HC Global

As the banking crisis continues, more information is seeping out from various sources regarding reward, operating culture, ethics and corporate reputation.

And there's one question in all of this what was HR's role? There has been an acute silence....

Let's take reward (exclude executive board remuneration for the moment).

Is it or is it not under HR's remit?

Somewhere, reward-risk design got badly out of kilter with organisation performance or more appropriately risk and timelines - i.e. short term reward for longer term pay-off which was unquantified.

From a reward perspective, banking and in particular case loan granting is a complex area (never mind derivatives) of reward design and associated risk. (I should know from personal experience as a line manager way back - as an aside I was amazed to find I was more banking qualified than the various CEOs sitting at the MP committee's table last week!)

It is now clear that HR functions were not in control of this area for a number of reasons - see my previous blog - HR Puppet on a string.

Sadly it seems as though either HR was told what to do or not involved at all. This is particularly at odds with Banks having been at the forefront of employee engagement.

But as we have previously pointed out on more than one occasion, this type of engagement (like many) was/is rather 'individual input' focused as opposed to being both individual and organisation 'output/outcome' focused. 

It is no good scoring high benchmarks to various 'engagement' questions (and publishing them) if there is no connection to individual/organisational performance or operating culture or indeed any potential risks attached. It all smacks of too much PR. By the way banking isn't the only one. 

That's why we believe employee engagement should be related to individual/organisation performance and in that respect we are the odd ones out professionally.

When it comes to operating culture and ethics, the HR function again seems to have gone AWOL.

However, it did spend a lot of time on diversity initiatives, general CSR PR and a plethora of other well-meaning things but ultimately these were 'missing the obvious' - the basics of organisational performance linked from its organisation design. Think Lehmans as an obvious example. Think everybody else since.

Nobody seems to have held their hands up professionally and said there's something missing here - this is exactly the kind of thing those who care about the HR/HCM profession's standing have been on about for some time.

Where is the CIPD in all of this?

Nowhere. Given all of the reward/benefits conferences that take place giving CPD points like confetti one would have thought that a few questions may have been asked previously on this organisational issue and other related issues. I did notice that Jackie Orme, to her credit, at least commented on 'bonuses helping the business' - see PT's recent 'Bonus blame game' article.

However, the CIPD currently really prefers to continue to broadcast daily in the media the same old thing about the economy about '3 million unemployed' like a broken record - I expect to find John Philpott walking the streets with a billboard with 'the end is nigh' written on it (or maybe the next CIPD conference).

[I wouldn't mind so much if they had spotted the economic downturn first but they didn't they were late to the party and have been trying to make up for it ever since - they were at least three months behind our announcement of 100,000 HR jobs at risk back in July 2008 which also outlined the potential unemployment statistics.]

Anyway back to the main feature. There's an opportunity here for the HR/HCM profession to grasp.

The business case now exists for the function to be thrust forward and 'be responsible for organisation design and the likes of reward (amongst other things) on a professional basis'. And I apologise in advance to those organisations where the HR/OD function is.

I would prefer it if the CIPD launched an investigative review of the shortcomings of reward and the related failings in the banking crisis (never mind the failure of whistleblowing policies). If the HR profession is found culpable or just plain ignored on matters of such importance then at least we know where we're starting from.

And if the CIPD aren't then ISHCM/HCMI may well do. It's just a pity we don't have 100,000 members paying £200 a year yet.......