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Edward E. Lawler III is Distinguished Professor of Business and Director of the Center for Effective Organizations at the University of Southern California. John W. Boudreau is Professor and Research Director of Center for Effective Organizations at the University of Southern California.
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Edward E. Lawler III is Distinguished Professor of Business and Director of the Center for Effective Organizations at the University of Southern California. John W. Boudreau is Professor and Research Director of Center for Effective Organizations at the University of Southern California.
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Produktdetails
- Produktdetails
- Verlag: Stanford University Press
- Seitenzahl: 216
- Erscheinungstermin: 24. Juni 2015
- Englisch
- Abmessung: 279mm x 215mm x 20mm
- Gewicht: 577g
- ISBN-13: 9780804791298
- ISBN-10: 0804791295
- Artikelnr.: 41753227
- Verlag: Stanford University Press
- Seitenzahl: 216
- Erscheinungstermin: 24. Juni 2015
- Englisch
- Abmessung: 279mm x 215mm x 20mm
- Gewicht: 577g
- ISBN-13: 9780804791298
- ISBN-10: 0804791295
- Artikelnr.: 41753227
Edward E. Lawler III is Distinguished Professor of Business and Director of the Center for Effective Organizations at the University of Southern California. John W. Boudreau is Professor and Research Director of Center for Effective Organizations at the University of Southern California.
Contents and Abstracts
1What HR Needs to Do
chapter abstract
The world of work is changing rapidly and dramatically. A strong case can
be made that the HR function in organizations needs to change as well. It
needs to take a more strategic role and develop new talent management
approaches. If it doesn't change, it could end up as an administrative
function that manages an information technology driven HR system. If it
changes it can become a driver of organizational effectiveness and business
strategy.
2The Role of HR
chapter abstract
HR has not significantly changed how it allocates its time since 1995. It
remains a function that spends the majority of its time on services,
controlling, and record keeping. This is true in the United States and in
the other countries studied. HR executives perceive that they spend more
time on strategic partnership, but the data show little change. Data on
management approaches and strategy provide one likely reason why there has
not been much change. Bureaucratic and low-cost organizations have HR
functions that spend the most time on services, controlling, and record
keeping. Management approaches and strategies such as innovation and
sustainability have a more strategic HR role, but are only now gaining
"market share."
3HR's Engagement with Boards
chapter abstract
HR has a limited role when it comes to supporting boards in all countries.
When it does provide support it is typically in executive compensation and
succession. HR Board support is more frequent and covers more diverse
arenas in high-involvement and sustainable management organizations, and it
is rarer and less extensive in bureaucratic and low-cost-operator
organizations. Providing support to boards is clearly an area where HR
could do more, which would lead to a larger role in the formulation and
implementation of business strategies.
4Business Strategy and HR
chapter abstract
In most organizations, HR remains a limited contributor to the business
strategy, development, and implementation process. The 2013 results are
remarkably similar to the 1998 results. Despite massive changes in the
business world since 1998, the data suggest that HR has changed little.
Yet, the direction of business changes would seem to lead to HR being more
of a strategic partner. The data show that HR executives are active in some
areas that directly affect the strategic direction of organizations, such
as human capital recruitment and development through organization design
and strategy development. Yet, the role of HR is too often separated or
subsequent to strategy formulation. The challenge for HR is to evolve
toward a balance of activities that support strategies after they are
developed as well as direct involvement in strategy formulation, as a full
partner in the high-value-added area of business strategy development and
implementation.
5HR Decision Science
chapter abstract
Decisions about human capital are a vital outcome of HR functional
leadership. HR executives rate human capital decision making in their
organizations as moderately effective, both inside and outside of HR. The
HR decision-science facility of organizations varies with the strategy they
pursue. Decision support and quality are more sophisticated in
high-involvement and sustainable management approaches. More sophisticated
HR decision support and quality is correlated with HR's role in strategy,
suggesting the strategic value of sophisticated human capital decisions.
There is room for improvement, as the average ratings of decision quality
in 2013 are near the midpoint of the rating scale. Yet, survey results
dating from 2007 show the positive association between an organization's
decision-science capacity and HR's role in strategy, particularly in
organizations pursuing management approaches and strategies that are
workforce-intensive and high-involvement.
6HR Organization
chapter abstract
The design of the HR organization has shown some change over time. The data
show significant growth in service units and centers of excellence, and
these design elements are related to HR's strong strategic partner role.
