Here Comes The Train

Here Comes The Train (Again)

(March 12, 2009) First of all, there are two very recent pieces that you need to read to stay on top of the global conversation about HR:

• Memo to CFOs: Don’t Trust HR (by Richard Beatty from Rutgers University in CFO Magazine)
• CFOs Should Trust HR, But Do Have Reasons To Be Wary (By Jim Holicheck of Gartner, in Response)

While the president of SHRM is off (famously) claiming that HR is where the Human Rights and Civil Rights movements meet the organization, The CFOs of the world are in receipt of a blistering indictment of the industry. Richard Beatty, a professor at Rutgers delivered a presentation to the CFO Rising conference in Orlando. Beatty is the Director of the Rutger’s Masters Program in Human Resource Leadership. One list of Beatty’s particulars suggests that he’s knowledgeable and credible.

Beatty is one of a few strong voices who hope to quantitatively tie the HR function more directly to organizational strategy and results. He opined that typical human resources activities have no relevance to an organization’s success. “HR people try to perpetuate the idea that job satisfaction is critical,” Beatty said. “But there is no evidence that engaging employees impacts financial returns.”

Maybe this sounds familiar:

“…let’s face it: After close to 20 years of hopeful rhetoric about becoming “strategic partners” with a “seat at the table” where the business decisions that matter are made, most human-resources professionals aren’t nearly there. They have no seat, and the table is locked inside a conference room to which they have no key. HR people are, for most practical purposes, neither strategic nor leaders.“Why We Hate HR

It’s not Beatty from the recent CFO presentation, it’s Keith H. Hammonds from the article that started this very same furor two years ago in Fast Company.  A follow up study, a year later, found data to support the assertions. The splash was so big that SHRM developed a teaching guide for use in University settings.

The teaching guide concludes with the following matrix that defines SHRM’s view of HR’s Strategic Value.

(From Greer, C. R. (2001). Strategic human resource management: A general managerial approach (2nd edition). Upper Saddle River, NJ: Prentice-Hall)

It doesn’t take a lot of analysis to see that the  “High Value” activities mostly involve expense management. To date, the professional response to increasingly broad criticism of HR’s importance has been misguided efforts like the teaching guide. Nowhere can you find the formula for ensuring the right deployment of the right people in the right way at the right time.

HR is rapidly approaching a crossroads. If you count the follow-up study, this will be the third year in a row that the industry is on the defense going into the professional conference season. And still, there is no convincing data (good enough for the CFO) that anything has changed or is changing.

As the Director of a Master’s Program in HR, Professor Beatty showed an enormous amount of professional courage. Faculty don’t do things like this. Right or wrong, his willingness to bring the topic to the table merits a closer look.

Tomorrow, some recommendations.