WHY HR & LINE MANAGERS LOOK

IN DIFFERENT DIRECTIONS AT HR PRACTICES | 2016 REPORT

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HRM is a single source for a wide range of talent acquisition support including professional recruitment, executive search, contracting and advisory services. Today we are a trusted advisor to leading professional service firms, financial institutions, technology firms, pharmaceutical giants and consumer products and services businesses. We nurture long term relationships and deliver meticulous, innovative solutions to meet our client’s needs. We operate across a three office platform in Dublin, Cork and Galway through selection teams in two practice groups:

Science,Technology and Operations:

ENGINEERING

LIFE SCIENCES

IT

SUPPLY CHAIN

Corporate and Professional Services:

HR

ACCOUNTANCY

MARKETING

LEGAL

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Contents Introduction

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The point in a workforce related matter you would turn to HR

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Background

How important an effective HR function is to your organisation

How effective you feel the HR function in your organisation actually is

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8

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How important you feel HR processes are to your organisation today

10

Is HR the “Partner or Police” within your organisation?

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Rating HR processes as to how well you feel they are being addressed in your organisation today Rating where the balance of responsibility ACTUALLY lies between Line Managers and HR in your organisation Where the balance of responsibility SHOULD be between Line Managers and HR in your organisation

The impact HR has on the ability of your organisation to achieve its goals

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16

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“It’s not HR’s job to be strategic”

HRM - WHY HR & LINE MANAGERS LOOK IN DIFFERENT DIRECTIONS AT HR PRACTICES | 2016 Report

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The Relationship between Line Managers, HR & HR Practices The number of articles found through google searches that seek to challenge the purpose and direction of HR, outnumber those that contest how line management create organisational value by almost five to one. HR bashing has long been a scholarly sport. The first five articles that appear when I add “HBR” to the end of my “HR” search string are “Why we love to hate HR…”, “It’s not HR’s job to be strategic”, “Why Managers and HR don’t get along”, “HR’s perception problem” and “The call for a more strategic HR”. To be fair, most of these are working to provide a supportive cry for HR but their titles set a scene that their content backs up. That fundamentally, HR is seen in too many organisations as being less strategically important than many line functions. It seems in fact, that many Line Managers and Business Leaders simply do not understand the importance and value of strategic HR which, in an extremely competitive market for talent, is worrying. Over the last twenty years, Human Resource Management has devolved from traditional HR departments in many more progressive organisations towards line management. This, in turn, has enabled HR practitioners to create higher value by partnering with their businesses and leaders in optimising organisational performance. In firms where this development has occurred, HR is not only completely aligned to business strategy but has become an essential competency for all leaders. When divergence between HR and Line Management is bridged in this way, and where deep understanding of each other’s roles is shared to create real collaboration, business performance is considerably stronger. In such organisations, key metrics such as employee engagement and return on human capital investment are considerably higher.

The challenge facing many organisations is that they have either not started on this transition to holding line managers accountable for the delivery of key HR processes or, they have gotten stuck half way on the journey. Some firms, more typically indigenous organisations, find themselves with neither a properly resourced HR function to deliver talent strategy nor line managers who fully understand how to drive employee engagement/ effectiveness. We know from our previous research, that indigenous firms are twice as likely to cut talent investment versus international firms and that they invest in talent at half the rate. As employees become a genuine source of differentiation, firms that do not have access to or awareness of global developments in HR practice and organisation design are unlikely to remain competitive for long. This research backed 2016 HR Report looks at the relationship between Line Managers, HR and HR Practices. In particular, we investigate the areas of talent management that are most likely to break down where HR is neither fully devolved nor strategically enabled. 4,320 line managers across 18 functions, including HR leaders of larger HR functions, responded to a research survey in October and November 2015. The survey was designed to evaluate line management perception of the importance of HR generally and their perception of the effectiveness of HR in their own organisations.

