Evaluating the HR function
It is necessary to evaluate the contribution of the HR function to establish how effective it is at both the strategic level and in terms of service delivery and support. The prime criteria for evaluating the work of the function are its ability to operate strategically and its capacity to deliver the levels of services required.
Research conducted by the Institute for Employment Studies (Hirsh, 2008) discovered that the factors that correlated most strongly with line managers’ and employees’ satisfaction with HR were:
- being well supported in times of change;
- HR giving good advice to employees;
- being well supported when dealing with difficult people or situations;
- HR getting the basics right.
But the results showed that HR could do better in each of these areas. The conclusions reached were that HR must find out what its customers need and what their experiences of HR services are. HR has to be responsive – clear about what it is there for and what services it offers, and easy to contact.
The IRS 2012 survey of HR roles and responsibilities established that the main measures used by respondents to assess HR effectiveness were:
- absence management data – 79 per cent;
- staff turnover data – 75 per cent;
- exit interview feedback – 66 per cent;
- discipline and grievance data – 60 per cent;
- results of employee surveys – 60 per cent;
- anecdotal/informal feedback – 59 per cent;
- number of tribunal cases – 50 per cent;
- benchmarking – 47 per cent;
- spending against budget – 46 per cent;
- time-to-fill vacancies data – 34 per cent;
- cost per hire – 30 per cent.
CASE STUDIES ON THE ORGANIZATION OF THE HR FUNCTION
HR organization at the National Australia Bank Group
HR at the National Australia Bank Group has a number of centres of expertise, business partners, solutions consultants, project managers, a shared services centre, and telephone advisory service for employees (the people advisory helpline).
Centres of expertise
Centres of expertise cover areas such as reward, employment policy, talent management, culture management, diversity and performance. The staff in the centres are specialists in their respective fields, while the other parts of HR can be found in the HR service centre, with the exception of recruitment, which is conducted by line managers.
Business partners attend business unit leadership team meetings and set the company’s people strategies and deliver the HR requirements emerging from various projects. They tend to work in the areas of talent, performance, leadership, diversity and culture and their job is to facilitate the implementation of corporate people initiatives with the relevant specialist HR partners. Unlike shared services staff, they only get involved in HR’s daily operational matters if projects escalate and extra help is required.
Solutions consultants deal with operational queries referred to them from the people advisory helpline – mainly issues of case management and other more complex enquiries. They are a key point of contact for people leaders on matters of policy and procedure, although they do participate in some transaction work as well.
Project staff work on projects that emerge from strategic discussions.
The HR shared services model at PricewaterhouseCoopers (PwC)
The HR shared services model at PwC consists of transactional and professional areas. Transactional functions include payroll, benefits administration and the joiners/leavers process department. The transactional functions also provide services for their professional counterparts. In contrast, professional areas organized into centres of expertise include functions such as recruitment, learning and development, reward, diversity, and legal and advisory.
The centres of expertise sit within the central human capital services centre but there are definite lines between them. Every centre of expertise is a cost centre, but for the annual budgeting process all are looked at together as part of the HR shared services function.
The result of introducing the centres of expertise has been that specialist knowledge is now organized into discrete units enabling know-how and experience to be more easily shared. The new structure means there is less duplication and the improved efficiencies allow more time to be dedicated to strategic issues. Additionally, a decrease in costs has been achieved via a combination of reductions in headcount, economies of scale and related efficiencies.
Reorganizing HR in the Greater Manchester Fire Service
Following major changes in operations, it was decided by senior management that the role of the fire service’s HR function was to provide high-level, strategic advice from advisers who could work closely with them, backed up by specialists. In other words, a business partner model. So the brigade began to recruit business partners – placing a special emphasis on those with expertise in employee relations – and specialists to cover areas such as occupational health, equality and diversity, reward, pensions and recruitment. Finding candidates with sufficient gravitas to act as top-level strategic advisers was difficult. There weren’t many true business partners about. A lot of people calling themselves business partners were really HR advisers.
When the team was in place the major developments were:
- to introduce a more transparent promotions process;
- to work on the organizational climate and leadership – a series of away-days for leaders using organizational climate tools such as 360-degree feedback and the Belbin Team Inventory;
- the recruitment process was also modernized by putting together a resourcing team, building a microsite and developing an applicant tracking system;
- to reorganize training;
- a departmental competency framework was put in place to ensure HR staff would be able to move easily within the organization rather than becoming bogged down in specialist areas.