There is a trend toward less variation in HR practices across business
units and a greater emphasis on HR self-service. Yet, other elements that
relate to strong strategic partnership remain stubbornly unchanged,
including career movement of individuals into and out of HR and adopting
information technology. The relationships between the characteristics of
the HR organization and HR's role in strategy suggest what HR needs to do
to become more of a strategic partner: establish centers of excellence, use
joint task forces, use information technology, and develop HR talent. HR
leaders plan to use more teams, and improve their efficiency but these
design elements also remain stubbornly unchanged so far.
7Changes in HR Activity
chapter abstract
HR executives report their organizations are expanding almost all HR
activities, suggesting that HR is increasingly seen as a worthy investment
and a determinant of organizational effectiveness and competitive
advantage. Increased activity in design and organizational development are
particularly strong with greater strategic focus on knowledge and
innovation. Organization design and development is an area that has not
always been a focus of HR, despite its close relationship to organizational
performance and business strategy. Providing expertise in this area appears
to be a way for HR to become more of a business partner, particularly in
information- and knowledge-based business.
8Measuring Efficiency, Effectiveness, and Impact
chapter abstract
HR metrics and analytics remain uniformly rated at or below the midpoint of
usage, and yet are correlated with HR's strategic role. This suggests they
remain underdeveloped and underused. That said, the strongest relationship
with HR's strategic role is with traditional efficiency and effectiveness
measures, not decision-focused impact measures. The path forward appears to
be for HR to begin by enhancing traditional measurement areas and evolve
toward more advanced impact measures as constituents become more familiar
and sophisticated. There are also systematic variations in how HR measures
are used, and how they relate to HR's strategic role. Organizations that
emphasize high-involvement management approaches show greater use of impact
measures, suggesting an organization's management approach affects
receptivity to sophisticated HR measurement.
9The Outcomes of HR Metrics and Analytics
chapter abstract
HR measurement systems emerge as moderately effective, with slight but
notable effectiveness improvement since 2007. Effective HR measurement
continues to be consistently and strongly related to HR's strategic role,
so improvement in measurement effectiveness is linked to a more meaningful
HR role in business strategy. Yet, it appears that measurement
effectiveness in traditional HR functional and operational areas relates
more strongly to HR's strategic role than more advanced decision-support
and impact measures. The findings reinforce the conclusion from prior
surveys-that the potential for HR metrics and analytics to contribute to
HR's strategic value is significant, while the perceived effectiveness
levels remain stubbornly moderate. The findings also suggest that strategic
partnership is reinforced through a balanced approach that combines
effectiveness in logic, analytics, measures, and process.
10HR's Role in Sustainability
chapter abstract
Across all countries, HR is not very active in sustainability activities
but HR executives feel it should be significantly more active. HR
executives feel it should provide more support in the design of
sustainability programs, organization design, change management, and the
way business is conducted. HR executives also believe that sustainability
should be built into such HR processes as selection, rewards, and talent
development. HR is more involved in sustainability activities in
organizations with a stronger strategic focus on sustainability. When HR is
active in sustainability, it is much more likely to play a significant role
in strategy.
11Outsourcing HR
chapter abstract
HR outsourcing shows little increase in recent years. Organizations may be
missing an opportunity to improve their HR activities. Outsourcing can
allow access to knowledge and expertise that they lack and cannot develop,
and create economies of scale. Despite these potential advantages, the slow
growth of outsourcing may be due to challenges in achieving sustained cost
and quality advantages. The findings show that HR executives rate moderate
outsourcing as most effective. While it is popularly stated that
outsourcing creates resources to enhance strategic partnership, our results
show only a slight relationship between the amount of outsourcing and HR's
strategic role. Outsourcing might grow in the future but its failure to
grow during a historically severe recession makes it difficult to predict
what might cause it to increase.
12Information Technology in HR
chapter abstract
Information technology is still used most effectively for the traditional
purposes of providing transactional tools for HR administration. There is
slow movement toward more integrated HR information systems that improve
decision making, but HRISs are not rated as more effective in 2013 than
they were in 2001, and they are rated as only moderately effective overall.
Yet, the drumbeat of big data and analytics, and the promise of
technology-enabled efficiencies continue to raise expectations about what
HRIS can and should deliver. HRISs are clearly most effective when they fit
the strategy of an organization. They are particularly likely to be
perceived as successful in companies with knowledge and information-based
strategies. The strongest finding is that HRIS's are perceived as more
effective the more things they do, and the more services they perform.
