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Monday, October 26, 2009

From Transactional to Strategic HR, The Challenge

I spoke about the topic in the recently concluded 3rd HR Philippines Convention last October 21, 2009. This article is to share what I said there and some of the ideas I was not able to mention during my presentation. This will come in several installments so as not to bore you with an overly long post. Today I'm going to focus on the challenge that many Filipino HR Practitioners face related to the topic.

In my presentation, I started by sharing what Jack Welch said in the Society for Human Resources Management Conference in the US that HR should be right up there with the CFO. I acknowledged that there are several organizations in the Philippines where the HR Managers play such a pivotal role. However, in many other companies, HR is relegated or not empowered enough to make a relevant contribution to the company's strategic direction. There is a real challenge for many of us to transition from doing purely transactional activities that can be automated or outsourced to becoming the organization's strategic partner for growth.

I posted two current problems with today's HR in the Philippines. One is that HR has too little power and too little influence in the organization. In many organizations, HR is a glorified clerk who undertake all other tasks that do not fall under operations and finance. Many of us also do not have the ability to move from that position to that of being a strategic partner because of a lack of competency to do so. We do not have a solid understanding of the business we are in, worse some of us do not have a solid understanding of the business, period.

On the other hand, I've met HR practitioners who wield too much formal power but lack the necessary influence to be taken seriously. What do I mean? I've seen HR Managers who write and impose all sorts of policies without working in partnership with the line. They tend to end up being scoffed at and reviled for coming up with initiatives that people don't understand, don't appreciate and of course, don't take seriously. Some HR Managers act as the police, judge and executioner of company discipline. I don't agree that HR should play this role. I believe that HR can't play the strategic partner role if line managers hide behind them whenever these things have to be done. Some of the indicators that HR has too much formal power but has no influence are the following:
  • Recruitment procedures are not followed because managers don't see the connection between filling out forms and hiring the right people.
  • Managers make all sorts of excuses not to send their employees to training because they don't see how training will improve their staff's performance.
  • They do performance appraisal to comply with HR's instruction and not to manage people's performance.
  • The company's code of discipline is the butt of many jokes (and the line managers are the ones laughing the loudest).
The strategic partner role, means that HR must work in partnership with its line counterparts. It cannot operate in a vacuum and then expect to be taken seriously. As I said in my previous post, HR is not a department. It's a shared responsibility between HR and the Line Managers. Hence, they must share the strategy for making things happen. If you think about what I just said here, you must realize that it becomes really important for HR practitioners to appreciate the work of their counterparts and to help the Line Managers understand the role they play in human resource management. If this happens, a few other things can happen:
  • Line managers will realize how important it is for them to explain clearly their recruitment requirements so HR don't have to guess what they need and want.
  • Line managers will actually appreciate the screening reports given by HR and use it as one of the bases for hiring. They will also learn how to properly interview applicants and refrain from asking stupid questions like "how will you sell ice to an eskimo in the North pole?"
  • Line Managers will send their employees to training that HR programmed because these courses were deemed by both to be important. Not only that, Managers will support the training with ongoing coaching and mentoring.
  • Line Managers will realize that performance appraisal is a small portion of a larger intervention called Performance Management. They will realize that it's intent is not only to serve as a basis for salary review but to actually align employees' performance with the organization's direction.
  • Line Managers will appreciate the importance of the company policies and will lead the way on compliance because they participated in writing these polices. They are also equipped to act on employees indiscretion because they are trained to maintain discipline in the workplace. HR doesn't have to act as the company's school principal anymore. (No offense meant for school principals).
if you find all these interesting, watch out for these next posts:

1.From Transactional to Strategic, A Change in HR Mindset
2. From Transactional to Strategic HR, Where Do We Begin?
3. From Transactional to Strategic HR, The Needed Competencies

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