How to Succeed in HR Without Really Trying: A Roadmap for HR Development in the Coming Decade

1. How to Succeed in HR Without Really Trying: A Roadmap for HR Development in the Coming Decade Presentation to the Evansville-Area Human Resource Association Dane M. Partridge, Ph.D. Associate Professor of Management University of Southern Indiana March 27, 2003

2. Is HR Playing a Strategic Role in Your Organization? • What’s the best change my organization can make to prepare for the future? • What makes an Ee want to stay with my organization? • How are we going to invest in HR so that my organization has a better HR dept than our competition? • Source: Halcrow (1988), reported in Noe et al. (2003)

3. Staffing the HR Function • What are the KSAs of HR staff? • What coursework? • Many MBA programs have no required HR course • What certification? • Bernardin (2003) indicates that only eleven percent of SHRM members have HR certification via HRCI • DMP not sure this figure is accurate – Bates (2002) reports ~56,000 HR professionals have passed a certification exam; 54% of PHR candidates are SHRM members, 72% of SPHR candidates (HRCI State of the Institute Report 2002).

4. Staffing the HR Function • Inherent exaggeration of abilities re: “people skills”? • Survey of HS seniors • 70% believed they were above average in leadership ability; 2% believed they were below average • 100% believed they were above average in ability to get along with others, 60% believed they were in top 10%, 25% believed they were in top 1% • Source: Ruggiero (2001) • Should we even be teaching “people skills” at undergraduate level? • Research indicates UG students have less interest in and perceive less relevance of OB course than other required business courses • Mintzberg (1989), Burke and Moore (2003)

5. Staffing the HR Function • More generalizable phenomenon, re: self-ratings? • Survey of 92 engineers (Meyer, 1980) • Asked to self-rate relative to peer group, 0-100 (percentile) • Mean: 78th percentile • Only two of 92 rated themselves below 50th percentile (45)

6. Some Discrepancies Between Research Findings and HR Practices • Recruitment • Research indicates that quantitative analysis of recruitment sources using yield ratios can facilitate efficiencies in recruitment • In practice, less than 5% of surveyed companies calculate yield ratios; less than 20% know how • Source: Bernardin (2002)

7. Some Discrepancies Between Research Findings and HR Practices • Staffing • Research indicates that • Realistic job previews can reduce turnover • Weighted application blanks reduce turnover • Structured, behavioral, or situational interviews are more valid • Graphology is invalid and should not be used • In practice • Less than 20% of companies use RJPs in high-turnover jobs • Less than 10% know what a WAB is; less than 1% use • Less than 30% of companies use structured interviews • Graphology’s use is increasing in U.S.

8. Some Discrepancies Between Research Findings and HR Practices • Performance Appraisal • Research indicates that • Traits should not be used on rating forms • Raters should be trained • The appraisal process should be an important element of managers’ jobs • In practice • More than 75% of companies still use traits • Less than 30% train raters • Less than 30% of managers are evaluated on performance appraisals

9. Some Discrepancies Between Research Findings and HR Practices • Compensation • Research indicates that • Merit-based systems should not be tied into base salary • Because size of bonus that can be offered is greater, cost to org in long run is much less • Gainsharing is an effective pay-for-performance system • In practice • More than 75% of companies tie merit pay to base pay • Less than 5% of companies use gainsharing where they could

10. Quiz!!! • Think back to your first day in HR… • What were you most confident about, in terms of your preparation for your responsibilities? • What were you least confident about? • What, in terms of your preparation, contributed to your confidence or lack thereof? • How could your development have better addressed your deficiencies?

11. TRW’s HRM Core Competencies • Leadership and Managing Change • Business Skills • HR Functional Leadership • HR Technical Skills • Source: Milkovich and Newman (1999) • “Core Competencies”: “The skills and abilities in value creation activities that allow a company to achieve superior efficiency, quality, innovation, or customer responsiveness.” • Source: Jones (2001)

12. TRW’s HRM Core Competencies • Leadership and Managing Change • Integrity • Efficiency • Performing in cost-effective manner • Objectivity • Clear perception of org and political reality • Proactivity • Risk taking • Taking action under conditions of uncertainty

13. TRW’s HRM Core Competencies • Leadership and Managing Change (cont.) • Decisiveness • Professionalism • Consciousness of one’s professional image • Negotiation Skills • Facilitating “win-win” • Communication Skills • Written, Oral, Non-verbal(!) • Brockbank (2003) found interpersonal competencies more important than verbal and written communication skills • Team Management Skills

14. TRW’s HRM Core Competencies • Business Skills • Industry Knowledge • Value chain, suppliers, competitors, how org satisfies customer needs • Knowledge of value chain has significant impact on business performance (Brockbank, 2003) • Strategic Management • Understanding and planning for environmental changes • Organizational Awareness • Understanding business operations, how business competes, cultural/value systems impacting org performance

15. TRW’s HRM Core Competencies • Business Skills (cont.) • Total Quality Management • Continuous Improvement • General Management Skills • Understanding of finance, marketing, law, IT • Partnership w/mngt team • Note: knowledge itself is insufficient to contribute to high-performing organization – must put knowledge into practice….Achieving results more important to personal credibility than getting along well w/mngt team. • Source: Brockbank (2003)

