homework
HRM 4413 Weeks 19
Strategic HRM Evolution & Devolution – the ‘Added Value Debate’
Leatherbarrow & Rees ‘HRM: The Added Value Debate’ Ch 4 in Rees & Smith, Kortext
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Where are we?
- Week 20: Today
- Week 21: 21st June: Corporate governance
- Week 22: 28th June: Exam briefing: Case study released
- Week 23: 5th July: Study week
- Week 24: 12th July: Study week
- Week 25: 19th July: Exam
Extra session: Fri 5th July or Sat 10th July
Eid: predicted for 20th July
Aims
- Revisit the evolution of the HRM role and function
- Consider: does HRM add value? If, so, in what ways?
- Explore three interrelated consequences of this evolution:
- The devolution to the Line Manager
- The evolution of the HRBP model
- The pros and cons of outsourcing HR functions
Learning Outcomes
- Know the key landmarks in thinking on how the role of people management in organisations has evolved
- Understand the need for clarity in design of the people management functions
- Be able to discuss the key features and implications of these developments for HR
Consider….
What are the key functions of managing people?
Why/in what ways are Line Managers and Supervisors best placed to deliver these functions?
What might get in the way? Why might Line Managers and Supervisors NOT deliver these functions effectively?
So what can be done?
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The Line Manager
https://www.cipd.co.uk/knowledge/fundamentals/people/hr/line-managers-factsheet
The fundamental paradox of line managers’ involvement in people management and development is ……that they’re expected (a) to engage with and demonstrate consistency against the overall organisational policy, while at the same time (b) tailoring their approach to individuals and teams.
People management practice and processes may be designed by HR or L&D specialists, but cannot be delivered by them. These include, for example,
- performance management and recognition
- employee engagement
- enabling employee voice
- creating and maintaining a learning culture, and
- achieving employee work-life balance.
Organisational Examples
Podcast 7 Jun 2016 Training Line Managers
Episode 114: Recorded at the CIPD’s annual Learning and Development Show, this month’s speakers discuss the importance of developing line managers and the different strategies they’ve found successful.
https://www.cipd.co.uk/podcasts/training-line-managers
The organisation behind the Discovery Channel and a raft of other media outlets. 67 locations all over the world
1,300 people across 40 sites…managers came through the system as doctors and clinicians
2,100 employees; two main routes to market (consumer & B2B); a lot of employees are remote or field based.
References, Further Reading & Listening
JACOBS, K. (2013) ‘Whose job is it anyway?’ Human Resources. February. pp36-39.
‘The HR department’s contribution to line managers’ effective implementation of HR practices’, Jordi Trullen, Luigi Stirpe, Jaime Bonache and Mireia Valverde, Human Resource Management Journal, Vol 26 No 4, October 2016, pp. 449-470.
This paper identifies several ways in which HR can enhance line managers’ ability, motivation and opportunity to implement HR practices effectively, including recognising good people management and providing training. https://www.cipd.co.uk/news-views/nutshell/issue-64/hr-line-managers-balance
Podcast 7 Jun 2016 Training Line Managers
Episode 114: Recorded at the CIPD’s annual Learning and Development Show, this month’s speakers discuss the importance of developing line managers and the different strategies they’ve found successful.
Moving on…..
The evolution of the
HR ‘Business Partnering’
(HRBP) Model
&
the ‘Outsourcing’ debate
Aims:
- Revisit the evolution of the HRM role and function especially Ulrich’s perspectives
- Explore the HRBP Model and its evolution
- Explore two interrelated consequences of this evolution:
- The devolution to the Line Manager
- The pros and cons of outsourcing HR functions
- Consider the challenges of moving to an HRBP Model (McCracken’s Life Cycle)
Week 19 The Human Resource Business Partner Model – Key Reading
- Leatherbarrow & Rees ‘HRM: The Added Value Debate’ Ch 4 in Rees & Smith, Kortext
- CIPD Fact Sheet Dec 2018 https://www.cipd.co.uk/knowledge/fundamentals/people/hr/business-partnering-factsheet#26474
- McCRACKEN, M., O’KANE, P., BROWN, T.C. and McCRORY, M. (2017) Human resource business partner lifecycle model: exploring how the relationship between HRBPs and their line manager partners evolves. Human Resource Management Journal. Vol 27, No 1, January. pp58–74.
