The Risk in Seeing HR Management as Risk Management

In an increasingly regulated and litigious society, Human Resource (HR) Managers have seen their role shift strongly towards management of the legal and compliance risks associated with employing people, with two challenging consequences:

1. The relevance of HR has moved from ‘facilitating the organisation’s role as a responsible employer’ to ‘avoiding all risk associated with employing – or un-employing – people’;
2. The role and value of HR in talent identification, recruitment, development and retention has seen the resources required for this gazumped by compliance risk management, to the extent where in many organisations, these roles gain cursory attention at best and are chronically sidelined at worst.

The consequences of this shift are obvious. Due to the compliance requirements of lawful recruitment, employment and dismissal, HR can become:

• a brake on talent renewal and a cultivator of mediocrity (no one ever gets fired around here);
• overly risk aversive and cramping of strategy, when the activity of entrepreneurship demands not risk avoidance but responsible and skilful riskmanagement – even risk optimisation – in the pursuit of reasonable profits.

In short the risk is that the ‘tail’ (HR as an enterprise service provider) can begin to wag the ‘dog’ (the entire enterprise it exists to service), leading to mediocre teams, mediocre plans and mediocre – or non-existent – results.

This sits in sharp contrast to Dan Kennedy’s table thumping exhortation that, “People are employed here to make the business money!”

Or, in a less caustic statement of his views, “A handful of cultivated, appreciated champions can make you rich”.

This paper is about identifying how to manage the compliance issues that are the responsibility of every employer, while taking advantage of the opportunities you’re your capacity to employ people provides in the form of talent identification, recruitment, development and retention.

Split the Tradition HR Manager Role in Two

The mindset, personality and behavioural profiles that would make a person an excellent compliance HR Compliance Curator are likely to be almost diametrically opposed to those that would make a person an excellent HR Performance Coach.

The Compliance Curator, on the one hand, is likely to need to be risk aware, detail-focused, legally literate, proactive, and to have structured thinking and processes that ensure that nothing drops through the cracks. Ideally, they will also see their role as ‘one half of the whole role of ‘responsible talent curation’ and as complementary to the role of the Performance Coach.

The Performance Coach, on the other hand, is highly likely to need to be goal, skill and performance-focused, with high emotional intelligence and to have strong people and coaching skills.

The points at which these two roles are likely to intersect are in formulating and using performance assessment tools and in matching relevant performance with rewards that include salary package and conditions (and therefore overlap on the Compliance Curator’s responsibilities to meet industry standards and to maintain a degree of wage equity and balance across the entire team).

A sound checks-and-balances approach may see the Coach recommending a salary or ranking upgrade to the Curator, and the Curator validating the basis for that recommendation on the person’s actual or potential value creation, and then putting in place the payroll and other administrative arrangements associated with such a move.  The Coach may then be responsible to monitoring future performance to ensure that the investment represented by the rewards upgrade, is realised.

It is critical that both Coach and Curator each see themselves as occupying complementary roles, and as a jointly responsible for creating the best possible employment environment for everyone employed within the enterprise.  At the same time, there needs to be a clear and agreed division of responsibilities associated with each role.

A Rose by Any Other Name

Splitting the roles outlined above and then applying appropriately descriptive labels can help to initiate and maintain the culture shift and role separation that we are seeking here.

You might consider using the labels suggested above, or coming up with your own, and then backing them up with a clear Responsibility Statement – statements of the results by which performance of each of those roles will be assessed in future – and including their KPI[1]s.

Be aware, this change must not be skin deep – it has to be a change in perception that is down to the enterprise’s bones, and must be reflected in and consistently honoured by its culture.

Role Responsibilities

Compliance Curator

With respect to individual team members, the Curators responsibilities include:

• Attraction: Pitching the enterprise’s talent needs in a sufficiently persuasive manner as to attract the attention and response of those who meet criteria formulated in partnership with the Coach.
• Qualification:  Ensuring that all employment candidates have been checked for qualifications, compliance, experience, demonstrable skills, and background beforethey are cleared to consideration by the Coach (and by a panel of their potential fellow employees, if a peer selection approach is chosen).
• Remuneration: Matching candidate expectations with role value, the enterprise’s capacity to pay, and the reward landscape of the entire team.
• Expectation:Ensuring that the candidate is clear on the Responsibilities Statement associated with their intended position and of the performance standards (KPIs) expected of that role and of their remuneration package – all framed within the context of the enterprise’s current Strategic Goals.
• Career Path:Matching the candidate’s professional ambitions to opportunities within the enterprise and its policies around talent development.
• Administration:Few aspects of HR compliance are more important than the on-boarding process, and especially those associated with documentation (employment contracts, tax forms); enterprise orientation (who’s who and where is everything?); equipment issue (and, where required, training); occupational health and safety induction; cultural induction (Vision, Mission, Values, Code of Conduct, Strategic Goals). It is not unusual – and likely to be highly worthwhile – for the cultural induction to be delivered by the leader of the enterprise.
• Hand over:Once the Curator has completed their initial responsibilities with a new team member, the last step is a formal hand-over to the Coach. Here, the Curator is likely to have already acquired valuable insights into the needs, capabilities and potential of the candidate that are essential to the Coach in their role. There should also be a formal, thoughtful hand-over of the candidate, by the Curator to their Coach that includes a clear statement (spoken and written) of the candidate’s assessments, career intentions, and any special arrangements or conditions agreed for them, in order to formally close this initial stage of the Curator’s engagement in the on-boarding process.
• Acceptance: Towards the end of any probation period, the Curator and Coach will make a joint decision on the Candidate’s progress throughout their trial period and decide whether to accept them as a full member of the team. Given that the Coach will assume the majority of responsibilities for the candidate’s continuing performance development, it would be appropriate that they have the casting vote in the event of a tied decision.

