VOLUME 38 | ISSUE 4 | FALL 2015

T H E P R O F E S S I O N A L J O U R N A L O F H R P E O P L E + S T R AT E G Y

ADVANCING THE HR PROFESSION

FEATURE

Reimagining HR: The Paradox of a Profession at the Tipping Point EXECUTIVE ROUNDTABLE

Charting the Future of HR

TALENT. ON A PLANET OF 6.6 BILLION, IT’S STILL YOUR MOST PRECIOUS RESOURCE. It’s bigger than all of us. The fact that companies today must do so much more with so much less. Which puts a premium on the performance of everyone in your organization. It’s why Right Management makes sure your talent strategy aligns with your business strategy. So each person in your company can reach their full potential. The world of work is changing. Is your company ready? Learn more at right.com

VOLUME 38 | ISSUE 4 | 2015 T H E P R O F E S S I O N A L J O U R N A L O F H R P E O P LE + S T R AT E GY

Content COVER 46 Reimagining HR: The Paradox of a Profession at the Tipping Point John Boudreau

FEATURES 56 Toward a Synthesis of HR Competency Models: The Common HR “Food Groups” Dave Ulrich, Wayne Brockbank, Mike Ulrich, and David Kryscynski

66 HR at the Crossroads: What We Measure Matters Marcus Buckingham

Laurie Bassi, David Creelman, and Andrew Lambert

DEPARTMENTS From the Executive Editor The HR State of the Union Anna Tavis

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Global Perspectives HR Standards Across the Globe POINT Howard Wallack COUNTERPOINTS Laura Harrison |

71 Advancing the HR Profession: Consistent Standards in Reporting Sustainable Human Capital Outcomes

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46

From the Guest Editors HR’s Evolving Role John Boudreau and Richard Vosburgh

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Jason McRobbie | Peter Wilson | Katharina Heuer | Ilan Meshoulam | Suchada Sukhasvasti na Ayudhya | Gustavo Aquino

18 In First Person How Organizations Around the World are Advancing the HR Profession: A Conversation with Jorge Jauregui Anna Tavis

20 Linking Theory & Practice Emerging HR Leaders and Business Schools: A Match Made in Heaven? Bradley Winn

26 HR Association Executive Roundtable What Can HR Associations Do to Advance the Profession? Moderator: Richard Vosburgh Participants: Lisa Connell | Henry Jackson | Steve Kozlowski | Jill Smart | Patrick Wright

34 Executive Roundtable Charting the Future of HR Moderator: David Reimer Participants: Paul Baldassari | Glory DiSimone | Sarah Dunn | Dominique Grau | Scott Kelly | Susan LaMonica | Alan Momeyer | Donna Morris | Dermot O’Brien | Michelle Smith

8 38 Research Corner A Competency-Based Approach to Advancing the HR Profession Alexander Alonso, James N. Kurtessis, Andrew A. Schmidt, Kari Strobel, and Brian Dickson

76 Book Reviews Work Rules! Insights from Inside Google That Will Transform How You Live and Lead Reviewed by Edie Goldberg

Global Trends in HR Management: A Twenty-Year Analysis Reviewed by Allan Church

Rise of Robots: Technology and the Threat of a Jobless Future Reviewed by Anna Tavis

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VOLUME 38 | ISSUE 4 | FALL 2015

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HR People + Strategy is a dynamic association of human resource and business executives committed to improving organizational performance by creating a global network of individuals to function as business partners in the application of strategic human resource management practices. T H E P R O F E S S I O N A L J O U R N A L O F H R P E O P LE + S T R AT E GY

EXECUTIVE EDITOR Anna Tavis, Ph.D. New York University GUEST EDITORS John Boudreau, Ph.D. Center for Effective Organizations at University of Southern California Richard Vosburgh, Ph.D. RMV Solutions PERSPECTIVES EDITOR Marc Sokol, Ph.D. Sage Consulting Resources EXECUTIVE ROUNDTABLE EDITOR David Reimer Merryck & Co. LINKING THEORY & PRACTICE EDITOR Brad Winn, Ph.D. Jon M. Huntsman School of Business at Utah State University THOUGHT LEADER EDITOR Steven Steckler EMD Millipore ASIA PACIFIC EDITOR Alison Romney Eyring, Ph.D. Organisation Solutions EUROPEAN EDITOR Yochanan Altman, Ph.D. BEM–Bordeaux Business School, France EDITORS-AT-LARGE David Creelman, M.B.A. Creelman Research Kathleen Ross, Ph.D. Healthy Companies International

HR PEOPLE + STRATEGY EXECUTIVE COMMITTEE CHAIR OF THE BOARD Edie Goldberg, Ph.D. E.L. Goldberg & Associates

HR People + Strategy continuously seeks to build recognition from business leaders and the HR community for the critical role of HR as a strategic business partner in achieving higher levels of organizational success. In support of this mission, HR People + Strategy: • Serves as a global forum for presenting the latest thinking and information on the HR implications of key business issues and strategic HR practices. • Offers a broad range of comprehensive publications and professional development programs with distinguished human resource scholars, practitioners, and business leaders. • Builds networks of diverse individuals to exchange leading-edge HR ideas, information, and experiences. The Five Pillars of Knowledge The following five knowledge areas are those HR People + Strategy believes are the most critical and strategic to HRM and HR best practices. HR People + Strategy has identified these pillars of knowledge through extensive research on human resources management and organizational development. These five areas drive the content and outcomes of all HRPS educational activities, from conferences to webcasts to content in our People + Strategy journal. • Build a Strategic HR Function. Enhancing the impact of the profession • HR Strategy and Planning. Ensuring excellence in human capital management • Leadership Development. Impacting leadership skills and attitudes individually and collectively • Organizational Effectiveness. Strengthening the organization’s effectiveness in achieving its intended outcomes • Talent Management. Securing diverse talent to meet the organization’s future needs at all levels The People + Strategy journal is published quarterly by HR People + Strategy. 1800 Duke Street Alexandria, VA 22314 888-602-3270 ISSN 1946 4606

VICE CHAIR OF THE BOARD Richard Vosburgh, Ph.D. RMV Solutions

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Anna A. Tavis, Ph.D. [email protected]

LEADERSHIP DEVELOPMENT

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EMPLOYEE ENGAGEMENT

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CAREER TRANSITION

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From the Executive Editor The HR State of the Union

I The purpose of this issue is to empower the HR profession with knowledge and move it exponentially forward.

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t is the best of times and the most challenging of times for our profession. It all depends on what you are paying attention to. If you follow the business media, the spotlight is clearly on us to deliver. And if you regularly read People + Strategy, you know that we have lined up the resources necessary to help the profession thrive. The apparent lack of unity on the “solutions” end of the issues prompted us to invite the greatest practitioners, researchers, academics, and HR leaders to contribute to this issue. We asked them to dialogue about what it will take for our profession to flourish. The sum total of their experience, commitment, and leadership resulted in this breakthrough edition that focuses on specific solutions to transform HR from within. Or, as Peter Drucker once wisely noted, “the future is already here, it is just not evenly distributed.” We teamed with John Boudreau of the Center for Effective Organizations at the University of Southern California and Richard Vosburgh, incoming HR People + Strategy board chair, to lead us on the discovery of the renewed and confident HR profession. We tapped into our longstanding international partnerships and affiliations and broadened our perspective beyond the more familiar boundaries of the English-speaking world. Boudreau leads the issue with a detailed update on Project cHReate, a perfect conversation starter that lays out five scenarios for HR to embrace. Dave Ulrich and his research team similarly reflect on the big picture and offer readers the “food groups” metaphor to help navigate the sprawling HR competencies empire and elevate the dialogue. Marcus Buckingham shares his advice on how to stand up in a profession that is so frequently beaten down. As expected, his message is as bold as it is uplifting. The team of industrial organization psychologists led by Alex Alonso of SHRM presents an impressive body of research underlying its new certification, adding scientific credibility to the credentialing process.

We gathered the heads of leading HR associations, to include Lisa Connell, Hank Jackson, Steve Koslowski, Jill Smart, and Pat Wright, to offer their perspectives on what the future of the profession ought to look like. Vosburgh expertly moved the conversation forward, transitioning from current challenges to next generation HR as seen by their members. In a separate interview, World Federation of People Management Associations President Jorge Jauregui offers his overview of the global HR issues, followed by Howard Wallack’s erudite summary of the global credentialing landscape, with representatives of HR associations in the U.K., Canada, Australia, Germany, Israel, Thailand, and Argentina also contributing. Throughout the issue, we take on the task of highlighting relevant HR credentialing questions. Linking Theory to Practice examines the important adjacent issue of academic credentialing and the role of education in HR’s professionalization. Executive Roundtable gathers 10 CHROs who shared their vision for the future of the HR function. To “book end” this impressive collection of HR thought leadership, we reviewed three publications that chart the vast territory of HR—from the broad historical overview of HR’s evolution over the last 20 years (Global Trends in HR Management) to an insider’s look at Google’s winning culture (Work Rules!) to the prognosis of the future of work (Rise of Robots). The purpose of this issue is to empower the HR profession with knowledge and move it exponentially forward. It is our issue about advancement and growth, and we believe that our mission for this issue has been accomplished. We are grateful to all of our contributors as well as our readers for their input and are proud to be in HR, a business function well-positioned to thrive in the 21st century.

Anna A. Tavis, Ph.D.

What does it take to change strategic direction? For starters, a commitment to immersing leaders in real world challenges—experiences that ignite purposeful contribution and innovation. It takes leadership development that can help organizations achieve heightened impact. Learn more at: kornferry.com/leadership-development

Letter from the Guest Editors HR’s Evolving Role How exciting to be contributing to the advancement of the human resources profession through the contributions of some great thought leaders in this edition of the People + Strategy journal. When we were approached to serve as guest editors, the topic—advancing the HR profession—convinced us in a nanosecond to sign on. As John’s article and his history of publications show, he is deeply involved in “future of HR” work. As the vice chair for the board of HRPS and now a retired CHRO, Richard has long focused on this topic, including publishing the Walker-Award-winning article in this journal in 2007 entitled “The Evolution of HR.”

T

he articles reflect the evolving nature and impact of HR by speaking to professionals wanting to grow and develop, organizations wanting to maximize the business impact of HR, professional associations wanting to support the ongoing development of professionals in HR, and universities wanting to prepare our entry-level HR professionals for the heightened expectations of HR contribution. John’s article, “HR at the Tipping Point: The Paradoxical Future of Our Profession” (page 46), provides an overview of the future of HR work, a multi-year project sponsored in part by HRPS and SHRM. It describes the work of a unique collaboration among experienced chief HR officers from varied and significant organizations. Bottom line: The coming decade holds the greatest opportunity for HR impact, but also the greatest risk of HR being left behind. While HR has progressed beyond “a seat at the table,” the article cautions against complacency in declaring victory too early and not pressing for greater HR contribution. The voices of these leading CHROs and their research and interviews with CEOs, board members, and thought leaders begin to describe a necessary step-change in HR’s evolution

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that will position HR for a more impactful but very different future. Dave Ulrich, Wayne Brockbank, Mike Ulrich, and David Kryscynski help reconcile thorny distinctions and contradictions between models of HR capability, competency, and success. “Toward a Synthesis of HR Competency Models: The Common HR ‘Food Groups’” (page 56), analyzes the history of HR competency models and identifies their differences using a historical perspective to develop an overarching model. They illustrate how six HR domains (much like food groups) can accommodate the many different historical HR competency models. Lauri Bassi, David Creelman, and Andrew Lambert contribute “Advancing the HR Profession: Consistent Standards in Reporting Sustainable Human Capital Outcomes” (page TK), where they explore the history and challenges of developing standards and metrics for reporting important organizational human capital outcomes. They show how economic, social, and political forces increasingly call for greater focus on reporting that supports forward-looking value creation, not just backward-looking financial performance. Marcus Buckingham contributes

“HR at the Crossroads: What we Measure Matters” (page 66), providing a well-grounded and clear argument that HR may have been too focused on large-scale organizational processes, neglecting a pivotal opportunity for great impact: empowering team leaders to create successful teams, right now and in real time. He suggests that most HR processes are based on a major fallacy: the assumption that the manager can accurately rate things like performance, competencies, knowledge, and promotability. “May you live in interesting times” can be both a blessing and a curse. With the HR profession at an unprecedented moment of opportunity and challenge, it is with thanks to our authors and the journal and with great pleasure that we bring you this unique thought leadership issue on such an important subject: advancing the HR profession.

Dr. John Boudreau

Dr. Richard Vosburgh Guest Editors

VOLUME 38 | ISSUE 2 | SPRING 2015

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Global Perspectives World HR Associations: Leading the Profession into the Future People + Strategy Executive Editor Anna Tavis convened tenured HR professionals from around the world to explore the future of HR from a global perspective. While committed to a common vision, HR’s impact and influence is delivered differently across time zones and cultures. No doubt questions and thoughtful contemplation will rouse you while reading the contributions of our global partners— and though they do not offer all the answers here, they do point us in the right direction. By Howard A. Wallack

the United States—believed that a recognized credential was necessary for career advancement in HR (see chart). Those respondents then, and HR practitioners today, continue to get professional certification around the world as a means to advance their careers, demonstrating what Nobel Laureate (economics) Michael Spence has recognized as the “unobservable attributes” of potential employees, such as their education and

training, which serve as “signals” to current and future employers of individuals’ potential productivity. Today, an overview of certification efforts internationally in Argentina, Australia, Canada, Germany, Israel, Thailand, and the U.K., as exemplified in the short summaries here that were supplied by the HR associations in those countries, shows great variety in the requirements and steps to get certified

To work in HR, one must have some type of recognized credentials.

More than a decade ago, cross-border research by the Society for Human Resource Management (SHRM) revealed that a strong majority of HR professionals believed that to work in the profession some type of recognized credential was necessary. Moreover, an even greater majority—reaching as high as 83.1 percent in Argentina and 80.8 percent in 8

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Argentina

To advance one’s career in HR, one must have some type of recognized credential.

% Agree

% Neutral

% Disagree

% Agree

% Neutral

% Disagree

62.1

20.7

17.2

83.1

9.5

7.3

Canada

61.3

17.0

21.6

68.3

16.9

14.8

Israel

71.1

13.3

15.6

79.1

7.0

13.9

Thailand

56.7

29.8

13.5

57.7

33.7

8.7

United Kingdom

61.1

17.9

21.0

77.9

10.5

11.6

United States

53.6

23.5

22.9

80.8

11.7

7.5

(Source: SHRM/SHRM Global Forum’s The Maturing Profession of Human Resources, 2004; survey reports for Argentina, Canada, Israel, Thailand, the UK and the US.)

as well as the many competencies that HR professionals need for success. Nonetheless, there are some trends and commonalties. These various country contributions highlight that terminology referring to the concepts of credential, qualification, certification, and certificate programs are, regrettably, all too frequently used inconsistently. A credential is usually issued by an organization with some authoritative status or power, and is evidence of an individual’s knowledge or competence in a given subject. A qualification can be an educational degree or certification, when an individual is required to pass an examination or assessment in order to achieve recognition as a practitioner or professional in a specific activity or function. Certification, however, usually includes both an educational and experiential eligibility requirement, and frequently is pursued after a basic tertiary educational degree has been achieved. Moreover, in addition to a requirement to pass an examination successfully, certification includes adherence to an accepted code of ethics for the field and an obligation to recertification within a specified time frame to maintain certification status. In getting recertified, either through the accumulation of professional education credits or reexamination, a practitioner or professional demonstrates a commitment to life-long learning and maintaining their knowledge and competencies at the forefront of their specialization. On the other hand, a certificate program may be a series of related training elements that cumulatively demonstrate knowledge or be a one-time documentation of attendance at a learning event, which documents exposure to content, though without necessarily measuring understanding, absorption and retention of the information. First, as the pieces reveal, there is growing collaboration with, or endorsement by, governments of certification efforts. In the U.K. and the two Canadian provinces of Quebec and Ontario (with efforts underway to extend this into more provinces), HR associations and the HR profession are statutorily recognized, conferring increased authority and accountability on certified HR professionals compared to their uncertified

peers. Recently, too, in Kenya, the Human Resource Management Professionals Act was passed, identifying HR as a profession for which practitioners needed recognized study or credentials and authorizing the national HR association there to define further what those qualifications might be, a process now underway. In Australia, an independent national certification council has been announced as the credentialing body which will be fully active by 2017, and in Israel the HR association there indicates that their “future goals are to find a way for government to make the accreditation an official requirement for HR management.” As we read here, in Thailand, certification needs to be accredited by the Thailand Professional Qualifications Institute (TPQI), and in other countries, such as Bahrain, Malaysia, Singapore, South Africa, UAE, and others, national qualifications frameworks and authorities are currently either monitoring or already guiding certification efforts, not only in the HR profession, but more broadly. A second trend manifest by these summaries is that frequently the competencies for professional effectiveness are defined both functionally and behaviorally and at different levels of HR career or responsibility. This reflects both the immense complexity and the different levels and answerability of HR management that exert themselves simultaneously and synergistically as HR professionals accept and confront daily the diverse global and local management challenges that they do each and every day, as well as through their extended career progressions with greater levels of experience, spans of control, and seniority. Clearly what we see here is that the certification and professionalization of HR is a work-in-progress, with many elements concurrently in play. It is a combination of market forces, governmental scrutiny and pressure, the reliability and universality of methodologies to create competency models, validity of certification schemes and exams, and most importantly the results and return on investment that certified HR professionals achieve, contributing to their organizations’ strategic goals and objectives, all of which will ultimately determine the best path to sustained credibility, legitimacy,

and effectiveness for the HR profession. The third trend we can see is less a commonality than an observation: The link between certification and HR association membership is a choice, but not necessarily a given circumstance. In some jurisdictions, one must have and maintain HR association membership to be certified, whereas in others the achievement of a professional designation is separate and independent of membership, though possibly at a higher nonmember cost. Nonetheless, as these readings attest, across the globe it is the membership-based national HR associations—the institutional bodies uniting, engaging, and representing the profession to the public, to government, and to other stakeholders—that currently drive the move toward broader certification and professionalization of the HR function. In that respect, they are all leading the profession into the future, albeit with differences in tactic and tone. Howard A. Wallack, M.A., M.Sc., SHRM–SCP, is a global markets executive at the Society for Human Resource Management (SHRM) where he shares responsibility for SHRM’s involvement in the World Federation of People Management Associations (WFPMA) and has accountability for partnership and relationship management in Brazil, Europe, sub-Saharan Africa, and the Asia-Pacific region, excluding China and India. He can be reached at [email protected].

Professionalism in Human Resource Management: Evolution of a Standard By Laura Harrison

The concept of certification in HR is a curious one. Unlike some professions, there are no formal or universally apVOLUME 38 | ISSUE 4 | FALL 2015

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plied requirements to practice HR. Of course, many employers expect their HR teams to have specialist qualifications, but can a qualification really “certify” someone to practice in a particular field? Most employers look for more than a qualification when recruiting HR practitioners; they look for a symbol of professionalism that indicates an individual’s commitment to raising his or her standards of knowledge, capability, and ethical practice. In the U.K., and increasingly in other parts of the world, particularly Southeast Asia and the Middle East, that mark of professionalism comes in the form of chartered membership in the Chartered Institute of Personnel and Development (CIPD). Headquartered in the U.K., with more than 140,000 members worldwide, we’re among only a handful of professional bodies in the world that awards HR and L&D professionals with chartered status. All chartered members of the CIPD must demonstrate that they have the technical knowledge, skills, behaviors and experience outlined in our body of knowledge, the Profession Map. The Profession Map was first published in 2008, after a large-scale research program involving organizations all around the world, and we’ve been continually updating it ever since. As 10

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well as defining the building blocks of effective people management practice across 10 professional areas or specializations, including L&D and organization design, it also describes eight fundamental behaviors that underpin good HR regardless of your specialty (see chart). A range of CIPD qualifications help provide individuals with the expert knowledge outlined in the map. They span three levels—foundation, intermediate and advanced—and are taught at hundreds of approved universities, colleges, and private training providers across the world, meaning there’s a range of full- and part-time courses and flexible study options that enable students to learn at their own pace and gain credit for their achievements. These qualifications form the most popular route to professional membership of the CIPD. The foundation and intermediate certificates and diplomas qualify learners for associate membership in the CIPD, while our advanced (Masters level) diplomas provide the underpinning knowledge to apply to become a chartered member or chartered fellow. But a qualification alone doesn’t make you eligible for chartered status, nor is a qualification necessary if you can demonstrate

that you’ve developed the relevant knowledge through experience on the job. While a qualification assesses a person’s knowledge at a given point of time and certifies that they successfully completed a particular program of study, professional membership also indicates an ongoing commitment to continuing professional development that is far more indicative of a person’s professional competence. With or without a qualification, we assess all our chartered members and chartered fellows against the levels of competence outlined in the Profession Map. The map is flexible, so practitioners can choose what to focus on, depending on their area of work, the level of accountability they have in their role, and their career development ambitions. For example, one professional may find their role requires a far deeper knowledge of resourcing and talent planning, while another will focus much more on employee relations. The world of work is increasingly diverse and complex, so keeping this body of knowledge relevant is challenging. HR capabilities must advance in line with the rapidly evolving needs and expectations of businesses and employees. To date, we’ve been able to describe a set of “best” practices across various HR activities. But, “good” HR is increasingly context-specific, and depends on business priorities, the nature of the workforce and organizational culture. The shape and the role of the HR function is changing too, with significant shifts in the focus and scope of responsibilities. Describing a single set of practices amounting to “best practice” HR is therefore increasingly difficult. This is why we think good HR should be defined in terms of broader principles, like many professions have. In contrast with a rules-based approach to standards, which defines specific practices, the principles-based approach focuses on professional judgement, describing the fundamental professional obligations we should take into account when deciding how to act in practice. It requires an astute awareness of the stakeholders who will be affected by alternative practices, for example, weighing public interest

against increased profit margins, even in the absence of regulation. The need for credible professionals who can foster productive relationships between various stakeholders is becoming more evident every day. Businesses increasingly recognize that effective human capital management is critical to their competitive advantage, and they rely on practitioners who can deeply understand the business context to get the most out of the workforce. At the same time, changing standards of corporate governance are putting a premium on organizations’ ability to create longterm shared value for the business, its people, and broader society. We believe that a principles-based approach to professional standards is key to ensuring HR balances competing stakeholder interests to find win-win solutions for everyone. Ultimately, this will shape the evolution of the HR profession in two ways. Firstly, it will highlight HR’s unique role in creating shared value through the sustainable treatment of people. Secondly, the principles will provide a guiding framework for making professional judgments in the context of high uncertainty, thus fostering the development of a professional body of knowledge and a standard of good practice that transcends time, cultures, geographies, and legal boundaries. The result will be to build trust and credibility in HR, and to put an end to debates about its relevance and value, so that it becomes a recognized profession like medicine or accounting. But our motivation is not to professionalize HR for HR’s sake. Our guiding purpose is to champion better work and working lives by improving practices in people and organization development for the benefit of individuals, businesses, economies, and society. In other words, we believe that good people management and development is vital to creating shared value for a range of stakeholders. And ultimately, if we’re to live up to that laudable claim, we must professionalize HR. Laura Harrison is director of people and strategy at the CIPD, the professional body for HR and people development. She can be reached at [email protected].

Certification Defines HR’s Business Value in Canada By Jason McRobbie

CHRP Overview and Philosophy

The Certified Human Resources Professional (CHRP) designation provides Canadian employers the highest degree of surety in their HR practices, supported by proven expertise, continual learning, and demonstrated commitment, as well as a nationwide community of knowledge and code of ethics. Established in 1994, the Canadian Council of Human Resources Associations (CCHRA) is a collaborative effort of human resources associations from across Canada, which represent more than 41,000 professionals—21,000 of whom hold the CHRP designation.

CHRP Standards and Process

From its inception in 1996 to present, the CHRP designation has set the standard and served as a catalyst for HR in Canada—one profession, one competency framework and one certification, served by a national body unified by purpose and clarity of process. As a commitment to a national standard of excellence, the CHRP designation emphasizes the strategic role of HR in business, and is administered across Canada through provincial associations. In order to pursue the CHRP, individuals must become and remain a member in good standing with their provincial association. Two provinces—Quebec and Ontario—have laws recognizing the HR profession “for the public good.” Other provinces are now advocating for similar status with their provincial legislatures. This statutory provision authoriz-

es HR professionals who are members of the HR associations and certified to perform certain functions that uncertified HR professionals cannot.

Four Qualification Pathways

The Standards Advisory Council of the CCHRA recently revised the requirements for candidacy and certification to include four primary paths to obtain the CHRP. All paths require a minimum of a bachelor’s degree from an accredited college or university, and three years of professional-level HR experience. Route one requires a Bachelor’s degree in any field or discipline to be supplemented by successful completion of the National Knowledge Exam (NKE), which assesses HR knowledge and skills based on the CHRP Competency Framework (NKE exam prep courses are made available through Captus Online and CCHRM member associations), and an experience assessment validated by the current employer to prove a minimum of three years of professional-level HR within the last 10 years—recently opened up to include teaching experience for full-time HR instructors and international HR experience. Candidates for certification must register for the NKE two months prior to testing, with results being released one month after, creating a streamlined inflow process of approximately three months. Once becoming a CHRP candidate, individuals have seven years to complete the process. Routes two and three promote strategic partnerships with post-secondary institutions while allowing greater influence over curriculum by waiving the NKE requirement for individuals holding—in addition to a Bachelor’s degree in any field—either a credit-level HR certificate or diploma program accredited by CCHRA or an MBA or Master’s degree in HR, respectively. Route Four permits for inter-provincial transfer of existing designationholders.

Competency Framework Updated by Professional Practice Analysis

The CHRP Competency Framework details the pathway to the CHRP desigVOLUME 38 | ISSUE 4 | FALL 2015

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nation and is built upon the results of the evidence-based process undertaken in the 2013 Professional Practice Analysis (PPA). Conducted by a third-party research firm (Castle Worldwide), the 2013 PPA surveyed or interviewed more than 1,000 HR experts and professionals from across Canada.

Experience Assessment Certification fee is $400. The Experience Assessment Review fee is $100. The annual CHRP dues are $155.)

Functional Knowledge Base and Enabling Competencies

HR Credentialing in Australia

The resultant 2014 CHRP Competency Framework is based on a dual-competency model, and outlines 44 professional competencies organized into nine functional areas of knowledge, together with five enabling competencies that complete the professional’s skill set. It also specifies the proficiency level at which each competency is to be demonstrated and how it will be assessed. The nine functional areas of knowledge in the CHRP Competency Framework are: • Strategy • Professional practice • Engagement • Workforce planning and talent management • Employee and labor relations • Total rewards • Learning and development • Health, wellness, and safe workplace • Human resources metrics, reporting and financial management The five Enabling Competencies, now integrated into the experience requirement, are: • Strategic and systems thinking • Professional and ethical practice • Critical problem-solving and decision-making • Change management and cultural transformation • Communication, conflict resolution, and relationship management

Maintaining the CHRP Designation and Costs

To maintain their CHRP designation, HR professionals must retain their provincial association memberships and demonstrate that they have achieved 100 points worth of professional development activity over a three-year period. The CHRP application fee is $60. The NKE registration fee is $275. The 12

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Jason McRobbie is the editor of PeopleTalk Magazine. He can be reached at [email protected].

By Peter Wilson

There are no regulatory bars to people wishing to work as a practitioner within a human resources division of an Australian company or a public service HR department, or to set up as a sole trader in an Australian HR consultancy. From time to time, members of the judiciary have refused leave for consultants calling themselves HR practitioners to appear before the courts. Refusals tend to occur in cases where HR practitioners specializing in industrial relations seek leave to appear on behalf of a client but do not possess a law degree. Cases of that order aside, there is no bar in Australia to practicing as an HR employee or a HR private consultant. The Australian Human Resources Institute (AHRI) is the sole body representing the professional interests of HR practitioners and has been so since the association was established by one of its antecedents in 1943. In those early years, immediate post-war preoccupations did not include certification. AHRI succeeded the Institute of Personnel Management of Australia in 1992. During 2004 and 2005, AHRI management restructured the member categories and created the post-nominal CAHRI, with the C indicating certified. That move involved an immediate plunge in member numbers, which in turn was followed by a reassurance to members that their classification was safe. The flow was

stemmed but the CAHRI credential was retained in a weakened form that required little assessment other than the sighting of a curriculum vitae denoting time spent and/or courses completed.  By 2014, the AHRI board had come to the realization that while the earlier certification move was well intentioned, it was hasty and lacked a process enabling consultation and lead time. It also acknowledged that if HR practitioners were to be respected in business, a credible credentialing mechanism had become a matter of urgency. A number of steps have since been taken to make HR certification a reality. The first was to indicate the fundamental principle behind certification. The principle, simply stated, is that Competence = Knowledge + Skills, a proposition I elaborated on in the 2014 ebook Certification: The Steps Toward Best Practice, edited by Dave Ulrich. The second was to pilot and launch a new program called the AHRI Practicing Certification Program (APC) which consists of three knowledge units and one mandatory capstone unit, the latter comprising an organizational capability workplace-based project. Together, they attest to practitioners’ capacity to behave as an HR expert and a business partner. The program is an industry recognized, postgraduate program designed to equip HR professionals with essential prerequisites for advanced strategic HR management. It is work integrated and includes an in-depth examination of the key functions of human resources management as it relates to the business environment, the organization, and the individual. Students may complete the APC on a part-time basis over two years by either workshop or distance learning. The third was to reassure CAHRI members that their existing credential was to be respected and would be grandfathered when the new arrangement became effective. All new members seeking certification under the new robust framework will be required

to take the APC as of January 2017. Upon doing so, they will be entitled to carry the post-nominal CAHRI-CP (certified practitioner). If the member is a practitioner and an AHRI fellow, the post-nominal will be FAHRI-CP. Finally, an independent national certification council was announced as the credentialing body. Composed of representatives from industry, government, and academia, it will credential the first practitioners to complete the APC and be presented to it in January 2016. The bar has been set. A communication strategy is under way and includes a campaign to inform the employment market that AHRI certified practitioners are the only practitioners with a credential that attests to their HR expertise and their capability in practice to act as a true business partner. Peter Wilson is the chairman and national president of the Australian Human Resources Institute. He is also an advisory council member of the Harvard Business Review and is adjunct professor in management at the Monash University Business School. He can be reached at [email protected].

