June 2007 – HR career paths

Is it time for a rethink on career paths in Human Resources Management? The need for some role transformation is highlighted in a new study on HR trends published by Mercer Human Resource Consulting.*

The study found that while HR professionals were being sought out increasingly as business partners, more than two-thirds of their time was being spent on traditional administration such as record-keeping and compliance.

The need for stronger HR at the top of companies was debated at a recent conference
on performance management mentioned in last week’s column.

Jack Welch, former chief executive of General Electric, argued strongly at the New York conference held by SuccessFactors, a performance management software business, that a company’s most senior HR professional should have first hand knowledge of the business.

This would involve a period during their career working in a front-line managerial role. A purely administrative HR background, he argued, was insufficient to equip a director with the business-wide knowledge needed to advise a chief executive on issues such as succession plans, in-house promotions and potential shortages in skilled management.

Mr Welch has stated his belief many times, repeated in his last book, Winning, that the head of HR should be the second most important person in any organisation, at least equal to the finance director.

The best HR people, he says, are “part pastor, hearing sins and complaints without recrimination, and one part parent who loves and nurtures but gives it to you fast and straight when you’re off track.”

I can’t subscribe entirely to this folksy pastor-parent concept although I agree with his argument that the HR director can work as a kind of referee between other members of the top team. To make this role workable anyone assuming that mantle would need to be in a trusted position, capable of maintaining confidences.

If you have ever seen The Godfather, you would have recognised Robert Duvall in a similar position, mediating between members of the family as consiglieri.

Mr Welch makes another good point in his book, again repeated at conferences, that if chief executives had to sign off on their employee evaluations in the same way they had approve their financial accounts under the Sarbanes-Oxley Act, then appraisals would get the kind of attention he believes they deserve.

“If you had to go to jail for doing phoney appraisals, then you’d have something,” he said. “phoney appraisals are a sin.”

This has been a long running Welch theme, supporting his argument that honest, rigorous, straight-talking appraisals are better for the business and better for individuals in the long term.

Any appraisal, he maintains, must be clear and simple, should measure people on relevant performance criteria, should be carried out at least once a year, and should involve some feature of employee development. Finally it needs to be audited for integrity.

This helps explain why Mr Welch was sharing a platform with Lars Dalgaard, the chief executive of SuccessFactors, a company that believes it has developed the software systems that can deliver a thorough process of performance management.

A common theme emerging from their discussion was the need to select and retain people for their values or principles as much as their performance. “Performance gets you in the game. Values get you promoted,” says Mr Welch.

In his system anyone with weak performance with the wrong set of values would be fired. Those featuring strongly in both areas are clear promotion candidates – his “A” players. A third category with the right values but poor performance should be given a chance to improve their results.

The most worrying category, he argues, are those who achieve good business results but who do not reflect the right attitude in their work – the uncaring manager who rules by fear, for example. “It’s this fourth type that destroys companies,” he says. “This is the type that delivers the numbers but who looks the other way on the values.”

But how many HR managers today are capable of delivering such candid assessments of employees? How many have the systems or the support of their peers to institute such rigorous appraisal systems?

The best, says Mr Welch, have made themselves integral to the way people are selected, trained and promoted for excellence. “They need to be absolutely in tune with the chief executive,” he says.

This does not, however, mean agreeing with everything a chief executive says. “If a CEO gets excited, we go off track. Somebody has to stay calm and ask whether various people implications have been thought through properly. The HR person has to be the most important partner of the CEO in my opinion,” he says.

But here is the real issue for the HR profession: Mr Welch makes it clear that those he considered the best HR people at GE did not come from the HR ranks. They were promoted in to the role from other parts of the business.

“They had been around managers, they might have run union shops and they have been a success as managers in other roles. The people in HR get to a certain level but they don’t get the top jobs.”

It’s important that the most ambitious HR people, therefore, are moved in to line jobs at some stage of their careers, says Mr Welch.

I have raised this potential difficulty for ambitious HR managers in the past, arguing that a useful career path might be to go in to consultancy or general management for a spell. Some of the basic HR roles are drying up anyway internally as more functions, such as payroll and benefits provision are contracted out to specialist providers.

The vital package for what some have called “strategic HR” is the role that covers recruitment, development, appraisals and promotions and succession planning, whatever you choose to call it, be it talent management or performance management.

At a meeting of chief executives during the same conference there was some discussion about whether the HR role could be divided in to two at the most senior level. The new word here in the bosses’ lexicon is “bifurcated”. The idea is that one HR professional does all the fun stuff – giving strategic advice to the chief executive, while another looks after all the administration – the boring stuff – as a head of HR operations.

There remains a problem here for HR people, however. Who would get the administrative role? The one with most HR experience, I would have thought. That would be galling if they saw someone from another function skip past them in to the chief executive suite. Yet I agree with the argument that people are too important in business to be the sole preserve of HR. It’s a role in need of review.

*The findings of Mercer’s Global HR Transformation Study can be found here: www.mercerhr.com/globalhrtransformation

See also: Hr goes back to school