People are the key element in creating and sustaining value in business. Increasingly, products, processes and technology today are becoming generic. The competitive differentiator between one company and another is becoming its intellectual capital. And herein, says Ricky Robinson, MD of national human capital company Learning Resources, lies the future key role of HR, long since the ugly sister among the traditional business units of most companies.
Historically, HR has tended to play a mainly administrative role in the organisation. It has been responsible for routine activities such as the payment of salaries and wages, staff medical aid and pension fund administration, recruitment and selection, creating and managing IR policy.
But an effective HR management system has potentially far more to offer: HR can take a company strategy, often a dust-gathering tome in a drawer, and make it sing through company corridors. The jargon is "operationalise the strategy". By redefining its role from transactional to strategic, HR can, and must, re-invent itself from ugly sister to Cinderella status within a company.
Once the strategy has been created, HR becomes the change agent, process facilitator, content expert and consultant in taking the strategy and ensuring that it becomes everybody`s job in the company, from company director to company driver, to execute it and be measured accordingly. This is achieved in three distinct phases: firstly by redefining the strategy in performance and outcome terms; then by ensuring the framework is in place to support the implementation of the strategy; and finally by implementing company-wide.
Phase 1: There are various options for redefining strategy in performance terms. Best practice would include the creation of a corporate scorecard, balanced in its measurement of present and future performance and in its definition of the criteria that will define success. The scorecard is similarly set up in all business units, in the simplest operational terms.
Position profiles are constructed and defined to best deliver the required performance. A competency matrix is constructed for each position - the five or six (only!) critical elements of skill, knowledge or behaviour that the company really needs, as defined in the strategy and resulting scorecards. Then performance contracts are constructed, aligned and implemented for each employee in the company.
Phase 2: This phase is crucial, and often overlooked in the pell-mell of today`s pressure-cooker working world. The process must have a supporting framework, a parachute if you like. HR is on solid ground here: constructing and implementing a comprehensive performance management system, capacity building, succession planning, setting up assessment structures, implementing training plans to fill skills gaps, providing personal development plans. Training becomes a fundamental enabler of the whole process. And all of this has to tie back to the business strategy. Otherwise it is probably wasting valuable resources. The emphasis changes from nice-to-have to need-to-have. So too does the role of HR.
Phase 3: In this phase, that of implementation, ownership reverts to line management. HR acts as change agent and consultant, ensuring continued alignment. One question will be top of mind: "Are the people in this company delivering according to the requirements of the business?"
Local companies are recognising that it is the quality of their people that sets them apart from their competitors. Those with effective HR management systems and teams will consistently outperform their peers and become tomorrow`s leaders.
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