Michael O’Leary is Chief Executive of HRM

HRM - WHY HR & LINE MANAGERS LOOK IN DIFFERENT DIRECTIONS AT HR PRACTICES | 2016 Report

Background to the research participants:

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CURRENT ROLE LEVEL (GENDER: MALE: 66.1% FEMALE: 33.9%)

11%

12.8%

11%

11%

11%

11%

11%

Company

 Function

 Middle Manager

 Specialist

 Early

Head

 Senior Manager

 Supervisor

Director Current Function

(or recent entrant to management)

career or stages standalone professional (first 3 years)

Accountancy

Administrative/ Clerical

Banking

8.5%

3.8%

4.9%

Customer Service

2.4%

General Management

9.7%

Engineering

6.5%

HR

3.9%

Legal

4.8%

IT

Manufacturing Marketing

Operations Management Quality/ Safety R&D Sales

Science

Supply Chain

HRM - WHY HR & LINE MANAGERS LOOK IN DIFFERENT DIRECTIONS AT HR PRACTICES | 2016 Report

7.4% 3.8%

4.8%

10.5% 6.1%

3.1%

6.4%

3.2%

10.2%

In one of the five HBR articles mentioned in the introduction to this report, author Ron Ashkenas references Dave Ulrich’s book “Human Resource Champions”, a well thumbed reference source I remember well from the late 1990’s. In his book, Ulrich describes four distinct roles that are performed by HR practitioners. The roles are “administrative expert”, “employee advocate”, “strategic business partner”, and “change agent”. In larger organisations, a HR professional might specialise in just one of these, elsewhere a practitioner might perform as a HR Generalist shifting between roles often in response to short term operational needs. This “shifting” can be challenging for all stakeholders, in particular where a lack of strategic perspective, involvement or oversight means HR can too often become a fixer rather than a designer. As a consequence, HR are often forced by their organisations to implement single loop solutions to problems that ultimately circle around again much to the frustration of both the HR practitioner and their internal customer.

We asked line managers participating in the research at

what point in a workforce related matter would they turn to HR?

26.1%

25.3%

48.6%

To design a solution for a future need

To design a solution for a current need

To fix a current problem

Almost half of the Line Managers that participated in this report see HR as a place to turn only when something is broken. HR practitioners often have to jump between these four roles based on their reading of a current organisational challenge. For example, adopting the position of employee advocate while a Line Manager is seeking partnership support on matters related to underperforming employees. Or during periods of strategic change, when HR often must also focus on the critical administrative consequences of change matters such as payroll, benefits or headcount budget. While these roles are essential for HR to play, all this can feel misleading to the Line Manager and can present the HR practitioner to them as being unsupportive and simply creating obstacles.

HRM - WHY HR & LINE MANAGERS LOOK IN DIFFERENT DIRECTIONS AT HR PRACTICES | 2016 Report

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How important is an effective HR function to your organisation?

7% 4% Completely Unnecessary

Unnecessary

20%

23% Absolutely Essential

Neutral

46% Essential

Line managers who participated in our research indicate a divergence between the importance they place on HR and how effective they actually find the HR function in their organisations. Over two thirds of respondents see an effective HR function as being essential to a firm. Female respondents to the survey were twice as likely as their male counterparts to rate HR as either Completely Unnecessary or Neutral.

HRM - WHY HR & LINE MANAGERS LOOK IN DIFFERENT DIRECTIONS AT HR PRACTICES | 2016 Report

How effective do you feel the HR function in your organisation actually is?

Only one third of respondents perceive their own organisations HR function to actually be effective, while almost 50% regard their HR functions as having little or no impact at all. Again, we note that female respondents were 60% more likely than males to rate HR in their organisations as having no positive impact.

HRM - WHY HR & LINE MANAGERS LOOK IN DIFFERENT DIRECTIONS AT HR PRACTICES | 2016 Report

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10

Insignificant

Rank the following HR processes as to how important you feel they are to your organisation today: 4% 5%

