempts at standards are misguided and wide of the mark because they are not measuring value and ASTD, who should know better, does not know how to evaluate, despite teaching every single one of its members that evaluation is a necessary and absolutely integral part of the learning cycle.

It is a strange phenomenon indeed that a global profession should still be searching for a solid foundation; so it will take an equally phenomenal shift in thinking if we are to put this situation right before our paymasters find us out.

CIPD’s ‘Next Generation’ are stuck in the 19th Century

Posted on May 2, 2012 by Paul Kearns

If you should ever have cause to visit the CIPD’s office in Wimbledon don’t be fooled by the modern façade: inside is a perfect replica of how dismal life must have been in the first half of the 19^th Century. They may talk about their ‘Next Generation HR’ but their methods and level of professionalism are exactly where the medical profession was back in 1858: -

“The ‘professionalization’ of medicine in the nineteenth century has long been a subject of interest for medical historians. They have shown how this period saw the creation of new institutions and formal mechanisms for regulating medical practice, and for distinguishing the ‘qualified’ practitioner from the ‘quack’. In Britain, a key development was the Medical Act of 1858 which established the General Medical Council and the Medical Register, a public list of all recognised medical practitioners.” (University of Manchester, ‘Making of the Medical Profession’)

The lack of a General HR Council, one that would actually enable HR practitioners to stand as tall as the medical profession, has been my biggest bugbear since joining the world of HR in 1978. So, when I was invited by Xpert HR to write a guest blog (February 2011) I chose to aim my ire at the CIPD’s dismal performance as the upholder of professional standards. Realising this might depress many readers I decided to sweeten the pill with liberal dollops of humour. Unfortunately I overdid it as some of those commenting on the piece thought I was joking so, for the record, I wasn’t!

Fast forward a year and the CIPD still shows no sign of taking itself or its 19^th Century members seriously. Its new petticoat, laughably referred to as a code of conduct, will not hide its shame or spare its blushes with no General HR Council in sight, no definition of what ‘professional’ means and no attempt to move the profession onto an evidence-base.

Meanwhile, proper questions about what it might mean to be a professional manager are being posed by the most prominent protagonist in the evidence-based management movement – Professor Jeffrey Pfeffer – who concludes in his HBR column (September 2011) entitled “Management a profession? Where’s the proof?” –

“Before management can be considered a profession, its practitioners will have to see themselves as part of a larger purpose. But it took more than higher aims to move medicine beyond quackery. It took science and its application to practice. In a world afflicted by complex problems we should have more assurance that managers will also draw on knowledge greater than their own.”

When set against Pfeffer’s tough, evidence-based criteria, having the letters FCIPD after your name confers about as much professional credibility as the 19^th Century doctor in the picture above. In case you might be wondering what he is up to it comes with the helpful caption -

“Classic illustration of a woman’s medical exam by her doctor. Many 19th century medical textbooks used this illustration to show the proper manner to examine a female patient. The physician’s eyes are diverted so he will not violate the woman’s “modesty.”

American ‘HR metric mania’ is a concrete lifejacket

Posted on March 20, 2012 by Paul Kearns

Quality standards often get a deservedly bad press. Tom Peters ridiculed ISO9000 by suggesting that a lifejacket made of concrete would satisfy the standard. He was perfectly correct of course because the standard is more concerned with process than outcome or the functionality of the end product. It is a pity no one on SHRM’s Taskforce for HR Standards had learned this lesson before it submitted its first attempt, Cost Per Hire (CPH), to the American National Standards Institute (ANSI).

We do not have to look very far for evidence of setting concrete. Page 3 of this standard – the Executive Summary – tells us that:

“The CPH metric has been in use for decades, providing HR professionals and
managers with information to assist them in establishing budgets and also serving as a benchmark for recruiting effectiveness and the efficiency of staffing processes.”

CPH was just one of many ‘HR metrics’ promoted by the work of SHRM’s favourite, number-crunching, benchmarker Jac Fitz-Enz but neither he nor SHRM ever showed any understanding of the crucial distinctions that must be made between efficiency, effectiveness and value (that’s $’s to you and me).

Cost-per-hire is just the average cost of recruiting someone. It does not tell you whether that person is of sufficient quality to do their job effectively. Nor does it tell you anything about their subsequent performance. So to claim that it can serve “as a benchmark for recruiting effectiveness” is actually a lie and to suggest it gauges “efficiency” is also nonsense until the outcome, the performance of the new hires, is established. You could be hiring idiots at a very low cost and it would still satisfy this standard (sic). In short, this is not a standard at all.