The essence of true HR business partnering is…..
…context i.e.
- understanding the business strategy, the trajectory of the organisation,
- appreciating employee needs and
- developing people solutions that help achieve business objectives while enabling employees to flourish.
This is achieved through developing meaningful relationships with key people and teams across the organisation.
Strategic Role of the HR Function - conceived in the mid-1990s by Dave Ulrich
Ulrich and Brockbank’s (2005) typology of HR functional roles updated model.
Ulrich’s (1997) typology of HR functional roles.
Future/Strategic Focus
Day-to-day Operational Focus
Processes
People
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The ‘Three-Legged Stool’ Concept of the HRBP Model
Shared services – usually a centralised entity that handles the routine ‘transactional’ services across the business such as recruitment administration, payroll, absence monitoring, HR template generation and advice on simpler employee relations.
Strategic business partners– senior HR professionals who work closely with business leaders or line managers, usually embedded in the business unit, influencing, steering and implementing the strategy.
Centres of excellence – usually small teams of HR experts with specialist knowledge. Centres of excellence deliver business and people benefits through HR innovations in areas such as reward, learning, recruitment, employee engagement, and talent management.
Four key areas that HR professionals need to understand to deliver the HRBP Model….
Understanding the business model at depth – getting to know and understand how the business operates, how it creates value and what its purpose is.
Generating insight from data and evidence – using evidence to support structured business cases or strategies.
Connecting with curiosity, purpose and impact – asking the right questions, crafting networks and understanding where HR can identify opportunities to create the most value.
Leading with integrity, consideration and challenge – having the courage and confidence to challenge the business and its leadership, using evidence, strong relationships and an understanding of the business to influence effectively.
David Ulrich 2017 talk https://www.youtube.com/watch?v=G-5VYZRVH-M
….and more recently (2012): Six competency domains….
Strategic positioner:
which focuses on understanding the business context, the implications of that context
and the creation of business goals
Credible activist: which includes the individual’s
interpersonal skills and results-oriented behaviour that builds trusting relationships
Change champion:
where they demonstrate the ability to drive change, overcome resistance and build
commitment
Capability builder: which involves strategically aligning HR to business drivers
and creating a meaningful work climate
HR innovator and integrator: with the aim of impacting business results
Technology proponent: where they display knowledge and
skills in relation to social networking, communicating and HR analytics
Ulrich, D., Younger, J., Brockbank, W. and Ulrich, M.D. (2012). HR from the Outside In: Six Competencies for
the Future of Human Resources, New York: McGraw-Hill Education.
Evolution (of HRBP Model) and Devolution (to the Line Manager)
McCRACKEN, M., O’KANE, P., BROWN, T.C. and McCRORY, M. (2017) Human resource business partner lifecycle model: exploring how the relationship between HRBPs and their line manager partners evolves. Human Resource Management Journal. Vol 27, No 1, January. pp58–74.
“HRBP transition is also inextricably linked to the issue of devolution of HR responsibilities to the line.”
3 reasons to support the devolution of HR tasks
to LMPs:
HRBPs can increase their strategic focus if LMPs assume more HR tasks,
line accountability can mean faster and more appropriate responses to HR issues and
effective management of HR issues by LMPs can facilitate employee commitment
Unfortunately…. (according to McCracken et al, 2016)
- ….a theme in the literature is that line managers often lack motivation or competence to assume HR tasks, and…
- many senior and line managers still perceive the primary role of HR professionals as legal and moral guardians, to ‘keep the organisation out of trouble’
McCraken et al research leading to ‘The HRBP Lifecycle Model’
3 large UK organisations referred to as….