13HR Skills
chapter abstract
The highest rated skills in importance for HR managers are business
understanding, interpersonal dynamics, and change management. These have
not changed significantly over time. Yet, HR professionals continue to
suffer from a skills deficit that limits their role in business strategy
development and implementation. There is only moderate satisfaction with HR
skills. No skill rating is higher than 3.9 on a 5-point scale, and that
level was reached only by one of the most traditional HR capabilities -
interpersonal skills. Of particular concern are the relatively low ratings
given to business partner skills, since they are most strongly related to
HR's significant role in strategy. A hopeful sign is an improvement in some
business partner skills. Yet, there is much work to be done to enhance HR
skills and to develop a common understanding about the required skill level
to have an effective HR organization.
14Effectiveness of the HR Organization
chapter abstract
The HR function in organizations is rated as only moderately effective, and
that rating has not changed in over a decade. HR executives continue to
report that HR is most effective in traditional arenas such as delivering
HR services and being an employee advocate. The data show there are many
important areas where HR falls short. HR is not rated highly in business
and strategy effectiveness. This may be due to HR's low rating on analyzing
HR and business data. HR executives say that a strong emphasis needs to be
placed on HR's role as a business partner and on improving decisions about
human capital, areas of relatively low effectiveness for HR. There is a
tremendous opportunity for HR improvement in areas that are related to the
strategic involvement of the HR function. This potential remains untapped,
as HR has not improved its effectiveness since 1995.
15Determinants of HR Effectiveness
chapter abstract
There are a number of relationships between the effectiveness of the HR
function and the way it is organized, managed, and staffed. Overall, the
findings tell an important story. HR effectiveness is associated with a
wide array of HR activities, structures, systems, and skills that are
within the control of HR. HR can do a lot to make HR more effective. Yes,
it needs to be sure its administrative processes work well, but its best
opportunities for improvement appear to be in the business partner role and
in strategy. Unfortunately, these are also the areas that emerge as least
effective and advanced in most HR organizations.
16Determinants of Organizational Performance
chapter abstract
Organizational performance is related to how HR is organized, managed, and
staffed, and how it spends its time. The amount of time spent on strategic
issues is positively related to organizational performance. Having a human
capital strategy that is integrated with the business strategy is also
associated with high performance. Having an integrated HRIS system,
employing metrics and analytics that measure the impact and quality of HR
programs, and processes and talent decisions are associated with
organizational performance. High performance organizations also have a high
level of decision science sophistication with respect to talent and its
impact on organizational performance. Overall, high-performing
organizations have more effective, strategic and sophisticated HR. The
typically moderate levels of HR activities and effectiveness in these areas
suggests significant untapped potential for HR to enhance organizational
performance.
17How HR Has Changed
chapter abstract
HR wants to be a strategic partner and the door is open because of the
growing recognition that talent is a key determinant of an organization's
effectiveness. But HR cannot get through the door in many organizations,
much less get a seat at the table. The good news is that there is a pattern
of HR activities, skills, and relationships that are associated with HR
effectiveness and a stronger strategic role. They include approaches to
designing the HR function and improving the skills of HR managers and
executives. Difficult as it may be to make them happen, the changes that
are required emerge consistently and are easy to identify.
18What the Future of HR Should Be
chapter abstract
The opportunity for HR to add value is great, but it remains more promise
than reality. HR executives need to develop new skills and knowledge, while
maintaining effectiveness in traditional human resource management and
administrative activities. The results of this study show that doing the
basics well remains the platform on which the HR organization needs to
build its role as a business partner. However, HR must also make strategic
contributions to the organization. As organizations adopt new definitions
of sustainable effectiveness that include social and environmental impacts
and face the need to embrace constant and dynamic change, there is an
increasing necessity for a new business model for HR, and this necessity
has been accepted and acknowledged by most HR executives. Yet, the reality
of today's human resource profession appears to reflect only the beginning
of the changes that will put that new model in place.
1What HR Needs to Do
chapter abstract
The world of work is changing rapidly and dramatically. A strong case can
be made that the HR function in organizations needs to change as well. It
needs to take a more strategic role and develop new talent management
approaches. If it doesn't change, it could end up as an administrative
function that manages an information technology driven HR system. If it
changes it can become a driver of organizational effectiveness and business
strategy.
