HR for Dummies

The idea of a strategic human resources professional is a good one. It's just too bad so many organizations don't have one.

It's not because expert HR professionals don't exist. They do, but they're either rare or ignored. Rare, because they are a special breed -- one that simply thinks differently than most other HR people do. Or ignored, because most organizations are driven by old methods and practices that reject the avant-garde ideas these experts offer.

Too many organizations fail to attain the high per-person productivity that results when talented HR experts are encouraged to make strategic decisions. According to Gallup Organization research, the best HR professionals can help their companies increase productivity, sales, and other performance metrics by as much as 20%, year after year. Yet senior executives are generally so inured to the typical "paper-pushing" HR approach that they overlook or disregard HR professionals who could be great strategic partners. As a result, many organizations remain mired in archaic approaches left over from the old "personnel office" days.

What to look for

How do you know if your organization is using an outdated HR model? According to Gallup, here are some warning signs:

• Your HR department spends more money on training than on selection.
  
  
• HR hiring decisions are based on a candidate's résumé, experience, and education levels and don't incorporate psychometrically sound assessment tools.
  
  
• HR promotes a competency model that has not been validated against measurable business outcomes.
  
  
• HR promotes a multiplicity of initiatives resulting in a "flavor of the month" perception among managers and employees.
  
  
• The HR vice president or director reports to someone other than your CEO.

If a few of these warning signs look familiar, it's time for your organization to ask its paper-pushing personnel administrators to move on so new strategic partners can move in. If you're lucky, perhaps you'll discover and develop a few potential partners already in your midst. Either way, here are some traits that signal you do have a strategic HR partner.

Measure business impact

The best HR professionals want their activities to have a meaningful effect on your business' bottom line. Driven and consumed by outcomes, they are intensely focused on questions such as:

• Have the HR decisions we've made in the past 6, 12, or 18 months increased our company's productivity?
  
  
• What impact will our present hiring practices have on our ability to outperform our competitors over the next 5 years?
  
  
• What profit did we make last year? Who was most responsible for making that profit, and how can we find more employees like them?
  
  
• Who are our best managers? Why are they the best? Are they experts in managing processes or managing people? What are we doing to recognize them and make them more visible?
  

Gallup's research has found that the most effective HR professionals don't just understand how HR works, they also grasp the inner workings of business. They know how to deploy people to influence their organization's essential outcomes.

Take Lucy, for instance. When she took over as vice president of HR for a reinsurance company, the department was strictly a paper-pushing unit, she says. Decisions about personnel were made without any input from her department.

"I report directly to the CEO, so I went to her and explained how this practice undercut the HR function. Thankfully, she agreed," Lucy says. "As I see it, every selection, promotion, or retention decision has a direct impact on our bottom line. The decisions we make about employees either help or hurt our ability to turn a profit, outperform our competitors, or increase our market share."

Focus on talent

When faced with the option of hiring an applicant with loads of experience but low talent for the role or one who has loads of talent but little experience, the savvy HR person will usually hire the talented applicant. The best HR people know that experience can be a good predictor of consistent performance. But whether that performance is high, average, or low depends largely on the degree of talent -- a recurring pattern of thought, feeling, or behavior that can be productively applied -- the person possesses.

This points out an important difference between a conventional and a strategic HR approach. Strategic HR professionals are devoted to excellence in every role, so they refuse to compromise when sourcing, recruiting, selecting, and developing highly talented employees. They hold fast to the tenet that successful organizational performance starts by capitalizing on each employee's talents.

John, an HR leader for a successful healthcare organization, shares his experience: "One day, a clerk approached me with an unusual proposal," he recalls. "She had noticed that the grounds were not well-kept, and she offered to make that responsibility her job. Well, this sounded to me like a clue to a possible talent -- so I agreed.

"It's been a few years, and we're extremely proud of our grounds. This employee makes all the decisions about our grounds, and in many instances, does the work herself. Patients and their families often compliment us on the beauty of our lawn and gardens," John says. "For me, this is my most important task as an HR professional: putting people in roles for which they have talent."

Out with the old, in with the best

It's common knowledge that 21^st century organizations require 21^st century strategies, yet the HR practices in many businesses are hopelessly antiquated. They are the products of an industrial approach that equates organizations with machines -- and mechanical products and systems.

Today, leading organizations understand that their success depends on engaging their employees and customers. Strategic HR professionals instinctively understand this, and they connect everything they do to enhancing the interactions between the organization and its customers and employees. They reject outdated practices in favor of management strategies that capitalize on the unique characteristics of each employee.

And unlike typical HR people, these experts refuse to treat everybody the same. They treat everyone fairly, but they lavish praise and recognition on employees who are most responsible for engaging customers. And these experts use validated ratings, rankings, or other metrics to pinpoint what these employees did to help the organization delight customers -- then help other employees learn their innovative techniques.

Think like a CEO

The best HR partners understand how the various areas of the organization fit together, similar to chief executives. They know that what happens in one part of a company can reverberate throughout the organization and affect all employees. As a result, talented HR professionals yearn to be part of the decision-making process within the organization. They want to help frame the decisions that will affect employees' ability to perform.

Like CEOs, the best HR professionals can -- and do -- make hard decisions based on individual performance. They develop performance metrics that address key questions, such as: What is our profit? And who is responsible for that profit? Then they use the answers to these questions to make decisions about selection procedures, pay and reward structures, succession planning, and development budgets.

Does this sound like a paper pusher in the personnel department to you? Not at all. It sounds more like someone who could be a chief executive someday.