Professionalization of Human Resource Management in Germany By Katharina Heuer

Professionalization of Human Resources Management. Meanwhile more than 1,800 participants have completed this training successfully. Through the training program, DGFP has been able to establish standards for professional human resource management in the market within the last decade. The main idea is that the professional HR management has a sustainable impact on the success of a company. ProPro prepares an individual for the complexity of HR management, brings transparency to its challenges, and highlights all HR areas. To be eligible for ProPro, participants must be in am HR manager position, HR administrator, or HR operator role. ProPro is available for members and nonmembers to participate in. However, nonmembers pay a higher rate. Up until now, every professional who has started the program has finished it successfully.

Primary HR Policy Areas

The program has a strategic approach, practical structure, and modular design. The DGFP concept of integrated and professional HR management is based upon 12 strategic and employee-related HR policy areas that form the HR-political framework of all success-relevant HR activities of a company. These HR

policy areas are the basis of the DGFP standards for integrated, professional HR management and are also the underlying structure of the DGFP ProPro Training Courses (see graphic).

Target Group, Learning Methods, and Examination

The DGFP is offering on the one hand the training course “ProPro Professional” for HR functional specialists and on the other hand the training course “ProPro Executive” for heads of HR management. Over the course of 15 days, attendees use different learning methods, from individual to group work, case studies, role-playing games as well as self-reflection. In addition to that one can use the ProPro Professional Learning Platform, an online tool which allows a very individual and flexible learning. The online tool provides individual and autonomous learning phases. The Professional Learning Platform offers the possibility to prepare the learning content of ProPro in advance or to revert to the content of the modules. The individual modules are taught at lectures. Additionally, they are made available in the form of up-to-date study materials which the participants study during self-learning

Primary HR Policy Areas

Corporate Culture and Changes

Added Value Management

Corporate and Human Resources Strategy

Life Cycle-Orientated HR Policy Areas HR Marketing and Selection

In Germany, there are several opportunities for studying HR management, either by taking HR classes at a university or acquiring qualification through professional development. In 2005, in collaboration with experts from industry, science, and consulting, the German Association for People Management (DGFP) developed the training program ProPro—

HR Support and Employee Loyalty

Performance Management and Compensation

HR and Management Development

HR Downsizing

International HR Management

Labor Law and Social Partenership

Relationship and Networks

Leadership Competence and Self-Competence

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phases. The final examination consists of an oral and a written exam. The format of the exam is developed in a target-group specific manner and depends on the specific level of job experience. For the target group of HR manager and personnel officer, the final examination consists of an oral and a written part. The participant will prepare as written homework a concept for a subsection of Human Resources Management that he or she will present and discuss during the oral examination. The oral examination takes 20 minutes. For the target group of HR administrator, the written part of the exam is a multiple choice test, which contains 40 questions. The duration of the exam is 90 minutes. The oral examination is a short 10 minute presentation of a HR-topic. During the final examination, the candidate demonstrates that he or she has understood and mastered the ProPro competence fields, and that the participant is able to apply this knowledge to his or her daily practical work. Candidates have two years to take the program and complete the exam. The DGFP offers five examination dates each year. The members of the Examination Board are chosen interdisciplinary. The board consists of a scientist, a practitioner, and the specific program manager of the DGFP. Participants prepare as written homework a concept for a subsection of human resources management that the candidate presents and discusses during the oral examination.

Fit for Future

The issues of HR management are constantly changing; therefore, ProPro also has to change again and again to remain on the cutting edge. An advisory board makes sure that the training is continually being developed and the curriculum is being adjusted. Katharina Heuer is managing director of the Deutsche Gesellschaft für Personalfuehrüng (DGFP), the German Association for People Management. The DGFP was founded as a nonprofit organization by representatives from the worlds of business and science in 1952. It has more than 2,500 members, ranging from large company groups to small 14

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firms. Its mission is to promote human resources management—its practice, research, and teaching—and to be a networking organization for HR communities.

Israel Human Resources Accreditation Program By Ilan Meshoulam

The Israeli Society for Human Resource Management activities are a reflection of changes in Israel’s environment, divided into two major periods. The first, Independence (1948) to the late 1970s, was characterized by fast growth as well as a continuous state of war. The country was led by strong socialist ideologies of the pioneers. The only union (Histadrut) was a dominant power, economically and politically. It was not surprising that socialism was the leading socioeconomic ideology during the first decades of Israel’s existence. During the 1950s, fast-growing immigration movements drew the country’s attention. Absorption, assimilation, and training were major roles undertaken by personnel departments. Internal labor market strategy—the system by which a company looks inside its own organization to find a suitable person for a senior job, before considering candidates from outside the company—was adopted by most large organizations, emphasizing formal and contractual relationships, bureaucratic organizational structures, narrow job designs, and long-term commitment. All were heavily unionized, advocating seniority-based pay. Labor relations were a major human resource management (HRM) activity, dictated mainly by the union and supported by legislation and regulations. HRM functions focused mainly on

administration, recruitment, labor relations, and some aspects of skills and managerial training. In many organizations, HR was not part of the leading management team, but reported to the financial or other operational unit. The second era began in the late 1970s and exist today. External challenges have caused transformations in Israel’s economy and a modernization of its industrial system. New forces helped shape the incremental development of the HRM field. First was the growth of a high-level technical workforce, a result of the downsizing of technical professions in the defense industry and immigration of Russian scientists in the 1980s. At the same time, the high-tech industry began to gain momentum. Some large U.S. companies opened local branches and new start-ups emerged. A new government approach of deregulation and privatization of businesses was adopted. New and extremely different demands were made on the HRM profession. Large and complex organizations, an educated workforce, and strong national and international competition have forced the profession to adapt. A fresh HRM of university educated professionals and HR executives at larger organizations have emerged. A new external labor market strategy was adopted by organizations, emphasizing global competition, broad and self-managed positions, individual growth and development, flexible workplaces, and performance-based pay.

The Accreditation Program

As a result of the new demands for a higher level of HR professionalism, the Israeli Society of Management, Development and Research of Human Resources was formed in 2004. Its first activity was to define society goals. A major goal, which later served as a basis for the accreditation program, was to help raise the level of HR professionalism in Israel by encouraging mutual learning, exposure to HR activities in and outside of Israel, and more. Two years later a group of members wrote a code of ethics, which became behavioral guidelines to all members. Next, the society moved on to develop an accreditation program, which was

launched in 2007. The first step was to define the knowledge required as a base for accreditation, based on the accreditation methodologies learned during visits with U.S. and U.K. HR societies. The second step involved approximately 30 individuals, all HR vice presidents from a wide scope of industry and academy, who formed a committee to define the basic principles of the accreditation program, as well as the knowledge base needed for each of accreditation level. Four levels of accreditation were suggested: accredited, specialist, senior specialist and leading senior specialist. The third step consisted of teams of senior members formed to define accreditation criteria for each level. For example, the first level allowed for two options: those with at least three years of HR field experience and a B.A. in HR studies, or those with other a B.A. and at least 100 hours additional certificate studies in the field. The criteria for expert level were numerous: six years of work experience and a B.A. not in HR, plus certificate studies; six years with a B.A. in the field; experience of more than three years and a Master’s not in the field, plus certificate studies; or more than three years’ experience and a Master’s in the HR field, could all be accredited. The fourth step included negotiations with universities and colleges to accept the society’s requirements as part of their curriculum. The degree received from those institutions was accepted as a basis for accreditation. Currently, 14 institutions have joined the program. Our future goals are to find a way for government support to make the accreditation an official requirement for HR management and to enhance professionalism by introducing many activities, including learning meetings at various organizations, conferences, collaboration with universities, an HR excellence competition, and more. Ilan Meshoulam, Ph.D., is a professor at the University of Haifa and chair of the Israeli Society for Human Resource Management, Research, and Development. He can be reached at [email protected].

Thailand’s HR Accreditation Model By Suchada Sukhasvasti na Ayudhya

The Original Model

As a driving mission to promote the HR profession in Thailand, the Institute of Human Resource Professional Development (IHPD) under the Personnel Management Association of Thailand (PMAT) has studied, researched, developed HR competencies, and introduced HR Professional Competency Accreditation since 2005. The original model of HR competency comprised of two major groups of competencies, generic/managerial functional/technical. Specifically focused on the latter competency, PMAT defined that there are human resource management (HRM) and human resources development (HRD) competencies. In HRM, there were four areas of competency: human resource planning; recruitment and selection; labor law and employee relation; and compensation and welfare. HRD competencies comprised of training and development; performance management; organization development; and career development. In the original PMAT HR accreditation model, there were three levels of HR personnel: HR practitioner, professional HR (PHR), and senior professional HR (SPHR). However, PMAT only offered the PHR accreditation level to eligible HR persons with at least five years of experience or at least three years of experience in HR field and a Master’s degree. The accreditation processes started with application screening, multiple-choice testing, and interview as final test of HR accreditation. Each applicant must fill out a form to be screened by an accreditation commit-

tee. Qualified applicants are invited to take a test which encompasses eight HR functional areas, and those who pass go on to the final interview.

The New Model

A decade has passed, and PMAT recognizes an indispensable need to improve the HR competency and accreditation model to catch up with both academic and practical changes. PMAT has an agreement with the Thailand Professional Qualification Institute (TPQI) to develop the Thailand HR Occupational Standard and

The new HR accreditation model divides HR roles into four groups that align with the Thailand Professional Qualification Framework. Professional Qualification, which is in the final approval stages. The new HR competency model has been developed through research and the help of academics, practitioners, professionals, and experts in HR. It is meant to evaluate HR academic knowledge and understanding, HR-related knowledge and technical experience in its application, analytical skill, and the integrative problem-solving skills of the test takers. The new HR competency model also can be divided into two major sets of competency: • HR generic competency, for HR professional practice • HR functional/technical competency, for HR expertise The new HR accreditation model divides HR roles into four groups that align with the Thailand Professional Qualification Framework: • HR practitioner • HR professional • Senior HR professional • HR expert This accreditation process is similar to the original model except that the person must provide a portfolio, there VOLUME 38 | ISSUE 4 | FALL 2015

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are a different number of criteria a practitioner must meet to achieve each level, and only the HR practitioner is not required to do the interview. The accreditation organization must be qualified by TPQI’s standards and certified by TPQI. Suchada Sukhasvasti na Ayudhya is past president of the Personnel Management Association of Thailand in Bangkok. She can be reached at [email protected].

HR in Argentina: Certification Has Yet to Catch On By Gustavo Aquino

Though the Human Resources Association of Argentina (ADRHA) was founded in 1968, human resource management (HRM), or perhaps a perceived lack of it, has a long history in Argentina. Yet progress, while admittedly slow, is being made. To understand the state of HRM and efforts to standardize practices and credential practitioners, it’s important to understand the history of it here, which dates as far back as the Steel Age. In 1855, when Gustavus Swift founded a meat packing company in Chicago, its rapid development saw Swift factories give rise to HR laboratories where analyzing and synthesizing workflows, assembly lines, union bargaining, welfare policies, and other workplace practices were pioneered. In 1907, Swift and Company expanded to Buenos Aires (later to Río Gallegos in 1912 and Rosario in 1924) where expatriate managers transferred their knowledge of developing local proto-HR teams trained in time and methods analysis, pay practices, personnel statistics, and policies. HR pioneers came from the very heart of factories, far away from universities. Personnel management was 16

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taught among scrap, grease, and smoke, with the goal of developing and implementing measures and techniques to maintain or increase productivity. In this setting, Alpargatas, the leading textile company in Argentina, brought the first university graduates to its personnel offices: the industrial engineers. These degreed professional brought new and improved methods— and along with them prestige—to the up-and-coming profession. The installment of the welfare state in Argentina post-WWII boosted labor regulation and legislation. Due to political process, a second diploma was now impacting employment laws and human resources: the Juris Doctorate. As engineers sought productivity, lawyers focused on labor relations and professionalization. During the 1960s, American companies such as Ford, General Motors, and Exxon brought some concepts, such as motivation and leadership, to the workplace. Trying to cope with Maslow, Herzberg, and Drucker, a third diploma, the Ph.D., was added to list. These professionals wanted not to just study and practice the entire gamut of HR—from leadership and management to organizational psychology—but also to shape it. The creation of degrees offered by business schools in various HR discipline saw a rise in the number of jobs for those graduates, which spread interest in the degree programs. Universidad Argentina de la Empresa (UADE) introduced its industrial relations major in 1962, and it is still being taught today. The Universidad del Salvador has its own personnel management field of study as well. Today, students here can choose to study HR at more than 40 universities. HR in Argentina evolved as an open community where you can find HR professionals from diverse backgrounds, including HR degree holders, engineers, lawyers, psychologists, sociologists, educators, and so forth. So far, two World Federation of People Management Association (WFPMA) presidents, Carlos Marcelo Aldao Zapiola (2002–2004), a lawyer, and Horacio Eduardo Quirós (2010–2012), an HR degree holder, have hailed from

Argentina. HR as an art and science is practiced widely here. By the end of the 20th century, groups of colleagues initiated a movement looking for HR labor market regulation. It was supported mainly by HR students and professors and resisted mainly by HR managers at local WFPMA chapters, such as Human Resources Association of Argentina (ADRHA). This remains an ongoing debate. HR graduates and students are still calling for official credentialing, but their opponent now in the HR community is indifference.

HR graduates and students are still calling for official credentialing, but their opponent now in the HR community is indifference. Except some specific jobs, mostly in the supply chain, there is no tradition of certification in Argentina, but it seems that the process started and will grow. In the building industry, the Construction Institute of Statistics and Regulation (IERIC) ensures only certified persons are put in specific jobs. ADRHA’s President Raúl Massarini manages IERIC. Labor Ministry promotes these kind of certification processes, focused on blue collar and unionized workers. White collar professions remain open, or with individuals earning degrees rather than obtaining certifications. Some colleagues are certified by international associations in compensations and benefits, training, or coaching, but they are not relevant—at least not yet. Far away from the American tradition of certified members of professional associations and the European one of government promoted processes, Argentina’s labor market remains open and without regulations. Employer expectations of HR professionals here are simply not tied to certification. Gustavo Aquino is an ADRHA member. He can be reached at [email protected].

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In First Person: Jorge Jauregui Executive Intro will vary Editor on depth Anna A. depending Tavis, Ph.D., oninterviews length...adjust World layout Federation accordinly of People Management Associations (WFPMA) President Jorge Jauregui about what organizations are doing around the globe to advance the HR profession in the 21st century.

Around the World, HR Associations Offer an Edge Anna Tavis: Tell us about the historical origins of World Federation of People Management Associations (WFPMA) and its global mission in advancing the HR Profession. Jorge Jauregui: WFPMA was founded in June 1976. Its main objectives are to: • Improve the quality and effectiveness of professional people management, and to demonstrate the importance of the human resources role in all employing organizations, both public and private. • Stimulate and assist in the establishment and development of regional and national people management associations in those parts of the world where a continental or regional association does not yet exist. • Create and maintain contacts with all WFPMA member associations, as well as with other organizations that have some activity in the same or similar field. • Support or represent people management associations in their contacts with world organizations such as the International Labor Organization, the United Nations, and others. • Commission or undertake research that will further broaden understanding of human resources issues. AT: How do you “recruit,” or how do country or regional associations “join” WFPMA? 18

PEOPLE + STRATEGY

JJ: WFPMA currently has five Continental Federations. Altogether, 100 countries are represented by the most relevant national HR association for each of them. WFPMA does not “recruit” individual countries; it works only through each of the corresponding Continental Federations. The five Continental Federations are African Human Resources Confederation (AHRC), Asia–Pacific Federation of Human Resource Management (APFHRM), European Association for People Management (EAPM), Interamerican Federation of People Management Associations (FIDAGH), and North American Human Resource Management Association (NAHRMA). AT: What are the advantages of being a member? How many members do you currently have and how are they organized? JJ: WFPMA represents today more than 600,000 HR executives and professionals from five continents that participate via their respective national HR association and, through the association, to the corresponding Continental Federation that are active board members of WFPMA. WFPMA shares with its members research studies and surveys on HR global trends, such as the survey sponsored by WFPMA and the Boston Consulting Group, “Creating People Advantage 2015,” in which 3,500 CEOs and HR executives from 103 countries expressed their current and future views on the profession through the year 2020.

Also, members of WFPMA are increasingly finding value in the lively and still growing professional network of this worldwide federation. For instance, communication and information exchange are aided by twice yearly board meetings, a biennial World Congress, an updated website, and a global newsletter, “WorldLink.” WFPMA has established the world’s most prestigious global HR award, the George Petitpas Award. Since the mid-1980s, this award has recognized individuals who have made outstanding contributions to the advancement of the HR profession at the international level and whose spirit and dedication have been inspirational to others. The award is presented at the WFPMA HR World Congress every two years. To date, WFPMA has organized 15 HR World Congresses. The next one will take place in Istanbul, Turkey, October 19 and 20, 2016. AT: Who are the representatives to WFPMA and how are they elected? JJ: Each one of the five Continental Federations described above has two members appointed to the WFPMA Global Board. These 10 board members plus the WFPMA president, the secretary general-treasurer, and the immediate past-president, along with the president of the Organizing Committee of the next HR World Congress, integrate the 14 WFPMA Global Board members. They are appointed by each Continental Federation, and WFPMA Global Board

members vote to elect the WFPMA president and the secretary general-treasurer for a two-year term. AT: What is the role of the president? JJ: The president is accountable for chairing the WFPMA board, leading two in-person meetings with all board members each year, as well as defining and approving the objectives and strategic priorities of WFPMA for the next two years. Also, he or she is in charge of personally conducting the negotiations to form strategic alliances and agreements with the International Labour Organization on human-capital-related issues, for instance with the International Labour Organization, on human capital-related issues, as well as with other relevant global organizations as well as other relevant global organizations, to enhance the human resources function worldwide. AT: Is there an aspiration to establish global standards in HR? If so, what could they be? If not, why not? JJ: WFPMA is currently participating formally in a strategic ¨observer¨ role with the International Standards Organization that is actually designing HR standards in a global scope. As the initial outcomes of that works progresses, WFPMA will keep its membership informed accordingly. AT: Based on recent developments, it seems that we are pursuing a more decentralized model for HR standards. Could you comment on recent developments toward proliferation of standards and certifications? JJ: WFPMA is systematically supportive of the continuous development of the HR profession and of its membership. Nevertheless, it consistently behaves with full respect of each country HR association and Continental Federation HR organization´s particular conditions about the type of standards and certification models that each national or regional HR association decides to follow, according to their own needs and

strategic approaches, within their own HR professional community. AT: Do you see any changes in the relevant legal requirements to address new HR developments? JJ: As every country has its own regulations in human capital matters, there are myriad current and potentially new legal regulations and requirements in the world that do not necessarily follow a single or unique trend. AT: Do you see HR collectively developing a defined body of knowledge, competencies, or scope of information required for successful certification globally? JJ: Some leading and more advanced national HR associations and related institutions around the world are developing different HR certification models, and at this stage, they are following divergent paths. Perhaps in the near future, more similarities than differences will emerge and a more inclusive model toward a global professional credential might be agreed upon internationally. AT: Are there eligibility (education, professional practice, etc.) requirements that are beginning to emerge around the world to be able to enter the HR profession? JJ: The most commonly found trend is that education, professional practice, expertise, as well as strategic judgment, a set of competencies, and others are beginning to emerge around the world within the HR profession. AT: What are the main trends you are seeing in global HR today around credentialing of HR professionals? JJ: In several regions of the world, credentialing is being discussed, reviewed, newly developed, or redesigned to provide HR professionals an upgrade that might allow them to catch up with the dramatic speed and depth of changes

Some leading and more advanced HR national associations and related institutes around the world are developing different HR certification models, and at this stage, they are following different paths. that is taking place in the business and social world every day. AT: What is your personal point of view and your aspirations for the role of WFPMA in advancing the HR profession? JJ: This is a great era for being in the HR profession. The challenges and strategic impact that our function faces and that can be delivered to organizations of all types have probably never been so demanding and are having an impact in so many different ways in human, business, and social dimensions. In the present and future contexts, WFPMA performs a key role in designing, developing, and sharing the best practices and different approaches helping its membership to create value to their respective organizations and for themselves—as human beings and professionals. Jorge Jauregui, M.A., HRMP, is president of the World Federation of People Management Associations (WFPMA) and immediate past president of the North American Human Resources Management Association (NAHRMA). He is the former chair of the board and current board member of the Mexican Human Resources Executives Association (AMEDIRH). Jorge has held senior executive positions at large multinational corporations such as Unilever, Best Foods, and Bristol-Myers Squibb in Mexico, the United States, and Argentina. He can be reached at jorgeandres.jauregui@ gmail.com. VOLUME 38 | ISSUE 4 | FALL 2015

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Linking Theory + Practice B-Schools and Emerging HR Leaders: A Match Made in Heaven? By Bradley A. Winn

I

n this installment of Linking Theory and Practice, we focus on the effect that graduate business schools have on advancing the HR profession and the bodies of knowledge they endeavor to pass on to the next generation of HR leaders. We also examine the alignment between what graduate HR programs are teaching, what certification bodies are requiring, and what business and industry need from emerging leaders in the HR profession. We gratefully incorporate interviews with Fortune 100 executives Mark James, SVP, HR, Honeywell; Kim Hauer, VP and CHRO, Caterpillar; and John Murabito, VP, HR, Cigna. When you think of the key factors that have advanced the HR profession over the past 100 years, what comes to mind? Of course, there are many historical trends that have impacted the evolution of the human resources profession, but a short list of societal, political, economic, and research-based phenomena would include: • The advancement of societal cultures that have placed greater value on balancing both productivity and the humane treatment of people at work. • The advancement and diversification of global economies from agrarian-age toward knowledge-age sectors of work. • The advancement of the executive’s perspectives on leadership and the recognition of the bottom-line economic value of people. • The advancement of political and governmental interests in workplace conditions. • The advancement of science in understanding human relations and productivity at work, including the development of the academic fields

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of human resources, organizational behavior, industrial psychology and the management sciences. • The advancement of HR leaders themselves and consultants in identifying what constitutes modern HR practice. • The advancement of HR professional associations and the development of professional certifications. • The advancement of professional schools of business and the development of relevant bodies of knowledge.

B-Schools: Are they Producing HR Expertise?

In his commentary entitled “B-Schools Aren’t Bothering to Produce HR Experts” (Harvard Business Review, 2015), Peter Cappelli writes: “Understanding HR innovations and figuring out which ones are

effective is, sadly, a low priority in the world of scholarship….In most companies, the HR staff is many times larger than the marketing department—yet while all leading B-schools have a marketing department, almost none have any HR-dedicated faculty at all….If companies were hiring MBA graduates to address HR questions, that would get the attention of business school deans, who allocate where faculty attention and resources go. But MBA programs aren’t actually producing those students.” In their response, Nancy Woolever and Deb Cohen paint a rosier picture: “We agree that there is much more to be done in this realm. But the picture is not as bleak as it may seem. Much progress

has been made in the past decade. The Society for Human Resource Management (SHRM) has been collaborating with business schools for many years and we have seen a positive evolution in how HR is taught and the resources universities dedicate to the discipline. Universities, and business schools in particular, are increasingly committed to teaching students a business-based HR curriculum that allows faculty to leverage individual interests, but that also reflects the needs of the market…. More than 380 HR degree programs across the globe… have embraced and follow SHRM’s curriculum standards.”

B-School Graduates: Are They Ready for the Fortune 100?

So are graduate HR programs producing the needed HR leaders of the future? I spoke with Fortune 100 CHROs Mark James of Honeywell, Kim Hauer of Caterpillar, and John Murabito of Cigna. Generally speaking, they look for graduates who can perform in a variety of HR functional areas including compensation and benefits, labor and employee relations, learning and development, recruiting and retention, and HRIS. Yet in general and perhaps more importantly, these Fortune 100 CHROs want someone with business savvy, with work experience under their belts, and with an ability to connect HR to business strategy. They want someone who can hit the ground running, communicate, think critically and globally, and work well with managers in a multicultural environment. They want someone who is less bureaucratic and administrative and more solution-based and strategically engaged in the business. They want someone who is quantitatively and financially literate, who can increase performance, impact costs, and drive culture. Yes, they want it all as they lead companies where HR is evolving and delivering more value to CEOs, customers and investors.

Figure 1: Four Roles and Sixteen Accountabilities Future/Strategic Focus Strategic Partner • Strategic Partner • HR as a Business Partner • Culture and Image

Change Agent • Staffing and Talent Management • Organizational Design • Survey Action Planning • Performance Management • Training and Development

Processes

People

Administrative Expert • Compensation • Benefits • HR Information Systems • Compliance

Employee Relations Expert • Employee Relations • Labor Relations • Safety and Workers’ Compensation • Diversity and EEO Day-to-Day Operational Focus

Master’s Programs: Are They Teaching the Right Material?

In his article entitled The Evolution of HR (Vosburgh, 2007), Richard Vosburgh extended the classic HR roles 2x2 model (Ulrich & Brockbank, 2005). The original 2x2 model identified four quadrants based on process versus people on the horizontal access and operational focus versus strategic focus on the vertical access. Vosburgh inserts 16 accountabilities to extend the model (see Figure 1). Interestingly, a survey of the courses offered in twelve different Master of Human Resources (MHR) or Master of Industrial and Labor Relations (MIRL) programs reveals a high amount of

alignment with these 16 accountabilities areas. Only “safety & workers compensation” and “global HR” appear to be outliers (see Figure 2). The surveyed universities that offer MHR or MIRL degrees include: Cornell University, University of Illinois, Michigan State University, University of Minnesota, Ohio State University, Penn State University, Purdue University, Rutgers University, South Carolina University, Texas A&M University, Utah State University, and West Virginia University. Figure 2 shows a comparison between the common courses offered by the business schools listed above and the 16 accountability areas: As a point of information, the

Figure 2: Alignment of HR Master Degree Courses & HR Accountability Areas Common HR Master Degree Courses

16 Accountability Areas

Labor Relations, Employee Relations, Negotiations and Mediation

Labor Relations Employee Relations

Employment Law

Compliance Diversity and EEO

Staffing, Talent Acquisition, Deployment and Retention

Staffing and Talent Management

Compensation, Benefits and Total Rewards

Compensation Benefits

Training, Learning and Development

Training and Development

Organizational Development, Organizational Change and Organizational Behavior

Organizational Design Culture and Image

HRIS, HR Analytics, Research Methods and Quantitative Analysis

HR Information Systems

Leadership and Performance Management

Performance Management

HR Strategy and Business Strategy

Strategic HR Planning, Survey Action Planning, & HR as a Business Partner

Global Human Resources

Safety and Workers’ Compensation

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Linking Theory + Practice B-Schools and Emerging HR Leaders: A Match Made in Heaven? HR competencies developed by Dave Ulrich and Wayne Brockbank, which were referenced earlier, are updated every five years based on data collected

In the middle of the twentieth century, discussions became more formalized around the idea of professionalizing the field of industrial relations and personnel administration. through the Human Resources Competency Study (HRCS). In the most recent iteration, more than 20,000 participants responded providing information that led to the development of an updated model. The current model identifies the following six competency domains for HR professionals: • Credible activist • Change champion • Capability builder • HR innovator and integrator • Technology proponent • Strategic positioner

HR Professional Certification: Bodies of Knowledge

In the middle of the twentieth century, discussions became more formalized around the idea of professionalizing the field of industrial relations and personnel administration. An histor-

ical overview written by Bill Leonard (Leonard, 1998) states, “In 1948, the debate had just begun on the professional nature of HR management and how to measure skill levels in the profession. The debate centered on three key questions: What body of knowledge must personnel professionals know? Who defines that body of knowledge? How do you objectively measure it?” In the 1970s, certification in human resources was endorsed by the American Society for Personnel Administration (now SHRM). Six committees were essential in defining the body of knowledge within the following functional areas: • Employment, placement, and personnel planning • Training and development • Compensation and benefits • Health, safety, and security • Employee and labor relations • Personnel research Over the last several decades, HR certifications proliferated while other subspecialty certifications have been created, and tens of thousands of these certifications have been granted by World of Work, International Foundation of Employee Benefit Plans, International Public Management Association for Human Resources, and the Association of Talent Development (formerly the American Society for Training and Development). The SHRM–CP/SHRM–SCP certification sponsored by the Society for Human Resource Management (SHRM) includes eight behavioral competencies: • Leadership and navigation

• • • • • • •

Business acumen Ethical practice Relationship management Consultation Critical evaluation Global and cultural effectiveness Communication In addition this certification includes the following technical competency and its attendant HR functional areas (see Figure 3 below): • HR Expertise (HR Knowledge Domains) ° People expertise » Talent acquisition and retention » Employee engagement » Learning and development » Total rewards ° Organization expertise » Structure of the HR function » Organization effectiveness and development » Workforce management » Employee relations » Technology and data ° Workplace expertise » HR in the global context » Diversity and inclusion » Risk management » Corporate social responsibility » Employment law and regulations ° Strategy expertise » Business and HR strategy

HR Master’s Programs and Certification Requirements: Should They Be Aligned?