On an enterprise-wide level, however, the Curator may be ideally positioned to assume responsibility for and to add value via:

• Design:Creating the processes and systems that support efficient and accurate management of their people’s employment. This may include choosing or designing or adapting payroll systems; record keeping; career path management systems; enterprise wide monitoring systems.
• Big Picture:Analysing for trends, to detect and improve larger scale employment issues (such as when poor scheduling systems create chaotic work schedules that disrupt lives); or when absenteeism changes around a particular person, location, situation, or innovation.
• Outside View: Ensuring that payscales and conditions match the enterprise’s desired position relevant to its market (which then impacts on the quality and type of talent it is likely to attract).
• Brand Projection: Through observation and liaison with those responsible for marketing and PR, analysing how well the team as a whole project the messages intended by the enterprise.

Performance Coach

Except in the context of very small teams, the performance coach is likely to rely on working through squad leaders, area coaches or team leaders in order to achieve the Coach’s goals. That usually entails the Coach coaching the team leaders to coach the team leaders to lead, coach and development their team members, which is the level at which most new candidates will enter the enterprise. Thus, the following responsibilities are best understood in that context:

• Integration: Facilitate the candidate’s integration into the culture of the enterprise (reinforcing the Vision, Mission, Values, Code of Conduct and Strategic Goals that form the enterprise members’ Guidance System) and into cordial and respectful membership of its existing team.
• Goals: Clarify with the candidate their (near) role performance and (far) career goals, then map out a performance development path with and for them.
• Mindset: Promotion within all team members of an optimistic outlook, a collaborative approach, and a positive expectation of success in executing their responsibilities and in achieving their performance goals.
• Motivation:  Ensuring that the environment supporting the candidate and all other team members is constantly undergoing improvement (see Hertzberg’s motivators/demotivators model for more on this).
• Monitoring: Regularly assessing – probably with the candidate’s squad leader – their performance relative to that of their peers and to the demands of the role.
• Feedback: Ensuring that the candidate is provided with regular, objective and constructive feedback that provides them with a clear understanding of what they are doing well, how well they are doing it, what they need to improve, and how to do that.
• Acceptance: Coordinate with the Curator to decide whether the candidate meets the requirements of the role or at least has the potential to develop to meet them and, in the latter case, make a value judgement as to whether the investment required to close the performance gap is justifiable.
• Performance Management: Ensuring that underperforming team members are provided with the means to improve their performance above the retention threshold, and that they are supported when challenged to exert themselves to achieve a retention level.
• Positioning: Sometimes it’s a case of ‘right person, wrong seat’. If culture and commitment and capability are all present but performance is below par, the investment in trialling the candidate in a different role is probably well justified.
• Promotion: Ensuring that excellence in performance is recognized and nurtured to accelerate the individual’s development and growth in responsibilities.
• Exits: Managing,in close liaison with the Curator, the orderly, respectful – and compliant – exit of any underperformers; and taking responsibility to ensure that those remaining members of the team understand fully and clearly the basis for the exit, and to deliver assurances that the team is now stronger for the fact.

A Return on the Investment into Human Capital

“What happens if you train your people and they leave?”

The question seems reasonable enough, but the answer is a lot clearer if you ask it upside down:

“What happens if you don’t train your people – and they stay!?”

But the need to invest in people goes well beyond ‘training’ and can absorb enormous amounts of capital without any sign of a return.

One sobering thought upon which to close:

The sole value of any leader – whether Curator or Coach – is the sum total of the value of the performance gap between the value created (or saved) by a team without the leader, and the value created with the leader.

Just to break even on the investment into the role of Human Resources Anything the people serviced or supported or led by that role have to create a net value for the enterprise that is worth at least three times the role’s salary package.

It may be worthwhile working out what that amounts to for your enterprise, and then working out how you re-engineer your HR roles to over-deliver that, consistently. After all, HR may be the ones who have to hire and fire, but they are not immune from the bases on which that is justified.

Everyone is accountable.

[1] Key Performance Indicators