What role is HR expected to play in your organization? Do you have a clear understanding of what your key internal customers expect HR to deliver?
To answer these questions you need to know what your senior leadership and key internal clients expect from HR. You also need to have an eye to current HR leading edge practice so that you are helping your senior leadership and management gain full value from what HR con contribute.
At the PPI Network we have developed a simple tool for gathering the perceptions of your senior leadership and key internal clients on what they expect from HR. It is easily administered and we follow up to remind people to complete it. We developed the tool using the expertise and knowledge of our Network who have extensive corporate and consulting HR experience. The model also takes account the work of leading edge thinkers on the role of HR.
The PPI HR Function Feedback Report instrument is based on a set of dimensions that are core to the effective performance of a modern HR function. They include:
- The HR Brand
- HR Business Thinking
- HR Business Partnering
- HR Processes and Systems
- Developing Organisational Capability
- HR Delivery
Let us walk you through our thinking behind why these dimensions and what each one contains. But let us also point out at the outset that the HR function is an integrated whole and there are many overlaps between the dimensions. However for the purposes of analysis, assessment and improvement it is useful to have these subdivisions.
This dimension evaluates the positioning and credibility of HR within the company and the business involvement of the senior HR professionals.
Mark Thomas, a leading European authority on the HR function and author of a number of studies and books, is a strong advocate of the need for HR functions to consciously manage their internal brand image. He has been working with senior HR professionals as well as senior line managers for over twenty years and has observed and commented on the evolution of the HR function in response to the demands from the business. In Mark’s analysis HR can no longer assume that it’s value is perceived by line and functional colleagues and must actively manage it’s brand and promote the recognition of the value it delivers.
One of the most influential global HR Thinkers, Prof. Dave Ulrich of Michigan University, recently presented the result of his latest major study of modern HR roles and competences in the book “HR from the Inside Out”. The core of Ulrich’s vision for HR and future HR professionals can be summarized as “Personal credibility (of the senior HR professionals), in depth business understanding and HR-business integrated support”.
The PPI Assessment tool includes the following factors as elements for measuring the HR Brand:
- The HR function in our company has the knowledge and expertise required to make a “value added” difference for the business
- The HR function is proactive in addressing real business issues and needs
- The HR professionals are strong ambassadors for the function
- The most senior HR professional is a valued, pro-active contributor to strategic business decisions.
- HR professionals are proactively engaged in key business decisions
HR Business Thinking
This dimension evaluates the perceived business understanding of the HR function, how well it uses that understanding for the benefit of the business, and how well it ensures that the HR service and deliverables meet the internal and external customer needs
In order to be credible and to be able to bring value adding suggestions and solutions the HR professionals must understand business in general and specifically how the company’s business operates including the key drivers of company success. Mark Thomas has regularly run a Mini MBA for HR professionals to enhance their wider business understanding particularly in the domains of finance, strategy and marketing. All too often HR fails to target key performance metrics such as debtor days, cost of sales, margin, customer satisfaction, EBIDA and ROCE in its general day to day focus. Unfortunately many HR professionals don’t see the connections between people performance and these measures and as a result lose huge opportunities to impact on the fundamental business drivers.
The PPI Assessment tool includes the following factors as elements for measuring the HR Business Thinking:
- The HR function understands the business and business performance drivers
- The HR function consistently identifies internal customer needs with regard to people resources and the business
- The HR function identifies appropriate deliverables to meet internal customer needs
- The HR function consistently challenges existing working and organisational practices with a view to prompting new ways of doing business and creating value
- The HR Function keeps up to date on current HR best practices and implements these when appropriate for business success
- The HR Function is proactive and demonstrates regularly that it is thinking ahead and not just reacting to events or issues as they occur
- The HR function is a strong advocate for ensuring sustainability of workload and resources available to deliver it
HR Business Partnering
This dimension evaluates the level of cooperation and influence that HR enjoys with key stakeholders including the active communication of Business / HR objectives and plans. It is vital that today’s HR professional has the capacity to influence the business agenda and she or he can only do this by demonstrating a strong business understanding together with leading edge HR thinking. This then needs to be combined with superb influencing and consulting/change agent skills.