In fairness, the standard acknowledges some of the “Known Limitations” of CPH (6.4) but then blithely carries on without resolving any of the complex issues inherent in the pursuit of value through strategic HR management. This simplistic approach also ignores, or is unaware of, the paradigm shift required to move HR onto an evidence-based management footing.

As a lifelong campaigner for improving HR professionalism I should be welcoming the introduction of standards. I was even a volunteer on SHRM’s Taskforce for six months before I realised that no one was listening to common sense or learning from their own mistakes. History tells us that the use of such HR metrics never improved HR’s credibility or reputation in the US (or anywhere else for that matter).

What worries me more is that SHRM now wants to use its ANSI standards (there are more in the pipeline) as the basis for globally recognised, ISO standards in HR. If it manages to do so there will be many HR departments, not just in America, who will be drowning under the immense weight of this misguided bureaucracy (all 50 pages of it). As an adviser to the British Standards Institute (BSI) on the same ISO-HR standards effort I will certainly be doing my best to ensure that the UK does not get dragged down with them.

Update – 9th June 2012 – the Americans have now submitted the ANSI CPH standard to ISO for approval as an international standard. It will be put to the vote in September 2012. See also HR Standards

‘HR Best Practice’ is the enemy of Evidence-based HR practice

Posted on November 19, 2011 by Paul Kearns

Ask any HR director whether they are using ‘best practice’ and of course they will say ‘yes’ if for no other reason than they believe ‘no’ to be the wrong answer. Even if they genuinely mean ‘yes’ it is simply because they are copying what everyone else is doing. They follow the same ‘best practice HR’ shopping list which is now about as long as a till roll (e.g. talent, competence, engagement, 360 etc.) It is just a pity that none of the goods on these shelves are evidence-based.

The term best practice used to actually mean something and became standard terminology when manufacturing companies tried to adopt total quality management in the 1980’s. It became synonymous with that other well-worn cliché – ‘world class’. The original reference point for both was the now famous Toyota Production System, which every self-respecting manufacturer has been desperately trying to emulate. Inherent in the Toyota Way (the Production System was only part of their total philosophy) was probably the first ever management philosophy of maximising the value of human potential – although if you looked for the words ‘human capital strategy’ in the Toyota lexicon you would not have found them.

Put these 2 facts together and you will understand why HR is in a mess. It will also demonstrate how only those companies that can see the connection between human capital and organisational value will be able to reap all of the benefits on offer. So HR needs to jettison any notion it ever had of ‘HR best practice’ and start looking for evidence that anyone in their organisation has the slightest idea about what maximising human potential really means. As always, HR’s biggest threat is also its best ever opportunity to put itself on the organisational map.

Evidence-based practice is the only best practice and, by the way, that is true of any organisation, not just manufacturing.

The Rise and Fall of America’s management ‘empire’.

Posted on September 5, 2011 by Paul Kearns

There are many, many things that I have come to admire about the ‘American Way’ over the years but human capital management isn’t one of them (nor the subtlety of their automotive designs).

Having experienced, at first hand, the style of people management methods amongst some of the biggest American corporations (Exxon, Ford, GE, GM, IBM, Microsoft, Oracle, Texaco) it always struck me that any success they achieved was in spite of, rather than because of, their people management. The evidence to support this view has been growing steadily over the years (and is presented throughout this series) but to get to the heart of what is wrong in American management one only has to look at America’s inability to learn from its own mistakes.

This is most clearly manifest within the very institution that should be promoting learning – the ASTD (American Society for Training & Development) – which always based evaluation of learning on a poorly designed model from 1959 – Kirkpatrick’s 4 levels. When the design flaws apparent in this model were exposed, during the TQM revolution of the 1980’s, what did ASTD do? Instead of admitting they had failed, and returning to the drawing board, they moved into hyper-over-engineering mode and bolted on another superfluous ‘tailfin’* (Jack Phillips’ fatuous ‘level 5’) in the hope that the new look might deceive corporations enough for them to continue employing their members.

So far, American management has fallen for it. That does not worry me unduly and should please managers from competing countries. No, what really concerns me is that the ASTD is now trying to force perfectly sensible learning and development people, from around the world, into following its asinine lead. You don’t need to be a historian to realise that all empires go through a natural, rise-and-fall cycle and there is a now a big question mark over the West’s future but is this just another tell-tale sign of it entering its descendency phase. By the way, the word ‘descendency’ does not appear in either American or English dictionaries.

