Tag Archives: HR audit

Organisational Maturity 2 – HR is toddling around at Stage 2

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If you are interested in improving your HR maturity level visit IHRM -  The Institute of HR Maturity

In Part 1 of this 3-Part assessment of organisational maturity we considered to what extent organisations are designed to learn.  This can only ever happen as part of a wider HR strategy that aims to create a competitive advantage from managing human capital as effectively as possible.

Such a lofty ambition can only ever be achieved in an organisation that is grown up enough to take a realistic view of its situation: understanding and making the most of its strengths whilst acknowledging its failings and limited capabilities.  Maturity is not a rose-tinted view of the world but an acceptance of the truth.  The HR Maturity Scale reveals the HR function to be a toddler that has not quite dispensed with its comfort blanket and needs to hang onto something for support while it stumbles around at Stage 2.

HR people at Stage 2 like to call themselves ‘professional’ even though this is only about one third of the way along this continuum.  They use lots of professional support mechanisms (CIPD, job evaluation, psychometrics, competence frameworks) but they have not yet reached a Stage where their advice is really valued (Stage 3) because their systems have not grown sufficient teeth for them to add much value (e.g. competence frameworks that do not remove the incompetent).  Much of this immaturity is down to their deep-seated, lack of confidence in their own methods and capabilities.  However, organisational maturity does not come from any specific function changing, it is about the whole organisation growing up and developing together.

From an Executive perspective it starts with a full and open acknowledgement that they have no clear understanding of what managing human capital actually means (shown on the Scale as the Human Capital Barrier). There is no common language in the boardroom to discuss the value of people and no way of auditing the organisation’s human capital management.  Unless and until these issues are addressed the organisation is incapable of getting the best value out of its people.

Similarly, any employee (Generation Y or any other generation for that matter) who thinks the world owes them a living; or the organisation exists to further their career; or that somehow they are indispensable; needs to realise that however talented or important they might be the value of the organisation, long term, will be dependent on how they work together – systemically- holistically.

Of course, this all assumes that the organisation has an ambition to be as good as it can be and realises that the only forward is a more strategic approach to managing people – all of them.  As we will see in Part 3 though (‘Off the Scale’) to make such an assumption would be very simplistic, not to say immature.

You can find out more about the HR Maturity Scale and where you are along it by watching the explanatory video here, reading a short descriptive extract from HR Strategy or visiting the Consummate Professional Series for online tuition.

If you need help in assessing your organisation’s HR Maturity contact info@paulkearns.co.uk

 

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Judge HR by the ‘metrics’ they choose

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One of the most common HR ‘metrics’ cited by HR people is the number of HR people per 100 FTE’s (full time equivalents – employees) and this is used by HR itself and auditors (see “Primary Indicator 2″ on page 13) as a benchmark to suggest how well they are doing.  The perspective of an EB-HR manager would suggest the exact opposite.

The PwC/Saratoga/audit ‘school of thought’ – that’s being generous, it’s more a mentality – encourages HR departments to choose these ‘metrics’, presumably, in the belief that either: -

a. There is an ‘ideal’ ratio to aim for (based on what?) or
b. HR is a necessary evil that should aim to eliminate its cost (otherwise known as HR’s suicide note)

The thinking EB-HR manager does not adopt either of these views.  To them it is a meaningless ratio that tells them everything they need to know about HR teams whose primary focus is activity rather than value.  Such ratios can only have meaning when allied to indicators of output.  So the EB-HR Manager asks each member of the team what they are contributing?    Let us compare a couple of possible answers.

1. ‘I deal with 100 managers’ queries a day’

EB-HR manager’s response? - ‘Let’s seek to remove all of the causes of those queries’.

This does not endear them to the HR team, or their line managers, who have become ‘HR support junkies’.  However,  this will not deter the EB-HR manager from adopting a two-pronged approach in removing transactional inefficiencies whilst resolving the underlying, strategic causes.  For example, if one of the ‘queries’ is to do with union issues it is because the HR Strategy has failed in some way.

2. ‘I’ve been working on re-designing team roles to increase efficiency, improve customer service and save us about $100,000 a year’

EB-HR manager’s response? - ‘Great. Can I see some of the detail of how things are going? What other plans have you got and do you need more resources?’

The choices are that stark and that simple; regardless of how difficult it might be to gauge value added.  Now take another staple HR activity – hiring – and ask yourself three questions: -

a. Which ‘metrics’ should be at the very top of the priority list?
b. Which are the easiest to gauge?
c. Which would your CEO most like to know?

  • The average time it takes you to hire someone?
  • The average cost of hiring someone?
  • The industry benchmark?
  • The number of applicants per vacancy?
  • The performance of the new hires?
  • Job offers turned down?
  • How often you get the hiring decision ‘wrong’?
  • How much value they add?

The choice is yours.

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