How is HR
shaping up in the first decade of the 21st century? 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 cliché 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
the important question is: 50 years on, are companies finally shaping policies
which walk the HR talk?
The
price of Americanisation
According
to Cary Cooper, professor of organisational psychology at the University of Manchester
Institute of Science and Technology, there is a feeling that the UK is too
close to the American model, and is in danger of becoming the 51st state.
"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," he says.
"How
we mend the psychological contract between employer and employee is, for me,
the critical question of the decade."
The
rush of post-11 September redundancies does not suggest any great rethinking in
the heart of the corporate world. But there are some structural factors which
may boost the influence of HR.
HR
benefits from industrial consensus
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.
‘Macho’
management out of favour
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
are 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.
Life
after Jack Welch
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).
A
guru for HR
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.
HR’s
next challenges
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?
At
the same time, there will be several big challenges. Like fixing that
psychological contract.
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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.