In some ways our views of what comprises the appropriate “HR body of knowl-

Figure 3 HR KNOWLEDGE DOMAIN (COMPETENTCY) FUNCTIONAL AREAS

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PEOPLE + STRATEGY

PEOPLE EXPERTISE • Talent Acquisition and Retention • Employee Engagement • Learning and Development • Total Rewards

ORGANIZATION EXPERTISE • Structure of the HR Function • Organizational Effectiveness and Development • Workforce Management • Employee Relations • Technology and Data

WORKPLACE EXPERTISE • • • • •

HR in the Global Context Diversity and Inclusion Risk Management Corporate Social Responsibility Employment Law and Regulations

STRATEGY EXPERTISE • Business and HR Strategy

Figure 4: Alignment of HR Master Degree Courses and Certification Bodies of Knowledge Common HR Master Degree Courses

SHRM Certification Knowledge Domains

Labor and Employee Relations Negotiation and Mediation

Employee Relations Employee Engagement

Employment Law

Employment Law and Regulations Risk Management

Staffing, Talent Acquisition, Deployment and Retention

Talent Acquisition and Retention

Compensation and Benefits, Total Rewards

Total Rewards

Training, Learning, and Development

Learning and Development

Organizational Development and Change Organizational Behavior

Organizational Effectiveness and Development Structure of HR Function

HRIS and Analytics, Research Methods, Quantitative Analysis

Technology and Data

Leadership

Workforce Management

HR and Business Strategy

Business and HR Strategy

Global Human Resources

HR in the Global Context Diversity and Inclusion Corporate Social Responsibility

edge” are aspirational. In their new book entitled, Global Trends in Human Resource Management: A Twenty-Year Analysis (2015), Ed Lawler and John Boudreau conclude that there analysis “reveals that HR has not changed very much. We can point to some areas where change has occurred, but even in those areas, the changes largely took place in the late 1990s and have leveled off….” It’s interesting to note that amidst all the calls for change, the basic HR functional areas have stayed fairly stable over the last two decades. At least the labels we give them have remained constant. That said, perhaps the nature of the work within these functions has tended to move from the tactical to the strategic.

The Top 10: Aligning the HR Bodies of Knowledge

There is a great deal of alignment between HR graduate degree program courses, certification requirements, historical consultant models, and industry demands. In general they all focus on the top 10 traditional functional areas of modern HR practice: (1) employee relations, (2) employment law, (3) staffing, (4) compensation, (5) training, (6) development, (7) HRIS, (8) performance management, (9) strategy, and (10) global HR.

What needs to be emphasized is the absolute necessity—from the perspective of business and industry—of having a critical depth of understanding in business acumen. Furthermore, not only having the knowledge, but having work experience and business savvy. In addition, while the functional HR domains taught in schools and tested in certifications appear fairly well aligned, HR thought leaders are pushing for evolution and in some cases revolution. It would be interesting if B-school courses were renamed to align with the Ulrich, et al. competency model (credible activist, change champion, capability builder, HR innovator and integrator, technology proponent, strategic positioner), or to align with SHRM’s “Behavioral Competencies” such as navigation, business acumen, ethical practice, consultation, critical evaluation, and communication.

B-Schools and HR Leaders

Business schools have had a hit-or-miss track record of advancing the HR profession. It is true that they have been a major purveyor of passing on business acumen and HR knowledge to each new generation of HR professionals. In this role, business schools have provided business language and context to graduates which are taken with them

into the world of work. In both undergraduate and graduate programs, business schools have offered frameworks for students learning how business works and for thinking more critically and perhaps philosophically about the big picture of human, organizational, and strategic dimensions of modern enterprise. Alongside consultancies, graduate HR programs have provided a hot-bed of discussion around strategic HR. The degrees that HR professionals hold have in many cases become the de facto certificates which have accelerated individual careers and provided many employers with one of the most prevalent standards for hiring. That said, many will agree that during our college days, it was likely only a few professors or classes really had a deep impact. For those professors, we are grateful. Yet we could have done without much of the curriculum that was not provocative, brilliant, or inspiring. The curriculum has been surprisingly stable over the years. When you look at the key topics being taught,

The degrees that HR professionals hold have in many cases become the de facto certificates which have accelerated individual careers and provided many employers with one of the most prevalent standards for hiring. it doesn’t appear that most business schools are infusing cutting-edge thought leadership. It is also not clear that the academic research being produced by business schools is making its way into the classroom or into practice. At times faculty researchers tend to look in the proverbial rear-view mirror at what businesses have done or are doing, rather than spawning innovaVOLUME 38 | ISSUE 4 | FALL 2015

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Linking Theory + Practice A Match Made in Heaven? other universities to make a difference. Melinda Merino, senior editor at Harvard Business Review, has observed that what executives want from HR thought leaders is a clear identification of non-obvious solutions that address practical and real business problems. There is a need for a stronger symbiotic relationship between B-schools and senior HR professionals to create new directions, innovative practices, and implement the future aspirations of the human resources profession. Both sides should partner more earnestly to ensure that the lessons learned in business schools are those needed most by corporations and our emerging HR leaders.

References

Business faculty members should be working together as HR thought leaders and with business practitioners to push the envelope regarding curriculum. tive ideas to move the future of HR practice forward, although there are notable exceptions. Where business schools might have greater impact on the HR profession would be to partner more closely with business leaders and try to better understand their practical needs and 24

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problems. Business faculty members should be working together as HR thought leaders and with business practitioners to push the envelope regarding curriculum. Senior HR professionals are also in a unique position to partner and engage with their alma maters and

Cappelli, P. (2015), HBR Online Commentary. See https://hbr.org/2015/07/bschools-arent-bothering-to-produce-hrexperts. Kim Hauer, Caterpillar; Mark James, Honeywell; John Murabito, Cigna; Melinda Merino, Harvard Business Review (2015). Personal communications. Lawler E. & Boudreau, J. (2015). Global trends in human resource management: A twenty-year analysis. Stanford, CA: Stanford University Press. Leonard, B. (1989). History of HR certification institute. HR Magazine. Alexandria, VA: Society for Human Resource Management (SHRM). Ulrich, D. & Brockbank, W. (2005). The HR value proposition. Boston MA: Harvard Business Press Ulrich, D. & Brockbank, W., Younger, J. & Ulrich, M. (2013). Global HR competencies: Mastering competitive value from the outside in. New York, NY: McGraw Hill Publishing. Vosburgh, R. (2007). The evolution of HR: Developing HR as an internal consulting organization. Human Resource Planning. Vol. 3, 11–23. Nancy Woolever and Deb Cohen (2015). HBR Online Commentary Response. See https://hbr.org/2015/07/bschools-arent-bothering-to-produce-hrexperts.

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HR Association Executive Roundtable What Can HR Associations Do to Advance the Profession? People + Strategy Guest Editor Richard Vosburgh, Ph.D., interviewed the heads of five prominent HR associations to discuss the future of HR across organizations and what it will take to move the profession forward. Moderator Richard Vosburgh Participants Lisa Connell Executive Director, HR People + Strategy (HRPS) Henry (Hank) Jackson President and CEO, Society for Human Resource Management (SHRM) Steve Kozlowski President, Society for Industrial-Organizational Psychology (SIOP) Jill Smart President, National Academy of Human Resources (NAHR) Patrick Wright T.C. Vandiver Bicentennial Chair in Business, University of South Carolina

Richard Vosburgh: What does the theme, “Advancing the HR Profession: Contributing to the Future of HR,” mean to you? Pat Wright: The “advancing” theme suggests to me an emphasis on making today’s HR more effective than it is. I interpret the “contributing” component as a focus on the future and trying to prepare the next generation of HR leaders to be ready for a 26

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future that looks unlike today. As a profession, we certainly have room for improvement in how we fulfill our roles and responsibilities. But we can’t simply be trying to catch up; we have to be reaching into the future to lead our organizations into it. Jill Smart: It means that HR professionals need to be first and foremost business professionals. They need to understand their organization’s business and the environment and ecosystem they are operating within, and create an HR strategy that is based on the organization’s business strategy and defines how HR will contribute to delivering on that strategy. The future of HR is about understanding the future of their organizations and having the capabilities within HR to deliver results in the continuously complex, global, and competitive business environment. Hank Jackson: Over the years, I have observed the HR profession evolve into the most critical function driving business strategy. However, HR is still a relatively young profession; we have room to grow and have more impact on business. Advancing HR is about continuing the evolution of our profession. It is about ensuring that the entire HR profession is defined by the strategic contributions it is required to make to drive business success. Just as successful, progressive business leaders anticipate future trends that will impact their strategy and

operations, so must HR leaders. HR professionals are now expected to know the implications of future business changes and shape the human capital strategies to address them. SHRM is contributing to this future by preparing HR professionals for success in the business leadership position. One key tool we recently developed for the profession is the SHRM Competency Model, which defines the business and leadership skills required of an HR business leader. Lisa Connell: Advancing the HR profession and contributing to its future means taking actions to ensure that HR expertise remains an enduring and highly desirable commodity in business. That means ensuring that HR remains both a viable profession and vital to the success of business. It means taking steps to ensure the best and brightest pursue HR as a career. It also means ensuring HR practitioners have the right set of competencies to fully function in HR. So good HR professionals are not only smart but they also possess empathy and have an intuitive ability to identify and bring out the best in others. Steve Kozlowski: It means making the strategic, operational, and business performance contributions by having the right talent most important to top management and beyond. Research shows that managers largely have no knowledge that there is a solid scientific foundation—a substantial evidence base—behind effective HR, and so there’s more to effective HR than “people skills.” Richard Vosburgh: I think we’d all agree that we hear much less complaining about “getting a seat at the table” and see much more real work being designed to ensure and advance HR’s impact on the business. In your

experience, what are two specific actions a professional association can take to advance the HR profession? Pat Wright: First, a professional society, because of the resources it has, can and should provide a vision of what is changing and how the world will look in five to 10 years, with an emphasis on

what will be different, what that means for HR, and what HR professionals can do to prepare for it. Then they need to provide developmental programs to help build the competencies necessary to function effectively in this new world. Finally, the professional society can be the platform for the exchange

of ideas about how firms are going to adapt as well as the kinds of practices they are implementing to prepare for the future state. Jill Smart: One, provide an easy way for members to exchange ideas, share best practices and lessons learned, and contemplate and define the future of VOLUME 38 | ISSUE 4 | FALL 2015

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the function. Two, create affiliations with universities to ensure the business curricula incorporate dimensions of human resources, as it is useful for all those studying business to understand the importance of this function. Also, for those universities that have HR-specific programs, ensure they are incorporating what leaders in the HR function are seeing as needed skills and capabilities. Hank Jackson: There is still some discussion about the value and future of HR, but I see more recent conversation acknowledging the critical role HR now plays in business success. An HR professional society should not only be a part of this conversation, but it should also be leading it. This is why SHRM took a number of recent actions, from convening leading HR practitioners and thinkers for an initiative on the future of HR to developing the SHRM Competency Model as a leadership model for HR professionals, and by introducing our new SHRM– SCP and SHRM–CP competency-based certifications. However, we have to do more than talk among ourselves about the impact of the HR profession. As the representative society for the HR profession, SHRM believes it has a responsibility to take that message to the broader business community. This is why SHRM launched our “Advancing HR” campaign, including nationally-televised commercials and advertisements in top business and media markets around the country. We want more business leaders to understand what we know— that great HR makes great organizations. Lisa Connell: The first thing we need to do is establish minimum standards for professionalism—whether through formal education, certification, or perhaps even licensure. Before you can hold yourself out as an HR professional, there should be minimum requirements either through experience or education. Second, we need to ensure that individuals in the profession maintain a certain level of proficiency through continuing professional development. Both of these actions would go a long way to ensure that HR is viewed as a 28

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profession and not merely a functional role. Steve Kozlowski: The two biggest challenges are, first, educating managers about the science behind effective HR practices and, second, doing a better job of translating research findings into clear application recommendations. I think the first challenge is something a CHRO can address by collaborating with management educators. The second one is something a CHRO can do by partnering with HR researchers. Richard Vosburgh: If you were to do a “force field analysis” on the topic of “Advancing the HR Profession,” what would be the negative forces holding it back, and what would be the positive ones propelling it forward? Pat Wright: I think the two greatest obstacles are the expectations of our organizations and the competencies of our people. As much as our organizations say they want and need great HR, they don’t really know what it looks like. Thus, they just want us to do what we do, but do it better. As far as the competencies of our people, my HR@ Moore Survey of CHROs asks about the greatest obstacles to HR achieving the CEO’s agenda, and every year the competencies of the HR professionals tops the list. It’s not just a lack of business acumen (although that’s a big one), but it’s also an attitude of hesitancy to take risks and be accountable for results. The positive forces consist of the needs of our organizations and the increasing diversification of the talent in HR. Since the “war for talent” began, it has become increasingly clear that our firms compete based on their human capital, and that presents a huge opportunity for HR to step up and meet those needs. Also, as HR functions increasingly source their talent from the line—from strategy consulting firms, from data-analysts—the profession has increased the breadth of HR talent that now exists. These diverse talents and perspectives should help to propel the HR profession forward. Jill Smart: Negative force: Our historic reputation for being back office, transactional, and low man on the

totem pole. In some ways we are still struggling to lift the expectations our constituencies have of us (and making sure we meet them!). Positive force: The incredible potential for impacting the business since talent is the single biggest differentiator for an organization. Hank Jackson: I see two challenges that persistently slow HR’s total evolution into the most critical business function. First, the HR profession has not clearly defined itself. We identify at least two distinct practices of HR and divide ourselves accordingly. This has become so pronounced that business advisor Ram Charan recently suggested we split the practice of HR into two functions: one for administration and another for strategy. He went on to argue that the strategic function should be what we consider the practice of HR. I strongly disagree. There are progressive levels in every profession, from basic to higher-level strategic activities, but there is only one practice of HR. All HR activities, whether designing benefits, processing payroll, building a succession plan, designing the right workforce strategy or providing business insights, should be done to support a broader “people strategy.” The HR profession is about engaging employees to drive business success. All professions define themselves by the higher-level business contributions while acknowledging that there are entry-level functions as well. The second challenge for HR is the difficulty in quantifying the bottom-line contributions it makes to business. I believe this is why the HR profession does not consistently get rightful credit for business success. To correct this, we must agree upon a language and set the standard for evaluating and reporting the practice of good HR. As challenging as these forces are, HR is in the right place at the right time. Most business leaders now agree on two things: The world of business is volatile, uncertain, complex, and ambiguous; and the most effective way to succeed in this environment is to have an engaged workforce that embraces change, seeks innovation, and presses forward despite ambiguity. The World Economic Forum has

said that talent—not financial capital— would be the key to business in the 21st century. The Conference Board’s latest survey of CEOs and other business leaders concluded that human capital is the biggest challenge facing business today. The SHRM Foundation in partnership with the Economist Intelligence Unit also found that what organizations need most today and into the future are people management strategies. I believe we are at the start of the Decade of Human Capital, when organizations will draw a clear, straighter line between people and business strategies. As I mentioned, our challenge will be to more clearly define our profession and its value to business at every level—from the entry-level administrator to the senior HR business strategist. Lisa Connell: I’ll start with the positive. The world of work is rapidly transforming. Financial capital and technology are now table stakes to be

Richard Vosburgh: What role should professional associations play in advancing the HR profession? What types of support do you expect to provide to professionals? Pat Wright: Let me take the perspective of our Center for Executive Succession. Our mission is to be “the objective source of knowledge about the issues, challenges, and best practices regarding C-suite succession.” Many of the organizations in this space right now, consulting firms, search firms, and so on, may do good work, but many CHROs are suspect that they are really selling products. We have engaged in very deep investigations getting behind the veil of what is publicly known about executive succession to identify the subtle, political, and emotional processes that play a role in executive succession decisions. As we build knowledge of how they can derail decisions, we will be able to develop guidelines and warning signs to

“I believe we are at the start of the Decade of Human Capital, when organizations will draw a clear, straighter line between people and business strategies.” successful in business. To win in business today, organizations must have access to the best talent available, and acquiring and enabling others to develop talent is what HR professionals do best. So HR is uniquely positioned to lead the business today. What’s holding us back is our reluctance to seize the leadership mantle. HR professionals must set the new agenda for business success. Steve Kozlowski: I think the negative forces are outmoded stereotypes about the nature of the HR profession. The positive forces are the advances made by HR professionals and HR researchers in substantiating the contribution of good HR practices to organizational effectiveness.

help CHROs play a positive and impactful role in choosing the talent to lead their firms. We can also help boards and CEOs better manage these processes, and that will continue to elevate the credibility of the HR profession in the eyes of key stakeholders. Jill Smart: We should help to educate HR professionals on the skills needed going forward, and provide platforms and programs to build them. And as I mentioned earlier, the HR professional associations are the perfect platform for HR professionals and leaders to collaborate with one another in a noncompetitive non-threatening environment. Hank Jackson: As the world’s largest

HR association, SHRM is playing a leading role in advancing the HR profession globally. We support HR professionals through all points of their career, from initial education and entry to the profession to the senior executive leader. For example, SHRM guides the academic community in teaching relevant HR knowledge and competency, provides career development from entry- to executive-level through the SHRM Competency Model, certifies competency through the SHRM-SCP and SHRM-CP competency-based certifications, and offers unique learning and networking opportunities for HR executives through our executive network, HR People + Strategy. More broadly, SHRM advances the profession by leading the conversation about what effective HR looks like now and in the future. On behalf of the profession, we advocate for effective employment laws and regulations and are sought after by the White House and Congress to provide expert guidance on proposed changes. Lisa Connell: A professional association should not only serve its members as a representative of its membership, but it should also always be exhorting its members to achieve higher levels of professionalism by setting an ever higher bar for professional development. An association should identify the knowledge, skills, and behaviors required not only to be competent but also to be exceptionally skilled in delivering HR. It should be able to identify with a certain level of specificity the resources available to gain those skills and knowledge. It should also have mechanisms to identify those who have mastered the necessary knowledge and skills. Finally, advocating on the behalf of a professional so that businesses know who is truly capable and who is not. Associations should create a runway for a successful career in HR. Steve Kozlowski: I think that professional organizations can play a key role in facilitating action with respect to advancing HR’s impact. First, they can help to influence the curriculum and requirements for management education. As I mentioned, there is research showing that a large majority of managers have very little knowledge of the VOLUME 38 | ISSUE 4 | FALL 2015

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science behind effective HR. That contributes to outmoded stereotypes and attitudes. There is also a nascent movement to make management education more evidence-based and professional associations can aid that education effort. Second, HR researchers publish their findings in scientific journals, but HR lacks effective mechanisms (e.g., books, journals, databases) to translate those results into tools, applications, and practical advice. That’s a big gap and that is gap that the Society of Industrial and Organizational Psychology is addressing during my presidency. Richard Vosburgh: As you look across at finance or marketing, do you see those professions grappling with issues similar to those we are discussing here? Jill Smart: Finance, no, since there are laws and regulations that give them authority and empowerment, and they have hardcore skills that are more definable and measurable than HR. Marketing, somewhat, but not as much as HR since everyone thinks they can do the HR job! Hank Jackson: Other professions are grappling with similar issues. Advancing technology, demographic shifts, and globalization are only some of the trends that are forcing us all to adapt to change faster than ever and to rewrite or update the playbooks for our profession. The SHRM Foundation, working with the Economist Intelligence Unit, recently issued reports on the “Evolution of Work and the Worker” and “Engaging and Integrating a Global Workforce,” that cover these trends well and provide insight for the future HR playbook. However, I believe HR lags other professions in a key area: fully assuming our position as leaders in the business world. When growth was the driver of business, finance took the lead. When technology was exploding, IT professionals led the way. To keep up with more empowered customers and technology, marketing raised its profile. In my opinion, the most pressing problems facing business today relate to talent management. Talent is what’s keeping CEOs up at night. This puts HR squarely in the Decade of Human Capital and leaves us no option but to take the lead. 30

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Lisa Connell: Finance went through its transformation decades ago. I do see some similar challenges with marketing. HR is not a licensed profession, and it is seen by some as a role anyone can step into—plus, the role marketing plays varies greatly across organizations. Alternatively, the role of finance is clear. It is seen as a critical partner in business, and its credibility rarely comes into question. Richard Vosburgh: Is there anything our graduate schools should be doing differently to better prepare HR professionals for organizational impact and success? Pat Wright: In our HR Master’s program we seek to develop our students in four ways. First, we provide them the basics regarding HR in terms of best practices and tools for selection, rewards, performance management, training, and so forth. Those are table stakes. However, we also have to build their knowledge of and passion for business. We want them reading the Wall Street Journal every day and talking about the pressures facing companies and their strategies for addressing these challenges. As they become enveloped in business, that builds an excitement for being part of it. Third, we want them to be critical thinkers as opposed to check-listers. I’ve met too many HR professionals that want the universal checklist to follow rather than to take ideas, apply them to their unique situation, critically evaluate if the ideas apply, and if so how. Students entering the profession need an appreciation for the ambiguity organizations face and to enjoy the requisite struggle entailed in dealing with it. Finally, we want to encourage them to be leaders who, after thinking critically, can develop innovative solutions, implement them, and be accountable for their results. We want them to think, talk, and act like business people who have special expertise in a firm’s human capital, not HR people who happen to work for a business. Jill Smart: Absolutely. The focus needs to be on building well-rounded business professionals, with a key focus on key business acumen such as finance, marketing, strategy, business

and labor law, IT, and program management skills. Communications skills are also paramount. Increased exposure to senior HR professionals in the classroom would also be beneficial. Hank Jackson: Higher education has played and will continue to play a pivotal role in preparing HR students for greater impact and success. Some graduate programs have started to integrate competencies into HR education; this is a positive and necessary step to prepare the next generation of HR business leaders. However, the move toward HR competencies is just beginning to gain traction and, although we expect others in the education arena to follow, such shifts in education happen slowly. I urge all colleges and universities to join this effort to introduce competency-based HR education, and quickly. In the meantime, SHRM continues to develop tools and provide support to move HR education in this direction. We currently provide HR curriculum guides to more than 240 institutions of higher learning. HR education must also include internships and other experiential learning opportunities, so that students have practical experience applying their HR expertise on the job. Lisa Connell: Education for HR professionals should prepare them to be business leaders. HR knowledge is simply not enough to be successful in HR. While we have made progress, we are still not including enough business and strategy courses in the HR curriculum. Steve Kozlowski: As I noted previously, we need to ensure that HR professionals are steeped in evidence-based practice. Their graduate education and experiences should give them the foundation to be “thought leaders” and innovators, not mere followers. Beyond HR expertise, they need to understand the business and societal trends that will shape the strategic direction of their organization. Richard Vosburgh: What are the greatest challenges facing professional HR associations today, and how must they evolve in the next 20-plus years to remain relevant? Pat Wright: One of the biggest

challenges HR associations face today is competition. Like most organizations, HR associations seek to grow, and while each began with a unique niche, growth has caused them to begin to overlap more and more in terms of both content areas and potential members. I think that this ecosystem could really benefit from cooperation, rather than competition. Each association brings unique strengths and weaknesses, and by cooperating on specific projects in specific areas, a synergy can be achieved in ways that will elevate the entire profession and benefit each association. But it will require each deciding on its domain, and rather than invading another’s turf, cooperating when there may be a turf overlap. Jill Smart: Attracting members in the first place is key, with offerings that are not overly time consuming or expensive. They must also focus on the

As a relatively young profession, HR must coalesce around a definition that clearly articulates our contributions and value to business, and we must avoid the trap of defining the profession based on numerous and varied associations. To remain relevant, HR associations must come together around a comprehensive set of human resource management principles that drive business success, and then provide a roadmap for the growth and success of all HR professionals along the entire career spectrum. Lisa Connell: The greatest challenge facing professional HR associations is remaining relevant in a world where access to information is relatively easy and developing professional networks can be done virtually and through a variety of social platforms. It’s very difficult for a professional society to serve different constituencies with differing needs.

Some graduate programs have started to integrate competencies into HR education; this is a positive and necessary step to prepare the next generation of HR business leaders. future, what needs to be considered, and what could happen in our organizations that will have an impact on our talent and therefore on HR. We also need to make sure we each have a well-defined purpose and mission, and while there will be some overlap, we need to make sure that overlap does not become too significant. Hank Jackson: The greatest challenges facing HR associations are not dissimilar from those facing all associations. Business and the expectations of the professionals within them are changing. The pace of this change is faster than ever. Even the membership model is being tested as technology enables instant access to global content and community.

Even for societies that claim a specific niche, the task can be daunting. Every association must identify its true north—why it exists and who it aims to serve—and remain steadfast to its mission. Associations tend to lose their relevance when they try to be all things to all people. Steve Kozlowski: I think professional organizations need to cooperate where possible and to build on potential synergies along paths of common interest. In addition, I think a big challenge for professional organizations is to balance and leverage the two forces that drive all systems: top down and bottom up. Leadership in professional organizations scans the environment, anticipates changes, and tries to adapt to meet its

members’ needs. This is the top-down aspect on which virtually every leadership team is focused. However, there is also substantial potential to leverage the unique knowledge and vantage point of the membership to also guide the future direction and practices of professional organizations. This bottom-up aspect is harder to capture, but it is critical to long term success. Richard Vosburgh: What metrics do we need to look at to be sure that HR has the desired impact on business? In other words, how does one know that someone in HR is achieving the desired outcomes? Pat Wright: Ultimately, we should be focused on the business’s success— profitability, market share, and so on. However, those metrics are driven by hundreds of things outside of HR’s control, so one cannot hold HR wholly accountable for the outcomes. On my most recent survey of CHROs, a few said that what makes a successful CHRO are things like an engaged workforce and the talent pipeline. However, while HR develops tools and processes to help make those things happen, they are most strongly impacted by business leaders using those tools, so again, a large portion of the variance is outside of HR’s control. In spite of this, HR must focus priority on the people metrics most relevant to the firm’s strategy. Certainly engagement, retention, and the talent pipeline (percent of ready successors) serve as overarching metrics, but to truly impact the business, these need to be fine-tuned to align with the strategy. For example, an overall retention rate is fine, but retention of high potentials is much more important, and in a company differentiating through innovation, retention of R&D scientists may be critical. While HR may not directly impact those metrics, the function can strongly indirectly impact them by (a) building the right tools and processes and (b) influencing the line leaders to use them consistently and effectively. Jill Smart: Using metrics to measure the effectiveness of HR is critical. Metrics around efficiency—such as time to complete something, cost per transaction, HR headcount per employVOLUME 38 | ISSUE 4 | FALL 2015

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ee, overall cost—and quality—such as impact of training, quality of recruits, leadership and 360 feedback, satisfaction rates, accuracy of forecasting resources needed—can really help HR leadership determine where improvement needs to be a focus. Hank Jackson: As I mentioned, quantifying HR’s bottom-line contributions is one of HR’s top challenges. Metrics are the language we can use to tackle this problem. At the most basic and common level, HR metrics measure our function’s productivity, such as time to hire and the ratio of HR professionals per employee. However, in the next evolution of HR, we must go deeper and further. Only by having a clear picture of what success looks like for our particular organization can we measure our progress toward getting there. It is up to today’s HR professionals, as business leaders, to start with their organization’s strategy, goals and needs first, then design the HR functions to drive them. Therefore, the HR metrics that matter will vary by industry, organization, size, and many other factors. Lisa Connell: Obviously, the overall success of the business would be one indicator of the success of the HR function. Another measure of success is how often HR is called upon when important business decisions are considered. True success would mean that the talent strategy is aligned with the business strategy. Having an engaged, productive workforce would likely mean that the organization’s talent is effectively managed. As with a lot of things, a true test comes with the face of change—how prepared is the organization to deal with that change? Say a key employee leaves the company—has his or her successor been identified? Or maybe there has been a major shift in business strategy—is it obvious what changes need to be made with the talent? And can the necessary changes be implemented quickly and effectively? Steve Kozlowski: One can look to business metrics, but organizational financial performance is multiply determined. In that regard, I think useful metrics need to be specifically tailored to HR and business strategy for a given organization. Frankly, this is where 32

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developing unique HR capabilities can provide unique competitive advantage for an organization. Richard Vosburgh: How do HR associations remain relevant to the most recent generation of HR professionals? Pat Wright: First, students have to be aware of the existence of the HR associations. The reality is that almost all undergraduate and most graduate students have no idea who HRPA, NAHR, or HRPS are. However, they are well aware of SHRM because SHRM has so successfully built local and student chapters. The lack of awareness of the other associations does not necessarily present a problem because their missions focus on constituencies with 10 to 20 years or more of experience. However, all of the associations can help contribute to these students’ development by making more of their resources available to them. When conducting Google searches to do the research for papers and projects, if students can get resources from the organizations that help them, those associations will begin to emerge as relevant. At the same time, these resources will provide them current, strategic, and business-focused perspectives, which should begin their development much earlier toward becoming the kind of HR professionals the future will require. Jill Smart: I think leaders in HR organizations need to have recent experience in HR, whether as a practitioner or an academic. Then I also think it is critical to stay involved in the profession so you can listen and learn from those that are practitioners, and not just at senior levels but all the way down the pyramid. Hank Jackson: In their simplest form, associations build and sustain community—a professional home—for practitioners. The more and better we use our platform as professional associations to unite and connect HR professionals to one another locally, the more effective and relevant we will be to HR professionals at every level. We must also do more to reach back and pull up the newest generation of HR professionals. This means making a concerted effort to develop relation-

ships with students and influence the HR curriculum. It means providing learning and networking opportunities designed with young professionals in mind. It means offering on-ramps to employment and growth through mentorship, career coaching, and other practical experience. SHRM is taking these steps and more. Every HR association must make a concerted effort to appeal to and excite the newest members of our profession and welcome them into our HR community. We need their engagement, leadership, and passion. Lisa Connell: HR associations must think of themselves as career partners in order to remain relevant for this and the next generation of HR professionals. People join professional societies with varying levels of experience and expectations. As such, an HR association must be really clear about what segment of the profession it wishes to serve and tailor products and services to specifically address the needs of that segment. No HR association can successfully be all things to all HR professionals. To remain relevant to its core constituency, an association must meet both current and evolving needs and must deliver its services across multiple platforms and through many channels. We will always have generational changes, as well as technological and other work-environment changes. We will need to approach our value proposition in different ways—through changes in content delivery, networking, and so on—but the value an association provides to its constituency remains the same: to help professionals be successful in their roles while advancing the profession. Steve Kozlowski: SIOP recognizes that student members are our future. We reach out to recruit student affiliates at the undergraduate and graduate levels and SIOP provides unique services and programming targeted at our student affiliates. They are our future membership base. SIOP is also somewhat unique because we straddle both science and practice careers. Keeping science and practice linked is a core value that we instill in newcomers because it will sustain SIOP and its professional value to the membership.

