HR enters a new era

How
is HR shaping up in the Naughts? Paul Simpson looks at how the latest social
trends are influencing the profession

The
idea that people are a company’s most important asset may well be half a century
old. The exact age of the clichŽ depends on whether you credit it to Gary
Becker (author of Human Capital, published in 1864), Peter Drucker (who began
producing classic work on management in the 1950s) or US social worker Mary
Parker Follett who started writing about work in the 1920s. But, regardless of
its source, the important question is: are there grounds for believing that in
the Noughts, companies may finally shape policy with the slogan in mind?

Well,
there are some. Cary Cooper, professor of organisational psychology at the
University of Manchester Institute of Science and Technology, says, "There
is a feeling in the UK that we are too close to the American model, have run
the danger of becoming the 51st state and that, although we don’t want the
rigidity you see in some European economies, we are seeing the costs of the
American model: the long hours, the rise in divorces, the insecurity which
comes from the use of short-term contracts. How we mend the psychological
contract between employer and employee is, for me, the critical question of the
decade."

Not
that the rush of post-11 September redundancies suggest any great rethinking in
the heart of the corporate world. But there are some structural factors which
may boost the influence of HR.

The
first is the degree of consensus which exists in the industrial and political
landscape. Neither last year’s British general election nor the 2000 US
Presidential election offered the voter the clear ideological choices of most
previous contests. Increasingly the argument has come down to personalities and
managerial competence. Cooper says the same is happening in industry:
"Look at John Monks at the TUC – he is a completely different kind of
union leader. He has a business case for everything."

Management
will welcome this in some ways – it is hard, after all, to negotiate with a
union leader who believes you are a running dog of imperialism who has deprived
the workers (his members) of the legitimate fruits of their labour.

And
yet the public argument may be harder to win now it is impossible to dismiss
the union leader as ‘red Robbo’. Indeed, this kind of name-calling feels like
old politics, of the kind practised so efficiently but ineffectually by William
Hague in his stint as Conservative leader.

But
this is good news for HR, which works best when there is common ground. The
absence of such agreement and the enslavery of HR to industrial relations
marked the 1960s and 1970s – two of the decades when personnel’s influence in
the corporate power game was at its lowest. At the same time, the balance of
power between employer and union is less one-sided than it was in the 1980s,
when line managers felt they could afford to ignore legitimate HR concerns in a
macho willingness to exercise their ‘right to manage’.

Macho
management isn’t very popular these days. Bill Gates, the most famous
businessman in the world, has managed to become public enemy number one in the
land of free enterprise partly by dint of his sheer visibility, a reputation
(realistic or not) for arrogance and an anti-trust case.

His
corporate ancestor Rupert Murdoch is now so low profile he is barely a blip on
the media’s radar screen. "We’re in a decade where it doesn’t pay to be a
household name as a business leader," says Cooper. "The best manager
in Britain today in my opinion is Tesco’s Terry Leahy but I bet you not one in
a 100 people on the street could tell you who you worked for."

This
is also partly a reflection of the shift in another balance of power: between
managers and investors. The Ivan Boeskys of the 1980s may have been stymied as
barbarians, but they made corporations (and managers) answerable to the people
who bought their stock.

This
has sometimes led to more short-termism and a return to the days when CEOs cut
their workforce to keep stock up, but it has also helped make management
accountable. General Electric’s reigning genius Jack Welch (in likeability
alone corporate US’s answer to President Eisenhower) had a high profile but a
slightly misleading public image as an avuncular regular fellow, a democrat
with a small d, a man whose ego was healthily smaller than his company’s annual
turnover. And even this modest behemoth has just retired, leaving corporate
America without a brand champion.

The
same rules now apply to gurus. The evangelical fervour of Tom Peters suited the
1980s perfectly (even if his message ran against the asset-stripping ethos of
that decade at its worst). But today, hard work and eye for detail are prized
more highly (not to say that Peters didn’t possess these  this is all about perception).

So
the most influential business guru in the US now is a professor at the
University of Michigan called Dave Ulrich. His chosen field of expertise? Human
resources.

The
other factor in HR’s favour is that, although science is more powerful than
ever, there has been no real return to the scientific management theories first
expounded by the US engineer Frederick Winfield Taylor (1856-1915). His idea
that scientific knowledge could alone make companies more efficient has
increasingly been challenged by theorists like Drucker. Parker Follett, who
influenced him, had begun talking about empowerment and flattening
organisations even before the Second World War. Today, Taylor’s simple belief
has been replaced by something much less clear cut, a recognition of the sheer
complexity of the corporation and of the employees who work for them.

So,
for the immediate future, the arguments in HR as a broader business environment
may be less about principle and more about nuance – a similar process to that
which has made politics so dull as a spectator sport. On the one hand, there
will be a trade of new buzzwords for old (out goes work-life balance in comes
time sovereignty).

HR
will be full of small challenges in the Noughts. What is the policy to be on
pets in the office? Is Take Our Kids To Work Day really such a good idea? But
at the same time, there will be several big challenges. Like fixing that
psychological contract. If work (or more crudely money) was the new rock’n’roll
of the 1980s, the thing which people most conspicuously desire in the Noughts
is time. How to reconcile that with the ever-shifting demands of business? And,
how, ultimately, to make a case for the discipline of personnel or HR which
goes beyond number crunching about successful recruitment and staff retention.

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