2The Role of HR
chapter abstract
HR has not significantly changed how it allocates its time since 1995. It
remains a function that spends the majority of its time on services,
controlling, and record keeping. This is true in the United States and in
the other countries studied. HR executives perceive that they spend more
time on strategic partnership, but the data show little change. Data on
management approaches and strategy provide one likely reason why there has
not been much change. Bureaucratic and low-cost organizations have HR
functions that spend the most time on services, controlling, and record
keeping. Management approaches and strategies such as innovation and
sustainability have a more strategic HR role, but are only now gaining
"market share."
3HR's Engagement with Boards
chapter abstract
HR has a limited role when it comes to supporting boards in all countries.
When it does provide support it is typically in executive compensation and
succession. HR Board support is more frequent and covers more diverse
arenas in high-involvement and sustainable management organizations, and it
is rarer and less extensive in bureaucratic and low-cost-operator
organizations. Providing support to boards is clearly an area where HR
could do more, which would lead to a larger role in the formulation and
implementation of business strategies.
4Business Strategy and HR
chapter abstract
In most organizations, HR remains a limited contributor to the business
strategy, development, and implementation process. The 2013 results are
remarkably similar to the 1998 results. Despite massive changes in the
business world since 1998, the data suggest that HR has changed little.
Yet, the direction of business changes would seem to lead to HR being more
of a strategic partner. The data show that HR executives are active in some
areas that directly affect the strategic direction of organizations, such
as human capital recruitment and development through organization design
and strategy development. Yet, the role of HR is too often separated or
subsequent to strategy formulation. The challenge for HR is to evolve
toward a balance of activities that support strategies after they are
developed as well as direct involvement in strategy formulation, as a full
partner in the high-value-added area of business strategy development and
implementation.
5HR Decision Science
chapter abstract
Decisions about human capital are a vital outcome of HR functional
leadership. HR executives rate human capital decision making in their
organizations as moderately effective, both inside and outside of HR. The
HR decision-science facility of organizations varies with the strategy they
pursue. Decision support and quality are more sophisticated in
high-involvement and sustainable management approaches. More sophisticated
HR decision support and quality is correlated with HR's role in strategy,
suggesting the strategic value of sophisticated human capital decisions.
There is room for improvement, as the average ratings of decision quality
in 2013 are near the midpoint of the rating scale. Yet, survey results
dating from 2007 show the positive association between an organization's
decision-science capacity and HR's role in strategy, particularly in
organizations pursuing management approaches and strategies that are
workforce-intensive and high-involvement.
6HR Organization
chapter abstract
The design of the HR organization has shown some change over time. The data
show significant growth in service units and centers of excellence, and
these design elements are related to HR's strong strategic partner role.
There is a trend toward less variation in HR practices across business
units and a greater emphasis on HR self-service. Yet, other elements that
relate to strong strategic partnership remain stubbornly unchanged,
including career movement of individuals into and out of HR and adopting
information technology. The relationships between the characteristics of
the HR organization and HR's role in strategy suggest what HR needs to do
to become more of a strategic partner: establish centers of excellence, use
joint task forces, use information technology, and develop HR talent. HR
leaders plan to use more teams, and improve their efficiency but these
design elements also remain stubbornly unchanged so far.
7Changes in HR Activity
chapter abstract
HR executives report their organizations are expanding almost all HR
activities, suggesting that HR is increasingly seen as a worthy investment
and a determinant of organizational effectiveness and competitive
advantage. Increased activity in design and organizational development are
particularly strong with greater strategic focus on knowledge and
innovation. Organization design and development is an area that has not
always been a focus of HR, despite its close relationship to organizational
performance and business strategy. Providing expertise in this area appears
to be a way for HR to become more of a business partner, particularly in
information- and knowledge-based business.
8Measuring Efficiency, Effectiveness, and Impact
chapter abstract
HR metrics and analytics remain uniformly rated at or below the midpoint of
usage, and yet are correlated with HR's strategic role. This suggests they
remain underdeveloped and underused. That said, the strongest relationship
with HR's strategic role is with traditional efficiency and effectiveness
measures, not decision-focused impact measures. The path forward appears to
be for HR to begin by enhancing traditional measurement areas and evolve
toward more advanced impact measures as constituents become more familiar
and sophisticated. There are also systematic variations in how HR measures
are used, and how they relate to HR's strategic role. Organizations that
emphasize high-involvement management approaches show greater use of impact
measures, suggesting an organization's management approach affects
receptivity to sophisticated HR measurement.