CALL FOR PAPERS People + Strategy Journal 39.2 (Spring 2016)

The New Science Behind HR: Shaping HR’s Future

Executive Editor: Dr. Marc Sokol | Guest Editors: Dr. Anna A. Tavis and David Creelman | Managing Editor: Mary Barnes Theme of the Upcoming Issue

Human Resources and Organization Management are undergoing a significant shift to become a more strategic, evidence-based discipline. Recent discoveries in sciences such as neuroscience, psychology, behavioral economics, sociology, environmental sciences, analytics and others have far-reaching implications for the workplace of the future. This issue takes a hard look at the scientific findings most relevant to business performance. While the focus is primarily on experimental sciences, we will also consider articles inspired by the social sciences like history or anthropology.

Submissions should: • • • •

Show a deep understanding of the scientific findings. Explain the implications for management practice. What should we do differently now that we have this new knowledge? Whenever possible, have examples of how these ideas have been applied in organizations. Bring fresh insight to and present a new angle on popular or older topics, for example, “big data.”

Topics to Consider

• Social network theory • Psychology (behavioral economics) • Neuroscience • Cognitive biases • Environmental science • Natural sciences, such as quantum physics We are looking for articles that have the following attributes: •

•

• •

• •

Strategic importance: Have a link to business decisions and do not rehash well-known information; should be the type of article an HR partner might pass on to business leaders to educate them about a concept, provide the basis for a decision or influence their thinking. Impact: Have a “so what” for the HR executive as well as a business leader, for example, does not just present research findings but also discusses applications and impact. Actionable: Focus on solutions, not just descriptions of issues. Grounded: Based on research, theory (with examples), or proven practice to provide a “proof of concept,” not just armchair observations; provides frameworks that can be applied in a variety of situations. Point of view: Make a case for thinking about a topic differently. Readable: Non-academic prose; uses active verbs and minimal jargon.

Our Audience

The typical reader of People + Strategy is an internal human resource executive or consultant seeking actionable and practical advice based in sound evidence. Our reader wants to be challenged by new practices, approaches, and models. Our readers are experienced, knowledgeable and work in and for a variety of organizations across the globe. They

turn to People + Strategy for clear, actionable, and thought-provoking articles on current topics.

Types of Submissions

Articles can take a number of forms, including frameworks for understanding and taking action on a topic, presentation of research findings with interpretation, case studies illustrating best practices or essays advocating new ways of thinking about an issue. Articles from consultants are especially interesting when they are written collaboratively with practitioners from a client company.

Submission Process

We encourage submissions of one-page proposals and article ideas first to the editors prior to submitting the completed article. All proposals will be reviewed by the editors and returned to the authors with comments and recommendations. If accepted, we will then guide you on the development of your article. Final submissions will be reviewed by members of the journal’s editorial review board. Criteria for evaluation include significance of contribution to the field of human resource management; usefulness of knowledge; timeliness of content; originality; provocative nature of content; quality of the data supporting the points; logical; and well-written. The reviewers’ comments will be sent to authors.

Writing Style and Guidelines

Articles can range from 2,000 to 2,500 words. Perspectives articles range from 500 to 700 words. See examples of articles published in the journal at http://www.hrps.org/PSJguidelines.

Timetable and Submission Information

All proposals should be sent to: Anna A. Tavis at [email protected] with a copy submitted to [email protected]. Please designate in your subject line that the submission is for the spring 2016 issue: The New Science Behind HR. Please indicate if your article is based on any prior publication or is also currently submitted to another publication for consideration. • • • •

•

Nov. 1, 2015: Proposals due. Submit a one-page overview of article concept and author’s bio. Nov. 15, 2015: Feedback provided. We will provide feedback and direction on your concept. Nov 1, 2015. Dec 18, 2015: Articles due. Submit a well-written draft ready to be edited. Dec. 30, 2015: Feedback provided. We will indicate if the article is accepted, and, if so, what revisions are needed. If your article is accepted, we will work closely with you to shape and revise it to meet the final submission deadline. Feb 1, 2016: Final articles due. All articles are due in final edited form.

Review Process

Contributions will be reviewed by a committee, and each paper will get at least three independent reviews, based on criteria including relevance, clarity, soundness and power of the arguments,

generality of results/claims, and novelty. Papers will be accepted based on this criteria and space availability. Accepted papers will be published in the spring 2016 issue of People + Strategy.

Copyright Policy

HR People + Strategy retains the copyright to all content published in the People + Strategy journal.

Executive Roundtable: Charting the Future of HR

A Candid Discussion with 10 CHROs People + Strategy’s Executive Roundtable Editor David Reimer sat down with 10 CHROs over two dinner conversations in Manhattan and San Jose. Each leader represented companies with global presence—with annual revenues ranging from $4 billion to $25 billion. The industry sectors represented spanned banking, B2B, retail, construction and manufacturing, and software. 34

PEOPLE + STRATEGY

Participants engaged in a freewheeling discussion about the ways their roles are different today than were just a few years ago, the future they envision for HR, and the active stance they are taking in helping create that future. Even when they disagreed on particulars, they agreed on one theme: It’s time to stop talking about the what of HR’s future, and shift focus and actions to the how.

People + Strategy: How does HR make the greatest impact today? Donna Morris: First, HR plays a critical role as the organizational architect—is the structure optimal and will it facilitate the company strategy? Second, it leads attraction and development of leadership to ensure the right people are in place to execute on that strategy.

needs and drivers. A few years ago, my biggest, hardest-to-address cost-drivers were manufacturing efficiencies. Then it became real estate. Now it’s talent supply. Each of those shifts have major implications for the business. Dermot O’Brien: HR has largely broken into two different areas. The transactional, all the former personnel functions—from labor negotiations to payroll and benefits to workforce management—and then separately, advisory. Advisory is about consulting to the CEO, the board and the business leaders about the talent and leadership needs required to deliver the business strategy. All the transactional stuff has become more efficient, but will ultimately be pushed to [relatively low-level outsourced or insourced] functions using technology. Advisory is what’s most needed today. Michelle Smith: So much of the conversation about the future of HR seems to continue to focus on those transactional functions, which Dermot mentions.

We have certainly put a lot of effort and emphasis into fine-tuning our systems. However, I don’t think you can ever put systems above the all-important “advisory role” within an organization. Glory DiSimone: In my role, I view myself as a “respectful agitator”—that is, challenging the status quo with executive leadership in a way that stimulates dialogue about doing things differently in the spirit of making our firm better. This has become a catalyst for bringing about positive change and it encourages stakeholders with different perspectives to contribute. Scott Kelly: HR at its best is an integrator of complex needs and conversations. The bifurcation between “good” HR versus “bad” HR is really the function’s measurable impact on the business. We’ve spent far too much time over the past 20 years asking what HR needs to do to get invited to the meetings—the “seat at the table” concept. In my view, good HR people call the meetings.

Executive Roundtable Participants

Those two components are the difference-makers. The rest is table stakes. Paul Baldassari: We’ve shifted from a time when HR just needed to supply and exit talent on behalf of the business to an environment where HR plays a key organizational role and needs to really understand company strategy, business model—including its P&L

Paul Baldassari

Susan LaMonica

CHRO Flextronics

CHRO Citizens Financial Group

Glory DiSimone

Alan Momeyer

Global Head of HR Brown Brothers Harriman

Vice President, HR Loews Corporation

Sarah Dunn

Donna Morris

Global HR Officer Coach

CHRO Adobe

Dominique Grau

Dermot O’Brien

CHRO Agilent Technologies

CHRO ADP

Scott Kelly

Michelle Smith

CHRO Hitachi Data Systems

Vice President, HR Barnes & Noble

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P+S: What do your businesses need most from a CHRO today? Michelle Smith: Adaptability. We have hourly retail workers, salaried people who grew up in the publishing business, and technology professionals straight out of Silicon Valley. They all bring different perspectives and have different expectations. My role is to help our leadership think about talent needs for the entire company.

today as part of how they measure the business. At board of directors meetings and annual shareholder meetings, CHROs are driving important conversations about proxy proposals, executive compensation, and talent selection. Audiences are even asking the CHRO about talent supply: “How confident do you feel about the talent necessary to deliver on the strategy?” Five years ago, the CHRO wasn’t as key to the board and committees or addressing shareholders.

We need to help with the sale of the value proposition to the employees—this role is an opportunity to be in front of employees and shareholders. Dominique Grau: We need to communicate the value proposition to the employees—this role also requires being in front of employees and more and more, in front of shareholders. It’s our job to know the pulse of the organization, especially considering the environments of rapid change we’re all in. Dermot O’Brien: We need short-term results, combined with a long-term human capital development agenda. Change is not going to be instant. Coming out of the last few years, people are burned out. You can’t just tell managers and leaders “give me different results” without investing in them to help with the “how.” Sarah Dunn: Bringing the mosaic together. HR’s true value exists at the intersection of organization, talent, and culture. This is the CHRO’s moment to help create a coherent mosaic and to ensure that more transactional processes are automated or housed within broader business services teams.

Scott Kelly: Complexity and the pace of business—the so-called “VUCA environment [volatility, uncertainty, complexity, ambiguity]—are driving what I see as a huge HR opportunity. There’s a growing consensus from business leaders that they need an HR partner to help them think through the different implications for talent and even their own roles in this context and at this speed. Paul Baldassari: In terms of business impact, we can get our buildings up, anywhere in the world, in a matter of a few months. We have highly tuned the system for getting our equipment on the production floor and fully operable in the same timeline. Opposite of that, human capital requires longer lead time. We have created a highly tuned set of predictive talent analytics that help us to better determine the talent needs in advance and shorten the staffing process as much as possible.

human resource capabilities over the past three to five years. Through a combination of voluntary and involuntary turnover, many (not all, but a majority) of the CHROs we interviewed had changed out between 24 percent and 70 percent of their HR team. None of this was primarily cost-based, but rather skills-based. In particular, bringing in HR Business Partners who have stronger P&L understanding and demonstrated learning and business agility was a recurring theme. Dermot O’Brien: HR is likely to follow the path of other functions, where all the transactional pieces are going to end up sitting in perhaps a company-wide shared service. And that’s a good thing. Whatever you call what’s left, it’s going to be much more about advising the CEO and the organization. HR must play a bigger role in defining success for the company. Helping business leaders assess who the right people are, what the right results are, and how to measure accountability. And if the business leaders aren’t hearing us, then we need to change the way we’re having the conversation. Sarah Dunn: Transactional processes will be automated or housed within a business shared services center, and then HR can focus on human capital. Many companies haven’t invested enough in management and leadership capabilities, or required that capability of their leaders, and HR has gotten into the pattern of cleaning up the results or reacting. Talent is our most precious and scarce resource, and HR must support and prepare leaders and managers to proactively succeed in that environment. Paul Baldassari: We need to shift from the perspective that “the business should know talent” to “HR needs to understand the underlying business drivers and how talent addresses them.” P+S: What credentials does someone need to be CHRO?

P+S: How do you see the future of HR? Donna Morris: Businesses need a partner that can provide input, influence, and a point of view specific to the company’s operations. In addition, analysts and shareholders want CHROs’ input 36

PEOPLE + STRATEGY

Executive Roundtable Editor’s Note: It was interesting in this segment of the conversation to note that many organizations have begun thoroughly overhauling their

Donna Morris: It’s an increasingly complex job. It’s not about certifications or training. You have to stand next to the CEO as an advisor and confidante. You have to stand in front

of the board, and know that you will be asked to evaluate the performance of your peers and your own boss. You have to know the business. You have to demonstrate the leadership with your own team that you’re asking of your other business peers. You have to meet employees where they’re at—if they’re on social media, be active on social media too. Ultimately, you need to be someone who can engage and build confidence at every level of the organization to be successful. Dermot O’Brien: The CEO and the CHRO are the two roles that go behind the curtain to discuss items with the board that are sensitive, giving the CHRO broadest access to the business and people, second only to the CEO. HR is one of the best business roles out there. Dominique Grau: I agree. We need to

be comfortable being in front of the board. We also need to be able to have honest, robust business conversations with the CEO. And we need to be able to offer an unbiased assessment that is objective of everyone else’s agenda.

or we need to not do it. Succession planning is an investment process—a human capital investment, with an ROI. We have to get away from HR language and use the language of the businesses we’re in.

P+S: What steps do we need to take today to prepare for and create that future?

Sarah Dunn: Rotations outside for HR are key. That way, future HR leaders will have real-world business acumen and bring that perspective to learning agility back to HR.

Paul Baldassari: We have got to have rotations—both into HR by business people and into business by HR people. The divide is far too wide. HR needs business, and business needs HR. We have to be intentional about addressing that gap. What will your legacy be as an HR leader—minding the shop or changing the game? Alan Momeyer: We need to bury the “human resources” title. We need to regard every hire as a capital investment,

Susan LaMonica: I agree. Business exposure for HR is key. I spent just seven years running a P&L, and it changed the way I run HR. Scott Kelly: It’s worth remembering that this is not a purely “enabling” role. At its best, it’s an inspirational, activist role. We should not underestimate the importance of the HR role within the leadership team. VOLUME 38 | ISSUE 4 | FALL 2015

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Research Corner

A Competency-Based Approach to Advancing HR By Alexander Alonso, James N. Kurtessis, Andrew A. Schmidt, Kari Strobel, and Brian Dickson

H

uman resources is under assault. Too often we hear about the failings of the human resource management profession. Every day new research drives a wedge between the strategic and the tactical sides like faults separating highly-active tectonic plates. For years, we have heard the cries for a “seat” at the proverbial executive table and the tales of HR missing the boat on the true needs of the business world. We’ve gone from the wilderness of personnel administration to the operational HR champi-

38

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on model to the great debate for the dissection of HR into “administrative” and “strategic” (Charan, 2014). While thought leaders like Ram Charan have driven these debates, several others have highlighted the need to change the way HR processes play a role in modern organizations (Buckingham & Goodall, 2015). All of these efforts sadly represent attempts to “fix” HR but what remains unclear is whether the aim is to advance or to handcuff the profession. As the debate has raged over HR’s

shortcomings, thought leaders such Dave Ulrich and colleagues (1995; 2008) and Patrick Wright et al. (2011) have focused efforts on lifting the profession to new heights. These researchers have defined the core concepts of HR delivery and identified the ways HR drives competitive advantage. While these thought leaders focused efforts on the future of HR, organizations such as the World Federation of Personnel Management Associations (WFPMA), the Chartered Institute of Personnel and Development (CIPD),

and the Society for Human Resource Management (SHRM) offered concepts for advancing the profession through various means. For WFPMA and CIPD, the focus has been enhanced educational opportunities while for SHRM the goal has been competency-driven approaches to development. Each approach provides significant contributions for enhancing the skills and stature of HR. At the heart of all efforts is the need for clear guidance for developing HR professionals. Whether it is Charan arguing for dissection or Ulrich detailing the rise of HR or SHRM researching HR success through competencies, the objective is to offer guidance to HR professionals in their quest to advance their profession. In recent years, we examined the history of HR competencies research and identified a clear model of HR competencies with direct guidance for navigating from early career to more senior stages. We then used additional research to identify the core concepts of leadership among HR professionals drawing upon principles of business leadership. What we developed was a leadership DNA model with a specific genome adaptation for HR professionals. This model (see Figure 1) represents a leap forward in demonstrating the core means by which HR brings value to any enterprise. First we will describe the model then we will provide the research support for how it FIGURE 1—The LBIT HR Model

was developed. The purpose of this article is to provide a unique look into core competencies for HR by (a) describing the concepts of the LBIT HR Model, a leadership application of the SHRM Competency Model (Strobel, Kurtessis, Cohen, & Alonso, 2015); (b) detailing the evidence base for the link between proficiency in these competencies and job outcomes; and (c) defining a plan for advancing the profession using these concepts to bolster learning and development.

The LBIT HR Model

What makes a successful business leader? This question has vexed researchers for a half century (Wright et al., 2011). At its very core, the question is about one thing—finding the right mix of competencies to ensure success of an enterprise. Look in the mirror and examine the competencies that led to your success. When you examine the business leader in you what do you see? If you are a vice president of marketing, your leadership DNA consists of technical competencies based upon your expertise in sales, advertising, social media, communications, and more coupled with behavioral competencies reflecting your mastery of specific actions involving relationship building, customer service, decision making, and analytical thinking. These competencies are critical to success and

represent two key variables in a genetic formula. Consider HR and its DNA. What are the competencies that drive success for people managers and talent leaders? The answer to this question is not unlike that of a marketing leader. The key distinction is the relative weight of behavioral competencies and the clear input of a different technical knowledge base. Following the DNA analogy, this means the technical genome is different while the behavioral genome is altered slightly to reflect different variations in the nature of the work. Further, HR effectiveness is a function of technical knowledge in employment situations plus three behavioral clusters—leadership, business, and interpersonal competencies. The initial component of the LBIT HR model is technical expertise based on knowledge of the following facets: • Talent acquisition • Employee engagement and retention • Learning and development • Total rewards • Structure of the HR function • Organizational effectiveness and development • Workforce management • Employee and labor relations • Technology and data management • HR in the global context • Diversity and inclusion • Risk management • Corporate social responsibility • U.S. employment law and regulations • Business and HR strategy Together, these areas of knowledge represent the collective knowledge base needed to function as an HR leader. But knowledge alone does not a leader make. The second cluster of competencies in HR leader makeup is interpersonal proficiency. A key factor for achieving success is the proficiency demonstrated in managing relationships, communicating information, and demonstrating deft global and cultural sensitivities. A significant part of an HR professional’s job is characterized by interdependence with stakeholders. In other words, the work of an HR business VOLUME 38 | ISSUE 4 | FALL 2015

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Research Corner A Competency-Based Approach to Advancing HR leader is largely a function of the need to collaborate with other leaders and to drive organizational strategy interdependently. To achieve interdependence with stakeholders, a successful HR professional must develop and maintain interpersonal relationships, share and discuss information, and influence others to achieve common goals. Further, this interaction occurs regularly with people with whom you may not share a similar background, similar perspectives, or even similar working styles. Despite these likely dissimilarities, the successful HR professional must

The HR strategic business partner today is expected to serve strategic objectives while driving people-oriented elements of strategy. develop productive, enduring working relationships. Such differences between the HR professional and stakeholders or even between HR colleagues leaves a lot of room for potential dysfunction or underperformance as the result of weak interpersonal competence. The successful HR professional is not only technically proficient and acts as an HR Strategic Partner, but he or she also has interpersonal competence. The third cluster of HR leadership makeup is business-oriented proficiency. A key factor for achieving success is the proficiency demonstrated in analyzing and interpreting data, offering coaching and consultative services, and making savvy business decisions for the enterprise as a whole. In today’s challenging business environment the workforce provided by HR should align with and meet the needs of the business strategy. Now HR professionals are expected to be valued team members with the rest of the organization and contribute as business partners for 40

PEOPLE + STRATEGY

the growth of the organization. The HR strategic business partner today is expected to serve strategic objectives while driving people-oriented elements of strategy. HR professionals are equipped with the knowledge, skills, abilities, and talent to partner with senior leadership not only to be involved in the strategic management of the organization but to drive the implementation of it. HR strategic business partners are effective at building strong partnerships with senior leaders as they provide expert advice on all matters relating to the ongoing development of the organization. How do they do it? They have the ability to (a) understand and apply information to contribute to the organization’s strategic plan, (b) interpret information to make business decisions and recommendations, and (c) provide guidance to organizational stakeholders. In other words, these successful practitioners are highly proficient in three critical HR strategic partner competencies: business acumen, critical evaluation, and consultation. These three competencies highlight the shift from transactional to strategic HR, and describe the three competencies on which you must apply your HR lens to drive organizational strategy. The final cluster of HR leadership makeup is leadership proficiency, the highest order competency cluster. A key factor for achieving success is demonstrating proficiency in navigating the landscape of industry, engendering cooperation, driving results with strategic planning and execution, and practicing ethically for corporate social responsibility. At executive levels, leadership is clearly important to the job and a requisite for entry. No matter the career level, the outcomes for an organization with HR professionals proficient in leadership are typically positive employee attitudes with regard to organizational commitment and job satisfaction. A true leader understands the impact of failure to adapt to changing business needs. The most effective behaviors a leader exhibits are easily

linked to the organizational vision. The model in its entirety speaks to how HR leaders achieve success and demonstrate the greatest value to their organizations. HR expertise (HR knowledge) includes subject areas that are fundamental to HR operations. The three behavioral clusters provide the direction for becoming a strategic business partner. In combination, both competency types provide the key to unlocking the formula for organizational effectiveness. The research evidence for this model and these conclusions will now be described.

The Evidence Base

Early HR competency models like the Ulrich model and others (Lawson & Limbrick, 1996; Schoonover, 1998; 2003) focused on knowledge-specific or role-specific competencies—such as knowledge of employment law or roles like serving as a credible activist—as opposed to more general work-related abilities such as the ability to manage interpersonal relationships and the ability to provide attention to detail. However, competency modelers realized that HR success requires more than just knowledge; successful HR performance is a combination of knowledge, skills, abilities, and other attributes (KSAOs). Moreover, it is important to demonstrate a link between the job relevance of competencies and their impact on performance. Today, competencies integrate KSAOs that indicate what successful employees need to know—knowledge—and what they need to be able to do—skills and abilities. A well-founded competency model developed by the profession and validated in organizations provides deep opportunities and an ideal place to start for individuals who are entering the profession or those who are currently in the profession and seek to enhance their capability and reception in the business community. If the sentiment expressed by chief human resource officers (CHROs) in the 2011

FIGURE 2—The Phases of SHRM Competency Research

book, The Chief HR Officer, is correct, then our efforts to date have not been sufficient in training and preparing future HR professionals. Those individuals dedicated to the profession have an obligation to improve, not just promote, the skills, abilities, and expertise of HR professionals. Furthermore, because the field of HR is multifaceted and continually undergoing change, competency models have become broader and more flexible over time. As technology changes the way organizations do business and the way modern workplaces function, the role of the modern HR professional must also change. Prominent HR models (Ulrich et al., 1995; Ulrich et al., 2008)11 show evidence of this constant adaptation, and it is good practice to revise and update any competency model as needed (Schoonover, 1998; 2003).12 The LBIT HR Model offers guidance to HR professionals in their quest to demonstrate value to their organizations. Recent SHRM research suggests one of the most effective ways to do this is to offer competency-based guidance using a foundational competency model linked to performance. Since 2011, SHRM has studied one key question—what are the foundational competencies needed for success? This initiative led to a variety of research activities ranging from development of the competency model to validation. Figure 2 provides an overview of the extensive research conducted which included global data collection to identify a framework of core competencies, a content validation effort larger than any in history (SHRM, 2014), and

a criterion validation study with eight strategic partners. The objective of this body of research was twofold: (a) to confirm the job-relatedness of the LBIT HR model and (b) to demonstrate that these competencies are linked to job performance. The first phase of these efforts

Competency Cluster

entailed model development in 2011. Using methods described in seminal works around competency modeling (e.g., Campion et al., 2011; Schippmann et al., 2000), the model was created based on the input of more than 1,000 HR professionals gathered during 111 focus groups around the world. Additionally, 640 CHROs provided survey data about the requirements of successful HR professionals. These data collection efforts, combined with an extensive review of the academic and industry literature, provided a massive amount of data about the HR profession that formed the foundation of the competency model. Second, we continued the practice analysis of the HR profession in 2012 with a survey to establish the job relevance (content validity) of the model. We surveyed 32,124 HR professionals and asked them to rate the importance of these competencies for an HR professional to successfully perform

Senior Level (n = 13,105) Is a very experienced generalist or specialist and holds a title such as senior manager, director, or principal

Executive Level (n = 7,068) Typically is one of the most senior leaders in HR and holds the top HR job in the organization or VP role

IMP (SD)

RUE (%)

IMP (SD)

RUE (%)

Leadership and Navigation

2.3 (.58)

78

2.6 (.51)

90

Ethical Practice

2.8 (.44)

97

2.9 (.35)

98

Consultation

2.4 (.56)

89

2.6 (.53)

91

Business Acumen

2.2 (.56)

73

2.5 (.54)

83

Critical Evaluation

2.2 (.56)

77

2.4 (.55)

86

Relationship Management

2.6 (.52)

94

2.7 (.47)

96

Global and Cultural Effectiveness

2.0 (.65)

60

2.1 (.63)

66

Communication

2.5 (.54)

93

2.6 (.50)

95

Human Resource Expertise

2.7 (.50)

95

2.8 (.43)

94

Leadership

Business

Interpersonal

Technical

IMP = Mean importance rating. SD refers to standard deviation. RUE = Required upon entry percent rating. Importance was measured with a 4-point scale ranging from 0 (unimportant) to 3 (critical).

VOLUME 38 | ISSUE 4 | FALL 2015

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Research Corner A Competency-Based Approach to Advancing HR his or her job at the identified career level and the requirement upon entry for several stages of career experience. These ratings were made for all nine sub-competencies. Participants also rated the importance of key behaviors for an HR professional to successfully

Organizations that rely only on technical knowledge to make personnel decisions are putting themselves at a significant disadvantage in identifying top HR talent. perform his or her job at the identified career level. Table 1 reports the average importance of each core competency for HR leaders. These results point to the job relevance of these competencies and the competency clusters to the role of HR leader. In other words, these results confirmed that the competencies accurately reflect the critical KSAOs of HR leaders. But the second and, more important factor is whether these compe-

tencies relate to job performance. The second phase of our research focused on this very topic. In 2013 and 2014, we engaged in a series of studies with eight strategic partners to examine the predictive validity of two instruments measuring proficiency in these competencies. We collected data from more than 800 dyads of HR professionals and their supervisors, who provided performance ratings. The first measure was a self-report assessment (SRA) of key behaviors indicating proficiency in the competency clusters. The second measure was a situational judgment test (SJT) assessing the ability of HR professionals to handle key situations with effective strategies for resolution. A hierarchical regression analysis was conducted to assess the ability to predict job performance using these measures of the core competencies. A summary of these results for the SRA is presented in Table 2 and the summary of the results for the SJT is shown in Table 3. From these results come three key findings. First, technical knowledge of HR (HR Expertise) predicts job performance (SRA: ∆R2 = SJT: ∆R2 = even when controlling for career level (i.e., early career, mid, senior, and executive) and HR tenure1. This key finding demonstrates that HR

Table 2 Self-Report Assessment of Competency and Job Performance: Model Summary. Model

R

R2

Adjusted R2

ΔR2

Model 1: Simple Demographic Data

.24

.06

.05

.06***

Model 2: Adding HR Knowledge to the Demographic Data

.27

.07

.07

.01**

Model 3: Adding Behaviors to Knowledge and Demographic Data

.31

.10

.08

.03*

Note: *p < .05, **p < .01, ***p < .001

Table 3 Situational Judgment Test and Job Performance: Regression Coefficients Model

R

R2

Adjusted R2

ΔR2

Model 1: Simple Demographic Data

.25

.06

.06

.06***

Model 2: Adding HR Knowledge to the Demographic Data

.29

.09

.08

.02***

Model 3: Adding Behaviors to Knowledge and Demographic Data

.36

.13

.12

.05***

Note: ***p < .001

42

PEOPLE + STRATEGY

Expertise contributes to the job performance of HR professionals regardless of their seniority or HR experience. Second, the behavioral competencies predict job performance above and beyond both demographic characteristics and HR knowledge (SRA: ∆R2 = SJT: ∆R2 = . Again, this means that the behavioral competencies contribute to job performance regardless of the seniority or experience of HR professionals. Perhaps more importantly, this finding also means that the behavioral competencies show a unique contribution to the job performance of HR professionals that is not accounted for by HR knowledge. This finding is especially significant because it empirically demonstrates that HR professionals’ job performance is affected not only by technical knowledge, but also by behavioral competencies and their associated domain-specific KSAOs—all of which, together, form the SHRM Competency Model. Last, these findings were consistent across two different types of assessments, providing further support for the criterion validity of the model. For HR leaders, the implications of this finding are key. The utility of behavioral competencies in predicting job performance suggests that they should take a central role as a factor in the recruitment, selection, training and development, and appraisal of HR professionals. Organizations that rely only on technical knowledge to make personnel decisions are putting themselves at a significant disadvantage in identifying top HR talent. Taken together, the results of the content validation and the criterion-related validity indicate the importance of key competency clusters in the LBIT HR model framework. More research is needed though, especially, as it relates to job performance. Most importantly, this has implications for everything you have ever been told about HR and what it takes to be successful. For example, for a very long time we’ve heard about the key to being a successful HR profes-

sional is having foundational generalist knowledge or holding a certification demonstrating this knowledge or taking courses in these key knowledge areas. In other cases, you may have heard that filling the business partner role was the key. Those thought leaders placed the emphasis squarely on engaging in business partner role-based behaviors. They told us that key roles were the one thing needed for serving our constituents; but this does not account for foundational expertise. Both these approaches exemplify attempts to explain HR effectiveness and its impact on organizational results by focusing on only half of the formula. This is tantamount to using DNA to determine lineage with all but the most important genome. HR leaders share DNA with business leaders but the career development system has failed to acknowledge this and now is the time to fix it.