It is equally well documented that the grieving process tends to follow five phases of denial, anger, bargaining, depression and, finally, acceptance. So you might think that the US is already well into the bargaining phase; as evidenced by its internal, political wrangling over its inability to tackle its huge debt, but actually America is still firmly in denial. They are still trying to convince themselves and the world that HCM is something they are actually quite good at. This is why, if you want the ASTD’s blessing, you will have to attend one of Phillips’ garage workshops on how to add an enormous and costly tailfin to your ‘Mini’ (or whatever model you drive). It might look ridiculous and not fit very well but you’re stuck with it because it only comes in one size – ROI.

You would be forgiven for thinking that, as a Brit, I am being partisan here if it were not for the fact that I am the first to admit that we are no better at HCM in the UK. We might take a less ostentatious, more thoughtful, approach but thoughts don’t amount to a hill of beans. To experience minds that are completely open to new ways of addressing the human dimension of large corporations (and Governments) you need to travel much further East; to a very different, underlying philosophy. We have been here once before, when the Japanese taught the West a few lessons about how to manufacture efficiently, but there was always so much more that we needed to learn – not least of which was some humility.

When I teach in the East** myself I know they don’t have all the answers either but their great strength is that, unlike the Americans, they don’t try to pretend that they do – and neither do I. Empires that are built on hubris crash and burn for the very same reason. When you have believed that you are the best for so long you tend to breed people who either believe their own hype or, worse still, are too frightened to challenge it – why do you think Hitler employed Goebbels? When hype trumps reality learning ceases and the problems really start.

I still think early reports of the West’s demise are, in the words of one wise American – Mark Twain – greatly exaggerated, but my own prediction would be that the next, most sustainable, management empire is likely to be founded on clear evidence that management is learning to best serve society – not some ugly tailfin.

*Many other evaluation models have emanated from the US over the last 30 years or so – all of them adding unnecessary paraphernalia and gadgets rather than focusing on super-charging the engine.

**Beyond Evaluation & ROI

EB-HR, Human Capital Reporting and International HR Standards are all closely connected

Posted on August 9, 2011 by Paul Kearns

There are three, seminal, management ideas that have been moving inexorably towards each other over the last 50 years and they are finally beginning to meet up at the same junction: -

Evidence-based management is emerging as a superior approach to management
Employees are increasingly being viewed as another form of very valuable capital that has to be expertly managed to achieve differentiation and greater returns
Tougher standards have to be imposed if HR and L&D are to achieve the same level of credibility and gravitas as other professions

The first of these, the concept of being evidence-based, is extremely simple – only do those things where you have evidence that they work. Human beings are already hard-wired to do exactly this – we made fire because the evidence was obvious that it would keep us warm and feed us. Intelligent managers, with common sense, will already be basing most, if not all, of their decisions on the obvious evidence of costs, output and quality figures.

However, the larger an organisation becomes the more its managers tend to lose sight of any direct connection between their decision-making and outcome. Take pharmaceuticals, with a 12 year product development cycle, or the long-term planning of health services: here, simple common sense is just not up to the job anymore because the complexities and organisational dynamics involved require a higher, more sophisticated level of management capability. We have already witnessed the evolution of concepts such as ‘total quality management’ and ‘balanced scorecards’ whose schemes try to ensure the whole organisation is working well as an organical. This thinking exposed the weaknesses in old-fashioned managerialism and stretched it to breaking point; as evidenced by the on-going, sovereign debt crisis in Western economies that has yet to find a coherent or sustainable response.

Meanwhile, it has become widely accepted that the difference between the market and book values of large corporations is connected to how well they manage their human capital. This has placed managing the expectations and performance of people firmly at centre stage. Despite early resistance the term ‘human capital’ is beginning to stick because the players most interested in understanding these connections, the financial and investment analysts, are struggling to come up with explanations themselves so they are the ones putting pressure on organisations – and their HR ‘experts’ – to come up with answers.

All of these forces have put HR management in the spotlight and so far the HR profession’s response has been woeful. Initially, in the early 1990’s, HR departments thought the answer was to measure themselves (e.g. Saratoga-type data of input and transactions) but it has become increasingly clear, especially in the wake of the financial crisis, that this does not offer the right evidence. Consequently the whole concept of what it means to be an ‘HR professional’ is called into question because the traditional skill-set of the HR practitioner is being seen as inadequate; hence the drive to the business partner model. The evidence is also clear that many companies have failed to perform, notably the banks, despite having adopted ‘progressive’ HR policies.

