The head of Human Resources at every company should be at least as important as the CFO.

We all wish that our workforce work together and work steadily, consistently.  We want them to continue to improve upon their performance, be motivated and stay with our companies as long as possible.  We also wish to see them grow as leaders.  Isn’t it that we all want?

But to achieve this, we need above all a robust HR system in place.

But the abject reality is quite stark and a large portion of HR activities have become limited to very routine tasks such as general reports & documentation, conducting daily, but petty interviews, candidate reference checks, issuing appointment letters, payroll work, termination letters and designing severance packages in some cases, but not all.   If I ponder upon my understanding of how they are operating generally and dare to make a statement, I do find that they are mostly stuck into the clerical tasks most of the time, all the time.

Going through with a large section of LinkedIn discussions, I find that the phenomenon is all-pervasive, including India and abroad.  A certain streak of inherent dissatisfaction, frustration and confusion could easily be sensed in the thousands of responses written over there.  Though I certainly believe that the management approaches and practices have evolved a great deal over the course of last 20-30 years, but still few things which are ages-old, are not being absorbed well.  And the thought about—what should be the correct & rightful place of HR systems in contemporary management practices—still has not been contemplated well.

The reason of my dilemma is that we have got fascinated with newer or newer jargons of management-world.  Employee empowerment, 360-degree appraisals, and now employee-engagement have caught the fancy of the CEOs/presidents nowadays, much in the same way the concepts of Kaizen, TQM, TPM, Business Re-engineering, strategy, core competence, customer-delight, etc have caught in the yester-years.  I have full respect for all these great concepts and for what they have delivered to us.

In search of excellence, I beg your pardon, in search of a new winning product or market IDEA, we have lost the quite obvious, but illusive wave-length of the most successful business leaders of the world.  That is, they have always instinctively judged the correct importance of their PEOPLE factor.   And all of their decisions across the many generations of business leaders were guided by this single wave-length.  And every time they ensured that their HR is elevated to a position of power and prime importance in their companies and organizations.  They made sure that their HR people have the special qualities to help business managers build and develop leaders and people’s careers.

Since I myself believe very strongly about this, I fail to understand that why most companies of our time do NOT place the same importance to their HR.  I don’t understand that why HR is not given equal respect in the context of whole company.  It really does not matter if the company is small or a big conglomerate, because with each of them, there must be some people doing the job of HR.  It really does not matter if there is only one person doing the job of HR or there is full-fledged HR department.

And HR has just got to be as important as any other function in a company. Period.

If the Finance head is known to be one-hand of the CEO, then HR head should be counted as another hand.  But with most of the companies this is not the case.  The fact of the matter is that HR is still not being given the right value, alas, the right place in the company buildings also.

Why?

Many reasons have been ascribed for this.   First, how does HR impact the financial performance of the company.   The worth of HR is always challenged by this line of thought and we are asked–how does HR impact the top-line? Bottom-line? Cash flow? Margins? Investments? Etc.  We can, no doubt, easily see the impact of Sales and R&D departments over the business performance and calculate how the finances tally it up.   But the impact of HR is very hart to quantify.  In fact, HR deals with ‘air’—and this air is made of its ‘People Skills’.  The soft nature of these people-skills makes it very tough to quantify.  And the part of this problem is that every body seems that have a pre-conceived notion that they have relevant manpower (or people) skills in abundance, ready made.   They feel like born with these people-skills and thus put low importance over the specialized nature of HR.

Second, even if some times they extend the role of HR, the expansion is in the duties or tasks which are thought to be handling of ‘people-benefits’ such as administrating employees insurance plans, scheduling the vacation time for employees, managing the flexi-times or overtimes, etc.  They are asked to look after the health and happiness activities such as organizing the staff-parties, picnics, get-togethers, drafting and printing the company newspaper or magazine, etc.   This is a trap.  No doubt, these are the tasks which should be done by somebody, but these are not the tasks which should define the HR.  If they are kept engaged or busy doing only these tasks, how would they be doing the tasks which are far more important and strategic in nature.

Third, HR should not become twisted up in palace-intrigue.  They should not think of themselves as kingmakers.  When companies don’t work out the correct role of HR, their HR systems would run on gossips, whispers, and tattling.  They become a small terrifying group of HR executives who would hold secretive opinions about every manager in the organization, and they could tar any employee’s life it they wanted.  On the other hand, they could also move any candidate up very quickly.   That is what is known as a ‘kingmaker-syndrome’.   Only a ‘right head of HR’ could set the path of reversal of this ailment.

Remember, the HR is meant actually for:  listening to its people vent—good or bad, brokering internal differences, and helping managers develop leaders and build careers.

Best HR guys are those kind of people who can listen very patiently all sins and complaints without making any type of opinion about who is the criminal or culprit; they are also the people who could love and nurture like parents, but they give the employees fast and straight feedback when they are off the track.   They have the stature beyond their ranks and title.  They genuinely know the business of the company—its every detail.  They understand the tension between marketing and manufacturing, or between two executives who once went after the same job.   They can see the hidden hierarchies in people’s minds—the invisible ‘organization-chart’ of political connections that exists in every company.  They know the player and the history.   They also have great integrity, trustworthiness and straight-forwardness and they also know how to settle a disagreement.

If the HR of any company is on track, they are ready to handle frictions and crises—they can channelize the anger, they can forge compromises, and if need be, they can negotiate dignified endings as well.

They are there to help managers manage people well.   And that’s exactly the reason that when Jack Welch, the ex-chairman of GE was once asked by an audience, “About the role of HR, what do you think it should be?”, he answered,

“Without doubt, the head of HR should be the second most important person in any organization.  From the point of view of the CEO, the director of HR should be at least equal to the CFO.”

You can download this article (FREE PDF) from:

http://www.docstoc.com/docs/121282309/The-Head-of-Human-Resources-should-be-at-least-as-important-as-the-CFO

With thanks,

Rajneesh Kumar
Mobile: +91 98106-63271
Join my network of Leaders, Managers, Sales Professionals, Educationists, Trainers, CLO, Management Consultants, Six Sigma Professionals, Marketing Professionals, etc at: http://in.linkedin.com/in/rajneeshkumar1

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About Rajneessh Kumar

A Marketing Professional with 16+ years of working experience
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