Advancing the HR Profession: Matching Career Development to Genetic Makeup

The importance of both types of competencies in predicting performance provides the foundation for a seismic shift in thinking about the HR profession. There are at least three significant implications of this finding: 1. HR leaders are business leaders first and therefore warrant the same selection and development models. HR can no longer be treated as a distant cousin to business. The key to changing this perspective is changing the model for selection and development of HR professionals as they evolve into leadership roles. Selection instruments for HR professionals should measure proficiency in both technical knowledge and behavioral competencies. The validation research on the competency model shows that HR professionals with this dual emphasis perform at higher levels on the job, so selection for key HR roles should include both elements. Similarly, learning and development channels should offer training in both technical aspects and behavioral elements of successful human

resource management. Improving both aspects of performance can result in reduced costs associated with faulty selection (Schmidt & Hunter, 2000) and poor transfer of training (Burke & Hutchins, 2007). Further, this approach is assured to have a cascading effect on organizational effectiveness. Wide adoption of this dual approach will motivate aspiring HR leaders to develop their technical knowledge and behavioral means of applying it, and they will in turn expect similar development from their direct reports. The overall impact can have a “rising tide raises all boats” effect on the HR profession as a whole. 2. HR leader performance must be assessed in a broader sense than traditional performance models. HR leaders are tasked with a wide array of tasks and responsibilities. Some parts of their performance are easily assessed by metrics, key workforce performance indicators, and engagement scores. But like most business leaders, HR performance is much more amorphous than mere objective metric measurement. As suggested by McPhail and Jeanneret (2012), the criterion domain for high potentials or captains of industry is primarily an amalgam of objective and subjective indicators of success or failure, assessed over several performance cycles. In other words, the performance appraisal for HR leaders, like all other business leaders, must consist of intangible corporate results along with hard metrics indicative of a large impact on the organization’s success. Given the duality of this criterion domain, it is critical that performance management for HR leaders is assessed using metrics (which often reflect tactical implementation of technical knowledge) and overall impact (which may include more amorphous results due to effective use of behavioral competencies). In sum, we support using the dual technical/behavioral model for performance management along with selection and development techniques.

3. Certification for HR leaders must assess more than technical knowledge. Since the 1970s we have seen a rapid rise of competency-based certification as an innovation necessary for all professions. Over the last 40 years, we have witnessed advancements in testing and educational measurement allowing for the measurement of proficiency and not just the mastery of infor-

But like most business leaders, HR performance is much more amorphous than mere objective metric measurement. mation. Some of the best examples of this are the use of portfolios to assess teacher excellence by the National Board for Professional Teaching Standards, the implementation of practicum in-basket exercises in the Foreign Services Board exams, the development of practicum deliverables for assessing detail orientation and business acumen of accountants in American Institutes of Certified Public Accountants exams, and the deployment of situational judgment test items by the Association of American Medical Colleges to assess bedside manner and customer service orientation in medical residency candidates. In HR certification, the traditional model has resorted to assessing technical knowledge and its application at the lowest levels of Bloom’s taxonomy for demonstrating mastery (Whetzel & McDaniel, 2009). This model will not suffice if we are to assess HR leaders’ proficiency in the modern business world. New certifications like the SHRM Certified Professional (SHRM-CP) and the SHRM Senior Certified Professional (SHRM-SCP) exams address the need for a dual emphasis on technical knowledge and behavioral proficiency. VOLUME 38 | ISSUE 4 | FALL 2015

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Research Corner A Competency-Based Approach to Advancing HR The evidence base suggests these competencies are job relevant and predictive of job performance across all HR professionals regardless of their seniority or experience. The Way Forward

HR remains assaulted by an opinion, from both outside and sometimes from within the profession, that it is distinct from other business functions. This assertion gets it all wrong. A close examination of leadership across various business disciplines illustrates their connection to and similarity with HR. The DNA of HR leaders is only distinct from other disciplines in its technical genome and the relative importance of key behavioral elements. The SHRM Competency Model suggests that there are four key competency clusters for the LBIT HR model: • Leadership proficiency • Business proficiency • Interpersonal proficiency • Technical knowledge The evidence base suggests these competencies are job relevant and predictive of job performance across all HR professionals regardless of their seniority or experience. With advancements in measurement, testing, and performance appraisal, HR leaders should be selected, developed, and certified on more than just technical knowledge. Only selection instruments, performance management tools, training programs, and certifications using a dual-emphasis competency-based approach will succeed in advancing the HR profession. Organizational success depends on it and we now have a clear well-researched way forward. 44

PEOPLE + STRATEGY

Alexander Alonso, Ph.D., SHRM–SCP, is vice president for research at the Society for Human Resource Management (SHRM). He serves as the head of examination development and operations for SHRM’s Certified Professional (CP) and Senior Certified Professional (SCP) certifications. He can be reached at [email protected]. James N. Kurtessis is manager of certification at SHRM. He conducts validation and research operations for SHRM’s Certified Professional (CP) and Senior Certified Professional (SCP) certifications. He can be reached at [email protected]. Andrew A. Schmidt, Ph.D., is the lead for learning and development at Lockheed Martin’s military and aeronautical flight division in Dallas, Tex. Kari Strobel, Ph.D., is a project manager and senior consultant at AvantGarde. She can be reached at [email protected]. Brian Dickson is senior vice president of professional development and strategic partnerships at SHRM. He has oversight of SHRM conferences, training and education, and certification preparation programs and leads SHRM’s efforts to build strong business relationships with corporations, government agencies, and other organizations. Brian can be reached at [email protected].

References Buckingham, M. & Goodall, A. (2015). Reinventing performance management. Retrieved from https://hbr.org/2015/04/ reinventing-performance-management. 2 Burke, L. A. & Hutchins, H. M. (2007). Training transfer: An integrative literature review. Human Resource Development Review, 6, 263–296. 3 Campion, M. A., Fink, A. A., Ruggeberg, B. J., Carr, L., Phillips, G. M., & Odman, R. B. (2011). Doing competencies well: Best practices in competency modeling. Personnel Psychology, 64, 225–262. 4 Charan, R. (2014). It’s time to split HR. Retrieved from https://hbr.org/2014/07/ 1

its-time-to-split-hr. Lawson, T. E. & Limbrick, V. (1996). Critical competencies and development experiences for top HR executives. Human Resource Management, 35, 67–85. 6 McPhail, S. M. & Jeanneret, P. R. (2012). Individual psychological assessment. In Schmitt, N. (ed.) The Oxford Handbook of Personnel Assessment and Selection. 7 Neter, K., Kutner, M., Nachtsheim, C. J., & Wasserman, W. (1996). Applied Linear Statistical Models (4th ed.). Boston: WCB/ McGraw-Hill. 8 Schippmann, J. S., Ash, R. A., Battista, M., Carr, L., Eyde, L. D., Hesketh, B., Kehoe, J., Pearlman, K., Prien, E. P., & Sanchez, J. I. (2000). The practice of competency modeling. Personnel Psychology, 53, 703–740. 9 Schmidt, F. & Hunter, J. (1998). The validity and utility of selection methods in personnel psychology: Practical and theoretical implications of 85 years of research findings. Psychological Bulletin, 124(2), 262–274. 10 Strobel, K. R., Kurtessis, J. N., Cohen, D. J., & Alonso, A. (2015). Defining HR Success: Nine Critical Competencies for HR Professionals. Alexandria, VA: Society for Human Resource Management. 11 Schoonover, S. C. (1998). Human Resource Competencies for the Year 2000: The Wake-Up Call! Alexandria VA: Society for Human Resource Management. 12 Schoonover, S. C. (2003). Human Resource Competencies for the New Century. Falmouth, MA: Schoonover Associates. 13 Ulrich, D., Brockbank, W., Yeung, A. K., & Lake, D. G. (1995). Human resource competencies: An empirical assessment. Human Resource Management, 34, 473–496. 14 Ulrich, D., Brockbank, W., Younger, J., & Ulrich, M. (2008). HR Competencies: Mastery at the Intersection of People and Business. Alexandria, VA: Society for Human Resource Management. 15 Whetzel, D. L., & McDaniel, M. A. (2009). Situational judgment tests: An overview of current research. Human Resource Management Review, 19, 188–202. 16 Wright, P. M., Boudreau, J. W., Pace, D. A., Sartain, E., McKinnon, P., & Antoine, R. L. (2011). The Chief HR Officer: Defining the New Role of Human Resource Leaders. San Francisco, CA: Jossey-Bass. 5

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VOLUME 38 | ISSUE 4 | FALL 2015

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HR at the Tipping Point: The Paradoxical Future of Our Profession By John W. Boudreau

How would a group of influential and accomplished HR executives map the future of the HR profession and the most pivotal requirements to meet its future potential? In September 2013, just such a group of HR leaders began a collective effort to answer that question. These leaders conducted interviews, focus groups, and reviews of published findings and drew upon significant personal experience. The results of this unique collaborative were indeed revealing. Their findings show a profession at an unprecedented tipping point, with implications even more significant than previously documented. Now is a time of the greatest opportunity for HR impact, but we also face the greatest risk of being left behind.

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PEOPLE + STRATEGY

T

he group foresaw that by 2025, HR will exist in a world of boundary-less work, detached from traditional employment. There will be a tsunami of big data on virtually every facet of work and the workplace. Workers will engage with work through a globally interconnected and democratized ecosystem that will have unprecedented ability to connect and share their views. The necessary organizational capabilities are not sufficiently reflected in today’s HR profession. Indeed, even the label “human resources” and today’s most advanced HR competency models, operating structures, and deliverables will fail to capture the necessary evolution. The future requires a profession that seamlessly integrates disciplines such as procurement, marketing riskbased options, global supply chains, and man–machine collaborative analytics. Its operating models must reflect structures that are networks not just hierarchies, work that is made up of globally sourced projects not just jobs, workers who are engaged as free agents not just regular employees, total rewards that are individualized and segmented not just consistently applied to all, and constant agility not just episodic change.

The Paradox: HR is Justifiably Well Regarded, Yet Falling Short

Evidence from more than 20 years of survey research at the Center for Effective Organizations (Boudreau, 2014) suggests that organization leaders realize they face significant strategic challenges that will depend on human capital, and so more attention is being given to evolving the HR profession. This has been true for decades. One would expect that the HR profession and its leaders must have progressed significantly during that time and be well-positioned for future leadership. Yet, research (Lawler & Boudreau, 2015) suggests that the role of HR in addressing these strategic challenges remains limited, and in many ways has been unchanged for decades. There is no shortage of criticisms of HR, descriptions of “why we hate HR” and examples of organizations choosing to go without HR departments, and warnings that HR is not up to the challenges of the future. Yet, evidence (Lawler & Boudreau, 2015) suggests that leaders outside of HR often rate HR’s effectiveness higher than HR leaders, with both consistently rating HR as only moderately satisfactory in its skills and effectiveness. The HR profession has changed only slowly in the face of rapidly increasing challenges. HR and its constituents have rated it moderately satisfactory for decades, suggesting they are comfortable, but not satisfied with HR’s progress. Yet, there is a drumbeat for change, one that became evident as we interviewed a sample of exemplary HR leaders in organizations celebrated for HR and people leadership. In 2013 and 2014, in collaboration with the Society for HR Management and the National Academy of Human Resources,

Andrew Schmidt of SHRM and I interviewed the original Advisory Group of approximately 25 former or current CHROs from organizations widely regarded as having state of the art HR (see Appendix). These CHROs were leaders of accomplished HR organizations, and were rightfully celebrated as examples for the HR profession. Their organizations and leadership teams are clearly pleased with HR. Yet, few of these leaders were satisfied with the state of the HR profession. They described fundamental gaps that threaten HR’s future relevance, many of which have existed for decades. These gaps and challenges were not isolated to one issue. They varied according to the HR leader’s industry, experience, and organizational strategy. Taken together, they described an array of vital future challenges that serve as both a warning and an opportunity. Several of the CHROs described the paradox as being similar to issues like climate change, global hunger, and socio-economic inequality. These issues have as yet produced few disruptive effects on those lucky enough to live in advantageous situations, so it is easy to be complacent. Yet, their future disruptive impact is unquestioned, and addressing it requires collective action. It is not enough simply to celebrate because one’s own family or community is safe, sheltered, and well-fed. The CHRO interviews portrayed an HR profession that is well-regarded but acting in isolation. Eva Sage-Gavin, then–EVP of HR and corporate affairs at Gap, Inc., noted that the HR profession had produced bright and warm local “campfires” in traditional arenas as well as emerging areas such as HR branding, HR technology, predictive analytics, and social media.

Project cHReate Project cHReate (The Global Consortium to Reimagine HR, Employment Alternatives, Talent, and the Enterprise) arose from a grassroots effort resembling the Delphi approach. A group of highly accomplished HR leaders (see Appendix) informally approached several of the eventual project leaders and expressed their growing discomfort with the progress and future position of their HR profession. They fully recognized and acknowledged the profession’s progress and significant social and economic contributions. Many of these HR leaders had helped to build exemplary HR organizations in some of the most admired organizations in the world. Thus, it was important that these HR leaders held a common view that a significant and collective effort was needed, lest the profession fail to meet its future potential. This informal discussion grew, several individuals agreed to become the “core team” (see Appendix) that oversaw a series of structured interviews of about

25 HR leaders. The interviews examined whether this perspective was indeed shared, and identified the specific experiences and data that led such an elite group of HR leaders to conclude that the profession was at a historic tipping point. The interviews also solicited the pivotal imperatives with the greatest potential to accelerate the profession’s progress. Interviews were conducted between January and May 2014. In June 2014 a summit was held where the participants engaged in a series of interactive sessions to refine results. They concluded that the tipping point was indeed real, and identified four arenas where progress would make a pivotal difference. Phase 2 occurred between September 2014 and May 2015, to deepen the descriptions and their implications. Four teams were formed, one for each arena, led by volunteer HR executives who recruited team members through their professional networks (see Appendix). The four teams collectively chose to

envision the future of work and organizations in 2025, on the advice of futurists who reported that a 10-year horizon was far enough ahead to avoid being constrained by current assumptions, and yet close enough to envision tangibly. The teams described the implications of that future for organizations and the HR profession. The four teams reviewed and summarized published material, interviewed experts and thought leaders, developed structured focus group exercises and conducted focus groups with their peers. At a summit in May 2015, they presented their findings and engaged in structured group exercises to generate consensus views and predictions. The project received monetary and in-kind sponsorship from the University of Southern California’s Center for Effective Organizations, the National Academy of Human Resources, HR People + Strategy, the Society for Human Resource Management, Root, and PricewaterhouseCoopers. VOLUME 38 | ISSUE 4 | FALL 2015

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Yet, when it comes to thorny issues such as globalization, strategic uncertainty, agility, leadership, personalization, and alternatives to traditional employment, they uniformly found the profession lacking. The “campfires” fail to coalesce into the needed collective “bonfire” to adequately enhance HR broadly. Like those lucky enough to not yet be affected by climate change, our research suggests that the leaders and HR professionals in these organizations are happy with the HR they are getting, but are also uneasy about whether and how their organizations will address broader human capital challenges. Such local complacency may be one of the biggest threats for HR leaders to address. Notable progress appears to be largely confined to a small, elite “marquee” set of organizations. Evidence from a 20-year series of surveys of HR leaders (Lawler & Boudreau, 2015) suggests that in a broader sample of organizations, HR effectiveness was frequently at or below “moderate” levels. Yet, there is little evidence that HR’s constituents are demanding better. Our research suggests that most organizations have not fundamentally redesigned or redirected their HR organizations to create the necessary resources and priorities to achieve systemic progress.

The Future in 2025: Five Forces Shaping Strategy, Organizations, and Work

TABLE 1 Five Forces

Effect of Force

Business Response

Exponential pattern of technology change

Technological breakthroughs produce exponential disruptions in markets and business. The rapid adoption of robots, autonomous vehicles, commoditized sensors, artificial intelligence, and global collaboration renew the re-thinking of work.

Business will be productive with flexible, distributed, and transient workforces that adapt to rapid cycles of business reinvention. Employees will need to successfully engage with automation transitions, constant legacy job loss and rapid skills obsolescence.

Social and organizational reconfiguration

Increased democratization of work will shift away from the hierarchy toward more power balanced organizations and communities, built upon relationships that are less employment-based and more project-based. Talent will increasingly “join” and engage based on aligned purpose.

Businesses will source and engage talent in diverse work arrangements that go beyond traditional full-time employment, to include part-time, freelance, outsourced, and crowdsourced workers. Results will be increasingly achieved through purpose-built networks vs. hierarchies.

A truly connected world

The world will be increasingly connected through mobile personal devices and the cloud, empowering work to be done from anywhere. New media will enable global and real-time communication that accelerates ideation, product development, and go-to-market strategies.

Work will be managed through newly defined talent systems that support a distributed and global workforce. Hightrust cultures and purpose-built networks, empowered with big data, will create a new level of innovation that develops and releases products in very short cycles.

All-inclusive, global talent market

Work will be seamlessly distributed around the globe with 24/7 operations enabled by new corporate and social policies. Extreme longevity will allow mature talent to work longer, and female and non-white ethnicities will become talent majorities.

Organizations will increasingly segment and direct work to the best talent, whether inside or outside the organization, through diverse work relationships. Differentiated leadership and engagement approaches will address varied cultural preferences in policies, practices, work designs, pay, and benefits.

Human and machine collaboration

Advances in analytics, algorithms, and automation will continue to improve productivity and decision making. Smarter computing will increasingly automate mundane tasks previously performed by humans.

Organizations will successfully migrate tasks from people to machines and/ or robots and find the optimal human– machine balance through big data. Organizations will create and maintain external partnerships to augment capabilities they do not own, and use them to manage workforce transitions humanely and without hurting reputation.

The project leaders set their sights on the year 2025. Collectively, the Future of HR teams developed a description of the likely economic and societal challenges that organizations will face in 2025. Then, they developed their predictions and recommendations about the future of HR in each of the three arenas. We know a single future description is by nature generic and will not describe perfectly the specific challenges facing any particular organization or industry. Thus, the objective was not to define one future for all, but instead to identify the broad trends and demonstrate how those trends translated into insights 48

PEOPLE + STRATEGY

about HR’s future charter, constituent expectations, talent pipeline and tools and operating models. The teams recognized that their work would be most useful by designing and demonstrating a framework and processes that HR and other leaders might replicate in their own organization. The investigation revealed five forces defining the future, and the teams traced the effects of each force on organizations and global social and economic systems, and the likely business response to each force (see Table 1).

Four Key Arenas for Professional Evolution A group of HR leaders convened a summit (see Appendix, page 54) where they identified four key arenas for accelerated change: 1. Align HR with Value Creation for Organizations that Win. Articulate a new HR charter and contribution model that describes the essential contributions companies will need from our field to successfully compete in the future. 2. Improve the Expectations of HR’s Key Constituents. Define what is needed to move beyond today’s constituent expectations of HR, then improve those expectations with

evidence that this role leads to improved value creation. 3. Rewire the Work and Tools of HR. Define the processes, practices, systems, and operating models that drive HR’s deliverables and outcomes. 4. Ensure the HR Talent Pipeline. Crystalize a new set of professional requirements based on current research that explores the needs and gaps in the HR profession.

Topics No. 1, 2, and 4 were the focus of Phase 2.

Two Future Themes and a Map of Future Scenarios These trends will not affect all organizations equally, so their value will be in helping HR and other leaders consider new approaches to strategy, organization, and workers. To guide organizations in locating themselves on the migration to the future, the teams summarized these five forces into two themes. Democratization of work was described as a combination of the first three trends. A more highly democratized future is characterized by new employment relationships, shorter in duration and more company–individual balanced. A shift toward a more agile and responsive view of work will deliver results by activating purpose-built networks. Technological empowerment was seen as a combination of the last three trends. Technology will continue to transform the way we live and work. Machine learning, 3D printing, mobile, wearables, and algorithmic analytics are among the many technologies that hold the promise to improve individual Figure 1. Mapping Your Future Location

empowerment. These two dimensions suggested a two by two matrix of potential future states for organizations and work as shown in Figure 1. Using this map, organizations can locate themselves in the future and replicate the exercise of the teams: Identify vital organizational responses to the forces, the organization, and work implications that they require. The teams then set out to

The States of Organization and Work 1. Current State. This scenario suggests that the world of work in 2025 will bear a striking resemblance to today. Through a general slow-down in the evolution of technology or management science or a significant setback, the world of work remains similar to today. 2. Today Turbo-Charged. This scenario suggests the continued evolution and empowerment of technology empowering business, but with few advances in the evolution of business or management models. This scenario is characterized by similar employment relationships but in a faster, better, cheaper business paradigm. 3. Work Reimagined. In this scenario, the future sees an evolution into new business and employment models but without disruptive advances in technology. Current technology enables social networks and web-connected groups and are increasingly focused on organizational impact, values, culture, and work relationships. 4. “Uber” Empowered. This more extreme scenario suggests a virtuous and accelerated cycle of technology and work democratization fueling one another to create the rapid evolution of new business models. These business models will increasingly be characterized by the way they place into balance the needs of the company and the needs of the individual.

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describe the implications for organizational capabilities and the future of HR in supporting and building those capabilities.

The Future HR Talent Pipeline: Beyond HR Capabilities and Competencies

Perhaps the most poignant evidence of the fundamental need to change the pipeline of HR talent came in the form of stories from accomplished HR leaders regarding the HR profession their children were encountering in 2013 and 2014. Several of them explained that they had children graduating from college and entering the workplace. Some of their children had degrees from leading academic institutions in the field of HR, industrial relations, organizational behavior, or industrial psychology, and had begun their career as HR professionals. They told me that their children, encountering their first jobs in HR, returned to their parents saying, “When do I get to do the world-changing and interesting work you told me about? Everything I am doing now, and that I can foresee for the near future is administrative and far removed from the organization’s purpose and mission. How long must I wait to make a real difference?” Other HR leaders had children who had received liberal arts or general business degrees and were searching for the career path that would allow them to have the greatest impact on their own and others’ lives. Their children asked them “Should I go into HR as the best profession to have a great impact on the world, and my own life?” Sadly, Figure 2. Future Capabilities

those experiences and capabilities systematically or consistently enough, so we can’t really be sure that if the best and brightest choose HR, they will gain the capabilities and opportunities to address future organization challenges. The talent pipeline needs to be far more predictable, systematic, and relevant to future organization challenges.” How should the capability and talent pipeline of today migrate to one that is sufficient for future demands? This was the question that the Future of HR teams tackled by reviewing existing competency frameworks, emerging research on what distinguishes the most accomplished leaders inside and outside of HR, and through focus groups and interviews with a variety of HR and organizational leaders. The results were summarized in this journal by two of our team leaders (Sage-Gavin & Foster-Cheek, 2015) as shown in Figure 2.

Trend Forecasting and Change Leadership Business and HR leaders need to anticipate trends and then proactively lead change so organizations can thrive in the new world of work. One critical skill will be the ability to analyze diverse sources of data and develop insights, providing “sense making” with strategic recommendations that can guide CEOs, Boards and organizations. HR must shift their mindset from change management to change leadership and foster truly agile leadership.

Talent Sourcing and Community Building Talent management will move beyond our current view of company boundaries to include an extended workforce, including those who will come together to deliver work outside a regular employment relationship, such as e-lancers, contractors and partners. Sourcing and recruiting must evolve to develop relationships over an extended period of time, leveraging global talent pools and using crowdsourcing or technology-enabled channels. HR leaders have the opportunity to serve as connectors, orchestrators, and brokers of a constantly evolving talent marketplace, bringing unique and innovative solutions to best match the demand and supply of skills and capabilities.

Performance Engineering

several of the HR leaders said, “I just couldn’t recommend HR to my child.” Yet, these were HR leaders of exemplary accomplishments, who were undoubtedly making the sort of contributions to which their children aspired. When this was pointed out, they often responded with something similar to, “The HR career path that brought me to this position was as much luck as design. I had the good fortune to work for a company that created an HR ‘academy’ that spawned a cadre of HR leaders, or I luckily worked for a leader who selected me actually to run a business, to work globally, or to take big risks on important issues. The HR profession doesn’t provide 50

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Diverse forms of employment and new ways of collaborating will challenge traditional approaches to how organizations have inspired and rewarded people to deliver results. Business practices will need to truly optimize talent and create less hierarchical, non-employment relationships. Organizations will need to apply a market segmentation approach to develop highly personalized deals for individuals that are still considered fair and equitable across a global framework.

Culture and Community Activism We will continue to shift away from legacy, company-centric views of the world, toward views that consider an ecosystem of stakeholders including customers, vendors, current and future “employees”, be they free lancers, partners or shareholders. Company brand and reputation management strategies will shift from being externally focused to engag-

Figure 3. The Shift in Business Capabilities from Today to 2025

ing employees and the larger talent ecosystem, as companies realize that employees are the best Brand Ambassadors. While Corporate Social Responsibility will remain critically important, employees will want to bring their whole-selves to work in a very different way. They will want to share their knowledge and skills beyond simply building houses or serving the less advantaged in limited volunteer engagements. They will want their personal contributions outside and at work to serve a greater good, and they want to constantly experience personal growth. They will want to craft employment to leverage their strengths, while also enabling them to have an impact on social capital priorities they consider important.

Service Delivery and Contracting The influence of technology will increasingly present options for work to be deconstructed and delivered by diverse talent pools anywhere and anytime. This will change the landscape of human capital contracting and service delivery, as we contend with new practices, regulations and governance. Private and public partnerships will emerge to shape new global ways of working, with transparency and equity as key themes. The team further examined how these organizational capabilities will evolve between now and the year 2025 (see Figure 3). This evolution suggested new and very different organizational roles that may embody the capabilities. Examples of the new roles were described this way:

• The Organizational Engineer. An expert in these new ways of working, she is a facilitator of virtual team effectiveness, a developer of all types of leadership, and an expert at talent transitions. She is an expert at talent, task optimization, and at organization principles such as agility, networks, power and trust. • The Virtual Culture Architect. A culture expert, advocate and brand builder, he connects current and potential workers’ purpose to the organization’s mission and goals. He is adept at principles of values, norms, and beliefs, articulated through virtual and personal means. • The Global Talent Scout, Convener, and Coach. She understands new talent platforms and optimizes the relationships between workers, work, and the organization, using whatever platform is best (e.g., free agent, contractor, regular employee). She is a talent contract manager, talent platform manager, and career/life coach. • The Data, Talent, and Technology Integrator. He is an expert at manipulating big data, understanding and modeling trends, and knows how to code to adjust algorithms, as well as design work to optimally combine technology, automation, and human contributions. • The Social Policy and Community Activist. She is a social responsibility leader. She produces synergy between the social goals of the organization, such as economic returns, social purpose, ethics, sustainability, and worker health. She influences beyond the organization, shaping policies, regulations and laws that support the new world of work, through talented community engagement. VOLUME 38 | ISSUE 4 | FALL 2015

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The cHReate teams realized that even the label “HR” cannot fully encompass the profession that will embody these capabilities. These HR leaders are united in their hope that the HR profession will play a vital and key leadership role. Yet, they also concluded that the pipeline of future talent to meet these challenges must extend well beyond today’s definition of HR. For example, these capabilities are absent or tangential to most major competency frameworks. Current work on competencies, capabilities and certifications shows promise, and one can see connections between current work and the findings described here. For example, the SHRM Competency Model (Society for Human Resource Management, 2012) appropriately includes more general management competencies such as communication, relationship management, ethical practice, global and cultural effectiveness, leadership and navigation, and consultation, in addition to more traditional competencies such as HR expertise, business acumen and critical evaluation. The addition of such management competencies seems to reflect a broader set of disciplines. One can also see parallels to the cHReate findings of culture and community activism in such competencies as ethics and relationship management. The cHReate results augment the SHRM competency model by suggesting how the competency of “HR Expertise” may blend with the other SHRM competencies to define competencies that reengineer fundamental HR processes such as planning and recruitment in ways that specifically draw on broader disciplines, and embody the use of the managerial competencies in the SHRM competency model. Similarly, the six HR domains or “food groups” suggested by Ulrich, Brockbank, Ulrich and Kryscinsky (2015) includes elements such as “workforce engineer” with “HR tools, practices and processes.” One can see correspondence between the cHReate elements described above and many of the six food groups, particularly the prominence of culture, organization and change. Again, the cHReate HR leaders foresee an integration across such competencies that manifests itself in very different behaviors and roles than are typically described in the job descriptions of HR leaders, and span professional capabilities that lie well outside the formal boundaries of HR. The competency models noted above represent substantial progress, yet too often the HR profession continues to define its capabilities and competencies traditionally, in terms of HR processes and programs, rather than in terms of the broad outcomes described in Figure 2. Developing leaders with these competencies may require careers that begin in completely different professions. For example, when work is delivered through a variety of arrangements that go beyond traditional regular full-time employment, and work is sourced and delivered globally, talent optimization bears a striking resemblance to procurement and supply-chain disciplines. Similarly, future work brand and reputation management bear striking relationships with marketing. Perhaps the future pipeline of talent with these capabilities should be built upon talented young professionals in procurement, marketing, finance, or corporate relations, who are given development and experiences to augment their skills regard52

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ing talent and HR. Might this be a more productive pipeline than attempting to take traditional HR professionals, and develop their capabilities in procurement, marketing, finance or corporate relations? In Phase 3 of cHReate, leaders from HR People + Strategy and SHRM plan to work actively with the cHReate leaders to consider the most promising ways to integrate the findings into arenas such as professional certifications and university and professional education.

