How Should The HR Department Be Organized?

Focus on relationships more than roles

Debates continue about how to organize HR departments. Should HR work be centralized (functionally driven across an enterprise), decentralized (uniquely applied to each business), or some combination (shared services)? With others, I have tried to define the right roles that HR professionals play in order to have an optimal HR operating model. We have proposed that the HR structure should match business strategy and structure. In many cases where a diversified business strategy has a divisional, networked, matrix, hybrid, or allied structure, we have proposed an HR operating model with service centers focused on technology-enabled transaction capability, centers of expertise with deep specialized HR knowledge and insight, embedded HR generalists who adapt HR services to deliver business needs, and corporate HR leaders who set overall policy. With good intent, many keep tweaking these HR roles to help the HR department and HR professionals deliver increased value to all stakeholders.

As I have participated in the ongoing debates about improving HR operating models, I have concluded that the next level of upgrades to the HR operating model will depend more on improved relationships within and outside the HR department rather than redefined roles based on organization charts. Imagine a family who is not getting along. They try to get along better by buying new appliances, chairs, and couches. Most of us recognize that new furnishings won’t help a family get along better. In HR, new HR tools and technologies are unlikely to improve the operations within the HR department. The dysfunctional family then tries remodeling their house or buying a new house with more and larger rooms. Again, most know that new floor plans won’t necessarily help a family get along better. Likewise, merely changing boxes on organization charts won’t help HR professionals work better together.

For families to function better, they need to learn to belong, to focus on relationships more than roles. My wife and I don’t do a RACI analysis for managing our household operations (actually this would feel kind of silly); we have a fluid relationship that ensures that things get done. For HR operating models to deliver more value (once the basic roles are satisfied, such as matching HR structure to business strategy and structure), maybe we should focus more on relationships than roles.

Many have studied what makes relationships work better in friendships, couples, families, and communities. For example, John Gottman, a relationship scholar, has been able to predict with over 90 percent accuracy-confidence which couples will stay together. Synthesizing his and other relationship research, let me propose six principles that, when applied, may improve the HR operating models more than debates about roles.

1. Share a Common Purpose

In HR, each role has unique expertise (service centers with technology-driven efficiency, centers of expertise with specialized HR insights, embedded HR with business insights). The challenge is to find a unifying purpose that brings together these different parts into a greater whole. This binding purpose may be business performance (strategic HR), employee well-being, or improved customer or investor value (outside-in HR).

2. Respect Differences

Clearly, different parts of the HR operating model focus on different activities, with HR service centers emphasizing standardized, consistent, and cost-efficient solutions and embedded HR generalists working to create tailored HR solutions for unique business requirements. Embedded HR professionals define the talent, leadership, and cultural requirements to deliver business goals. When these different groups respect each other, focus on what is right more than what is wrong, and yield to the influence of the other, they are more able to form relationships that supersede their separate roles. When differences are respected, dissent becomes positive, not negative because there is tension without contention, disagreement without being disagreeable, dialogue without demeaning, etc. Each of the groups within an HR operating model is a “partner” because each brings unique value to the overall goals.

3. Govern, Accept, and Connect

In HR, we may falsely assume that relationships among the parts of HR will be congenial and solved. More realistic expectations recognize that the processes used to govern HR will be more important than the solutions. For example, managing decision rights is less about who decides now and more about a process for knowing who decides because the decision right may vary over time. When different parts of an HR operating function can focus on creating a growth mindset, they worry less about the right answer and more about learning to negotiate and discuss. Managing differences with calmness, curiosity, and caring will help build connection among HR parts.

4. Care for the Other

In HR departments, different parts of the operating model should care for each other. Each part should be confident that HR transaction work will be done on time and accurately. Centers of expertise need to be trusted that they will not impose answers but collaborate to discover innovative solutions. Embedded HR professionals need to be able to accurately diagnose current and future business problems. Trust in the HR function should be high due to each area being predictable, dependable, available, accessible, and consistent. Different groups should be aware of scorecards for each group and be delighted when those in other groups do well. “We” language should replace “my” language as the goal is for HR unity more than isolation.

5. Share Experiences Together

In any relationship, things go wrong. In the HR operating model, isolating oneself into one’s group is easy. But having individuals work across groups is much more effective and helpful. This collaboration may mean career rotation from CEOs to embedded HR roles and vice versa, group HR meetings or calls where the groups share concerns and celebrate successes, problem-solving groups with representatives from each HR group, or informal contacts where HR bids are quickly attended to. In addition, when things go wrong in the HR operating model—and they will—HR needs to have the emotional confidence to admit a problem and seek a joint solution rather than blame, complain, or hide.

6. Grow Together

HR departments need to learn from the past. The stories of HR success can be woven together into a historical narrative of how an HR department has made progress. Sometimes, HR groups don’t recognize the progress they have made. But their historical narrative should be a basis for future growth. When the growth of the HR department focuses on the shared purpose of delivering sustainable business value, when differences are respected, when governance is managed, when caring occurs, and when HR professionals share time and energy, then HR will likely sustain its growth.

So, For the HR operating model to deliver real value, HR roles matter. Families need houses with rooms that reflect their lifestyle. But relationships matter even more. A nice house will not ensure a well-functioning family nor will an elegant organization chart guarantee an effective HR operating model. Roles matter, but they matter less than relationships. Now that we understand a functional model, maybe it is time for our discussions of the HR operating model to focus more on relationships rather than roles.

Your experiences with emerging HR operating models?

Author : Dave Ulrich is the Rensis Likert Professor of Business at the Ross School, University of Michigan and a partner at the RBL Group, a consulting firm focused on helping organizations and leaders deliver value. He studies how organizations build capabilities of leadership, talent, and culture through leveraging human resources. He has helped generate award-winning databases that assess alignment between external business conditions, strategies, organization capabilities, HR practices, HR competencies, and customer and investor results. He has published over 200 articles and book chapters and over 30 books. He edited Human Resource Management 1990-1999, served on editorial board of 4 Journals, on the Board of Directors for Herman Miller (16 years), and Board of Trustees at Southern Virginia University, and is a Fellow in the National Academy of Human Resources. He has consulted and done research in over 90 countries with over half of the Fortune 200.
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Magazine Name : Ross School of Business, University of Michigan
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