HR still has a lot of convincing to do and it has to start by ensuring its own professional standards are up to the job; hence SHRM’s current project on professional standards and metrics under the auspices of a Director of Standards and its efforts to move towards an ANSI (American) standard for HR that they hope will eventually become a globally-recognised (ISO) standard.

Behind all of this though lies the simplest tenet of all that underpins evidence-based management – the need for BASELINE EVIDENCE before you start trying to manage people more effectively. The majority of conventional HR and learning methods are fixated with process, technique and ‘best practice’ rather than on any evidence of outcomes required in a particular context.

So HR Directors need to be acutely aware of what this potent mix of EB-HR, HC Reporting and International Professional Standards means for them. Regardless of what credibility they might have earned in their careers to date, and irrespective of the ‘best practices’ they espouse, they will have some serious thinking and explaining to do when one of their international competitors manages to mix the perfect cocktail with these three, key ingredients.

HR playing the Fool

Posted on April 1, 2011 by Paul Kearns

I was sorely tempted to write an April Fool’s piece today but instead I opted for a history lesson on ‘The HR Department’. In case you were still wondering, this is not a site for HR people – or at least not the majority of those in conventional HR roles. As far back as I can remember there were soothsayers predicting that HR was at a ‘crossroads’ and had to decide which path to take. In 1991 I decided to take a very different path to the one that the other 99% of the ‘HR profession’ thought was a safer bet. So let’s go back 20 years and remind ourselves what the current thinking was then.

1991

The precursor of the UK’s CIPD was the IPM (Institute of Personnel Management). Its president was Barry Curnow who wrote a piece for Human Resources magazine (Summer issue) entitled -

“Measuring the intangible – performance criteria in jobs without a bottom line”.

Barry, obviously having a penchant for self-immolation, did not present the most positive face that one might expect from a professional body’s titular head. But even in 1991 Barry was totally out of touch with the real world, which was increasingly demanding a ‘total quality’ approach to management that had to exclude all muda (a Japanese term used in the Toyota Production System for an activity that is wasteful, unproductive and adds no value) and personnel people were definitely starting to be seen, at best, as a necessary evil and, at worst, as the PC (political correctness) police.

1993

Two years later I was asked to speak at the IPM’s annual conference on the radically new theme of ‘The added value of Personnel’ (HR was still not on the scene). Someone had finally decided that the Personnel department should at least acknowledge it had a bottom line. Although it had not yet registered with the 500+ members in the audience: the majority of whom had bemused looks on their faces, as though I were speaking a foreign language.

The keynote conference speaker that year was Dr. Richard Pascale (“The art of Japanese Management”) who told his audience -

“In the US people in personnel take on a psychological contract to be a victim.” (reported in Personnel Today, 9 November 1993).

So the US experience was no different apparently.

1995

By 1995 the response from beleaguered personnel departments, to all of this damning criticism, was to re-invent themselves as ‘HR’ – because it sounded more like the sort of department that might actually have a ‘bottom line’. Yet the guy who had taken over Barry Curnow’s role, the infamous Geoff Armstrong, was having none of it. In a book review in Personnel Today (23 February 1995) he predicted –

“In my view, it is wrong to tie strategic people issues to the HRM bandwagon. They were around before HRM was invented, and will still be around long after its faddish label has faded.”

Whilst over-staying his welcome at the CIPD, and building a sycophantic regime that even Colonel Gaddafi would envy, Armstrong arguably did more damage to the cause of business-focused HR professionalism than any other person. Certainly it set back the CIPD’s development by at least 10 years, IMHO.

1996

Meanwhile observers such as Thomas Stewart in Fortune magazine (15 January 1996) had a simple solution to the HR department ‘problem’ -

“Why not blow the sucker up?”

and added -

“Human resources has come to the proverbial fork in the road. One path leads to a highly automated employee services operation…. The other leads straight to the CEO’s office.”

What he didn’t cover in any detail was what the HR director would do once they got there (having never been a strategic HR director himself). Stewart is now the MD and editor of Harvard Business Review (HBR), a journal that has also failed to come up with an answer to maximising HR’s impact on the bottom line, despite publishing many questionable ‘solutions’ in the meantime (Prahalad and Hamel’s ‘core competence’ theory being probably the worst culprit, IMHO, although W. Chan Kim and Renée Mauborgne’s piece on ‘Blue Ocean Strategy’ gets my personal award for the most crass HBR article of all time). I think it’s high time he blew that sucker up as well.