Creating the “Pull” for the New Profession: Aligning Constituent Expectations

Accelerating the evolution of the HR profession will require not only a “push” from within the profession, but also a “pull” from better-informed constituents. What are the current expectations of those key constituents? The cHReate Figure 4. Constituent Views of the CHRO

CHRO Capabilities Report Card Analytics and experimentation Strong consultative skills Business acumen How to partner and engage senior Leaders Workforce management Risk management Execute the business strategy Talent management for the new world organization Transformation/change leadership Organization/culture shaping and mobilization Leadership architecting

teams conducted interviews to gather the perceptions of 22 HR constituents that included CEO’s, C-suite officers, and Board members in elite U.S. and global companies. These individuals had worked with some of the most celebrated and successful CHROs in the world, and in organizations with some of the most advanced and emulated HR systems. One might expect their perceptions to be uniformly positive, yet even among this group, the vital need for significant acceleration was apparent. The executives and board members generally agreed that the five trends were likely to affect their organizations in fundamental ways but opinions varied regarding whether their organizations and HR were prepared to address the trends. For example, regarding the capabilities of the CHRO, Figure 4 summarizes the findings, where “X’s” indicate room for improvement and check-marks indicate areas of satisfaction. Considering that their interview subjects had worked with among the best HR organizations and leaders in the world, it is a sobering result. The many X’s and few check marks suggest opportunities as well as challenges. These CEOs and board members saw great potential for the HR profession. They foresaw future roles for the HR profession such as:

Figure 5. Future of HR Social Movement

Discover Today’s Best: Identify What’s Already Out There through Research Engage the Movers and Shakers: Identify and Coordinate the Key Constituents Rapid-Prototype: Crowdsource Through Social Innovation Build The Tools: Create and Validate Common Tools, Frameworks, Development and Diagnostics Roll Out to Early Adopters: Deploy at scale to early-adopters in the field

2015). That requires an articulated logical framework and charter that connects trends such as the five forces to organizational capability, and then in turn to the competencies and tools that create workplace value for organizations and their members.

What’s Next: Rapid Prototyping, Creating a Movement, and Tools for Change

The findings of Phases 1 and 2 have produced a coherent Reach”the other 98%”: Deploy tools and systems “at scale” to organizations and consistent picture that of all sizes, missions and regions verifies the dilemma that these HR leaders sensed when we started: The profession that today is known as HR (a • A chief operating officer of organizational culture label that may not be sufficient to capture its future poten• A leader of a board committee on culture and innovation tial) has reached a tipping point. While the profession has • A definer of the new work force (people, organization, an admirable history, and continues to progress at a strong talent, structure) that delivers business strategy, considers pace, that pace of change is simply not fast nor disruptive emerging employment and work styles, drives purpose enough to meet the strategic, social and workplace requireand engagement, reflects permeable and changing orgaments of 2025. Constituents want and deserve more, even as nizational boundaries, and is much more diverse they struggle to articulate how to bridge from today’s HR to • A profession that can get ‘in between’ organizations the new capabilities. HR professionals know they are making where partnerships are formed and use science to cross important contributions to their organizations, yet also know barriers between companies, with suppliers and customthat today’s contributions are rapidly falling behind the ers. impact they must have in the very near future. • A profession that uses the cloud, through a world of apps The phrase “creating a movement” reflects decades of and personal devices, to bring Amazon- and Google-like research on social movements and social history (e.g., Coy & insight and responsiveness to the domain of work. Coy, 2010; Dani, 1992). Social movements require not only attention to building tools, competencies and operating One of the cHReate team members described a CEO models; they require a focus on influence, change, values, who, in their first leadership team meeting, introduced the passion and community. Phases 1 and 2 of the cHReate projheads of marketing, finance, operations and strategy by ect saw our collective team of HR leaders shape the direcdescribing how their functions would help the organization tion, message and rationale for the social movement needed win. Turning to the CHRO, the CEO started to describe how to create the step-change that will allow today’s HR to meet HR would help the organization win, but couldn’t, and asked its significant potential impact. The challenge is depicted in the CHRO to please do it. Today, HR’s constituents typically Figure 5. understand HR’s value only in traditional domains such as Phases 1 and 2 of our process concentrated on the top compliance, process efficiency, service delivery, and trusted two boxes of Figure 5. Phase 3 will extend that by engaging a advice on “soft” issues. They are hopeful for a better articularger community to prototype new tools, develop the wider lation of HR’s broader future contribution, but they typically dialogue and messages, and gain adoption of the framehave not seen it and cannot articulate it. works, tools and ideas across a wider constituency. Lacking an articulated value proposition, CEOs, boards The future depicted here is already a reality for some orand constituents grasp at the latest popular “shiny object.” ganizations, and will be the reality for others very soon. The Examples include “big data,” “holocracy,” “abandoning perFuture of HR project revealed a widespread and collective formance ratings,” “neuroscience,” “social networks,” and so recognition that HR has both enormous potential to contribon. Each of these has the potential for very real and tangible ute, as well as a need to rethink and accelerate its evolution value, but if improperly adopted they all carry the danger of to keep pace. needless organizational disruption and value destruction. The difference between an endless pursuit of fads versus a lasting organizational contribution lies in part with a future John W. Boudreau, Ph.D., is a professor at the Marshall School of HR profession that brings evidence-based principles and disBusiness and Center for Effective Organizations at the University of cipline to evaluate and adopt such ideas (Boudreau & Rice, Southern California. He can be reached at [email protected]. VOLUME 38 | ISSUE 4 | FALL 2015

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References Boudreau, J.W. (2014). Will HR’s grasp match its reach?: An estimable profession grown complacent and outpaced. Organizational dynamics. 43.1, 189–197. Boudreau, J.W. (2010). Retooling HR. Boston, MA: Harvard Business Publishing. Boudreau, J.W., Ravin Jesuthasan & David Creelman (2015). Lead the work: Reimagining a world beyond employment. New York: JosseyBass. Coy, P.C. & Coy, P.G. (2010). Research in social movements, conflicts, and change. New York, NY: Emerald Group Publishing. Dani, M. (1992). The concept of social movement. The Sociological Review. 4.1, 1–25. Lawler. E.E & Boudreau. J.W. (2015). Global trends in human resource management: A twenty-year analysis. Stanford, CA: Stanford University Press. Society for Human Resource Management (2012). The SHRM Competency Model. http://www.shrm.org/HRCompetencies/Documents/Competency%20Model%2011%202_10%201%202014.pdf. Sage-Gavin, Eva & Foster-Cheek, Kaye (2015). The transformation of work: Will HR lead or follow? People + Strateg y 38.3: 8–10. Rice, Steven & Boudreau, J.W. (2015). Bright, shiny objects and the future of HR. Harvard Business Review. July–August. Ulrich, D., Brockbank, W., Ulrich, M & Kryscinsky, D. (2015). Toward a synthesis of HR competency models: The common HR “food groups.” People + Strategy, 38.4: 56–65.

Appendix

Leaders and team members of cHReate (The Global Consortium to Reimagine HR, Employment Alternatives, Talent, and the Enterprise) Core Team Dick Antoine- former of National Academy of Human Resources and Procter & Gamble (Phase 1) John Boudreau, University of Southern California Debra Engel, formerly 3Com Scott Pitasky, Starbucks Jeff Pon, Society for Human Resource Management Jill Smart, National Academy of Human Resources, formerly Accenture (Phase 2) Ian Ziskin, EXec EXcel Group, formerly Northrop Grumman Advisory Group Lucien Alziari, Maersk Dick Antoine, formerly National Academy of Human Resources and Procter & Gamble (Phase 2) Beth Axelrod, eBay Mark Blankenship, Jack in the Box Tom Codd, PricewaterhouseCoopers (Phase 2) Rich Floersch, McDonald’s Kaye Foster-Cheek, Boston Consulting Group, formerly Onyx Pharmaceuticals and Johnson & Johnson (Phase 2) Diane Gherson, IBM Marianne Jackson, eBay, formerly Blue Shield of CA Steve Milovich, The Walt Disney Company/Disney ABC Television Group Sandy Ogg, Blackstone Group Vivek Paranjpe, formerly Reliance Industries Limited

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Steven Rice, Juniper Networks Coretha Rushing, Equifax Eva Sage-Gavin, Sage-Gavin Associates, formerly Gap Libby Sartain, Libby Sartain L.L.C., formerly Southwest Airlines and Yahoo! Brian (“Skip”) Schipper, Twitter Laurie Siegel, formerly Tyco Jill Smart, President of National Academy of Human Resources, formerly Accenture (Phase 1) Mara Swan, Manpower Group Gaby Toledano, Electronic Arts Pat Wadors, LinkedIn Phase 2 Project Team Members: Project 1, Align HR with Value Creation for Organizations that Win Project Leader Marianne Jackson, eBay, formerly Blue Shield of CA Project Team Members Anne Donovan, PricewaterhouseCoopers Jing Liao, Trinet Tom Perrault, Rally Health Steven Rice, Juniper Networks Mala Singh, Minted Laurel Smylie, GPTW Institute Gautam Srivastava, Shutterfly Kelley Steven-Waiss, Extreme Networks Kristin Yetto, eBay Project 2: Improve the Expectations of HRs Key Constituents Project Leaders Laurie Siegel, formerly Tyco Dick Antoine, formerly National Academy of Human Resources; formerly Procter & Gamble Project Team Members Jacqui Canney, Accenture Sandy Ogg, Blackstone Group John Rice, Carpenter Technology Linda Rogers, eSilicon Coretha Rushing, Equifax Libby Sartain, Libby Sartain LLC; formerly Southwest Airlines and Yahoo! Project 3: Rewire the Work and Tools of HR Project Leaders Libby Sartain, Libby Sartain LLC; formerly Southwest Airlines and Yahoo! Mara Swan, Manpower Group Project 4: Ensure the HR Talent Pipeline Project Leaders Eva Sage-Gavin, Sage-Gavin Associates; formerly Gap. Kaye Foster-Cheek, formerly Onyx Pharmaceuticals Project Team Members Deborah Barber, D Barber Consulting & Associates; formerly Jackson Hole Group Jo Dennis, Hewlett-Packard Edie Goldberg, E.L. Goldberg & Associates Tracy Layney, formerly Old Navy Liz Nguyen, InterMune Greg Pryor, Workday Eddie Sweeney, The Angel’s Forum; formerly National Semiconductor Wayne Tarken, Comcast; Social HR & Collaboration Center Paul Whitney, Nimble Storage

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Toward a Synthesis of HR Competency Models: The Common HR “Food Groups” By Dave Ulrich, Wayne Brockbank, Mike Ulrich, and David Kryscynski

As businesses face unprecedented rates of volatility, uncertainty, complexity, and ambiguity (VUCA),1 business leaders increasingly recognize the importance of talent (workforce, competencies, skills, abilities), leadership (senior leader and leadership team), and organization (workplace, capability, culture, processes, systems) as sources of competitiveness. Competitors can readily copy access to capital, strategic intent, and operational efficiency but they have a more difficult time copying talent, leadership, and organizational practices.2 As a result of this increased visibility, HR issues have received increased attention in the C-suite.3

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A

s more is required of HR professionals, many outstanding professional groups are committed to helping HR professionals respond to the increased expectations. For example, through alliances and affiliation with the World Federation of Personnel Management Associations (WFPMA), over 90 countries have HR professional associations committed to improving the abilities of HR professionals. These associations sponsor research, publish insights, create professional networks, and offer conferences designed to help their members improve both professionally and personally. In recent years, there has been a flurry of work on HR competencies: the knowledge, skills, and abilities required of HR professionals. Many HR associations, independent organizations, researchers and consultants have worked to define the competencies required for HR professionals. As the number of these competency models increases, the amount of confusion in the HR field about what is required to be an effective HR professional also increases. Rather than compare and contrast the HR competency models and engage in a debate over which particular HR competency model is better, this article offers a synthesis of these competency models by proposing an umbrella concept about how to define competencies for HR professionals. We will begin by offering a metaphor from nutrition that frames how to comprehend competencies; we will then review some of the major HR competency efforts and offer an integration

of these diverse efforts; and we will conclude with choices that can be made to define and create more competent HR professionals. We offer this synthesis so that HR associations, consulting firms, and academic researchers can more effectively continue their important work in positioning HR professionals to add greater value to their organizations.

Nutrition Metaphor and HR Competencies

To move the discussion forward, we offer the following metaphor. The U.S. Department of Agriculture (USDA) has a mission to encourage healthy eating. To do so, the USDA has identified nutrition guidelines. These nutrition guidelines are based on “food groups” showing the types of food and how they should be eaten for good health. This work started in 1894 by Dr. Wilbur Olin Atwater as a farmers’ bulletin.4 In Atwater’s 1902 publication titled Principles of Nutrition and Nutritive Value of Food, he advocated variety, proportionality and moderation; measuring calories; and an efficient, affordable diet that focused on nutrient-rich foods and less fat, sugar, and starch. 5 This original work has morphed dramatically over the last 100 years, but the essence is that there are “food groups” (ranging from 4 to 11 groups and now 5) that individuals should include as they prepare healthy meals. The current image for healthy eating includes five food groups (called Choose My Plate in Figure 1) and it offers recommended daily portions of each of these food groups. Figure 1: Choose My Plate

Physicians, nutritionists, and other health care professionals specify these food groups to create value relative to the physical well-being of individuals around the world. Because of different tastes, cultures, and environmental conditions, these core and basic food groups are combined to accommodate different tastes around the world. Few would quibble that food flavors in India, Brazil, U.K., Nigeria, U.S., Australia, and Germany differ. Yet, each of these unique country flavors draws on the basic elements of the food groups. How does this metaphor inform the HR competency work? HR associations and organizations in different parts of the world are seeking to define competencies for their

respective HR professional audiences (see Table 1 for some examples). With the shared intent of improving the quality of HR professionals, each organization identifies seemingly unique competencies for their audience. This is like having

One of the first large-scale applications of competencies to the work environment occurred during World War II; the United States Army Air Corps applied competency logic in selecting and training fighter pilots. different flavors of food in different countries. While the food groups are the same, unique flavors differ based on how the food groups are combined along with spices and flavorings. In like manner, there are common domains of HR competencies from which HR associations may select and adapt based on their unique country, industry, or business circumstance. As these HR associations and organizations build their competency models, they can then make more informed choices about how to identify and implement their respective competency insights.

History and Overview of HR Competencies

The discussion of competencies for HR professionals is an extension of the general competency-based approach to building leaders. One of the first large-scale applications of competencies to the work environment occurred during World War II; the United States Army Air Corps applied competency logic in selecting and training fighter pilots. Following the war, a central figure in the Air Force’s task force, John Flanagan, applied this approach on a large scale at the Delco-Remy division of General Motors.6 This approach was advanced by David McClelland in 1973 in Testing for Competencies, and further developed by Richard Boyatzis, then of the McBer and Company consulting firm, in his work The Competent Manager.7 Personal competencies for HR professionals began across organizations in the 1970s with work by the Association for Talent Development (known at the time as the American Society for Training and Development, or ASTD), where Patricia McLagan documented the variety of possible roles for HR professionals and examined the detailed competencies of those involved in human resource development (coordinated integration of training, development, organizational development, and career development).8 Since her work, a number of efforts have been pursued to define competencies for HR professionals as summarized in Table 1. We are admittedly biased by our own involvement in the development and empirical evaluation of HR competency models, but our work with The University of Michigan, the RBL group and our global partners and colleagues has reVOLUME 38 | ISSUE 4 | FALL 2015

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Table 1. Summary of Illustrative HR Competency Work Sponsor

Sample

Major finding

Towers Perrin with IBM, 19919

Interviewed 3,000 line managers, consultants, HR managers

Line managers wanted HR more computer literate; consultants wanted HR to better manage change. Line managers wanted more HR influence.

University of Michigan and RBL Group (Dave Ulrich and Wayne Brockbank)10

Six rounds of HR competency studies from data by HR and line (sample size): 1987: 10,291 2002: 7,082 (with SHRM) 1992: 4,556 2007: 10,063 (with SHRM) 1997: 3,229 2012: 20,103

Most recent round (2012) showed competencies that predict personal effectiveness and business results in six areas:

Arthur Yeung and the California Strategic HR Partnership, 1996

Interviews of senior HR leaders in 10 companies

Leadership, HR expertise, consulting, core competencies

Pat Wright and colleagues, with the HR Policy Association

CHRO focus 2009: 56 CHROs 2010: 72 CHROs 2011: 172 CHROs

CHROs need skills in managing talent, cost, succession, and culture; also defined seven roles for HR: Strategic advisor to the executive team • Strategic advisor to the executive team • Talent strategist/architect • Counselor/confidante/coach to the • Leader of the HR function executive team • Workforce sensor • Liaison to the board to directors • Representative of the firm

Center for Effective Organizations (Ed Lawler and John Boudreau)11

Have done seven surveys studying the evolution of HR for 20 years from 1996 to 2015;12 the first few in partnership with HRPS13

Highlighted how HR leaders allocate their time in administrative vs. strategic activities. They also show trends in HR more than specific competencies.14 • Hero leadership to collective leadership • Sameness to segmentation • Intellectual property to agile co-creativity • Fatigue to sustainability • Employment value proposition to personal • Persuasion to education value proposition

Boston Consulting Group with World Federation of People Management15

Conduct studies every few years on HR trends, particularly in Europe; 2011 study included 2,039 executives; SHRM the North America partner on this

Four critical topics: • Managing talent • Improving leadership

2012: 143 CHROs 2013: 128 CHROs 2014: 213 CHROs

• Strategic positioner • Credible activist • Capability builder

• Change champion • HR innovator and integrator • Information (technology) proponent

• Transforming HR • Strategic workforce planning

Five critical HR skills: • HR business partner, • HR processes • Recruiting

• Restructuring organization • Leadership development

Table 2: Overview of Proposed HR Domains (six food groups for HR) Michigan, RBL, and many global partners over the six rounds23 HR competency studies  

Round 1 1987

Round 2 1992

Round 3 1997

Round 4 2002

Round 5 2007

Round 6 2012

Total respondents

10,291

4,556

3,229

7,082

10,063

20,023

Business units

1,200

441

678

692

413

635

Associate raters

8,884

3,805

2,565

5,890

8,414

17,385

HR participants

1,407

751

664

1,192

1,671

2,638

[1] Business

Business Knowledge

Business knowledge

Business knowledge

Business knowledge Strategic contribution

Strategic architect

[2] Human Resources tools

HR delivery

HR delivery

HR delivery

HR delivery

Talent manager & organization designer

[2] HR Innovator & Integrator

HR technology

Operational executor

[3] Technology or information Proponent

Culture and change steward

[4] Change champion

Credible activist

[6] Credible activist

[3] HR Information, Analysis, Operations

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[4] Change

Change

Change

Change

[5] Organization and Culture

 

 

Culture

Change and culture were combined into strategic contribution

[6] Personal

 

Personal credibility

Personal credibility

Personal credibility

PEOPLE + STRATEGY

Business ally

[1] Strategic Positioner

[5] Organization Capability builder

Sponsor

Sample

Major finding

Deloitte

40 colleagues within Deloitte in 2011

• Business: commercial awareness, business acumen • HR: employee relations, HR expertise • Consulting: trusted advisor, influence

SHRM17

1989: ASPA built learning system with Golle and Holmes18

The foundation of the learning system for HR professionals.

1990: Tom Lawson,19 20 CEOs and 50 HR interviews

Building management abilities in leadership, influence, business, and technology

1998: Steve Schoonover, 300 interviews in 21 companies in conjunction with SHRM

• Core competencies • Level-specific competencies

• Role-specific competencies

2002: 7,082 (with Michigan and RBL group, Dave Ulrich and Wayne Brockbank20)

• Business knowledge

• HR technology

• HR delivery

• Personal credibility

16

• Strategic contributions 2007: 10,063 (with Michigan and RBL group, Dave Ulrich and Wayne Brockbank21)

2013–2015: Did 111 focus groups, surveyed 640 CHROs and 32,124 SHRM members and HR professionals from 33 countries

Generated after an in-depth investigation Chartered Institute of Professional Development involving detailed interviews with HR directors across all main economic sectors and scores of (CIPD) map22 senior professionals and academics.

• Talent manager and organization designer • Culture and change steward • Strategic architect

• Operational executor • Business ally • Credible activist

Identified nine competency categories, and created a Body of Competency and Knowledge: • Communication • Critical evaluation • Relationship management • Global and cultural effectiveness • Ethical practice • Leadership and navigation • HR expertise (HR knowledge) • Consultation • Business acumen Identified 10 professional areas and four bands for HR’s professional map: • Organizational design • Employee engagement • Organizational development • Employee relations • Resourcing and talent planning • service delivery • Learning and talent development • Information • Performance and rewards

sulted in broad global exposure: four books, dozens of refereed journal articles and dissertations, and dozens more magazines and other publicans in the popular press. As we examine the history of this long running Human Resource Competency Study (HRCS) over six rounds that span more than 30 years, we see six key domains of HR competencies emerge that seem common across the broad range of competency models. These domains are summarized in Table 2 and discussed in detail below. As is summarized in Table 2, six core HR competency categories emerge from the six rounds of our competency research. These constitute the basic food groups of the HR profession that have the greatest impact on personal and business performance. • Business. This category includes core knowledge of business. To be optimally effective HR professionals must have knowledge of internal business operations such as finance, IT, accounting, supply chain management, firm portfolio considerations, order fulfillment cycles, service requirements, marketing techniques, distribution channels and operations management. They also need

to have knowledge of external realities such as customer buying criteria, market segmentation, capital markets, global financial developments and global demographic trends. They should understand how these integrate into and are executed through the firm’s value chain. For HR professionals to be fully competent in the business domain, they must also be able to apply this knowledge to the formulation and implementation of business strategy. • Human resource tools, practices, and processes. Competence in this domain entails the ability to design and utilize the basic HR tools such as recruitment, succession planning, job rotation, outplacement, performance management, reward mechanisms, classroom training, and on the job development. • HR information systems, analytics, and architecture. Emerging as a centrally important HR competency is the involvement of HR professionals in the broad field of information management. Three levels of such involvement may be differentiated. At the most basic level, HR professionals should be able to leverage the human resource information system to track talent, enable emVOLUME 38 | ISSUE 4 | FALL 2015

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Focusing on business outcomes is more like asking, “How much from each food group should you eat to maintain good health?” It should be clear that both questions are critically important. We must both define the food groups and determine how to best use the food groups.

we also suggest that these six domains are the basic food groups of the HR profession. How these domains are emphasized and adapted will vary across national, industrial, and organizational contexts.

Choices for defining HR Competencies: 7 Questions to Guide the Creation of a Specific HR Competency Model

Creating an HR competency model requires making a series of choices about how to approach, define, use, and deploy the model. We have identified seven key questions to help guide HR associations, organizations, and researchers in tailoring the six basic HR domains to their particular settings.

Research Approach ployees to manage their benefits, enable supervisors to access real time employee performance and other related data, and to provide on-line basic training programs. They must also be able to apply predictive analytics to answer important HR questions such as: What factors predict the likelihood of key talent leaving? What factors predict the kind of leaders who are most likely to optimize key talent? What percent of your workforce create 90 percent of the value, who are they, what do they do and what motivates them? Finally, to optimize their contributions in this arena HR professionals should also be able to work with firm leaders to architect the flow of critical competitive information from the outside in, to disseminate important market information and ensure its effective utilization in executive decision making. •• Change. Competent HR professionals must manage the paradox of providing institutional stability while concurrently facilitating institutional innovation, flexibility and adaptability. They mobilize leadership in initiating change while building the institutional infrastructures that help to ensure the sustainability of change efforts. •• Organization and Culture. This competency domain mandates that HR professionals not only can ensure outstanding individual talent but that they also help to create and sustain competitive, high performance organizations. Organization consists of more than structural configurations of horizontal and vertical and differentiation and integration. Organization is also the culture of how people think and behave together in ways that are required and perceived by the realities of the competitive market place including customers, competitors, and owners. •• Personal. To be effective, HR professionals must have personal credibility. Personal credibility is built on a foundation of having strong relationships with key leaders, of communicating clearly through both written and verbal media, of having absolute integrity, and of having rigorous discipline in achieving agreed upon objectives.

Creating an HR competency model can use HR competencies as either a stand-alone variable or as an independent variable that predicts business and other outcomes. As indicated above, most often HR competencies are answers to the question “what are the competencies of the HR professional”? These are descriptive statements which describe the current state of HR competencies. This is like asking “what are the five food groups?” Another option is to show the impact of the HR competencies on an important variety of organization outcomes. Builders of HR competencies might consider three alternative outcomes: •• Business results. Which, if any, HR competencies impact business performance? •• Individual job performance. Will more competent HR professionals be better able to do their job? (If such is the desired outcome, then data might be analyzed to define the competencies for a particular task, role, or job.)31 •• Personal effectiveness of the HR professional. How will specific competencies of HR professionals influence whether or not they are seen as being competent by their internal associates? Focusing on business outcomes is more like asking, “How much from each food group should you eat to maintain good health?” It should be clear that both questions are critically important. We must both define the food groups and determine how to best use the food groups. Similarly, we must both define the competencies of HR professionals and continually refine our models by evaluating the effectiveness of those competencies for the performance dimensions we care most about. This leads to our first guiding question: Guiding Question 1: Do you intend to have a descriptive model or a prescriptive model of HR competencies? If prescriptive, what are the outcomes you care most about?

Research Methodology As mentioned above, these six competency domains are not only an accurate summary of our research, they also represent the categories which provide order, structure, and integration for most other competency models. This integration is shown in Table 3. From this vantage point 60

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Creating a useful HR competency model requires determining which research methods fit the issues that are most critical in the development of your particular competency model. Any empirical validation of a competency model requires clear tradeoffs. A single study cannot do all things

Table 3: Integration of HR competencies into 6 HR domains Core HR domains HR Association SHRM24

Business • Business acumen

Personal • Ethical practice • Leadership and navigation

CIPD

HR Tools, Practices and Processes

HR Information System and Analytics

Change

Organization and Culture

• HR expertise

• Communication • Critical evaluation

• Relationship management • Consultation

• Global and eultural effectiveness

• Resourcing and talent planning • Learning and talent development • Performance and rewards • Employee engagement • Employee relations

• Service delivery

• Information

• Organization design • Organization development

• Organizational capability • Culture leader

Australian Human Resources Institute (AHRI) (model of excellence)

• Business driven • Strategic architect • Future oriented

• Ethical and credible activist • Critical thinker • Courageous • Understand and care

• Workforce designer • Expert practitioner • Solutions driven

• • • •

National Human Resource Development (NHRD) (HR compass)

• Strategic thinking and alignment • Business knowledge • Financial perspective

• Personal credibility • Service orientation

• Recruitment • Performance management • Talent management • Compensation and benefits • Employee rights and labor law

• Execution excellence • Change orientation • Networking management

• Managing culture and design

• Collaboration • Knowledge management

• Innovative culture

• • • •

Asociación Mexicana en Dirección de Recursos Humanos (AMEDIRH) Pedro Borda Hartmann (studies in 100 companies in Mexico)25

Self-awareness Synthesis Formulation coaching

Change leader Influencer Collaborative Resolver of issues

Illustrative companies BAE Systems

GE

• Business partner

Hershey

• Business acumen

WD 4026

• Know the business

• Personal attributes

• Enabling employee engagement • Talent management • HR planning • Enabling performance management • Remuneration and benefits • Delivery of HR solutions

• Organization development

• HR effectiveness

• Organization effectiveness champion

• Talent management • Become trusted advisor

• Process excellence

• Impact and influence

• Support decisions with analytics

• Be business psychologists • Teach people to take action

• Organization diagnosis and change

Other studies or reports Boston Consulting Group

• HR business partner

Deloitte

• Commercial awareness • Business acumen

• • • •

Managing talent Improving leadership Recruiting HR processes

• Restructuring organization

• Trusted advisor

• HR expertise • Employee relations

• Influence

Dick Antoine27

• Credibility with line leaders • Providing counsel

• Offering solutions

• Change agent • Managing influence

Alan May from Boeing28

• • • • •

Schuler and Jackson29

• Business competency

Joyce Westerdahl, Oracle30

• Building business acumen

Intellectual curiosity Empathy Courage Dynamic range Grit

• Leadership and managerial competencies

• Simplicity

• Professional and technical competencies • Making right HR technology choices

• Change and knowledge management • Having data driven mindset

• Leveraging ideas to move faster VOLUME 38 | ISSUE 4 | FALL 2015

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at once and still be practical and executable. Some of these methodological issues include: • What you measure. A study may examine individual behaviors, attitudes, situational judgements, performance outcomes, or some limited combination of each of these. • Whose perspective matters most. A study could leverage self-assessments by HR professionals or observer assessments of HR professionals (e.g. 360 evaluations). • The frequency of evaluation. A study could examine one point in time to develop a snapshot of the field and profession, or could examine multiple points over time to explore an evolving model. • Analytical techniques. A study could leverage descriptive qualitative data to examine competencies or quantitative data with statistical analysis. Guiding Question 2: What methodological choices will you make? Will the results be reliable, valid, and generalizable? Will they give you the results that you desire?

