HR Models – lessons from best practice
Initial desk research October 2009
© Henley Business School 2009
Introduction The classic HR model
Over the last decade a classic model, based on the work of Dave Ulrich et al, has emerged that has three elements (recently he has added to the model but these three remain the core). We don’t need to go into detail but we will simply highlight these three key elements: business partners, shared services and centres of expertise: Business Partners Establish relationships with customers line/ business units Contribute to business unit plans Shared Services Deliver HR services Manage routine processes effectively and efficiently Often using a single HRIS, intranets to provide basic information and call centres for specific queries May be outsourced Back Office Centres of Expertise Create HR frameworks Develop and introduce strategic HR initiatives. Specialised areas such as compensation and benefits, employee relations, learning and development, talent management, OD, staffing, diversity, and workforce planning Often depend on the business partners to roll out programmes to the business.
Develop organisational capabilities Implement HR practices Represent central HR Log needs and coordinate HR services Front Office
In this report we are not seeking to reinvent this model but to review how to implement it effectively. Like so many apparently simple models we believe the model is sound but that understanding the complexities that lie behind it, and implementing it in a way that is relevant to each organisation specific context, are the real challenges. This report is based on extensive desk research over the last few months and will be followed up with a series of interviews to look at the latest view ‘from the street’. (CIPD 2009 Market Wire 2005 Kates 2006 Lawler 2006 Porter 2006)
The challenge of deciding what HR model
In adopting an organisational model for HR the danger is that we believe there is a one size fits all approach. We look for, one model that meets all needs, or look at external best practice in admired companies to decide what model to apply. The problem is that every organisation faces a unique set of challenges in terms of scale, culture, maturity, strategy, market, sector, geography, customer needs etc. Each organisation needs to look at its own context and develop a model that meets its own different challenges. In addition organisations should recognise that in implementing the model there are several underlying paradoxes: The inherent paradoxes of HR models Focusing on long term strategic capabilities and talent Creating a single employee experience Applying higher level strategic HR skills Driving a central HR agenda Being part of one central HR team Creating a harmonious single HR team Operating in a central function Being a one stop shop Delivering a seamless service to the end user Allowing a focus on, and the development, of deep HR skills Keeping admin costs low Dealing with local employee relations issues Delivering against local tactical needs Dealing with differing local perceptions Reporting to local businesses Being loyal to one element of HR (C&B, L&D etc) and competing for limited resources Maintaining contact with the business reality Outsourcing or subcontracting activities, often with local duplication Operating as multiple delivery elements Maintaining wider generalist and commercial skills
(CIPD 2009 Market Wire 2005 Kates 2006 Lawler 2006 Porter 2006) Learning point: Do you recognise the paradox of most HR models and are you addressing them?
Why have organisations looked at their HR model?
The drive to look at how HR is organised has in many cases been positive but it has often been a defensive reaction to pressures both from within organisations and from external criticism*. Such a defensive reaction rarely produces an effective response as...