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Blog: Books@Work June 2009 Archive
 

June 11th, 2009

HR Stagnation

Every three years since 1995, HR researcher Edward E. Lawler III and his colleagues have conducted a survey to assess the human resources function, measuring how it is changing and determining how effective it is. It’s the only long-term analysis of its kind, and the 2007 survey results have just been released in Achieving Excellence in Human Resources Management: An Assessment of Human Resource Functions.

Anyone hoping to read it to see how far HR has come will be disappointed. The times may be changing. HR is not.

The most-discussed issue in HR circles (aside from why everyone hates HR) is whether the human resources function has finally become a full partner in shaping an organization’s business strategy. Sadly, the 2007 survey found little or no change since 1995 in the extent to which HR reports being involved in business strategy, according to Lawler and his co-researcher, John W. Boudreau, both of whom are with the Center for Effective Organizations in the Marshall School of Business at the University of Southern California.

Think of how the business world changed between 1995 and 2007: We had the rise and fall of Enron, and the exposure of compromised executive ethics. We had a dot-com crash and suffered a national security crisis triggered by terrorist attacks on September 11, 2001, both of which racked workforces across America. Since 1995, we’ve seen the growth and dominance of the Internet in the workplace, with related technologies that promised to streamline HR record keeping, recruiting, performance management and benefits administration. But despite of all that, and despite all the books, conferences and articles that have told HR it can and should have a strategic focus, it apparently hasn’t happened.

Lawler and Boudreau note few changes in the importance of HR services and the characteristics of an effective HR function. They also find little change in efforts to rotate people into, within and out of HR. This kind of rotation is critical if HR practitioners are to have an understanding of how other parts of the business work, and, if they hope to be well-rounded enough to be considered business partners and possible candidates for a CEO spot someday. Virtually no HR professional has managed to achieve that at a Fortune 500 company. (Xerox’s retiring CEO, Anne Mulcahy, shouldn’t count; she was in HR, having done a three-year tour of duty there, but wasn’t from HR.)

Perhaps the most disappointing stagnation of all can be seen in the amount of time HR spends on rote activities. That hasn’t changed since 1995, when respondents said they spent 15.4 percent of their time maintaining employee records. (In the late 1980s, it was 22.9 percent.) In 2007, the time spent on this non-strategic activity increased to 15.8 percent. Lawler and Boudreau dryly note that respondents “may have perceived more change in their role than has actually taken place. In short, they may be guilty of wishful thinking and a selective memory.”

The same wishfulness can be seen in a question about strategy. Again, the needle barely moved. In 1995, respondents said they spent 21.9 percent of their time in activities associated with being a strategic business partner—being part of the management team, being involved in strategic HR planning and working on organizational design, for example. In 2007, they estimated it to be 25.6 percent of their time. In both instances, they estimated (incorrectly) that they were currently devoting substantially more time to strategy than they had in prior years.

Although the authors mostly maintain a dispassionate and scholarly tone in the book, frustration with the static state of the profession seeps through: “It is almost an understatement to say that the world of business has changed dramatically since 1995. Thus it is surprising, indeed shocking, that how HR spends its time has not. It is perhaps less surprising that HR continues to believe it has changed, even though it has not! But this may be a major problem if it leads to HR executives believing they have made progress toward an objective they feel is important when in fact they haven’t.”

This gets at the heart of HR’s aspirational problem: Its desire to be strategic may be unattainable in the vast majority of organizations. Most companies don’t understand or want strategic HR, the authors say.

“The existing role and activities of HR are well institutionalized in a kind of codependency relationship,” Lawler and Boudreau write. “The individuals in the HR function are comfortable in their current role … the recipients of these services are happy to have an administrative function that removes what they see as onerous HR responsibilities from them.”

Late in the book, Lawler and Boudreau quote a senior HR leader as saying that it is “easier to find an organization that understands and supports strategic HR than to try to change an organization that does not.” That might be the best career advancement strategy yet for serious HR game-changers.
 



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