Purpose of the HR Competency Model It is obvious that the HR competency model is meant to improve the quality of HR professionals. Some of this improvement might come within a company so that HR can better attract, screen, assess, develop, and manage the

For either personal, organizational, regional or professional (certification) development, HR competencies need to be modified over time to reflect changing business requirements. careers of their HR professionals. Some of HR improvement may be broader than a single organization. The focus might be elevating the value added of the community of HR professionals within an industry, city, state, or country. Clearly defined competencies aid HR professional certification. Certification has clearly become a major topic for HR associations around the world. Certification has different implications based on different career stages. For early HR entrants, certification is like a license that validates their ability to practice the craft (like an attorney passing the bar or psychologist being licensed). But the licensing does not ensure one’s ability to practice the profession at a high level of quality and results. Thus, proficiency certification generally indicates the quality of HR professionals in being able to perform the jobs they are assigned. Proficiency may also be assessed for the professional through granular assessments of which HR competencies apply in which setting (size of company, level of HR, role of HR, experience in HR, business strategy, organization culture, government laws and so forth). Finally at the mastery level, HR competencies may define someone who is a “Fellow” 62

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or truly advanced in his or her career. For example, Peter Wilson, CEO of AHRI (Australian Human Resource Institute), reviews the importance of differentiating competencies by career level and shows how AHRI validates competency mastery for very seasoned and senior HR leaders. For either personal, organizational, regional or professional (certification) development, HR competencies need to be modified over time to reflect changing business requirements. The food groups have evolved with new science and research. The core domains of HR should also evolve with new research. In our studies, we found that many core domains have held rather steady over 25 years. However, new core domains continue to evolve and emerge (e.g. the importance of defining culture from the outside in and the role of HR in designing the flow of information) as do some of the specific behaviors With this in mind, it may be premature to have an effectiveness standard for all effective HR professionals. Standards define what is expected; HR competencies form an index against which HR professionals perform. For example, consider the Economist’s Big Mac index, which measures the cost of a Big Mac in various countries in terms of its difference from the average Big Mac price in the United States. It doesn’t try to tell you how much a Big Mac should cost—instead, it is a crude but useful assessment of the cost of living around the world. An HR competencies index guides HR professionals on how to improve. When a rating agency like Moody’s or S&P downgrades a company, it is not saying the company did or did not meet financial reporting requirements (GAAP). It is offering an opinion about the firm’s ability to repay loans in the future. Likewise, HR competency models may help HR professionals and others better define and deliver value to their company. HR competencies are not some form of HR professional GAAP—this is not an attempt to codify all HR professionals in the same way. Such an HR standard would be nearly impossible because HR effectiveness is inevitably both personally subjective and contingent on the unique needs of the company. Defining a single HR standard would be like defining the perfect basketball player. Both Michael Jordan and Bill Russell were enormously successful, but they had very different skills, played in different eras, and had different roles on their teams. Likewise, it is silly to ask who was or is the best leader—Bill Gates, Richard Branson, Indra Nooyi, Ratan Tata, Carlos Ghosn, Warren Buffett, Zhang Ruixin, Steve Jobs, Larry Page, Oprah Winfrey, or Jack Welch. In fact, each was very successful using unique skills appropriate for the circumstance. Guiding Question 3. Why are we doing the HR competency work? To upgrade HR professionals? To define the effective HR professional? To certify the HR professional?

Scale and Scope As corporations seek to expand their production and distribution capabilities, HR professionals frequently find their careers crossing national boundaries. The specific competencies that are useful in one national setting may be relatively less useful in another. Likewise competencies may vary based on the requirements of different industries. In the same

vein, the competencies that are relevant in one division of a company may be less relevant in a different division. This may especially be true in highly diversified firms. Thus as research is applied to identify relevant competency models for different contextual conditions, we may consider what competencies the local markets require, what competencies are required for potentially different business models, what competencies are required across different geographical regions, and so forth. As indicated earlier, just as food groups may vary depending on local food availability and nutritional

…just as food groups may vary depending on local food availability and nutritional requirements, HR competencies may require adaptation to different geographical locations and business demands. requirements, HR competencies may require adaptation to different geographical locations and business demands. Guiding Question 4. What is the scope of our HR competency research? The individual HR professional? A specific business model? A specific organization? A specific country? The truly global HR profession?

fessionals who have been lifetime HR professionals may need to focus on different competencies than individuals who are at advanced career stages and who have recently moved into HR. Guiding Question 5. What are the granular or contextual dimensions that affect HR competencies?

Who Does HR Work? One of the conundrums of HR competency assessment is that HR professionals have an impact on what and how HR work is done, but so do line managers. Sometimes, line managers and the organization cultures they perpetuate help or hinder the ability of HR professionals to do their work. In many knowledge-based businesses line managers will assume a larger role in HR decisions. For example, an academic department chair is unlikely to relinquish hiring authority to an HR professional. If line managers are not accountable for good HR work (around talent, leadership, and capability), it severely hinders what HR professionals can do. At the other extreme, a very effective line manager can overshadow a weaker HR professional. The extent to which HR versus line management holds primary responsibility for specific HR work may have a significant impact on the HR competency model. Guiding Question 6. How do we manage the roles of HR versus line managers in defining and delivering HR competencies?

Who Creates the HR Competency Model? General vs. Tailored HR Competencies In developing competency models, we must also determine whether we are exploring competencies at the highest level (e.g. the food groups) or at a lower level of analysis (e.g. how the foods apply specifically in some contexts). • How might competencies vary by firm size? HR competencies may vary depending on whether or not the firm is a small office, home office, small, medium, or large enterprise. • How might competencies vary by role? Competencies may vary depending on whether the professional is in a corporate office, a service center, center of excellence, an embedded generalist, or an administrative specialist. • How might competencies vary by function? It is easily conceivable that competencies may vary depending on if the professional is in training, staffing, compensation, performance management, or communications. Likewise, necessary HR competencies will likely vary between business functions (e.g., manufacturing and accounting). • How might competencies vary by career stage? An HR professional at the apprentice or learner stage may require different competencies from an individual contributor, a manager integrator, or a director strategist. • How might competencies vary by company culture? The competencies that are required for a monopolistic bureaucracy will be different from those in a fast moving competitive high tech firm. • How might competencies vary by career history? HR pro-

A final issue is “who should have accountability for competency model development”? As competency models are developed, several options are available ranging from academics, practicing HR professionals, consultants, and professional organizations. These different types of developers bring different strengths to the table. Researchers likely leverage rigorous data and methods but may not be in tune with practical HR business needs. Practicing HR professionals bring significant domain expertise but may at times be limited by their focused experience in HR with limited exposure outside of HR. Consultants bring a combination of breadth and context but may have incentives to sell their findings rather than benefit the field more broadly. Lastly, HR professional organizations bring a strong commitment to the HR professionals in their target audience and in their region. Each of these different players brings strengths to the table, but each also brings risks in generating and creating the most broadly applicable and/or context appropriate model. Research Question 7. To whom will we turn for creating our HR competency model?

Conclusion and Future Opportunity

The answer to the substantial question, “What do I have to be, know, and do to be an HR professional who delivers personal and business value?” requires a set of detailed decisions before finding an answer. This question requires partnerships among HR professional associations around the world, VOLUME 38 | ISSUE 4 | FALL 2015

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…HR professionals can be both architects who design and deliver and anthropologists who anticipate requirements for talent, leadership, and capability. focusing on outcomes of HR skills, aligning competencies to current and future business conditions, tailoring competencies to specific situations, and identifying the competencies that matter most for business performance. There is a value of the “food groups” logic for HR. The six domains proposed in this paper capture the major categories for HR competencies. We have also raised seven sets of choices and questions that should be addressed to make conscious choices about developing and using HR competencies. Why do competencies for HR professionals matter? Like many others, we are passionate and optimistic about the future of HR. First, HR is not about HR, but about delivering sustainable business results. When asked to define “the biggest challenge in work today?” too many HR professionals focus on HR practices like talent acquisition, learning, training, compensation, or building the HR organization. HR’s biggest challenge should be the business’ biggest challenge. Business leaders who are seeking to deliver profitable growth through geographic expansion, customer intimacy, product innovation, or efficiency increasingly recognize that HR issues are central to their success. In our work, we have linked HR work with customer and shareholder value.32 HR competencies matter because when HR professionals master these competencies, they help deliver business results. Second, we are increasingly clear about the unique outcomes HR professionals deliver to increase business results: individual talent, leadership, and organization capabilities. To accomplish any business agenda, HR professionals can be both architects who design and deliver and anthropologists who anticipate requirements for talent, leadership, and capability. With this focus, HR professionals know what to discuss and deliver to business discussions. In building talent, HR professionals help individuals discover and achieve their personal growth mindset through their organization work. In building organizations, HR professionals build institutions that deliver and shape societal value. In building leadership, HR professionals ensure a continuity for future success. Finally, as the bar for HR value is raised by connecting to business outcomes and by delivering talent, leadership, and capability, HR professionals have enormous opportunities for impact. When we can better define the competencies to respond to these opportunities, HR delivers enormous value. Dave Ulrich, Ph.D., is a professor at the Ross School of Business at the University of Michigan, author, speaker, management coach, and management consultant. He is also the cofounder of The RBL Group He can be reached at [email protected]. 64

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Wayne Brockbank, Ph.D., is a professor at the Ross School of Business at the University of Michigan and cofounder of The RBL Group. He can be reached at [email protected]. Mike Ulrich is codirector at the Human Resource Competency Study and a Ph.D. candidate at the University of South Carolina– Columbia. He can be reached at [email protected]. David Kryscynski, Ph.D., is an assistant professor at Brigham Young University. Prior to that he was a process engineer at Holcim. He can be reached at [email protected].

References The concept of VUCA comes from the U.S. military as a way to describe the changing business context: Stiehm, J. H. (2010). U.S. Army War College: Military education in a democracy. Philadelphia, PA: Temple University Press, 6. For an example of where VUCA has been used to capture the challenges leaders face see: Johansen, B. (2012). Leaders make the future: Ten new leadership skills for an uncertain world. San Francisco, CA: Berrett-Koehler Publishers. 2 The logic for HR and organization as a competitive advantage has been laid out in: Ulrich, D., Lake, D. G. (1990). Organizational capability: Competing from the inside out. Hoboken, H.J.: John Wiley & Sons. Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of management, 17(1), 99–120. 3 The conference board CEO challenge. (2014). The Conference Board. Retrieved May 16, 2015, from http://www.conference-board. org/ceo-challenge. 4 Davis, C., & Saltos, E. (1999). Dietary recommendations and how they have changed over time. America’s eating habits: Changes and consequences, 33–50. U.S. Department of Agriculture Economic Research Services, 5 USDA Food Pyramid History. (n.d.). USDA Food Pyramid History. Retrieved May 16, 2015, from http://www.healthy-eating-politics.com/usda-food-pyramid.html. Atwater, W. O. (1902). Principles of nutrition and nutritive value of food. Washington DC: U.S. Department of Agriculture. Retrieved from https://archive. org/details/CAT10306183. 6 Christie, M., & Young, R. (1994). Critical incidents in vocational teaching: A northern territory study. Darwin, Northern Territory, Australia: Northern Territory University. 7 Kamoche, K. (1996). Strategic human resource management within a resource‐capability view of the firm. Journal of Management Studies, 33(2), 213–233. Catano, V. M. (2001). Empirically supported interventions and HR practice. HRM Research Quarterly, 5, 1–5. 8 McLagan, P. A., & Bedrick, D. (1983). Models for Excellence: The results of the ASTD training and development competency study. Training and Development Journal, 37(6), 10–20. 9 Brockbank, W., Ulrich, D., & Beatty, R. W. (1999). HR professional development: Creating the future creators at the university of Michigan business school. Human Resource Management, 38(2), 111–117. 10 Ulrich, D., Younger, J., Brockbank, W., & Ulrich, M. (2012). HR from the outside in: Six competencies for the future of human resources. New York: McGraw-Hill Publishing Company. 1

Ulrich, D., Brockbank, W., Younger, J., & Ulrich, M. (2012). Global HR competencies: Mastering competitive value from the outside-in. McGraw-Hill Publishing Company. Ulrich, D., Allen, J., Brockbank, W., Younger, J., & Nyman, M. (2009). HR transformation: Building human resources from the outside in. New York: McGraw-Hill Publishing Company. Ulrich, D., Brockbank, W., Johnson, D., Sandholtz, K., & Younger, J. (2008). HR competencies: Mastery at the intersection of people and business. Alexandria, VA: Society for Human Resource Management. 11 Lawler, E. E. III, & Boudreau, J. W. (2009). Achieving excellence in human resources management: An assessment of human resource functions. Stanford, CA: Stanford University Press. Lawler, E. E., III, & Boudreau, J. W. (2012). Effective human resource management: A global analysis. Stanford, CA: Stanford University Press. Boudreau, J. W., & Ziskin, I. (2011). The future of H R. Retrieved May 16, 2015, from http://ceo.usc.edu/project/the_future_of_ hr.html. 12 Lawler, E. E. III, & Boudreau, J. W. (2015). Global trends in human resource management: A twenty-year analysis. Stanford, CA: Stanford University Press. 13 Lawler, E. E., III, & Boudreau, J. W. (2012). Effective human resource management: A global analysis. Stanford, CA: Stanford University Press. 14 Boudreau, J. W., & Ziskin, I. (2011). The future of HR. Retrieved May 16, 2015, from http://ceo.usc.edu/project/the_future_of_ hr.html. 15 Strack, R., Caye, J.-M., Teichman, C., Haen, P., Frick, G., & Bird, S. (2011). Creating people advantage 2011: Time to act: HR certainties in uncertain times. The Boston Consulting Group and the European Association for People Management. Retrieved from http://www.bcg.com/documents/file87639.pdf. 16 Business Driven HR: Unlock the value of HR Business Partners. (2011). London: Deloitte. Retrieved from http://www2.deloitte. com/content/dam/Deloitte/ie/Documents/People/Unlocking_the_value_of_HR_Business_Partners_High_Res.pdf. 17 Lawson, T. E. (1989). The competency initiative: Standards of excellence for human resource executives. Alexandria, VA: Society for Human Resource Management. 18 A history of human resources: SHRM’s 60-year journey. (2008). Alexandria, VA: Society for Human Resource Management. 19 Lawson, T. E. (1989). The competency initiative: standards of excellence for human resource executives. Alexandria, VA: Society for Human Resource Management. 20 Ulrich, D., Younger, J., Brockbank, W., & Ulrich, M. (2012). HR from the outside in: Six competencies for the future of human resources. New York: McGraw-Hill Publishing Company. Ulrich, D., Brockbank, W., Younger, J., & Ulrich, M. (2012). Global HR competencies: Mastering competitive value from the outside-in. McGraw-Hill Publishing Company. Ulrich, D., Allen, J., Brockbank, W., Younger, J., & Nyman, M. (2009). HR transformation: Building human resources from the outside in. New York: McGraw-Hill Publishing Company. Ulrich, D., Brockbank, W., Johnson, D., Sandholtz, K., & Younger, J. (2008). HR competencies: Mastery at the intersection of people and business. Alexandria, VA: Society for Human Resource Management.

Ulrich, D., Younger, J., Brockbank, W., & Ulrich, M. (2012). HR from the outside in: Six competencies for the future of human resources. New York: McGraw-Hill Publishing Company. Ulrich, D., Brockbank, W., Younger, J., & Ulrich, M. (2012). Global HR competencies: Mastering competitive value from the outside-in. McGraw-Hill Publishing Company. Ulrich, D., Allen, J., Brockbank, W., Younger, J., & Nyman, M. (2009). HR transformation: Building human resources from the outside in. New York: McGraw-Hill Publishing Company. Ulrich, D., Brockbank, W., Johnson, D., Sandholtz, K., & Younger, J. (2008). HR competencies: Mastery at the intersection of people and business. Alexandria, VA: Society for Human Resource Management. 22 The CIPD professional map can be found on the CIPD website: http://www.cipd.co.uk/cipd-hr-profession/hr-profession-map/ professional-areas. 23 51job (China); AHRI (Australia); ASHRM (Middle East); CEIB (China); HKIHRM (South China/Hong Kong): HR Norge (Norway/Europe); IAE (Latin America); IPM (South Africa); NHRD (India); SHRM (USA); RBL affiliate (Turkey/Balkans); RSM (Europe). 24 Some of the SHRM work is found in: Society for Human Resource Management. (2014). The SHRM body of competency and knowledge. Alexandria, VA: Society for Human Resource Management. Retrieved from http://www. shrm.org/certification/Documents/SHRM-BoCK-FINAL4.pdf. 25 Hartmann, P. B. (2015). Creativity, innovation, and leadership as key factors in HR’s future. In Ulrich, D., Schiemann, W.A.& Sartain, L., The rise of HR (471–476). Alexandria, VA: HRCI. 26 Ridge, G., & Sewitch, S. (2015). How HR can get the squeaks out of an organization. In Ulrich, D., Schiemann, W.A.& Sartain, L., The rise of HR (511–518). Alexandria, VA: HRCI. 27 Antoine, R. L. (2015). HR as business partner. In Ulrich, D., Schiemann, W.A.& Sartain, L. The rise of HR (461–464). Alexandria, VA: HRCI. 28 May, A. R. (2015). Behavioral characteristics of highly successful HR leaders: A subjective view. In D. Ulrich, W. A. Schiemann, & L. Sartain, The rise of HR (477–484). Alexandria, VA: HRCI. 29 Schuler, R. S., & Jackson, S. E. (2001). HR roles, competencies, partnerships and structure. International encyclopedia of business and management (2nd ed.). London. 30 Westerdahl, J. (2015). Marketing, measurement, and modern HR. In D. Ulrich, W. A. Schiemann, & L. Sartain, The rise of HR (pp. 533–540). Alexandria, VA: HRCI. 31 Campion, M. C., Ployhart, R. E., & Mackenzie, W. I., Jr. (2014). The state of research on situational judgment tests: A content analysis and directions for future research. Human Performance, 27(4), 283–310. http://doi.org/10.1080/08959285.2014.929693. 32 Ulrich, D. (1989). Tie the corporate knot: Gaining complete customer commitment. Sloan Management Review. Summer.19–28. Ulrich, D. & and Smallwood, N. (2007). Leadership brand. Developing customer focused leaders to drive performance and building lasting value. Boston, MA: Harvard Business Review Press. Ulrich, D. & and Smallwood, N. (2012). What is leadership? In Mobley, W.h. &Ming Li, Y.W. (ed.) Advances in global leadership (Vol. 7) Emerald Group Publishing Ltd., 9–36. Ulrich, D. (2015). Leadership capital index: Realizing the market value of leadership. San Francisco: Berrett Kohler. 21

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HR at the Crossroads: What We Measure Matters By Marcus Buckingham

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e go into human resources because of dreams. Other people’s dreams. They come to work and they dream of success and prestige, of making an impact, advancing a mission, and of discovering the best version of themselves along the way. Yes, of course, they want to make money, and support their families, but through it all they yearn for something grander, the chance to commit to something bigger than themselves, a life at work that allows them to grow, helps the organization and makes a contribution to the profession. And we, in human resources, are there to help them. We are the ones who design the systems that guide them to the right role, teach them how to perform it well, speed their development, and ensure they receive the compensation and benefits they deserve. We provide them with the cues, symbols, and rituals that express the values they all share, and in so doing, we shape and reinforce their culture. And when we do this well, we perform an extraordinary service: We transform dreams into meaning. Yet, there are times when we fall short of this service—when we fixate on process 66

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and on enforcing adherence to process, and we lose sight of the individual humans and become instead the guardians of the mild, firm, and relentless pressure of the corporate will. At such times, we are seen not only as obstacles to human dreams, but worse, as antagonistic or irrelevant to them. Today, we in human resources find ourselves at a crossroads. Down one path we find ourselves as process owners— designing, implementing, and administering static systems in which the humans are the natural resource to be corralled and coerced into producing the desired output: performance. The other path leads to a very different role—one where we are woven into people’s daily challenges, frustrations, and successes—where our tools are light but insightful, with just enough guidance, just enough space, and where we are seen not as enforcers but as catalysts turning talents into contribution and contribution into meaning. Down this path lies agility—and collaboration, and innovation, and mission. Most important, down this path lies relevance. For us to take this path, however, will require of us that we face up to and solve two distinct challenges. Today we are barely aware of these challenges, and yet they must be grappled with and solved if we, as a discipline, are to become all that we are capable of becoming.

From the Organization to the Team Leader

Study performance inside any organization and one finding leaps out at you. It’s an odd finding in that it is at once obvious and surprising, the sort of discovery that’s as clear as day, and yet makes you realize that you’ve never seen it written about in the business press. This discovery is range—the variation in performance between two teams in the same organization doing precisely the same kind of work. This is true whether that performance is measured as per person productivity, quality, employee engagement, customer satisfaction, accidents on the job, or lost workdays. Even if you study highly controlled environments, such as retail or manufacturing in which each team has been carefully constructed to do exactly the same job in exactly the same way, you still find significant range in the performance metrics. In books such as The Toyota Way and How Google Works you are led to believe that organizations are monolithic—they have one business model, or one company culture, and this model and this culture explains why certain organizations are successful and others are not. While on one level, you know that it must surely feel different to work at Pixar than at, say, the federal government, on another more personal level, you know that your day-to-day experience of working is forged locally, by the actual activities of your own job, by the support of your teammates, and by the feelings of purpose, progress, and personal success created in your team. And, of course, the creator of these feelings is your local team leader. Your team leader is the one who makes the difference. If your organization wants high performance and engagement—or, for that matter, collaboration, innovation, quality, efficiency, and agility—then these things are created in the context of a team and a team leader, or they are not created at all. This variation in team-level data reminds us that the most important decision an organization makes on any sub-

ject is not strategy, marketing messaging, or capital allocation. It is who you make team leader—because so goes the team leader, so goes everything. Intuitively, we all know this—we’ve all worked for a great company with a rotten boss, and, sadly, the rotten boss trumps the great company. And so you would have thought that our people systems—learning, performance, employee engagement, strengths assessment systems—would all focus on serving the team leader. And yet they don’t. Look closely and you realize that an entire suite of people systems often misses its most important audience. Take employee engagement as an example. Engagement happens, or fails to happen, on a team. The company can provide the support and the tools, but the actual experience of working in a company is in the hands and mind of each team leader. It is surprising then to see most employee engagement programs deliver survey data in a similar sequence. First an organizational hierarchy is pulled from the people systems of record; then, a few weeks later, the survey

If the HR profession is to successfully move forward, our performance management, employee engagement, learning management, and strength assessment systems should all be designed to address the practical concerns of team leaders, rather than the abstract needs of the organization. is deployed against this hierarchy—a hierarchy that is almost immediately out of date; then, four or five weeks after that, the results come in to HR, where they are poured over, vetted and cleaned; whereupon they are presented to senior management, patterns are explained, and improvements over the previous year celebrated in an all-hands town hall or a newsletter; and then finally, oftentimes months after the data were collected, they are cascaded down to team leaders, where, inevitably and justifiably, the data are dismissed as too stale, too abstract, with the broad organizational patterns irrelevant. Even some of the newer self-serve survey tools which allow data to be collected and shared more frequently, are still designed to deliver that data to the organization’s executives and the HR function. If we are interested in actually building engagement in our organizations, rather than merely measuring it year over year, then we need to redesign our system so that it delivers real-time data to the right audience: team leaders. The same applies to performance management. As with engagement systems, the intended audience for most performance management systems is the organization not the team leader. The organization’s goals are set at the beginning VOLUME 38 | ISSUE 4 | FALL 2015

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of the year; these goals are then segmented into “buckets,” which are cascaded down through the ranks whereupon team leaders throughout the organization are required to place their own personal goals into one of the required buckets, their team members do the same, with completion percentages and ratings handed out during the year. In theory this “nested” goals approach is sensible in that it offers the promise of perfect organizational alignment. The reality is quite different. In reality, each individual team member’s goals are so individual, so specific to each team member’s strengths, needs, and oft-changing circumstances that team leaders struggle to place one team member’s actual goals into one of the static buckets, let alone record reliably their completion percentage. The result is a kabuki-like process in which everyone goes through the motions of alignment, but none of it addresses what is most pressing to team leaders: namely, how to get actual work done with a specific team member in the real world. If the HR profession is to successfully move forward, our performance management, employee engagement, learning management, and strength assessment systems should all be

This combination of the growing suspicion of our colleagues and the overwhelming body of research evidence puts pressure on all of us in HR to respond. It is another sign of our profession at a crossroads. Either we can continue to produce data that the organization rightly distrusts, or we can become more data fluent and face up to the implications for our people systems and practices. designed to address the practical concerns of team leaders, rather than the abstract needs of the organization. And what might these tools look like? Team leaders in the real world don’t have an unending number of questions for which they want answers. They have three. When you take on the challenge of leading a team you want to know, first, what are the strengths and capabilities of each team member? Second, what each person is doing this week? And third, how is the team feeling right now—are they engaged or checked out, resilient or close to breaking? These aren’t theoretical questions. They represent the real-life preoccupation of every team leader the world over. And yet, at present, we in HR offer no tools to address them. All we can provide are siloed systems that don’t talk to one another—the engagement data is in one binder on one shelf (or more likely a “soft copy” deep in the recesses of the PC), the performance data is in another binder on another shelf, 68

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the learning data is in no binder at all, while each team member’s assessment results are buried in a drawer somewhere, interesting but invisible. No team leader can possibly integrate all of this. It’s too complicated, too disaggregated, and so they push it to one side during most of the year, and suffer through it when they must. Continue down this path, and the HR profession will become increasingly irrelevant to the real-world challenges of a real-world team leader. We will have created and then moved into our own parallel world, one where our processes, forms, and tools are seen as “make work.” Instead, to become increasingly relevant, we must design tools and systems that focus explicitly on the team leader— not the organization, not the team member. Both of these constituencies are important, of course, but both are in the hands of the team leader. We must serve team leaders by providing them with tools agile and flexible enough to answer their most pressing questions—and if we do, then we will wind up serving both the organization and the team member. We must follow the mantra, “Serve one, serve many. Serve many, serve none.” Yes, it will be a challenge to design simple tools to support team leaders—the simplicity we seek will be found on the far side of the complexity we currently live in—but it will be impossible if we don’t keep in mind who the tools are meant to support. Challenging though it may be, the wonderful thing about designing tools for team leaders is that, if designed well, they will be constantly in use, and as a result will generate real-time and reliable data from within the team. This is the brass ring for any organization—to be able to see, right now, which teams are most productive and engaged, and which aren’t. At present, this knowledge lies beyond our grasp. Our once-a-year ratings, surveys, and assessments, deployed by and for the organization, provide no insight into what is going on inside each team. Ask the senior executives in your organization, “Today, which are our most productive and engaged teams?” and they are forced to guess. They have no data, no real-time and reliable measures of team-level performance, learning, and engagement. Our organizations are functionally blind to the unit that adds all the value to the organization: the team. We in HR can cure this blindness. If we simply design our tools expressly for team leaders then finally we will be able to help our organizations to see.

From Big Data, to Real-Time, Reliable Data

A discipline is defined by the quality of its data. These days, of course, there is much talk of big data, of the need to capture tidal waves of data and then sluice these waves through complex algorithms to produce accurate predictions of the future. It’s all very exciting, and those disciplines—such as marketing and manufacturing—that have proven their ability to make accurate data-based predictions of the future are now the disciplines the organization relies on. Naturally, we in HR aspire to such a position—we are, after all, dealing with the organization’s most expensive, complex, and fertile asset. And yet, we are not currently in such a position. Why?

Because no matter how sophisticated our algorithms or how powerful our data analytic engines, if we put garbage in we will get garbage out. And sadly, at present it appears that most of the data we collect and input is of the garbage variety. Here I am not referring to compensation and benefits data, or lost work days, or accidents on the job. Nor even to sales and productivity data. These are all reliable numbers blessed with very high levels of inter-rater reliability—meaning that the data remain the same no matter who is doing the counting. However, these data are all historical representations of the past. They are trailing indicators of where the organization has been, and thus, while reliable, possess little predictive power. What the organization really wants to know, of course, is where it is headed. It wants reliable leading indicators of the near-term future. It wants data on learning, performance and potential, engagement, and performance strengths because each of these provides line-of-sight to where the organization’s results are going to be. And yes, we in HR do collect data on these variables. We measure strengths through assessments and 360 degree tools, engagement through surveys, learning through attendance and completion, and performance and potential through ratings. Unfortunately, virtually all of these data are bad. We could examine any one of these data sources, but let’s take the most egregious example of faulty data: performance and potential ratings. These data are significant since most of our downstream actions on people—how much we pay them, do we promote them, where should we deploy them—are guided by these data.

