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

Workforce, June, 2002 by Allan Halcrow

Alan Schnur, a senior consultant and market leader in the San Francisco office of Watson Wyatt, offers this appraisal. "Sometimes, CEOs and the line don't really want HR to be strategic. HR is given a double message: Get out of the box, stay in the box."

He tells a story about a CEO who challenged the executive team to figure out how the company could triple revenue within five years. The HR team took the assignment seriously and came back with an assessment that said the company didn't have the right leadership or structure to accomplish the desired growth, and proposed some changes. "The team was told, 'You took it too far,'" Schnur relates.

But for every organization in which strategic HR is an oxymoron, there is another in which HR is actively helping to run the company. Talk is turning to action, Schnur adds, and there's never been a better time for HR to play a strategic role.

It will take the right CEOs working with the right HR executives to make it happen. Holzworth credits Podurgal, for example, with helping to boost the 450-employee organization to a new level. "There are a lot of HR professionals out there who are not very effective," Holzworth says. "Traditional HR people could not have accomplished what Rich has done. They are focused on employment law, compensation, and dispute resolution. They don't have the skills to be strategic."

And it's no wonder. HR has had few opportunities to learn strategic skills, because it hasn't been included as a participant in the decision-making process, and because many CEOs themselves operate in a strategic-planning vacuum, Schnur says. What's more, HR's efforts at strategy are often foiled because there is a disconnect between the espoused and the actual culture of an organization, Wolfson notes. Examples of common company slogans that often have nothing to do with reality: Employees are our most important asset. We pay for performance. We advance people on merit.

Podurgal and Holzworth are in sync about the corporate culture at Analytical Sciences and they work closely. "In the beginning, Don couldn't define specific objectives for HR," Podurgal says. "He saw that turnover was too high, that the company was not recruiting the top people, and wasn't an employer of choice."

Holzworth says the first step in improving these critical areas was to define the company's broad initiatives and to confer with Podurgal about what HR should do. What they came up with is so different from earlier notions of HR that Holzworth dropped the term in favor of "organization development." The emphasis now is on performance development, performance management, supervisor and manager training, and employee competencies. Each element is tied to long-term business goals.

"I can't think of a proposal I took to him where he didn't listen," Podurgal says. "That doesn't mean he doesn't push back, but he trusts us." Podurgal has been given the latitude to add value to the business, and he has seized the opportunity.

Although he has been at the company for little more than a year, Podurgal has already created a performance-management program that ties each employee's goals to organizational goals, and has implemented market-based merit pay, introduced succession planning, and built a competency model that is linked to HR. Costs per hire have been reduced, and turnover has been slashed from 38 to 10 percent.