16. TRW’s HRM Core Competencies • HR Functional Leadership • Network Building • Working effectively w/others, both inside and outside org • Setting the Vision for HR • Selecting and Developing Staff • Identifying and implementing org and individual developments plans • Value-added perspective of HR • Communicating to mngt how HR can contribute to org

17. TRW’s HRM Core Competencies • HR Technical Skills • HR Planning • Competencies in org design now fundamental, including org and job restructuring (Brockbank, 2003) • Communications • Fostering understanding of key business and HR issues • Work Force Diversity • Selection and Placement • Including effective performance mngt system • Training & Development

18. TRW’s HRM Core Competencies • HR Technical Skills (cont.) • HR Information Systems • Compensation and Benefits • Performance-based, linked to performance mngt • Health, Safety, and Security • Org Effectiveness • Managing cultural change within org to impact org effectiveness • Note that culture management makes strategic contribution (Brockbank, 2003) [focusing internal culture on meeting needs of external customer, aligning HR w/ desired culture, facilitating quick change] • Ee and Labor Relations

19. Additional Competencies • International • Infusing org culture w/local talent worldwide • Integrating foreign Ees into U.S.-based businesses • Balancing differentiated pay scales/benefits levels to achieve internal equity • Restructuring recruiting practices to ensure org is capturing best talent globally • Source: Patel (2002) [SHRM Workplace Forecast: A Strategic Outlook]

20. Top Ten Workplace Trends as seen by HR professionals • Use of technology to communicate with Ees • Rising health care costs • Increased vulnerability of intellectual property • Managing talent • Greater demand for high-skilled workers than for low-skilled

21. Top Ten Workplace Trends as seen by HR professionals • Labor shortage • Change from manufacturing to information/service economy • Increase in employment-related government regulations • Focus on domestic safety and security • Ability to use technology to more closely monitor Ees • Source: Patel (2002)

22. Implications • Given these trends in organizational environments, what are the implications for HR function? • How do we get from where we are to where we need to be? • What organizational and individual development needs to be provided to facilitate change? • Are there additional competencies that need to be developed so as to effectively manage these trends?

23. Evolving HR Function • Some traditional roles, e.g., HR generalist, benefit specialist, likely to become less common and less important • Will be increasingly important to be able to illustrate cost effectiveness, value-added contribution of HR practices • And will need to manage relationship w/providers of outsourced activities (transactional functions) • Know finance! • Will business degree be a requirement in the future? • What would be the implications? • “Human capital strategist”? • Source: Bates (2002), Glister (2000)

24. Challenges (Potholes?) • David Ulrich (U of Michigan): “We have to shift the focus of HR away from training and process to the outcomes, away from a people function to an organization function. I’m not optimistic about all HR people” making that transition. • Source: Bates (2002)

25. Staffing the HR Function (revisited) • KSAs for HR? • Preparation (Education and Experience)? • Certifications – value and nature • Specialist certifications (e.g., ACA’s Certified Compensation Professional and Certified Benefits Professional, IFEBP’s Certified Employee Benefits Specialist)

26. Staffing the HR Function (revisited) • HR Competencies – Build or Buy? • Re: HRIS, most HR certifications attest to non-technological body of knowledge. PHR, SPHR not intended to address individual systems or software (Glister, 2000) • Software-specific training (e.g., PeopleSoft) • New International Association for Human Resource Information Management (IHRIM) certification (purported to be both technical and functional) • Knowledge relevant to choosing right vendor • HRCI due to include more technology emphasis in revised curriculum • MBA w/ HR concentration? (Note that USI has moved in opposite direction…)

27. HRCI Core Knowledge Areas • Knowledge of needs assessment and analysis • Knowledge of third-party contract management, including development of requests for proposals (RFPs) • Knowledge of communication strategies • Knowledge of adult learning processes • Knowledge of motivation concepts and applications • Knowledge of training methods • Knowledge of leadership concepts and applications • Knowledge of project management concepts and applications • Knowledge of diversity concepts and applications

28. HRCI Core Knowledge Areas • Knowledge of human relations concepts and applications (for example, interpersonal and organizational behavior) • Knowledge of HR ethics and professional standards • Knowledge of technology and human resource information systems (HRIS) to support HR activities • Knowledge of qualitative and quantitative methods and tools for analysis, interpretation, and decision-making purposes • Knowledge of change management • Knowledge of liability and risk management • Knowledge of job analysis and job description methods • Knowledge of employee records management (for example, retention, disposal) • Knowledge of the interrelationships among HR activities and programs across functional areas • Source: http://www.hrci.org/certification/spec-core.html

29. Conclusions and Challenges • As business organizations and the business environment continue to evolve, the competencies required of HR professionals are also evolving. • Knowledge is necessary but not sufficient prerequisite for success; skills and abilities are critical (i.e., the ability to put theory into practice). • Key org and individual development question pertains to those skills and abilities – build or buy? • To great extent, both degree programs and certification are indicators of knowledge, not necessarily competencies. • Hmmm…