9The Outcomes of HR Metrics and Analytics
chapter abstract
HR measurement systems emerge as moderately effective, with slight but
notable effectiveness improvement since 2007. Effective HR measurement
continues to be consistently and strongly related to HR's strategic role,
so improvement in measurement effectiveness is linked to a more meaningful
HR role in business strategy. Yet, it appears that measurement
effectiveness in traditional HR functional and operational areas relates
more strongly to HR's strategic role than more advanced decision-support
and impact measures. The findings reinforce the conclusion from prior
surveys-that the potential for HR metrics and analytics to contribute to
HR's strategic value is significant, while the perceived effectiveness
levels remain stubbornly moderate. The findings also suggest that strategic
partnership is reinforced through a balanced approach that combines
effectiveness in logic, analytics, measures, and process.
10HR's Role in Sustainability
chapter abstract
Across all countries, HR is not very active in sustainability activities
but HR executives feel it should be significantly more active. HR
executives feel it should provide more support in the design of
sustainability programs, organization design, change management, and the
way business is conducted. HR executives also believe that sustainability
should be built into such HR processes as selection, rewards, and talent
development. HR is more involved in sustainability activities in
organizations with a stronger strategic focus on sustainability. When HR is
active in sustainability, it is much more likely to play a significant role
in strategy.
11Outsourcing HR
chapter abstract
HR outsourcing shows little increase in recent years. Organizations may be
missing an opportunity to improve their HR activities. Outsourcing can
allow access to knowledge and expertise that they lack and cannot develop,
and create economies of scale. Despite these potential advantages, the slow
growth of outsourcing may be due to challenges in achieving sustained cost
and quality advantages. The findings show that HR executives rate moderate
outsourcing as most effective. While it is popularly stated that
outsourcing creates resources to enhance strategic partnership, our results
show only a slight relationship between the amount of outsourcing and HR's
strategic role. Outsourcing might grow in the future but its failure to
grow during a historically severe recession makes it difficult to predict
what might cause it to increase.
12Information Technology in HR
chapter abstract
Information technology is still used most effectively for the traditional
purposes of providing transactional tools for HR administration. There is
slow movement toward more integrated HR information systems that improve
decision making, but HRISs are not rated as more effective in 2013 than
they were in 2001, and they are rated as only moderately effective overall.
Yet, the drumbeat of big data and analytics, and the promise of
technology-enabled efficiencies continue to raise expectations about what
HRIS can and should deliver. HRISs are clearly most effective when they fit
the strategy of an organization. They are particularly likely to be
perceived as successful in companies with knowledge and information-based
strategies. The strongest finding is that HRIS's are perceived as more
effective the more things they do, and the more services they perform.
13HR Skills
chapter abstract
The highest rated skills in importance for HR managers are business
understanding, interpersonal dynamics, and change management. These have
not changed significantly over time. Yet, HR professionals continue to
suffer from a skills deficit that limits their role in business strategy
development and implementation. There is only moderate satisfaction with HR
skills. No skill rating is higher than 3.9 on a 5-point scale, and that
level was reached only by one of the most traditional HR capabilities -
interpersonal skills. Of particular concern are the relatively low ratings
given to business partner skills, since they are most strongly related to
HR's significant role in strategy. A hopeful sign is an improvement in some
business partner skills. Yet, there is much work to be done to enhance HR
skills and to develop a common understanding about the required skill level
to have an effective HR organization.
14Effectiveness of the HR Organization
chapter abstract
The HR function in organizations is rated as only moderately effective, and
that rating has not changed in over a decade. HR executives continue to
report that HR is most effective in traditional arenas such as delivering
HR services and being an employee advocate. The data show there are many
important areas where HR falls short. HR is not rated highly in business
and strategy effectiveness. This may be due to HR's low rating on analyzing
HR and business data. HR executives say that a strong emphasis needs to be
placed on HR's role as a business partner and on improving decisions about
human capital, areas of relatively low effectiveness for HR. There is a
tremendous opportunity for HR improvement in areas that are related to the
strategic involvement of the HR function. This potential remains untapped,
as HR has not improved its effectiveness since 1995.
15Determinants of HR Effectiveness
chapter abstract
There are a number of relationships between the effectiveness of the HR
function and the way it is organized, managed, and staffed. Overall, the
findings tell an important story. HR effectiveness is associated with a
wide array of HR activities, structures, systems, and skills that are
within the control of HR. HR can do a lot to make HR more effective. Yes,
it needs to be sure its administrative processes work well, but its best
opportunities for improvement appear to be in the business partner role and
in strategy. Unfortunately, these are also the areas that emerge as least
effective and advanced in most HR organizations.
