Have you really got an HR strategy?

Paul Kearns questions commonly held views on what constitutes a strategic approach to HR

The simplest answer to this question is to use the analogy of an electrician re-wiring your house.

A good electrician will strip out all of the old wiring, light fittings and sockets and replace them with a completely new system. Shoddy electricians, or those working to a budget which is too tight for the work to be done properly, will just disconnect most of the old wiring and replace where necessary. However, the most crucial part of the whole job is to make sure the new circuits are all correctly wired into the mains.

Most HR “strategies” are akin to the shoddy electrician. HR directors do not have either the power or the inclination to do a complete re-wiring job.

The most damning criticism of such “strategies”, however, is that the HR director usually forgets to wire them into the mains. Or perhaps doesn’t even know where the main fusebox is.

So they have some really nice, new, clean fittings but none of them work. In this HR analogy, the mains is of course the business plan.

Ask an HR director what their strategy is and instead of showing you the connections to the mains, they will usually present you with a shiny, new set of policy statements or documents.

The pay policy, for example, may state that the company will aim to set its pay levels in the upper quartile of similar companies. It may have a policy on continuous development for all staff and put a Personal Development Review system in place to support this policy.

Although a good HR strategy will provide a solid foundation on which to build a coherent set of policies such as these, simply having a set of policies does not mean there is any semblance of an HR strategy beneath it.

Is there, for example, a clear statement that under-performance will not be tolerated? Does the company intend to reward high performance? Is an upper quartile salary level enough to attract and retain high performers?

All of these questions are linked. Without eradicating under-performance, those having to work with the under-performers will have less chance of excelling. If you really want to reward high performers why does the company not want to exceed market salary levels? Indeed, why cap earnings at all? Or is that too revolutionary for most businesses and their HR experts?

An HR strategy will address all of these questions in the round. It will produce an approach that can address all of these issues simultaneously. The whole strategy will hang together well. So under-performers will know where they stand and cannot expect a pay rise every year as a matter of course to keep up with upper quartile salary levels. The strategy will also have ensured that these messages are communicated well, so that all employees know where they stand.

It is extremely difficult to capture the essence of what makes a good HR strategy. It cannot be defined in just a few simple sentences.

But here are some key elements:

1. The HR strategy should be formulated as the business strategy is being formulated, not afterwards.

2. There should be a clear statement of purpose for the HR function. Is it a support service or is it an equal business partner?

3. Strategic HR thinking should actually inform the business strategy. The choice of where to get recruits from for the new 24 hour banking operation is a good example of this.

4. An HR strategy is a strategy for organisational change. If the organisation does not need to change then it does not need an HR strategy, as such. Instead it just needs a set of policies (eg. pay, recruitment and training policies).

5. An HR strategy will, almost by definition, address fundamental structural and process changes. If it does not, then a question has to be asked about whether real change is necessary.

6. The HR strategy should be a written document, which shows direct links to strategic business objectives. So, if market share is a strategic objective, the HR strategy should state how it would help to achieve this.

7. HR should be totally accountable. If it says it is going to help achieve an increase in market share then it should share accountability for the achievement of market share targets.

8. A strategy is more than just a plan but the strategy should certainly be set out as a plan with timescales, milestones and targets.

This article is adapted from The Bottom-line HR Function by Paul Kearns

The Bottom-line HR Function by Paul Kearns is published by Chandos Publishing (Oxford) Price: £49.95 Available from Turpin Distribution on 01462 488900 or by email custservturpin@rsc.org

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