- Insurance Co
- Transit Inc, and
- Energy Ltd
3 stages:
Exploration
Developing an Effective Partnership and
Maintaining, Excelling and Maladaptation
The 3 stage evolution of the HRBP Model (McCracken et al)
Exploration: Organisations need to assess their ‘readiness’ for an HRBP Approach: ‘The catalyst for change was what was happening in the market…when we looked at the benchmarks we were not even in the top twenty in terms of the most efficient utility’ (Energy Ltd)
Developing…: The importance of
relationship building was clearly evident …., as well as challenges associated with the changes to HR’s roles, responsibilities and protocols.
Thus, …..HR professionals need to develop their credible activist competency (Ulrich)
Maintaining: relationships still being worked upon
Excelling: movement to mire strategic HR roles and LMPs growing in confidence
Maladaption: ‘too cosy’ or LMP’s ‘still looking for hand holding’
So…..so what? Culture is vital to understand (Goffee & Jones 1998 Double S Model of Culture)
….all very good in theory, but what about in reality…the transition and then the effective development thereafter?............
Goffee & Jones (HBR, 1996) University Business School: A Fragmented Organization
https://hbr.org/1996/11/what-holds-the-modern-company-together
Despite how unpleasant it sounds to work where both sociability and solidarity are lacking, there are indeed environments that invite such cultures and do no harm whatsoever to the organization, its people, or its products in the process. Still, there is the stigma of an “unfriendly” organization to contend with, which is the reason this case study uses a disguised name for its subject.
University Business School is typical of its breed: it offers an M.B.A. program and several shorter executive programs. Its other products are books, reports, and scholarly articles. The school achieves all this smoothly, with remarkably low levels of social interaction of any kind among members of the community.
Take sociability. At UBS, professors work mainly on their own, researching their specialty, preparing classes, writing articles, and assessing students’ papers. Often this work is done at home or in the office, behind closed doors displaying Do Not Disturb signs. Many professors have demanding second jobs as consultants to industry. Therefore, when social contact does occur, it is with clients, students, or research sponsors rather than with colleagues. In fact, faculty members may actively avoid sociability on campus in order to maximize discretionary time for private consulting work and research for publication.
As for solidarity, UBS professors see themselves foremost as part of an international group of scholars, feeling no particular affinity for the institution that employs them. Their occupational group, they believe, sets the standards and controls outputs, such as journal articles. In addition, it shapes employment opportunities and determines career progress. There is no point, the professors’ thinking goes, concerning themselves with the goals and strategies of an institution that does not have direct bearing on their day-today work or future pursuits.
As we have said, however, none of this diminished sociability or solidarity compromises the competitive position of UBS, a highly renowned institution. The reason is that many professors do indeed do their best work alone or with scholars from other institutions who share similar interests. Moreover, M.B.A. and other academic programs don’t necessarily need input from groups of staff members; most professors know what to teach and are disinclined in any case to take the advice of others. Indeed, the only reason for meetings in this environment is to decide on academic appointments and promotions. This activity involves consideration of scholarship, which requires neither sociability nor solidarity. Finally, UBS need not worry that its employees are losing focus or urgency about their work—one of the biggest risks of low-solidarity organizations. On the contrary. UBS attracts a self-selecting group of highly autonomous, sometimes egocentric individuals who are motivated, not alienated, by the freedoms of the fragmented organization.
In short, the success of UBS underscores our point: there is no generic ideal when it comes to corporate community. If the culture fits, wear it.
Outsourcing - what
https://www.cipd.co.uk/knowledge/fundamentals/people/hr/outsourcing-facsheet
Buying one or more business services from an external provider.
Could include HR and/or other services such as IT.
