The Future Of HR As We Know It: Repositioning & Transforming
HR In High Performance 'World Class' Organisations*
By Andre Parker* who can be contacted at
The interdependence of Customer Service, Product Quality and Price are three of the most significant barriers to competitor entry and success in just about any business and is a continual ‘top-of-mind’ guiding philosophy in 'world class' business organisations.
Such organisations rely on their people to give effect to their philosophy to unlock the value contained in their organisations. It underpins and gives substance the organisation’s change strategy to create a paradigm shift in the psychosocial contracts of the organisation’s human capital from one of a ‘coercive relationship’ to that of ‘business partnering’.
Veldsman (2002: 42) reports on this trend is an emerging theme in high performance 'world-class' business organisations, making the point that "without a partnership contract, the mobilisation of organisational members around a commonly understood, accepted and internalised strategic intent becomes a myth and a pipe dream."
2. Business Practices Of World Class Organisations
‘World Class' organisations know and understand that committed, motivated, and productive people have a sound relationship with the organisations that employ them and that this has a direct positive rub-off as to how they treat their customers. This view concludes that poor relationships become the breeding ground for destructive attitudes, poor commitment and poor customer service.
Hiebler, Kelly & Ketterman (1998:26-27) report that 'world-class' organisations are obsessively focused on their customers and see their employees as key to customer service, developing serious, positive and ongoing partnering relationships with key stakeholders. "Unfulfilled … frontline employees make for unhappy customers and an army of unhappy ex-customers". This implies that where there is a positive employment relationship between internal suppliers and internal customers all along the value chain, the ultimate ‘moment of truth’ where the end customer or consumer’s needs are met, is positive. The conclusion therefore is that "happy employees equal happy customers."
Bob Head, MD of the UK’s revolutionary Egg Bank puts it this way: "if you want happy shareholders, if you want happy customers, you’ve got to have happy people working for you" (Grulke & Sibler: 2002: 97). Reporting on Sears transformational experience, Anthony, Steven & Richard (2001:90) clarify how Sears’ employees drive customer satisfaction and how that, in turn, fuels overall organisational performance.
In the course of an interview with a team of supervisors and managers at the Disney Corporation to understand their commitment to customer service, a Disney World Manager commented as follows. "Committed, motivated and productive people have a sound relationship with the organisation that employs them. That has a direct rub-off as to how they treat their customers. Such people are a valuable asset to the organisation. Poor relationships, on the other hand, become the breeding ground for ‘lousy’ attitudes and poor commitment – for which the customer bears the brunt. Such people are a costly liability." (Parker, 1998).
Great Plains Coca-Cola, a 'world class' bottler of Coca-Cola products in Oklahoma City in the USA see this partnership relationship as a two way street in that "we are each other’s customers … together we manage things … we lead people only by example … use things … love people". What is so significant about this approach explains Thomas (2003), is that "even at the "moment of truth," we are our customer’s customers in that there is a reciprocal meeting of needs. Where there is true partnering, no one is greater than the other. It is a case of sharing reciprocal interests from a base of equality."
3. The Role Of Line Managers: Unlocking The Passion For Customer Service
One of the main keys to unlock a ‘passion’ for unrivalled customer service is therefore undoubtedly the management of a sound employment relationship between employer and employee. Drawing on extensive research into the connection between customers and how the employment relationship is managed, Marchington and Harrison in Slabbert, Backer and Prinsloo (2000: 7-14) conclude as follows: "Senior Managers in each of the companies regard customer service as the key to competitive advantage. There is little doubt that customer pressure, in whatever form it appears, acts as a considerable constraint on managerial choice in the area of work relations. What emerges is that from a strategic point of view, the employment relationship must always be managed in such a way that it proactively and constructively promotes the ‘business’ or mission accomplishment of the organisation as a whole. "
Aware that line management is logically best positioned to manage this ‘employment relationship’, 'world class' organisations endorse the intent that line management should take full ownership of managing individual and collective relationships with their people. This, in turn, casts the spotlight on the Human Resources function to re-assess its role and function in the organisation with a view to integrating the management of human resources practices into line so that line can assume the responsibility of managing their relationships with their people with increasing competence and effectiveness.
This view has long since been reinforced by Beatty and Schneier (1997: Vol 36:1:29) who report that the latter half of the last decade of the 20th century saw the most popular emerging role promoting HR being that of a "business partner". They point out that this process has led to the re-engineering of HR processes – one of which has been exporting of some HR work back to line management. Describing the process that HR must follow in becoming a strategic partner, Ulrich (1997: 61) identifies a number of principles as central to organisations with HR best practices. One of the most significant on his list is that line managers are accountable for HR management as a key piece of total business management.
4. A Paradigm Shift For HR In The New Economy
This paradigm shift in how HR is viewed and practiced in 'world class' organisations can be illustrated as follows:
This implies that:
# Line management will need to undergo a ‘paradigm shift’ in their thinking and practice in that they have to assume responsibility for some fundamental HR (people) practices which directly impact on the employment relationship.
# HR will have to undergo a similar shift in their thinking to dismantle the structure of the traditional HR Department and skillfully integrate HR practices into line where HR plays an integrated role as business partner, guiding and supporting line with a "HR Toolkit" and systems that become enablers for line to fulfill this role.
# HR will ‘have to let go’ and outsource low level value-adding work to a centralised shared service center so that it can focus on value adding strategic business decisions and tactical implementation plans … and in the process, integrate and operationalise sound HR practices into these plans.
In their new roles, HR will have to broaden their skills, knowledge and hence competence in every area of HR and that of the business as a whole. For example, in this new role, a HR practitioner will no longer be able to ‘hide’ a weak side to say, Industrial Relations or Learning and Development by referring such work to a specialist managers in their discipline.
Simply put, HR practitioners will have to become multi-skilled. More than that, HR practitioners will have to develop a relatively deep understanding of business processes and principles to be effective. This implies transcending from being solution providers to becoming business partners.extensive and a carefully crafted Learning and Development plans – aimed at both HR practitioners and line management, will have to be crafted and implemented to achieve this shift in mindset and accountabilities.
'World Class' organisations are ranked 'world class' by their customers who are served with a passion by their people. This passion is driven from a deep commitment to and alignment with the vision, values and purpose of the organisations in which they are valued partners. In these organisations, HR is not a Department, but a discipline that is practiced and owned by everyone in the organisation and which provides guidance in how to best manage relationships along the entire values stream, transmitting effective moments of truth into unrivalled customer satisfaction.
* Reprinted by permission; first published in HR Futures Dec 2003