The HR responsibility should be one of the most crucial roles in any organisation – if not the most crucial.
And yet, in many businesses it receives scant attention. If there is an HR executive in place, they all too often do not fulfill the critical requirements of this key function.
What then is the role of HR? Why doesn’t it always function as it should, and why don’t leaders recognise its importance and take appropriate action?
The HR function, whoever manages it, should be viewed as the cornerstone of any organisation if it is to be successful.
Companies commonly state that people are their most important asset, but this sentiment does not always find real-world application. Looking at it from a cost perspective, the total cost of employees in most organisations is possibly the biggest outlay, usually not less that forty percent of sales revenue and often significantly higher.
The key requirement of the HR function is to understand the people needs of the business, which will enable it to achieve its strategic and tactical objectives.
The key responsibilities include:
- training and developing
- if warranted, letting go
The business with the best team players will ultimately win.
Unfortunately, too many HR executives occupy themselves in essential but not strategic areas, including employee welfare, personal administration, industrial relations, CCMA negotiations and other such activities.
It’s rare that they operate as one of the key critical senior executives working hand in hand with the CEO, understanding implicitly the strategic imperatives of the organisation and directing the people portfolio and management philosophy accordingly.
The HR appointment should be one of the inner cabinets of any business. If you consider you are too small for a full time appointment, find an outsourced, part-time expert that can provide that objective guidance.
The person chosen should be candid, balanced, tough, people orientated and commercially minded. They must also understand the crucial balance between the needs and ambitions of the employees, and the needs of the company, including its strategic direction and essential skill requirements.
Another key requirement for a successful HR function is an effective performance appraisal and evaluation scheme that ensures every employee understands unequivocally how they perform, where they stand and what course correction, focus or improvement is required.
Going hand-in-hand with performance measurement, HR should reasonably ensure the following:
- An adequate, market related reward system for all employees.
- Ideally, a performance incentive geared to the key success or performance factors for that role and the organisation’s overall success.
- A culture if of recognising success, rather than just criticism for mistakes.
- Adequate and aligned training and development, which, again, is geared to strategic direction and needs.
- That employees are motivated for mutual success, constantly strive for improvement and that there is a strategy to retain good people and give notice to those who do not fit.
HR needs to face the people realities, taking positive or negative steps to optimise team performance.
It is undoubtedly the toughest and, yet, most critical function in the organisation: people are the key to success for sound operations, good customer relations and the development of new ideas and developments.
How effectively does your organisation handle the HR function?
Do the CEO and his HR support person effectively manage the complete people process?
If it isn’t at the top of your management agenda, perhaps the effectiveness of your people philosophy requires rethinking. People are after all the key to success.
And what could be more important?
(First published in Real Business)