The specific processes included within any HR outsourcing arrangement will vary from organisation to organisation
- some may outsource virtually all of their HR processes
- while others select specific components such as payroll or recruitment.
Outsourcing - why
Help meet the increasing demands placed upon HR to deliver greater levels of transactional efficiency at the same time as….
…raising the level of other HR activity to focus on ‘strategic’, ‘value adding’ service.
Benefits & Challenges of Outsourcing
Commonly mentioned benefits include:
- reduced costs
- increased efficiency
- access to improved HR IT systems without capital outlay
- improved people management information (including human capital metrics)
- access to HR expertise that is not available internally
- increased flexibility and speed of response to HR problems
- ability to support or fit well with an overall strategy (for example where the organisation is outsourcing a number of its support functions, of which HR is just one part)
- reduced risk, as it is possible to scale up and down more efficiently
- capacity for HR to operate more strategically.
Potential Challenges
- ‘Don’t outsource what you don’t understand’ - the outsourcing provider will only have to subsequently solve the problem (at a cost) and the provider’s solution might not be most suitable from the organisation’s perspective.
- Outsourcing does not absolve the organisation of good people management practices nor of overall responsibility for the provision of HR services.
- Increasingly, outsourcing arrangements are long term (five to ten year contracts are not unusual). An understanding of the organisation’s current and future business strategy and potential changing business (and hence risk) profile by the outsourcing provider is crucial before entering into any contractual arrangement. This helps to avoid being tied into unfavourable contractual arrangements.
- Loss of local knowledge and processes which instead reside with the outsource provider.
- Standardisation of processes in line with the preferences of the outsourcing provider rather than the organisation.
- Fragmentation of the service provided meaning that day-to-day operations are split from strategy and policy direction.
- The need to constantly review the success of the outsourcing arrangement against specified metrics.
Outsourcing example….BT
(2008) "Outsourcing connects BT with better and cheaper HRM: Deal builds on strengths of joint‐venture partners", Human Resource Management International Digest, Vol. 16 Issue: 1, pp.10-12
Paper traces the history of the BT‐Accenture e‐peopleserve joint venture, which provides HR services not only for BT but also for other clients.
Initially,
- costs went up, and
- the transferred workforce took time to adjust to their role as a service provider.
This has been addressed through
- self‐development and
- process improvement.
By outsourcing, BT has
- rationalized its training catalogue by 50 percent,
- reduced training waiting lists by 26 percent and
- saved $2.2 million in time and money lost because of sickness.
- also increased employee‐satisfaction ratings across training and counseling.
Other benefits of the deal include:
5. one telephone number for BT staff to contact HR;
6. a single Peoplesoft HR information system that provides enhanced HR reporting capability and employee self‐service; and
7. a company‐wide learning‐management system. BUT…..
2005: BT and Accenture signed a 10-year, $575 million business process outsourcing (BPO) and transformation contract for human resource (HR) administration services.
BUT……(The Times, January 8th 2018)
The £49 billion BT pension scheme is set to pull its administration back in-house after terminating a contract with Accenture three years into an eight-year deal.
The pension scheme, which has 300,000 members, is one of the largest in the private sector. The decision comes amid intense discussions over the future of the scheme, which has a £13.9 billion deficit.
With 106,400 staff and sales of £24 billion last year, BT is one of Britain’s biggest companies, supplying fixed-line, mobile, broadband and television services nationwide. It reported profits of £666 million for the three months to the end of September.
However, the cost of plugging its pension deficit is a growing burden. BT has poured an extra £6.2 billion into the scheme in top-up payments…
Alternatives
- Shared Services (see earlier)
- Offshoring - may sometimes relate to outsourcing (although the two terms are often incorrectly used interchangeably); the process of outsourcing business activities or services to a third party overseas and/or moving business activities or services to another country ****does not necessarily involve the services of an external provider
- Employee self-service (ESS) – employee updates personal details - and manager self-service (MSS) systems – Manager can review absence patterns