A 360-degree view of HR: CEOs, line managers, and employees speak frankly about HR; brace yourself

Workforce, June, 2002 by Allan Halcrow

Benson credits improved communication for the turnaround. In surveys and focus groups, employees acknowledged the benefit cuts, but said that other changes in the overall work environment compensated for the reductions. And they said they understood what HR was doing, and why the changes were necessary.

The line managers see HR's value--really

If employees give HR mixed reviews, do the line managers see HR more favorably? Again, the news is mixed. In a recent landmark study, Cornell University professor Patrick Wright and three colleagues studied how HR and managers each see HR's effectiveness in its service delivery, roles, and contributions to the firm.

The team investigated 14 companies. The process included hour-long interviews with 103 top HR personnel and line executives. Each participant also completed surveys. The companies were all large and had a median employee population of 42,000. The industries represented included banking, computers, pharmaceuticals, and food processing. On average, the firms were in the top quartile of their industries in revenue, market share, and profitability. Two of the firms were ranked among Fortune's "100 Best Companies to Work For" and five were in the top 100 of the magazine's "Most Admired Companies" list.

The best news is that both HR and line managers recognize HR's potential for making a strategic contribution. "The line sees that HR is adding value to the business," says Wright, chairman of the HR Studies Department and co-director of Cornell's Executive Education program. He says that line executives view several HR activities as "critical" to a company's success.

Surprisingly, when one group rated HR services higher in importance, it was inevitably the line managers who gave the rating. "The line has been faster than HR at realizing HR'S impact," Wright says. "The line sees the value of developing talent, of focusing on recruitment and retention."

Although both groups recognize the potential, they also believe that HR is falling short. The study shows a negative relationship between the importance of an HR function and how effectively it is delivered. "If something isn't very important, we excel," Wright says. "If it adds value, we can't deliver."

Specifically, HR is rated high on providing services such as equitable compensation systems and effective staffing systems. Neither line managers nor HR professionals give HR a high score on change consulting and other strategic functions.

While the news isn't good, it should be considered in context. At the Hay Group, Wolfson has worked with several organizations to conduct the Hay HR Audit, a tool intended to assess HR's effectiveness and bring people together to make necessary changes. He says that the view of a company's internal support group is always lower than external customer satisfaction. This is partly because few organizations have a strong internal-customer focus. He adds that these support groups are usually perceived as having their own goals and that IT usually scores lowest in evaluations.