Nearly every large-scale company in the country has a human resources department. However, unlike other departments, the role of human resources can vary widely from one company to the next. As such, upper-level management has the responsibility to consider and strategically determine the credo that guides the actions of the Human Resources department.
If management neglects this responsibility, the law of entropy soon applies. The department somehow acquires an ever-increasing amount of cumbersome tasks, which have the potential to hinder employee productivity and damage company morale. For example, time-consuming employee satisfaction surveys are often required and are rarely employed to bring about empirical changes. Similarly, the employee review process can quickly become an ineffectual tool used to solve nebulous HR challenges.
These cumbersome tasks have the effect of positioning what could be a valuable resource as an annoying side show. But even that isn’t the bottom for HR. Sometimes the HR department is converted like Anakin Skywalker into a dark henchman used to eliminate deviant employees. They start to mill through company gossip to find disloyalty and then use this information to make or break people’s careers. Their allegiance to the C-suite compels them to try to cut the pay and benefits of even the loyal employees. When HR fills this role it loses all credibility with the employees whom they are supposed to advocate. Talented people quickly leave the company in search of greener pastures.
If your company’s HR department has been operating without strategic direction for some time the odds are there is room for improvement, but before you begin examining HR with a critical eye, consider this: sometimes HR departments are so understaffed that they must devote nearly all their time to fulfilling administrative duties. In this state of affairs it’s easy to wonder if outsourcing HR altogether may not be the best decision. HR departments have the potential to contribute much more to the company than an online data center ever could. So, begin analysis of HR knowing that the first step may be expanding the department.
Jack Welch, a management professional and educator at Strayer University, in a recent article described his vision for the most effective HR department. He said that the best HR professionals have the ability and natural disposition to fill the role of what he calls a “pastor-parent.” These people act like a pastor by listening to employee sins and complaints without passing judgement or taking sides on an issue. They enjoy interacting with people and are willing to go the extra mile to help them. But they also play the role of a parent, someone who maintains discipline in a way that helps the employees grow and reach their potential. Welch continues,
“Leaders must also make sure that human resources fulfills two other roles. It should create effective mechanisms, such as money, recognition, and training, to motivate and retain people. And it should force organizations to confront their most charged relationships, such as those with unions, individuals who are no longer delivering results, or stars who are becoming problematic by, for instance, swelling instead of growing.”
An HR department, acting in this way, will help contribute to a company’s bottom line. To further the betterment of the company the HR department should be expected to possess means of collecting and analyzing data that assists in the managerial decision making process. Too often HR analysis is simply informative. A graph illustrating the results of monthly employee satisfaction surveys is useless unless it is part of a larger talent retention strategy. That talent retention strategy should also be quantified and connected to productivity and profits. HR presentations often do not push far enough into the realm of strategic, result-based information the way that other departments do. For example, IT, financial, and legal departments do a better job of making their value clear to upper-level executives. Since people are a company’s most valuable resource, HR should hold themselves to the same standard required of other departments.
HR departments should be able to identify potential areas of improvement and plan to address them. For example, many companies have an Applicant Tracking System (ATS). These systems provide a convenient central database for applications and assist in the recruitment process. However, recently recruiters have noticed that an overly complicated ATS that requires superfluous information may drive away talented applicants who only want to work for companies they deem “high speed, low drag.” An ineffective ATS may be the first warning sign that the company of interest is not efficient in its systems and policies.
The efficiency of the ATS is within the purview of HR. To determine if the ATS is repelling talented people HR should find the number of potential employees who enter the ATS and then exit before completion. If that number is higher than expected, HR should take steps to improve the system and reduce abandonment rates and then report on the results of their improvements.
Effective ATS software can provide numerous benefits to your HR department. A smooth operating ATS can help you locate and retain only the best employees. If you employ an ATS program, then be sure it is working towards growing your company with only the best of employees and candidates. While a full discussion of its benefits requires further insight, some of the highlights are: it can link automatically to job sites like Monster, Indeed, and LinkedIn, and it saves time and generates helpful analytical tools, as well as provide the right training so that new employees can begin their positions in the most effective way.
Additionally, the effectiveness of job ads must be addressed. Who writes a job posting may differ from one company to the next, but in the end this is a human resources issue. There is a lot of information out there about how to engage future employees with job ads, but here is a summary:
- Don’t post an ad that simply lists the necessary requirements. People desperately looking for a job probably won’t have the requirements you are looking for, and talented, experienced people will be turned off by the curt ad.
- Do write the job description with a human voice that communicates to the reader that working for your company would be a pleasure.
HR should demonstrate what steps are being taken to improve ad copy and what quantifiable results have taken place.
Lastly, compensation plans are perhaps the best way to retain talented people and maximize the utility of HR. The traditional method of compensation is to evaluate employees on a bell curve. However, this model moves the bulk of the available compensation funds to the largest class of performers, which is the mediocre class. Research shows that in a large company there is a small number of employees that contribute more to the success of the company than the vast majority of remaining employees. In this light, these top performers should receive the majority of the compensation. Microsoft, for example, follows this logic. They have a handful of employees with stratospheric salaries, and the majority of employees are paid a usual amount.
Additionally, the outdated bell curve model requires employees to be rated according to a normal distribution. The problem is that, if you have a 10-member team, one member will be rated as exceptional and one of them as low-performing when, in fact, there might be 9 exceptionally performing members with one normal performing member. The system forces ratings, and the resulting pay distribution, to follow an imposed structure that has no bearing on reality. Building a compensation strategy that is flexible enough to reward employees based on their performance will retain talent more effectively than the traditional policy mandated bell curve approach. HR professionals should be accountable for compensation planning with the intent of attracting top talent. For a detailed explanation of the concept mentioned above refer to this article.
Human Resources has the potential to make a tremendous impact on the productivity of a company. The strategies mentioned above are only a few suggestions to get the thought process started. The bottom line is that too often HR departments are left to run without enough strategic direction. A few hours spent to procure new HR directives will help the department reach its full potential, and will probably make the HR professionals staffing the department a lot happier.