The HR value proposition - Dave Ulrich and Wayne Brockbank
The authors’ new offering is a ‘blueprint’ for future HR in a world class organisation. Dave Ulrich and Wayne Brockbank in this book urge HR to add more value to business. The book marks an interesting shift from Ulrich’s “Human resource champions” (1997) philosophy of HR as a business partner to HR as a value creator. “Human resource champions” suggested four key roles for HR to fulfil: strategic partner, administrative expert, employee champion, change agent.
Chapter 1 sets out the premise for the HR value proposition and introduces the framework of HR elements and the themes developed through the book. Chapter 2 points out that HR is not independent of external business realities and it must reflect and connect with them. This would result in binding HR practices to the competitive strategy of the business. Chapter 2 also provides data needed to specify and identify the external business trends influencing the stakeholders.
The key stakeholders (customers, investors, suppliers, employees etc.) expect the tangible and intangible results of HR practice to influence the success of the organisation. HR needs to focus on adding more value to the stakeholders by turning strategies into sustainable results.
The book suggests a model of how to deliver value from all HR investments.
Source: The HR value proposition, 2005, HBS Press.
1. Knowing external business realities
HR internal actions must reflect and influence the external business factors affecting the organisation. Complex and rapidly changing external realities (technology, economics, globalization, demographics) should be discussed and connected to the day-to-day work. This will inform the need for transformation in the organisation, creating a shared understanding of external realities and actions needed to compete in a changing context.
2. Serving external and internal stakeholders
The stakeholders define the value from HR actions. HR (givers) becomes successful when its stakeholders (receivers) perceive that it produces value. To really add value, HR needs to focus on the deliverable (outcomes) rather than doable (activities). Chapters 3 & 4 of the book discuss how HR can add value to its stakeholders. It suggests ideas and tools to measure the value added to external stakeholders, to assess the alignment between HR activities and internal stakeholders.
3. Creating HR practices
By crafting practices around people, performance management, information and workflow, HR can transmit the right message to all the stakeholders. Chapter 5 offers a collection of choices for how the administrative activities (e.g. staffing, training, rewards, and appraisals) can be crafted to deliver value to each of the HR stakeholders.
Chapter 6 specifies the best and emerging practices in information and workflow management. The book predicts that HR will be greatly involved these areas in the future. HR will have to facilitate information flow in five different ways:
- Outside In
- Inside Out
- Top Bottom
- Bottom Up
- Side to Side
4. Building HR resources
HR functions need a strategy and structure to deliver value. Chapter 7 offers a framework around which to build the HR strategy development process. It articulates ways both of preparing and implementing the strategy. The six stages involved in the HR strategy development process are:
- Identifying the organisational unit and organising the workshop
- Prioritize the trends in the business environment
- Specify the sources of competitive advantage and the measurements for each source of competitive advantage.
- Define the desired cultural capabilities together with behavioural expressions of these cultural capabilities.
- Identify the HR practices that will have the greatest influence on creating and sustaining the desired culture.
- Develop an overall implementation plan.
- Chapter 8 suggests that value is created when the HR organisation (e-HR, service centres, centres of expertise, embedded HR, and outsourcing contracts) is aligned with the business strategy. This chapter is a reality-check for HR to check whether their functions are aligned to deliver maximum value.
5. Ensuring HR professionalism
Chapter 9 discusses the emerging roles of HR in the organisation. It shows the evolution of HR over the last decade and suggests five roles of HR: employee advocate, human capital developer, functional expert, strategic partner and leader. The interesting new role since HR Champions is ‘Employee advocate’, which is subtly different from “employee champion”.
HR as employee champion ensures meeting employees expectations, gaining credibility by listening, respecting and being trustworthy. Employee advocacy is the systematic understanding of employee concerns and finding a
fit with the organisational strategy. It entails managing diversity, ensuring mutual respect, facilitating sharing and discussion of different view points. It also requires establishing transparent and fair process for reproving and removing employees for the right reasons. This moves HR towards Storey’s ‘policing role’.
Chapter 10 describes the competencies required for HR professionals to go from good to great. The framework of competencies requisite was derived from the global HR survey done at the University of Michigan Business School. The project spanned sixteen years and was conducted at four points in time with a gap of five years between them: 1987, 1992, 1997 and 2002. Data was gathered by 360o surveys of nearly 30,000 HR professionals.
Chapter 11 and 12 are the concluding chapters and suggest the development of HR professionals by reading, listening, observing and doing. They also suggest an approach to organisational audit and draw implications for general managers, senior HR managers, line managers or professionals who want to improve or build a world class HR organisation.
Conclusion
The basic five elements of the HR transformation model form the structure for an effective HR function. Based on this framework of elements (theory), HR professionals can use the tools described in the book to plan and make the necessary investments in HR functions and processes to deliver maximum to value to the stakeholders of the business. The book does deliver its promise of both defining the value proposition and practical ways of delivering it.