The Fault in Our Stats

How good a rater do you think you are? If you were my manager and you watched my performance for an entire year, how accurate do you think your ratings of me would be on attributes such as my “promotability” or “potential”? How about more specific attributes such as my customer focus or my learning agility? Do you think that you’re one of those people who, with enough time spent observing me, could reliably rate these aspects of my performance on a 1 to 5 scale? And how about the people around you—your peers, direct reports, or your boss? Do you think that with enough training they could become reliable raters of you? These are critically important questions, because in the grand majority of organizations we operate as though the answer to all of them is “yes”—that with enough training and time, people can become reliable raters of other people. And on this answer we have constructed our entire edifice of HR systems and processes. When we ask your boss to rate you on “potential” and to put this rating into a nine-box performance-potential grid, we do it because we assume that your boss’s rating is a valid measure of your “potential”— something we can then compare to his (and other managers’) ratings of your peers’ “potential” and decide which of you should be promoted. Likewise, when, as part of your performance appraisal, we ask your boss to rate you on the organization’s required competencies, we do it because of our belief that these ratings reliably reveal how well you are actually doing on these competencies—the competency gaps

your boss identifies then become the basis for your Individual Development Plan for the next year. The same applies to the widespread use of 360 degree surveys. We use these surveys because we believe that other people’s ratings of you will reveal something real about you, something that can be reliably identified, and then improved. We are mistaken. The research reveals that neither you, nor any of your peers, are reliable raters of anyone. The effect that ruins our ability to rate others has a name: the Idiosyncratic Rater Effect, which tells us that my rating of you on a quality such as potential is driven not by who you are, but instead by my own idiosyncrasies—how I define potential, how much of it I think I have, how tough a rater I usually am. This effect is resilient—no amount of training seems able to lessen it. And it is large—an average of the three largest studies reveals that 61 percent of my rating of you is a reflection of me. When I rate you, on anything, my rating reveals to the world far more about me than it does about you. In the world of psychometrics this effect has been well documented—the first large study was undertaken in 1998 and written up in the refereed journal Personnel Psychology; there was a second study published in the Journal of Applied Psychology in 2000; and a third confirmatory analysis pub-

Our data mantra should be that we in HR will collect data as simply as we can, as frequently as we can, as close to the action as we can, and as reliably as we can. lished in 2010, again in Personnel Psychology. Examine the research of the last 15 years and you will find many such studies, the most recent of which was published in the Journal of Behavioral and Applied Management in 2013. In each of the separate studies, the approach was similar. First ask peers, direct reports, and bosses to rate managers on a number of different performance competencies. Then, examine the ratings to measure what explained why the managers received the ratings they did. In each study they found that more than half of the variation in a manager’s ratings could be explained by the unique rating patterns of the individual doing the rating—in one study it was 71 percent, another 58 percent, a third 55 percent. No other factor—not the manager’s overall performance, not the source of the rating—explained more than 20 percent of the variance. Bottom line: When we look at a rating we think it reveals something about the ratee, but it doesn’t, not really. Instead it reveals a lot about the rater. And when the researchers attempted to remove this Idiosyncratic Rater Effect by developing ever more complex rating scales and more detailed descriptions of the competencies being measured, the effect actually increased. Today, we know that the more complex the performance or leadership VOLUME 38 | ISSUE 4 | FALL 2015

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model, and the more complex the rating scale, the bigger the Idiosyncratic Rater Effect will be. The existence of this effect will likely surprise none of your colleagues. After all, they are the ones sitting in yearend calibration meetings discussing a person, looking at her overall performance rating, and her ratings on various competencies, and thinking to themselves, “Really? Is this person really a ‘5’ on strategic thinking? Says who, and what did they mean by strategic thinking anyway?” They look at the behavioral definitions of strategic thinking and see that a 5 means that the person displayed strategic thinking “constantly” whereas a 4 is only “frequently” but still, they ask themselves, “How much weight should I really put on one manager’s ability to parse the difference between ‘constantly’ and ‘frequently’? Maybe this 5 isn’t really a 5. Maybe this rating isn’t real.” And so they begin to suspect that maybe HR’s people data can’t be trusted. This combination of the growing suspicion of our colleagues and the overwhelming body of research evidence puts pressure on all of us in HR to respond. It is another sign of our profession at a crossroads. Either we can continue to produce data that the organization rightly distrusts, or we can become more data fluent and face up to the implications for our people systems and practices. Look closely, and we will realize that we will need to rethink virtually all of them. For example, all ratings systems will have to be rebuilt—rebuilt rather than removed because the organization will always need data to be able to decide what to do differentially with people—how much to pay them, whether to promote them, and how to make many other decisions. As a result, we cannot remove ratings simply because we don’t like them. It is interesting to note that a number of organizations have recently gotten rid of ratings because they were unpopular, and now they are having to sneak them back in because, in the end, the organization does need a data-based way to decide what to do with people. Ultimately, we must find a reliable way to generate a natural, unforced range in data, person by person. We will need to dismantle our leadership and competency models. These models may have value as a way to get people thinking about what they should aspire to, but, because they are impossible to measure reliably, they should never be part of a performance management system. When HR supports efforts to have people rated against these models, we simply reveal our continuing data disfluency. And of course, we will have to reexamine all our 360 degree survey tools, and their most recent incarnation: the crowd-sourced rating. Some of our colleagues are enamored with these tools because if you ask for feedback from lots of people, you get a reliable point of view on who the person is. We in HR need to be able to refute this logical non-sequitur. We need to be able to explain to our colleagues that if one rater’s rating is unreliable, then combining this rating with 10 other raters’ ratings does not magically transform it into reliable data. Add lots of bad data together and you do not get good data, any more than adding more noise to noise creates a signal. This disciplined reexamination of our people data will challenge all of us in HR, but it is time to do so. For us to be 70

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relevant, we have to be able to supply the organization with reliable data. Our data mantra should be that we in HR will collect data as simply as we can, as frequently as we can, as close to the action as we can, and as reliably as we can. And of course, the good news is that with the accelerating proliferation of mobile phones to team leaders and team members alike, we have the technological capability to do this. Apple CEO Tim Cook recently said that in business, “the most important data points are people.” If he’s right—and in HR we’d like to think he is—then the evidence suggests that, at present, all the most important data points that HR provides are wrong. When it comes to our people within our organizations, we are all functionally blind. We cannot see into the real world of our teams, and what data we do generate is deeply flawed. And this is the most dangerous sort of blindness. Because we are unaware of it, we think we can see. If we are to advance our profession, then our challenge in HR is to stop, take stock of our role, our tools, and our data and admit to ourselves that the systems we currently use to reveal our people only obscure them; that these systems and these data have created a parallel, shadow world, tangential to the questions and needs of real-world team leaders and their teams. Facing up to this challenge will take courage, clear thinking, and a deep conviction that we can and must find a better way to serve. This is the crossroads we find ourselves at—and I, for one, cannot think of a more exciting time to be a human resources professional. Marcus Buckingham is founder and president of the Marcus Buckingham Company, a firm that specializes in reverse engineering engagement and performance. He is a best-selling author, researcher, motivational speaker, and business consultant known for his “strengths” assessments. Marcus has worked with the world’s most prestigious companies, including Facebook, Toyota, Coca-Cola, Wells Fargo, Microsoft, and Disney. He has appeared on “The Oprah Winfrey Show,” “Larry King Live,” “The Today Show,” “Good Morning America,” and “The View,” and has been profiled in The New York Times, The Wall Street Journal, USA Today, Fortune, Fast Company, and Harvard Business Review. He can be reached at [email protected].

References Mount, M.K., Judge, T.A., Scullen, S. E., Sytsma, M.R., & Hezlett, S.A. (1998). Trait, rater and level effects in 360-degree performance ratings. Personnel Psychology, 51. Scullen, S. E., Mount, M. K., Goff, M. (2000). Understanding the latent structure of job performance ratings. Journal of Applied Psychology, 6, 956-970. Hoffman, B., Lance, C., Bynum, B., & Gentry, W. (2010). Rater source effects are alive and well after all. Personnel Psychology (63), 119–151. Scullen, S., Mount, M. & Goff, M. (2000). Understanding the latent structure of job performance ratings. Journal of Applied Psycholog y (85.1), 956–970. Stepanovich, P. (2013) Pernicious performance appraisals. Journal of Behavioral and Applied Management (14.2), 107–139.

Advancing the HR Profession: Consistent Standards in Reporting Sustainable Human Capital Outcomes By Laurie Bassi, David Creelman, and Andrew Lambert

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s professions mature, they tend to define consistent standards and metrics, and human resources (HR) is still in the process of doing that. Consider operations and ISO standards, or finance and GAAP standards, or marketing and the “4P’s.” All have advanced by internal agreement, customer expectations, or external legislation on standards and metrics that are consistent. HR is still developing consistent standards and metrics for the reporting of important human capital outcomes in organizations—and we are making progress. A well-established voluntary, global movement is underway to improve annual reports so that they go beyond narrow financial reporting and provide stakeholders— not just stockholders—with important insights and information about an organization’s value-creation processes. The purpose of this movement is to promote deeper, more integrated thinking among leadership and the board. It is a means for helping people see beyond short-term financials. Since a core element of this movement is the integration of human capital and financial information into a single report, it has important implications for all HR

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professionals—even if you work in an organization that does not produce an annual report or if HR is far removed from the process, and even if your organization decides that the consistent metrics are better used to inform senior leadership and the board rather than being made publicly available. Here we summarize the key findings that emerged from an extensive analysis we recently conducted of the early adopters of this perspective. These findings come from all sectors of the economy, including not-for-profits, government entities, privately-held companies, and publicly-traded companies. For the purposes of this article, we will call this new consistent set of human capital outcomes the “smarter annual report.” It will serve as a primer for HR leaders to use to communicate with their executive team and board. Whether or not organizations choose to make any of this new, integrated method of reporting available to additional shareholders—either internal or external (for example, through the publicly available annual report)—remains, of course, a choice, not a mandate.

Who Is Behind This Movement?

The big players in driving a push to smarter annual reports are the Sustainability Accounting Standards Board (SASB) in the United States and, globally, the International Integrated Reporting Council (IIRC). An important well-established player in sustainability reporting is the Global Reporting Initiative (GRI). Its focus is more on corporate responsibility than value creation; nonetheless it plays an important role in defining the metrics that will go into the smarter annual report. A variety of other bodies are actively supporting improved corporate reporting. For example, The B-Team is a group of global business leaders including Sir Richard Branson and Ariana Huffington who are pushing for greater corporate responsibility with “true accounting” being a clear part of their mission. And the Vitality Institute is explicitly working on a set of recommendations on the human capital metrics that progressive, forward-looking organizations should consider incorporating into their internal assessments and annual reports.

Will Anything Come of This?

Michael Bloomberg, former New York City mayor and multi-billionaire and international philanthropist, and Mary Shapiro, a former chair of the U.S. Securities and Exchange Commission, are serving as the chair and the vice chair of the SASB. Do they have the power to drive change in the world? IIRC and B-Team have the Prince of Wales and Richard Branson as flag wavers. Do they have the power to bring international attention to this issue? The bottom line: Yes, change is coming. And it has important implications for the future of the HR profession. Hence, HR professionals will be well-served by seeking to understand, harness, and leverage the best insights from this movement.

Best- and Worst-Case Scenarios

Smarter human capital reporting can give the CEO a platform to communicate a more complete and comprehensible picture of how the firm is creating value, and provide a better ba72

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Customers who care about quality care about HR It is common for manufacturers with a wellestablished quality program to ask their suppliers about their own quality programs. Quality standard may specifically cover HR topics; for example the ISO ISO/TS 16949 standard includes “Maintain appropriate records of education, training, skills and experience” and “The organization shall have a process to motivate employees to achieve quality objectives, to make continual improvements and to create an environment to promote innovation.” The takeaway is that it is not just boards and investors who want to see evidence that the firm has good HR processes and outcomes; customers may care as well.

sis to manage relations with stakeholders. This, in turn, could help lay the foundation for more patient investors who accept short-term drops in earnings when it is clear that the longterm trajectory is sound. This type of investor is sometimes called “patient capital.” If stakeholders—especially stockholders—have credible, forward-looking information about the sources of value creation, the sole focus on this quarter’s earnings could begin to diminish. That, in turn, would be a very positive development for strategic HR professionals and functions that truly are drivers of long-term value creation. In short, a drive to provide better evidence of value creation can spur improved practices and investment in human capital, and also in HR information and analytics. If badly done, however, it could become just another expensive compliance exercise, throwing more metrics into a report without providing better insight into value creation. Organizations that have inadequate HR data management or poor results on human capital measures are likely to resist publicly revealing these metrics.

What Are Companies Reporting Now?

In our extensive analysis of the “smarter reporting” movement, we carefully studied 62 integrated reports from a broad range of industries around the globe. We found that nearly 80 percent of these integrated reports have a separate “people section”. This section goes by a variety of names, such as “our people,” “investing in employees,” “winning with people.” or, more prosaically, “human capital report” or “labor practices.” The length and depth varies greatly. At one extreme, Enel provided 13 pages of employee data, but many others had just a few pages, often light on data. What is actually covered also varies considerably. Different companies cover different topics and use different formats for the same topics. We see everything from absenteeism to leadership to training and talent development. These reports, while by no means perfect, can provide tangible examples that might be useful in conveying

your organization’s human capital and value creation story to stakeholders. The large variations in what is reported show that as a profession we are still early in grappling with the issue of consistency of definition and measurement. We discovered that information in these reports may include: • A discussion of HR and people strategy and goals; essentially stating what HR’s goals were for the last period, how they performed against those goals and what the goals are for the upcoming period. • Familiar HR metrics such as absenteeism, demographics and diversity, health and safety, talent retention, investment in training and hours of training, and results from employee or engagement surveys. There is usually text to explain the numbers, but often the data speaks for itself such as engagement trending upwards or injury metrics that are worse than industry benchmarks. • Contextual information that helps investors better understand how the company operates, for example information on leaders and leadership development, organization structure (usually to explain the rationale behind a reorganization), governance processes and information on composition of the board, statements about culture and values, and information on labor relations and upcoming negotiations. • Finally, we may find financial information such as total employee costs or ratios such as revenue per employee. We are seeing an era of experimentation, which is helpful because it provides many examples of what your organization might do and what your organization might want to avoid doing.

HR’s Challenge

Higher standards of human capital reporting—whether for internal or external stakeholders—offers great opportunities for HR to demonstrate its contribution, through playing a core role in shaping the organization’s value creation narrative. There are also threats to HR if it is underprepared—if it is a bit player in the corporate reporting process, with little knowledge of the various emerging standards, and if its HR information systems and analytics are patchy and unintegrated, with limited ability to demonstrate cause and effect between human capital investment and business results. Based on our review of these annual reports, we’ve identified key areas for your organization to focus on as it addresses the issue of the consistency of human capital outcome measures.

Ensure Full HR Involvement HR leaders should be sure they are part of the team working with the CEO, not standing on the sidelines.

What to Include and What to Exclude The starting point is to articulate clearly and succinctly the description of the role that people and HR play in creating value.

Finding Data You probably will not be able to achieve your ideal reporting status in the short-term, but that shouldn’t become an excuse for inaction. It is important to develop aspirational goals in this regard, but also to operate in the reality of the here and now.

How to Tell a Smarter Story Simple yet compelling visualizations, along with a well-constructed narrative, is important. In addition, a parsimonious, well-chosen set of metrics that is consistent with and supportive of the narrative needs to be provided.

What to Do with Bad News It is bound to happen. Although smarter reporting will have the benefit of helping your organization focus on the most important human drivers of organizational performance, not every key metric will improve from one report to the next. You need to anticipate that and decide in advance how to handle setbacks along the way.

How to Generate Smarter Data Almost certainly working through the issues noted here will point to needed enhancements of both your analytics strategy and your HR information system. The good news is that obtaining the required funding is more likely when the need is identified as a part of the holistic process described above.

What to Do Next You need to build awareness in the organization that the movement to smarter reports is underway, and make sure key stakeholders recognize the opportunities along with the risks—including that of failing to respond proactively.

A Framework for Smarter Human Capital Reporting

Achieving smarter human capital reporting requires thinking differently. We have found that a good way to do this is to think like an external investor, rather than from the perspective of (internal) HR. Doing so tends to separate the wheat from the chaff—the essential essence of “people issues”— from all of the processes, procedures, details, cultural, political, and budgetary issues the HR function is immersed in on a day-to-day basis. As you consider this framework, keep in mind that every organization—government, not-for-profit, privately held, and publicly traded—has investors (including your organization’s employees who invest a large percentage of their waking hours at work). At the most fundamental level, here’s what investors— both internal and external, current and prospective—want to know: • Does the organization have the capability to achieve its goals? • Will the organization be able to innovate so that it not only stays relevant, but also grows? • What are the risks that the organization faces that threaten its future capability and ability to innovate? VOLUME 38 | ISSUE 2 | SPRING 2015

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And so, at the most fundamental level, this is how HR creates value. It builds capability, it helps create a culture that fosters innovation, and it helps mitigate “people risks.” Every HR activity—recruiting, onboarding, training, leadership development, performance management, compensation and benefits, rewards and recognition—is in service to one or more of these goals. This perspective provides the building blocks for the narrative for telling a smarter story. The metrics that correspond to this narrative will, of course, be more specific when applied to your organization. Universally, however, the metrics fall into one of six categories noted in the graphic below. Examples of the types of metrics that you might use to provide corroboration of your value creation and risk reduction narrative include some of the following: • Health and safety. Injury rates, participation rates in employee wellness programs, trends in employees’ health risk measures • Skills. Scores on questions about employee capabilities from customer or employee surveys, investment levels for training and development • Leadership. An index of leadership quality based on employee survey questions about leadership behaviors • Alignment. An index of questions that measure employees’ alignment with the organization’s goals and values (based on the organization’s employee survey) • Engagement. An engagement index (based on the organization’s employee survey) • Talent pipeline. Percent of key positions for which a qualified internal candidate has been identified, percent of turnover in key positions that were filled by internal candidates during the previous year To share one example, consider the “Diverse Senior Management Teams” graphic from Novo Nordisk on a factor that is important to them: diversity. Note that they do not just show a table or pie chart; they show the trend over time, and they

show their target so stakeholders know what level of diversity Novo Nordisk is aiming for. In other words, they provide the context so that the data has meaning. The graph shows that in 2014, 32 of their senior management teams were diverse in terms of gender and 24 in terms of nationality. Their target is to have all 33 teams diverse in both gender and nationality. The framework noted above is largely consistent with specific metrics that were proposed in 2012 by a SHRM working group charged with developing an ANSI standard for voluntary public disclosure of human capital metrics to investors. (See sidebar, “Proposed ANSI Guidelines for Reporting on Human Capital,” at right for a summary of

Diverse Senior Management Teams

A Framework for Smarter Human Capital Reporting

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Proposed ANSI Guidelines for Reporting on Human Capital 1. Spending on human capital a. Total amount spent on employees (salaries, benefits, taxes) b. Total amount spent in support of employees

b. Broken down by subset of EEO-1 job types

b. Information on the response rate and methodology/tool

c. Industry standard formula of (# of terminations during the period) / (average active headcount during the period)

5. Employee engagement a. Index of relevant questions from employee survey

3. Leadership depth

b. Information on the response rate and methodology/tool

d. Total amount invested in training and development

a. Percentage of defined positions that have an identified successor

6. Human Capital Discussion & Analysis (HD&A)

e. Total headcount and total FTE (full time equivalents) at the end of the period

b. Percentage of open defined positions filled internally during the period

a. Narrative to provide context and discussion of the reported metrics

2. Ability to retain talent

4. Leadership quality

a. Voluntary and total turnover

a. Index of relevant questions from employee survey

c. Total amount spent in lieu of employees

the metrics proposed by the taskforce.) While the proposal was never brought to ANSI for final approval, the proposed metrics remain highly relevant. Subsequent to the work of the SHRM taskforce, SASB has been addressing many of the same issues. Its Materiality Map goes so far as to define specific measures for specific industries. For example it has concluded that the semiconductor industry should report the “percentage of employees that are (1) foreign nationals and (2) located offshore. Disclosure shall include a description of potential risks of recruiting foreign nationals and/or offshore employees, and management approach to addressing these risks.” It is evident this “investors’ framework” is equally useful with both your board of directors and executive team—even if your organization decides not to disclose any of this information externally. The board needs to know everything that investors need to know, plus some. Similarly, the executive team needs to know everything that the board needs to know, plus more. So once you’ve done the hard work of creating a smarter reporting framework that would be of interest to investors, you’ve gone a long way toward creating a framework for smarter, more compelling reporting for your executive team and board.

Higher Standards

The bar is being raised, and our HR profession has the opportunity to define more consistent human capital metrics. A convergence of forces—economic, social and political—are pushing organizations to meet a set of higher standards. Social media is fueling increased transparency that, in turn, is enabling consumers to reward virtuous corporate behavior and punish bad behavior. Sustainability has evolved from a marginal issue to a business imperative. Investors, in turn, want more than backward-looking financial results. All of this is leading to smarter forward-looking value creation reporting, both internally and externally.

b. Disclosure of any material risks or any other material information related to human capital

HR professionals are uniquely positioned to ensure their organizations benefit from these forces, rather than be blindsided by them. In so doing they will advance both the profession and themselves.

Laurie Bassi, Ph.D., is CEO of McBassi & Company, a leading analytics firm. She can be reached at [email protected]. David Creelman is CEO of Creelman Research. He does research and consulting on emerging areas of HR. He can be reached at [email protected]. Andrew Lambert has been a management consultant for 35 years and headed corporate functions in two U.K. banks. He can be reached at [email protected].

References A copy of the full report, “The Smarter Annual Report: How Companies Are Integrating Financial and Human Capital Reporting”, is available at http://www.mcbassi.com/wp/resources/pdfs/The_Smarter_Annual_Report.pdf. See http://www.sasb.org. See http://www.theiirc.org. See http://bteam.org. See http://thevitalityinstitute.org/commission. See http://www.mcbassi.com/wp/resources/pdfs/The_Smarter_Annual_Report.pdf. Enel Sustainability Report 2013. Two of the authors (Bassi and Creelman) co-chaired the SHRM working group. http://www.sasb.org/materiality/sasb-materiality-map/ http://hrstandardsworkspace.shrm.org/apps/group_public/download.php. 6684/ANSISHRM%2002001%20201X%20Investor%20Metrics%20 %28100512%29%202ndPR%20Version.pdf. VOLUME 38 | ISSUE 2 | SPRING 2015

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Book Reviews Author: Laszlo Bock Publisher: Twelve | 2015 | 416 pages Reviewer: Edie L. Goldberg, Ph.D.

Work Rules!: Insights from Google That Will Transform How You Live and Lead Work Rules!: Insights from Google That Will Transform How You Live and Lead is a must-read for all HR practitioners. In fact, it is a must-read for all organizational leaders. The book is insightful, easy to read, evidence-based, practical, and includes succinct key takeaways at the end of each chapter. More than just a book about Google, Work Rules! is about unleashing talent in a modern workplace. The concepts described by Laszlo Bock, the visionary head of Google’s innovative people operations, both help elevate the profession and are well-positioned to meet the talent challenges organizations will face based on the changing nature of work. One of the main premises of Work Rules! is that talented employees want to work in a high-freedom environment. He shares the fundamental building blocks of Google’s culture conducive to such freedom: a mission that matters, transparency, and voice. As Bock points out, Google’s mission (“to organize the world’s information and make it universally accessible and useful”) is unique in that it is a moral mission rather than a business goal. Google fosters a culture of transparency that would frighten most other companies. It openly shares all information. And it provides employees the freedom to question everything and provides them with a voice through various channels. Millennial, knowledge-workers are demanding such levels of transparency and freedom to act so that they can bring the best of themselves to work to achieve more. Bock clearly practices what he preaches in “hire only people who are better than you.” He has surrounded himself with brilliant, passionate people. It is in this practice that he illustrates how Google’s HR practices are far superior to most organizations. They practice something unusual: patience. They are willing to wait for the right talent. Bock clearly states that they front-load their investment into attracting, cultivating, and assessing new hires. They have conducted internal research and identified the optimal approach to consistently hire the best talent, and they rigorously follow this approach. 76

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In the areas of attracting and cultivating talent, Bock demonstrates foresight for the future. Recruiting has shifted from screening resumes to cultivating networks of talent. They court highly desired talent over long periods of time and this relationship-building effort will serve them well as top talent gets more difficult to find. HR has been struggling with how to build a better talent pipeline to meet current and future needs. Bock’s description of how he hires within HR is particularly unusual, yet quite insightful. He hires one-third of his talent with strong core HR expertise, one-third with great strategic thinking skills, and one-third that are deeply analytical. Having a blend of skills

Google’s mission is unique in that it is a moral mission rather than a business goal. helps HR become more effective at leading organizational changes required to win in the marketplace. Bock describes how he was less than thrilled to be hired as the VP of “people operations.” However, the title set the stage for Bock to become a business leader who runs the people operating system. Much can be learned from how Google operates and how it uses data to drive decisions.

Global Trends in HR Management: A Twenty-Year Analysis Authors: Edward E. Lawler III and John W. Boudreau Publisher: Stanford Business Books | 2015 | 216 pages Reviewer: Allan H. Church, Ph.D.

Every few years, an article pops up in the press or a wellrespected journal that calls into question the value of HR as a function. And while meant to be provocative, these analyses are often based on limited data. The next time one of these emerges and ruffles the feathers of your leadership team, turn to a copy of Global Trends in HR Management: A Twenty-Year Analysis. The book is essentially a comprehensive research report based on authors Edward Lawler and John Boudreau’s seventh applied study conducted in 2013 regarding the characteristics, capabilities, and effectiveness of the HR function in large corporations. Based on responses from 143 HR execu-

The higher the level of talent decision sophistication in an organization, the greater the role of HR in shaping that company’s business strategy overall. tives from multiple countries and industries, the survey covers a number of critical topics—including the link between HR and the business strategy, outsourcing and technology, use of metrics and analytics, program effectiveness and impact, skills and capabilities needed for the future, the role of HR with boards, and more. The research agenda dates back to 1995 and represents a completely independent point of view on the state of the field, enabling the authors to make some insightful comparisons regarding both the current state and the evolution of HR. There is no hidden consulting agenda, making the findings all the more relevant, meaningful, and valid. The analysis contains a wealth of insights, trends, and benchmark data. One in particular regarding staff ratios of the HR function stood out. Lawler and Boudreau report the ratio in 2013 to be 100 to 0.91, which appears to be slightly lower than reported between 2001 and 2007, yet a little higher than in 2010. Also of interest is the finding that 76 percent of the CHROs in their subsample of U.S. companies came up through the HR function. This means, of course, that 24 percent ascend from other disciplines. While apparently similar to findings from 2001 to 2010, this has important implications for how we think about senior HR succession planning and the role the position plays in setting the people agenda. After a helpful overview of trends in the field that sets up the themes to follow, the rest of the book is organized in a very straightforward manner according to the topics in the survey. Each chapter is relatively short, focused, and follows the same general pattern. It opens with bullets outlining the key findings, provides detailed results for U.S. organizations and global comparisons, reports trends over time, and then links the responses to five types of management approaches ( bureaucratic, low-cost operator, high involvement, global competitor, and sustainable) for additional insights. Each chapter closes with conclusions and implications helpful in summarizing the findings and what they mean in a larger context. Among the many interesting points made throughout the book, one section that stood out was on the impact of HR as a decision-science. In particular, results indicate that the higher the level of talent decision sophistication in an organization, the greater the role of HR in shaping that company’s business strategy overall. In addition, decision-science practices were more likely to occur in organizations with high-involvement and sustainable management approaches, and less so in comparison in bureaucratic and low-cost ones. This finding complements existing research we know regarding the importance of driving employee engagement and having strong data-driven organization development and talent management functions and processes. This is great content for HR professionals to use in building and supporting robust people agendas in their own companies

The final two chapters in the book are arguably the best. The first synthesizes the key findings regarding what has changed (and has not) in HR and over the last 20 years, and the second speaks to the future of the function. This is also where the authors provide their perspective on the field, which is as engaging as the data itself. Global Trends in Human Resource Management offers a compelling set of data and insights for the HR professional. Although it is not a traditional management book, and more of a comprehensive research report, it has been put together in a way that is highly accessible, easy to use, and most of all incredibly relevant.

Rise of Robots: Technology and the Threat of a Jobless Future Authors: Martin Ford Publisher: Basic Books | 2015 | 352 pages Reviewer: Anna A. Tavis, Ph.D.

How does a review of the Rise of the Robots by an artificial intelligence entrepreneur Martin Ford find itself inside the covers of an issue of the People + Strategy journal themed ““Advancing the HR Profession”? What makes it a perfect bookend to the strategic conversation about “The Future of HR?” Our choice of the topic and particularly Martin Ford’s thoroughly researched second book, subtitled Technology and the Threat of a Jobless Future, is intended to provoke a reflection and a conversation that has not been much of a focus in HR up until now. Ford’s book leaves us with a challenging dilemma to solve for. What if the “human” in human resources were replaced—with machine? What changes then? What would it mean to the function? The time has come for HR to pay attention and launch a broad-based dialogue across the profession about not so far away future where people and machines will be working seamlessly together. “Seamless” collaboration between people and technology is what we aim to achieve. The coming of the “jobless future” is what we need to avoid. Unlike previous economic disruptors that affected one sector of the economy more than others such as the shift from the agricultural to the industrial age; information technology revolution is not sparing any jobs. None. The phenomenon is pandemic; it affects all job functions— from blue collar factory jobs to white collar legal and medical professionals. Technology is coming to replace and surpass the skills that took humans so many years to develop. Ford argues that the workplace machines are about to VOLUME 38 | ISSUE 4 | FALL 2015

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What if the “human” in human resources were replaced—with machine? overhaul the 21st century economy. As robots become more sophisticated and further “personalized,” we are beginning to witness the next generation of artificial intelligence coming into the work scene. It’s becoming increasingly evident that data and algorithms, computers and wearables, robots and drones are not only able to execute most of the routine, patterned types of jobs, but that also go beyond the predictable and move up the food chain toward more sophisticated “white collar” domains. As an example, Ford cites a manufacturing “BOT” from Universal Robots that can paint, screw, glue, and solder and can build new parts for itself when those break or wear out. It does it just in time, only when needed, and moves on with its task without missing a beat. A robot built by Momentum Machines can make a quarter pounder in 10 seconds and has the capacity to replace an entire McDonald’s crew solving the company’s problems with turnover, recruitment, and training of employees. Japan a few weeks ago saw the opening of the first hotel fully staffed by the robots. Google in turn is prioritizing its worker robots winning a recent patent to create worker robots with personalities. Robots experience no downtime, no turnover, and are completely loyal to their employers, generating high and consistent productivity, with 100 percent retention rates. In short, they outperform their human counterparts every time. General research in the areas of artificial intelligence supports Ford’s ominous outlook. Oxford University has conducted research that has shown that an estimated 47 percent of U.S. jobs could be automated within the next two decades. And if even half of that proposed number is closer to the truth, we are in for a rude wake-up call. 78

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Have we thought through the full spectrum of consequences to the employees and our organizations? What would leadership and management look like if humans are operating alongside with the machines? Our ability to figure out the relationship between people and machines in the workplace could be that moment of truth. What if all depended on HR’s ability to help govern the new machine enabled workplace, or else it would become irrelevant. Ford predicts a new type of a revolution looming on the horizon. A 21st century technological disruptive shift followed by a fundamentally new economic era. People in the 21st century will live more purposeful and fully entrepreneurial lives supported by the products and services generated by increasingly more sophisticated machines. Ford and a few others believe that technology might be the ultimate and only recourse for solving the knowledge and wealth-inequality gap. Critics of the robotic workplace do not want to accept Ford’s picture of the jobless future. It does sound somewhat apocalyptic and Luddite. Whether we buy into his vision or accepts parts of what he shows, there is no question the march of technology is unstoppable. In an environment where human labor becomes uneconomical vis-à-vis a machine (as HR administration jobs have already started to become), we need to explore a radically different approach to the role of people in organizations. We need to help business figure out how to pivot the workplace to be functioning in an economy that none of us have ever seen before Ford’s book is an irresistible well-researched read that tells a powerful story. Unintentionally, it challenges HR to find our own position on the issue—and soon.

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