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Published 05 July 2012 05:02, Updated 05 July 2012 09:05
Human resources management has a mixed record when it comes to attaining a seat at the executive table but HR has been more successful in positioning itself as a defender of employees’ entitlements and professional development – at least when times are good and the “people are our greatest asset” mantra prevails.
But when push comes to shove, is HR’s first loyalty to the company’s “greatest asset”, or the company?
The answer may seem obvious but in times of mass lay-offs, employees who are handed a pink slip may feel a tinge of betrayal as they observe that standing behind the manager delivering the bad news is an unsmiling HR officer who previously may have been handing out gushy pamphlets on work-life balance or the importance of ergonomic furniture.
For HR professionals, it’s a conflict that goes with the territory but some manage it better than others.
The group general manager of HR at listed property services company Programmed Maintenance Services, Jim Sherlock, remembers that when he was an HR manager in the 1990s “there were HR people falling out of the trees”. It was a time of well-resourced HR departments assuming greater responsibility for hiring, developing and communicating with employees – which was all very cosy, except in periods of cutbacks.
In organisations where HR is seen as an ally, Sherlock says, employees feel let down when previously supportive HR departments appear to switch loyalties in a downturn.
“If there’s a perception that you [HR] stop doing the things you have been doing and take on a different role, if employees feel that the people who were looking out for them have jumped to the other side, the danger is that they will feel abandoned,” he says.
Sherlock says there has been a realisation that the HR function may have gone too far in claiming “ownership” of people management. “Organisations have woken up to the fact that managers need to manage people and be accountable for the safety, mood and engagement of employees,” he says.
PMS has 10,000 employees. Following a review of its HR function in 2009, disparate full-service HR units within the diversified group were merged into a single division. As well as removing duplication and streamlining activities, Sherlock changed the focus of the HR function to ensure that managers took direct responsibility for engaging and developing staff.
“Employees’ principal relationship has to be with their line manager,” he says. “I should never stand between managers and their employees. It’s their relationship – not my relationship.
“I view my role as facilitating the development of managers so that they have the skills and confidence to better manage people and teams and create work environments in which everyone performs at their best.”
Sherlock says that placing greater responsibility on managers for the development and performance of staff has improved employee engagement and also ensures a closer alignment between employees and the needs of the business. He is able to make this assertion as a member of the PMS executive team.
The long-coveted goal of a seat at the leadership table has eluded many of Sherlock’s peers. A survey of HR managers by the Hay Group found that only 27 per cent believe that HR is making a significant strategic contribution to their organisation.
Hay Group’s head of consulting, Anand Shankaran , says it is up to HR to demonstrate that it deserves to be a strategic partner in the business.
“Bridges need to be built between HR, line managers and senior leadership,” he says. “HR has to step up as a genuine business partner, helping to integrate HR into business processes and align people management with business strategy.”
Shankaran warns, however, that employees must be kept informed of changes to the HR role.
“With the shift in priorities will come new or changed engagements between HR and the rest of the organisation. Often these shifts are not communicated or understood by different parts of the organisation [which leads] to lower impact from the change, confusion and conflicting perceptions of HR,” he says.
The vice-president of HR and organisation at Norsk Hydro’s Kurri Kurri aluminium smelter in the Hunter Valley in NSW, Trevor Hall, believes the strategic interests of the employer and the best interests of employees can be aligned – even if it involves job losses.
The Norwegian company has been moving towards closing the smelter since December last year when 50 people lost their jobs. Another 150 jobs went in January. Norsk struggled to keep the plant open in the face of low metal prices, the high dollar and high input and power costs. Finally, the smelter was deemed unviable and in June it was announced that the final 344 workers would be retrenched and the plant shut.
When BRW spoke to Hall, he was putting the final touches to a “redundancy expo day” that will feature presentations by NSW State Training Services, Centrelink and superannuation fund managers. Also on hand were psychologists, financial planners, outplacement services and the Men’s Shed support network.
Hall says overseeing the loss of more than 500 jobs has been confronting. “Some of our workers have been working here for 25 to 35 years,” he says.
When the decision to shut the plant was made, Hall called a meeting of his staff to help them reconcile the conflicting emotional and professional dimensions of their challenge.
“After the announcement, obviously there was a lot of doom and gloom but this was a strategic decision made in Oslo,” Hall recalls. “It was nobody’s fault that this plant is closing, so I said to my team, ‘What can we as a group of professionals do to ensure that everyone who works for this company feels that they have been treated well beyond all expectations and in the process make what we do as motivating and fulfilling as possible?’
“The people on my team said, ‘Yes, we want to be part of that’ and they feel energised because they’re doing everything they possibly can to make sure that everybody’s needs are met.”