Nils Munck, a very experienced European HR professional with over 20 years in senior HR roles with leading international and global companies comments that “An often overlooked factor of HR functionality is the working/partnership relationship with other departments. HR is a complex functionality; the activity portfolio is very, very broad and reaches into many grey zone areas of other departments. No department is an isolated island in the company ocean. And for HR it is a pre-requisite for success to build partnerships and alliances.” As part of this, “HR must master influencing skills, and it must master the consultancy role” - Mark Thomas: ”High Performance Consulting Skills”, 2003.
The PPI Assessment tool includes the following factors as elements for measuring the HR Business Partnering:
- The HR function regularly communicates a clear view of HR objectives and plans
- The HR function actively seeks involvement in business decision making
- The HR function contributes in a positive way to important business decisions and business plans
- The HR function builds and maintains effective trust based working relationships with all key stakeholders
- The HR functions initiates and maintains a regular dialogue with important stakeholders
- The HR function responds rapidly to important stakeholder needs and requests
HR Processes and Systems
This dimension evaluates how HR uses modern technology, systems and metrics to accomplish results and measure effect.
Two more insights from Nils Munck are:
- “Another aspect of modern HR is the ability to search for, collect, analyze and decide HR strategy/planning based on relevant, evidence anchored data. These will be related to social media developments, demographics, business, staff and organization. Thus, there is a ”data wizard” component to the modern HR role.”
- “Today, a well-functioning HR department will have KPIs in place for all critical HR activities, and the outcome will be measured in the light of business impact.”
The PPI Assessment tool includes the following factors as elements for measuring the HR Processes and Systems:
- The HR function uses modern technology and social media to create important connections and enable channels of communication
- The HR function uses modern HR analytics and data management for HR planning and activities
- The HR function ensures that relevant HR metrics are in place including HR KPI’s and calculation of HR return on investment
- The HR function ensures that Total Rewards are used for people management purposes in alignment with business strategy
- The HR organization and processes are designed deliberately and flexibly to meet the requirements of the business
- The HR function has in place effective policies and procedures for supporting line managers in their people management role
Developing Organisational Capability
This dimension evaluates how well the HR function is seen to actively support and enable the development of the organisation and the people to match business requirements.
A McKinsey & Company survey of 2010 identified that “Nearly 60 percent of respondents to a recent McKinsey survey say that building organizational capabilities such as lean operations or project or talent management is a top-three priority for their companies.” So developing organisational capability for better positioning strategic execution and achieving business success is a must for HR.
The PPI Assessment tool includes the following factors as elements for measuring the HR Delivery:
- The HR function actively works to optimize the organisation disposition for business success; using both Performance Management and Workforce Planning
- The HR function plays an active role designing organization and defining work processes
- The HR function is effective in attracting and recruiting the right talent
- The HR function monitors and seeks to maintain a high level of employee engagement
- The HR function actively works to increase leadership capability
- The HR function secures and promotes change management capabilities so the organisation is well positioned to adapt to changing business requirements
- The HR function constructs and drives initiatives to build organizational capabilities for future business challenges
This dimension evaluates HR Service delivery with regard to value-added, fulfillment, reliability and excellence
Studies by Bersin & Associates Report: “Top 10 Best Practices on the Road to Excellence”, 2011 and Mercer: “HR Transformation in EMEA”, 2011, show that in order to move to the next level of HR development, somebody needs to ensure that the core, transactional HR service deliveries are flawless. The truth is that if Basic HR deliveries are far from excelling, nobody will listen to strategic input from HR and there will be no place at the decision maker table. At the same time HR needs to ensure that such services and not over engineered and meet the needs of the internal customer.
The PPI Assessment tool includes the following factors as elements for measuring the HR Delivery:
- The HR function ensures that the core, transactional and administrative HR deliverables are executed in a flawless manner
- The HR function partners with business management for the relevant level of Manager Self Service involvement
- The HR function fulfills internal customer requirements and delivers expected results according to service level agreements
- The HR function perseveres and maintains energy in programs and projects until results are obtained
- The HR function facilitates advantageous organization change when it is needed for the benefit of effective strategy execution.
Applying the PPI HR Function Feedback Tool
Some client comments on the application of this Tool
- Findings more interesting – more focused on HR’s role.
- Instead of 100 questions on HR details – quite simple feedback.
- More qualitative than traditional HR evaluation.
If you would like to explore if this instrument might be of help to you e mail firstname.lastname@example.org or call Gerry Buckley on telephone +32 479 281601.