Has Human Resources Function Found its Soul?

Has Human Resources Function Found its Soul?

Summary of the Talk at National Institute of Personnel Management, Karnataka Chapter on 11-12-13

In late seventies Udai Pareek addressed the NIPM on the title “Personnel Function in search of a Soul”. Almost thirty five years later I consider it a privilege to address the NIPM in Bangalore. Hence I chose the topic Has HR Function found its Soul.

What Constitutes Personnel or HR Management? There are three important functions of Personnel Management or now called Human Resources Function. These include: IR – PM – T&D: and deal with Peace, Stability and Growth:

1.       IR ensures Peace and work motivation of all employees and particularly the workmen or employees who actually produce and deliver goods and services. It is re-titled as Worker Affairs by Pareek & Rao in 1975. Now days it is also referred as Human Relations, Work Place Management, or Employee Engagement and Happiness management etc.  Deals with Peace
2.      HRM which includes: Manpower planning or HRPM, Recruitment, comp. and ben., Career management, retirements, PMS, T&D etc. Deals with stability.
3.     HRD: is the Soul of PM or HRM. It deals with Development focus at Individual, roles, dyads, teams and organization. It was designed to be a new role.

PRINCIPLES UNDERLYING DESIGNING OF HUMAN RESOURCES SYSTEM and consequent activities expected to be performed by HR Function

Conceptualised by Udai Pareek and T. V. Rao while establishing the first HRD  department and HR Function in L&T, 1974-75 (reproduced from the Book Pioneering Human Resource Development: The L&T System” by Udai Pareek and T. V. Rao; Academy of HRD, Ahmedabad, pages 74-79. (For copies write to: director@academyofhrd.org ). This is a part of the report of L&T. The conceptualization is done largely by Udai Pareek and accepted in full by L&T after a presentation to its top Management including Mr. N. M. Desai  Mr. Holk Larsen) .

Very little systematic attention has been given to the designing of human resources system (HR FUNCTION). In the absence of systematic attention to various aspects, HR FUNCTION may not be able to serve effectively the various purposes for which it is set up. So far, the urgent but not necessarily the most important problems have been attended to in HR FUNCTION viz. statutory requirements of industrial relations and appointments, promotions and salary administration etc. of the various personnel in the company. The designing of HR FUNCTION would require attention to various aspects. We purpose 15 principles which should be followed while designing HR FUNCTION in any company.

Focus on enabling capability: The main focus of HR FUNCTION should be to help the company increase what may be called its “enabling” capabilities. These capabilities would include development of Human Resources in the company, development of total organizational health, improvement of the problem solving capability, developing diagnostic ability so that the problems in the organization can be quickly, timely, and effectively located and solutions attempted without dependence, and developing a healthy open system so that maximum commitment of the employees can be obtained. HR FUNCTION, in this sense, becomes an important one underpinning various other functions and strengthening them through its programme.

HR is expected to continuously develop the competencies of individuals, dyads, teams and the entire organization. Employees should be helped to develop competencies to solve their own problems

Integrating the Development of people with Organisation Development: Every human being has certain capacities and potential to do certain things. Human beings are not very often aware of their own strengths. It requires another human being to point out one’s own strengths. HR FUNCTION should provide enough opportunity for each individual to become aware of his potential and thus make maximum possible contribution in his various organizational roles. It is certainly not possible for any organization to provide scope for complete exploration of individuals’ talents and potential.

However, HR FUNCTION should offer maximum opportunity through appraisals, feedback, counselling and experimentation in various roles.

Maximising Individual Autonomy and Growth through Increased Responsibility: Learning experiences get maximized when individuals have opportunities to experiment and also hold the responsibility for outcomes. Such learning experiences on the job have a great value for the individual and the organization. Employees start enjoying their jobs more and develop themselves better if their jobs offer them some flexibility and autonomy to innovate.

HR FUNCTION should attempt to help employees assume more responsibility through autonomy in decision making and experimentation.

Decentralisation through Delegation and Shared Responsibility: People who work together or close to each other know each other better than those who do not have such opportunities to be together. HR FUNCTION should be based in such a context.

Identification and development of human resources becomes an integral part of every manager’s job. HR should facilitate this

Participative Decision-making: Dealing with human beings is a sensitive area for any organization to handle. No matter what innovations are made and what opportunities are provided there are likely to be frustration. People tend to feel frustrated when they are not consulted in matters in which they have enough knowledge and information. Design matters in which they have enough knowledge and information.

HR function should give adequate weightage to the ideas and existing resources of people. It should attempt maximum participation or representation of people who are likely to be involved in its implementation or are affected by it.

Balancing adaptation to and changing organizational culture: HR FUNCTION does not have any standard form and has to be evolved for each organization according to its nature, recruitment and its culture. While designing HR FUNCTION, it is necessary to take into consideration the nature and culture of organization for which it is being designed and at the same time it should be designed to suit the prevalent culture of the organization and the intended direction of change. The role of HR FUNCTION is not only to perpetuate such culture but to modify it for increased effectiveness. There has always been a controversy between those who believe that HRD or any parts of HR FUNCTION like appraisal system should be designed to suit the culture and those who believe that such systems should be able to change the culture. Both extreme positions seem to be less functional.

HR function should not make the company stay where it is; it should take it forward. However, this can be done only if its design does not severely conflict with the prevalent culture, but at the same time has elements of change and evolution towards the future. Some organizations like the Birla group and the Tatas have done a marvellous job in maintaining and changing some parts of their culture to suit changing needs and times.

