How human capital is managed within an organization is crucial to that organisation’s success. Yet too often human resources (HR) functions are treated as a compliance exercise. Nowhere is this more evident than in the common misalignment between a firm’s strategy and its internal policies and procedures.
As an adviser in the HR space, it is not unheard of to be asked by a client to draft a policy or design a process, and then to be told: “We just want something generic”. In this case, the policy in question is being drawn up as a compliance exercise. It’s simply box-ticking to comply with the law, and it’s assumed the policy will vanish without a trace. However, when a firm drafts a certain policy or puts a process in place, this new practice will drive a certain behavior. The problem comes in when little thought is put into the behavior these new policies and procedures will drive, and if these behaviors are going to be aligned, or in conflict, with the lived reality of the company culture.
If a company, for instance, proclaims that its values are all about family, collaboration and team work, but then runs an incentive scheme and performance management process which rewards individual performance, then a conflict develops. Organizations whose’ values speak to creativity and innovation but polices speak to rigid working hours, timesheets and strict deadlines create a conflict. Further companies whose value statement is about mobility, talent development and fast career progression but have highly hierarchical organization structures with rigid grades and benchmarks per level are in contradiction.
Individuals who were recruited and attracted to an organization on the basis of the company’s advertised culture who then find a quite different reality on the ground, will be unfulfilled, less productive and ultimately disengaged.
HR practices are indeed a compliance exercise, but they can also have a direct impact on the performance of an organization. It makes sense to align all of a firm’s policies, culture manifestos, mission statement and procedures to achieve one strategic outcome. It’s crucial that companies think through this process carefully. It should begin by outlining the company’s strategic goals, the culture they want to foster, and then drafting the company’s policies and procedures in such a way to drive the necessary behaviors to achieve its goals.
If a company’s policies are working against its goals as an organization, or not accurately reflecting its employee value proposition, it may be time to reframe its value statement to the world. The key principle is alignment.
The goal of an HR department is to optimize the human capital within an organization. The way to do this is by connecting all of its processes to the organisation’s goals, and articulating them clearly, from recruitment to reward to performance management to talent management, so they all drive behaviors which speak to the organizations ultimate goals. Companies wishing to perform at their full potential, where every team member understands his or her company’s goals and their personal role within the system, need to take the time to formulate some authentic, coherent mission statements and policies which speak to those and are integrated with their values.
The price of an inauthentic value statement can be significant in that it will attract staff who misunderstand the kind of company they’re joining. These staff members will not be aligned to the actual practiced values of the organization and will directly, or indirectly, work against the organization’s ultimate strategy.
Part of the problem may lie in a lack of appreciation of the value of the HR function, which is often seen as a transactional service. Business leaders often may not realize the impact some of their company policies and practices are having, and the behaviors certain business practices are driving. Without an understanding of the strategy, and goals of an organization, HR will put policies in place which may be aligned to legislation and compliance regulations, however these are most likely not going to be aligned to the organization’s values and goals. When Senior Management take HR into their confidence, helping them to understand the strategy and goals of the organization, then HR can become a business partner who can ensure that the company’s policies and procedures are aligned to the strategy, and drive the necessary behaviors to achieve the organization’s goals.
When HR is pursued as a strategic business imperative, it can add real value to a company. Human resources management has the potential to be so much more than a box-ticking exercise. HR can be a practical, strategic tool to drive productivity, ensure harmony and to help an organization to achieve its goals.
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