9% 9%

10%

8%

7%

9%

7%

7%

17%

17%

12%

Unimportant 11%

14%

Neutral

Important

37%

42%

33%

36%

36%

35%

36%

31%

31%

35%

Extremely Important

Performance Appraisal & Recognition

Recruitment of New Hires

Training, Coaching, Guidance

Employee Engagement

HRM - WHY HR & LINE MANAGERS LOOK IN DIFFERENT DIRECTIONS AT HR PRACTICES | 2016 Report

Employee Communication

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7%

8%

8%

8%

5% 6%

6% 8%

17% Insignificant

21%

18%

19%

25%

14%

Unimportant

Neutral 32% 41%

39%

44%

40%

26% Important

22%

27%

26%

20% 10%

Extremely Important

Compensation

Well Being

Disciplinary Issues

Enabling Organisation HR Policies

Workflow Design

There are many possible reasons for the HR/ line management discrepancy illustrated on the previous pages and before we look at the issue of where HR process accountability lies, we asked Line Managers to break down what they saw as being the key HR processes in a firm. Recruitment of New Hires, Employee Communication and Disciplinary Issues rank for line management as their top three HR priorities. It is perhaps interesting to note that while in a devolved HR system line managers must bring HR policies to life and be responsible for implementing them, they rank the process of doing so second lowest here in terms of importance.

HRM - WHY HR & LINE MANAGERS LOOK IN DIFFERENT DIRECTIONS AT HR PRACTICES | 2016 Report

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Not in Place

Rate each of the following HR processes as to how well you feel they are being addressed in your organisation today: 5%

11%

17%

19%

14%

15% 24% Partially in Place

21%

26%

23%

25%

15% Neutral

42%

21%

51%

In Place

24%

25%

28%

29%

30%

In Place and

8%

8%

7%

7%

7%

Excellent

Performance Appraisal & Recognition

Recruitment of New Hires

Training, Coaching, Guidance

Employee Engagement

HRM - WHY HR & LINE MANAGERS LOOK IN DIFFERENT DIRECTIONS AT HR PRACTICES | 2016 Report

Employee Communication

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15%

21%

8%

13%

31%

Not in Place

16% 18%

16% 29% 27% 28%

17%

29%

25%

Partially in Place

31% Neutral

42% 35%

32%

27%

17%

7%

5%

Compensation

Well Being

8%

Disciplinary Issues

7%

Enabling Organisation HR Policies

In Place

In Place and 3%

Workflow Design

We asked research participants to rate how they felt each of these HR processes are being addressed in their

organisations today. Overall their perception is that these processes are, at best, being about 40% implemented.

Again it is worth observing, that the four biggest areas of divergence between the ranking of importance of a HR

process by Line Mangers and their perception of how successfully these have been implemented in their

organisations are: i) Training, Coaching, Guidance, ii) Employee Engagement, iii) Employee Communication and iv)

Well Being. Four areas whether by design or by default (and it should be the former), Line managers arguably have

the most influence upon. We also know from prior research that many firms do not apply HR metrics in their

organisations in a sufficient range of areas with any consistency, thus making it very difficult for HR to objectively

measure and report on the actual implementation success of many of these processes.

HRM - WHY HR & LINE MANAGERS LOOK IN DIFFERENT DIRECTIONS AT HR PRACTICES | 2016 Report

Excellent

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Therefore, while Line Managers might complain that HR does not fully support the business, a similar level of concern arises from

HR practitioners that many line managers simply do not step up

to the plate consistently enough in taking responsibility for talent management processes. Key interventions around performance

management, recruitment, pay reviews, training needs analysis and feedback sessions are often missed due to timing issues or simply not being sufficiently prioritised. This does little to reduce the relationship gap between HR and Line Management especially

when the former have to chase the latter to gain compliance and to police internal HR processes. We asked participants, in their

opinion, is HR Partner or Police in their organisation. Less than 30% chose Partner.

Is HR the “Partner or Police” within your organisation?

28.2% 35.4% Partner Both

36.5% Police

HRM - WHY HR & LINE MANAGERS LOOK IN DIFFERENT DIRECTIONS AT HR PRACTICES | 2016 Report

While close collaboration and partnership between HR and Line

Management is ultimately the key to effective talent performance and engagement, line managers must be the primary

implementers of HR practices and policies. The lack of alignment

between both stakeholders is often ascribed by commentators as being due to poor understanding of each other’s roles and

responsibilities. Much of the research on this subject suggests that HR practitioners generally perceive line manager’s

ownership for HR processes as greater than the level of

responsibility line managers actually feel they have. In effect, HR

believe that there is a greater HR role for line managers than line managers actually expect to have. The gaps between these perspectives are often where organisational culture and

performance breaks down. We asked Line Managers participating in the research to share firstly where they believe the balance of responsibility ACTUALLY lies between them and HR for each of these HR processes, today in their organisations. Again we

note in particular in the two datasets on the following pages, that Line Managers simply do not feel they are responsible for the implementation and enablement of HR policies.