1998

Then Dave Ulrich turned up on the scene with his own HBR article entitled “A new mandate for human resources” where he argued -

“In recent years, a number of people who study and write about business have been debating whether we should do away with HR. The debate arises out of serious and widespread doubts about HR’s contribution to organizational performance. And as much as I like HR people, I must agree that there is a good reason for HR’s beleaguered reputation. It is often ineffective, incompetent, and costly; in a phrase, it is value sapping. But the truth is that HR has never been more necessary.”

This was a very clever article. Ulrich knew his audience. At a single stroke he wrote off HR departments as ineffective but then held out the prospect of a promised land, for the very same people who were so obviously ineffective, with his magic wand that would transform them all into strategic, business partners. He also remembered that when ‘personnel’ people were struggling in 1991 they were happy enough to just change their name rather than their modus operandi. So he offered them an opportunity to pull the same stunt again, with new titles, only to suggest a full decade later, in …

2008

… at a conference hosted by PwC, that HR had failed to make his model work, rather than admit he had produced a seriously flawed model (which remains fundamentally flawed despite his more recent amendments).

Which roughly brings us up to the present day.

2011

So what are the key items on the organisational, HR agenda now, when HR no longer pretends it does not have a bottom line?*

Human capital management and reporting
Evidence based (HR) management methods
Tougher professional standards for HR people (SHRM is currently working on this)
Demonstrating added value and ROI

So, after two decades, HR has arrived right back at the same historical junction. Of course, some HR departments have already tried to get away with their re-naming stunt once more – this time calling themselves ‘Human Capital’. Others are stuck on a vicious, circular path that always leads back to the transactional ghetto still fooling themselves that efficient transactions have something to do with value – but they are no longer fooling anyone else.

For personal development linked to this topic visit the Consummate Professional Series

*But see Ulrich’s 2003 book “Why the bottom line isn’t!”

HR is NOT a support function

Posted on January 14, 2011 by Paul Kearns

After hearing Neil Roden’s very late admission that the function he headed up at RBS (Royal Bank of Scotland) was merely a support function it is time to finally put a few hoary old misconceptions about HR to rest.

First on that list is the simple fact that when we all talk about ‘HR’ most people forget that this is short for human resource management – HR is a management function. Second, managing an organisation’s human resources (or human capital if you prefer) is inherently and necessarily a strategic role. The reason RBS went bust was because a sizeable chunk of their bankers were not managed well enough to stop them creating huge bad debts. RBS’s strategic ambition to become the ‘most admired bank’ was not matched by an ability to get the best value from its human capital. If that isn’t the job of an HR director then I don’t know what is. For Roden, as with the HR directors of all the other banks that failed, if they somehow think this is not their job then they need to make room for those who do. Otherwise they are turning the clock back to the bad old days of the lowly, unprofessional personnel manager – often appointed because no other department would have them.

A support function like Roden’s involves recruitment, advising on contractual pay and conditions, dealing with the usual grievance and disciplinary issues and reacting to any changes happening in the business such as relocations, revised terms and conditions and the like. This is what passes for HR in the vast majority of organisations today but is just old-fashioned personnel administration by any other name, with all the severe limitations that entails. The world might have changed in many ways and the job titles too (e.g. talent manager) but a support function runs training courses – it doesn’t get the best value out of its talent.

Day-to-day maintenance and reacting to operational demands, such as filling vacancies and running courses (even in expensive, purpose-built business schools or corporate universities) is intrinsically low value work because it is so easy to replicate; as evidenced by the low salaries of personnel and training officers relative to other professions. Nevertheless, even basic tasks need to be managed well and constantly monitored for how efficiently and effectively they are carried out. This leads personnel administration teams to resort to the sort of number crunching promoted by PwC/Saratoga to show how quick or cheap their recruitment process is.

The key distinction between personnel admin and real HR is that real HR people know that their main priorities are getting the right people and ensuring they are performing to their full potential, adding as much value as possible. They know this presents them with a much more problematic set of issues but they are not stupid enough to be taken in by the sort of simplistic and misleading data used in PwC/Saratoga-type metrics.

The biggest problem of all though with an HR ‘director’ believing an organisation like RBS can operate in a global banking and finance system with only a personnel support function is the most obvious one – it failed miserably – because if you leave human capital management to personnel people, or even other senior, operational directors, it doesn’t happen. Fact.