Balancing differentiation and integration: With increase in expertise in RHS, the three distinct functions need clearer identity. These functions are: personnel administration, organization development and training, and industrial relations. Putting these three functions under one person may not do justice to them since there is a distinct identity of these three functions. Time has come that this differentiation is not only recognized but is built into the design of HR FUNCTION.

Integration of these three functions is also necessary because they have inter-linkages and may require mutual support. This can be done, as we state in another principle, at a fairly high level. Such integration along with necessary differentiation would be necessary to make the function effective.

Balancing Specialization and Diffusion of the function: While HR FUNCTION is a specialized function and should be treated as such in the organization, its special identity should not result in lack of involvement of line people in various aspects of HR FUNCTION. Since action is the sole responsibility of line people, HR FUNCTION should strengthen their role.

This can be done by diffusing part of HR FUNCTION amongst the line people. For example, simple personnel administration like sanctioning of leave, disciplinary action, dealing with conflict problems, etc. should be handled by the line people themselves. If necessary, they may have help from a personnel man. Without such diffusion, the personnel function may only be used for escaping the responsibility of administering personnel effectively. Certainly, specification of systematic practices would be necessary but this has to be supplemented by the participation of line people in some of the HR activities.

Ensuring Responsibility for the Function: Unfortunately, in most companies, HR FUNCTION does not have much credibility for several reasons. One main reason is that this function is at a very low level in the organization. Unless the HR FUNCTION is introduced at a high level in the organization, its respectability will continue to be a very low. Moreover, unless a very senior person is in-charge of HR FUNCTION, the insightful and creative leadership, which is required to make the function effective, may not be provided.

For this reason, it is necessary that HR FUNCTION be instituted at a very high level in the organization to increase both its visibility as well as its usefulness.

Balancing Linkages within and with other functions: HR FUNCTION should be designed to strengthen various functions which are important in the company.

HR Function should have linkages with the budgetary and other information control systems. It should have linkages with long-range corporate planning, with marketing finance and production and other functions of the company. Such linkages are extremely important. On the other hand, linkages amongst the various sub-systems of HRD are also necessary.

Building Feedback and Reinforcing Mechanisms: The various sub-systems in HR FUNCTION should provide feedback to strengthen one another. Systematic feedback loops should be designed for this purpose. For example, performance and potential appraisal should provide necessary leads for training in OD and OD programmes may provide necessary leads for work redesigning etc.

A systematic plan of flow of one subsystem to the other should be properly prepared. They also need to be periodically examined to ensure integration.

 Balancing quantification and qualitative decisions: While quantification of various aspects in HR FUNCTION is necessary, everything cannot be completely quantified. This applies as much to selection and recruitment as to performance and potential appraisal. Attempts should be made to continuously improve and quantify several variables and even to design computer storage of various kinds of data. But the qualitative and insightful decisions will always be necessary and desirable.

For example, while promoting people, various quantitative data available and computerization of data may be useful. These may be used as necessary inputs, but some other factors which cannot be quantified will have to be taken into account while taking the decisions. Such a balancing is necessary.

Balancing internal and external help: HR FUNCTION would require development of internal expertise and resources. However, the company should see the optimum pay-off in terms of employing their internal or external resources. Some highly rare expertise which may be available from external resources has to be used only occasionally in the organization. Thus may not be developed internally in the system. Such a balance is necessary. Similarly, the use of external resources in terms of training should be used minimally, but cannot be completely ruled out. A judicious planning for the use of both is necessary.

A company which is completely closed to external resources and is doing everything internally may not be able to benefit from some of the latest developments in the field. On the other hand, a company which is merely relying on external help cannot develop itself effectively without necessary internal resources. Organizations should constantly balance them.

Planning evolution of the function: HR FUNCTION cannot be established overnight in a company. Some aspects can be introduced depending on the state and sophistication of the company. Some other aspects would require longer preparation before these are effectively introduced.

Rushing the introduction of all the aspects of HR FUNCTION may only result in ritualism rather than effective introduction of the system. Introduction of HR FUNCTION, therefore, should be properly phased, and there should be enough thinking about how these phases will be completed and build one over the other.

Continuous Review and Self renewal: The environment and the organizational culture keep changing with time. However innovative a system may be, there is always a danger of it becoming ritualistic and dysfunctional after sometime.

Therefore it is necessary to plan any system in such a way that it has mechanisms of self renewal. HR FUNCTION should provide in it mechanisms for continuous review and change.

Has Human Resources Function Found its Soul?

HRD is the Soul of HRF if designed systematically and implemented following the principles mentioned above. While IR provides the bases for peace, Personnel Management or HR Management provides stability, HRD provides the soul for growth. This was envisaged in mid eighties when we designed the HR function at L&T. This was almost two decades before we saw HR Champions emerge from the west and three decades prior to HR being projected as Strategic Partner or as Business Partner. All the principles envisaged by Pareek and Rao in HRF mentioned in the first edition of the book “Designing and Managing HR systems” lifted up the HR function. Some organizations had to wait for this to come from the University of Michigan or Harvard business school in the form of Strategic HRM or HR Score card, HR Champions and the like.

After evaluating all this now I leave for the audience to decide if Human Resource Function has found its soul. The answer is “Yes” if we are doing many of the things that were envisaged and are living up to the expectations of “Good HR Function” outlined here. If not we have to research for the soul to renewal and redesigning.