HRM - WHY HR & LINE MANAGERS LOOK IN DIFFERENT DIRECTIONS AT HR PRACTICES | 2016 Report

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Totally with HR Slightly with HR Neutral

Rate where you feel the balance of responsibility ACTUALLY lies between Line Managers and HR in your organisation today: 4% 3%

11% 11%

11%

6% 10%

7% 12%

8% 14%

13% 19%

13% 20%

16% 20%

9% 10% 19% 22% 12% 14%

24% 21%

34%

18%

Slightly with Line Managers

22%

20%

21%

25%

25%

28%

29%

30%

29%

26%

26%

31%

21%

30%

Totally with Line Managers

51%

21%

40%

16%

Performance Appraisal & Recognition

Recruitment of New Hires

32% 21%

Training, Coaching, Guidance

29% 17%

25% 16%

Employee Engagement

HRM - WHY HR & LINE MANAGERS LOOK IN DIFFERENT DIRECTIONS AT HR PRACTICES | 2016 Report

Employee Communication

Mark where you feel the balance of responsibility SHOULD lie between Line Managers and HR in your organisation. 20% 17%

12% 16%

14% 16%

31% 40%

9% 9% 9%

22%

11%

23%

Totally with HR Slightly with HR

11%

19%

17

23%

21% 20%

33%

24% 23%

37%

Neutral

18%

Slightly with Line Managers

25% 28%

28%

28%

26%

32%

20%

22% 18%

20%

23%

24%

17%

22%

19%

Totally with Line Managers

12% 18%

14%

12%

12%

Compensation

Well Being

10%

18% 11%

29% 23%

10% 8%

Disciplinary Issues

Enabling Organisation HR Policies

Workflow Design

The above response data highlights a number of challenges to the partnership that needs to exist between Line Management and HR for optimum employee performance. We can see responsibility for Employee Engagement and Employee Communication being pushed back towards HR when, in fact, an employee’s manager is the primary determinant of an employee’s experience. Line managers who responded to the survey also feel they have too much responsibility for Performance Appraisal and Recognition and Disciplinary matters. As executive recruiters we experience the stand out difference between working with a HR practitioner who is commercial and who understands their business model, products, services and processes versus those that show little awareness. HR wins its credibility and licence to influence by getting into the business, knowing the challenges and by speaking the right language to the line manager they are supporting. Line Managers report that they find it more difficult to relate to and respect HR where this is not the case. HRM - WHY HR & LINE MANAGERS LOOK IN DIFFERENT DIRECTIONS AT HR PRACTICES | 2016 Report

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Without HR being really connected to the business, we see that line management are arbitrary about which HR

processes they are likely to embrace. In many ways this implies a “fifth” role for HR practitioners that, to borrow a

disagreeable phrase, of being a conscious coupler. A role which maps out a strategy to ensure common appreciation

and application of key HR processes. One that not only communicates clearly to line managers in a context that

matters to the line manager but explains in detail how the line manager’s function and personal performance can be

enhanced by buying into a devolved HR process or system. This to the point that the line manager’s personal

appraisal includes HR metrics in their functional area. This role can only be performed by HR truly “getting” the

business and its core functions.

It is often said that we concentrate our work effort on the area which we believe our manager is most likely to ask

us about. So it is incumbent on CEO’s to continuously ask their line managers about their HR performance and not

just output related to core activity. This only becomes a reality when HR is allowed to be strategic and ideally board

represented in an organisation. While it is clear that line managers must accept responsiblity for critical talent

processes, HR’s acceptance correlates directly with the ability of the practitioner to develop deep, cross-functional

understanding and to articulate credibly in line manager language how HR impacts on the organisation achieving its

goals. It is quite a challenge because, right now, it appears too many line managers and business leaders don’t fully

believe it.

In your opinion, what impact does HR have on the ability of your organisation to achieve its goals?

22% Some impact

25% Important Impact

20% No impact at all

7% 11% Neutral

Essential Influence and Impact

HRM - WHY HR & LINE MANAGERS LOOK IN DIFFERENT DIRECTIONS AT HR PRACTICES | 2016 Report

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