16Determinants of Organizational Performance
chapter abstract
Organizational performance is related to how HR is organized, managed, and
staffed, and how it spends its time. The amount of time spent on strategic
issues is positively related to organizational performance. Having a human
capital strategy that is integrated with the business strategy is also
associated with high performance. Having an integrated HRIS system,
employing metrics and analytics that measure the impact and quality of HR
programs, and processes and talent decisions are associated with
organizational performance. High performance organizations also have a high
level of decision science sophistication with respect to talent and its
impact on organizational performance. Overall, high-performing
organizations have more effective, strategic and sophisticated HR. The
typically moderate levels of HR activities and effectiveness in these areas
suggests significant untapped potential for HR to enhance organizational
performance.
17How HR Has Changed
chapter abstract
HR wants to be a strategic partner and the door is open because of the
growing recognition that talent is a key determinant of an organization's
effectiveness. But HR cannot get through the door in many organizations,
much less get a seat at the table. The good news is that there is a pattern
of HR activities, skills, and relationships that are associated with HR
effectiveness and a stronger strategic role. They include approaches to
designing the HR function and improving the skills of HR managers and
executives. Difficult as it may be to make them happen, the changes that
are required emerge consistently and are easy to identify.
18What the Future of HR Should Be
chapter abstract
The opportunity for HR to add value is great, but it remains more promise
than reality. HR executives need to develop new skills and knowledge, while
maintaining effectiveness in traditional human resource management and
administrative activities. The results of this study show that doing the
basics well remains the platform on which the HR organization needs to
build its role as a business partner. However, HR must also make strategic
contributions to the organization. As organizations adopt new definitions
of sustainable effectiveness that include social and environmental impacts
and face the need to embrace constant and dynamic change, there is an
increasing necessity for a new business model for HR, and this necessity
has been accepted and acknowledged by most HR executives. Yet, the reality
of today's human resource profession appears to reflect only the beginning
of the changes that will put that new model in place.
Contents and Abstracts
1What HR Needs to Do
chapter abstract
The world of work is changing rapidly and dramatically. A strong case can
be made that the HR function in organizations needs to change as well. It
needs to take a more strategic role and develop new talent management
approaches. If it doesn't change, it could end up as an administrative
function that manages an information technology driven HR system. If it
changes it can become a driver of organizational effectiveness and business
strategy.
2The Role of HR
chapter abstract
HR has not significantly changed how it allocates its time since 1995. It
remains a function that spends the majority of its time on services,
controlling, and record keeping. This is true in the United States and in
the other countries studied. HR executives perceive that they spend more
time on strategic partnership, but the data show little change. Data on
management approaches and strategy provide one likely reason why there has
not been much change. Bureaucratic and low-cost organizations have HR
functions that spend the most time on services, controlling, and record
keeping. Management approaches and strategies such as innovation and
sustainability have a more strategic HR role, but are only now gaining
"market share."
3HR's Engagement with Boards
chapter abstract
HR has a limited role when it comes to supporting boards in all countries.
When it does provide support it is typically in executive compensation and
succession. HR Board support is more frequent and covers more diverse
arenas in high-involvement and sustainable management organizations, and it
is rarer and less extensive in bureaucratic and low-cost-operator
organizations. Providing support to boards is clearly an area where HR
could do more, which would lead to a larger role in the formulation and
implementation of business strategies.
4Business Strategy and HR
chapter abstract
In most organizations, HR remains a limited contributor to the business
strategy, development, and implementation process. The 2013 results are
remarkably similar to the 1998 results. Despite massive changes in the
business world since 1998, the data suggest that HR has changed little.
Yet, the direction of business changes would seem to lead to HR being more
of a strategic partner. The data show that HR executives are active in some
areas that directly affect the strategic direction of organizations, such
as human capital recruitment and development through organization design
and strategy development. Yet, the role of HR is too often separated or
subsequent to strategy formulation. The challenge for HR is to evolve
toward a balance of activities that support strategies after they are
developed as well as direct involvement in strategy formulation, as a full
partner in the high-value-added area of business strategy development and
implementation.
5HR Decision Science
chapter abstract
Decisions about human capital are a vital outcome of HR functional
leadership. HR executives rate human capital decision making in their
organizations as moderately effective, both inside and outside of HR. The
HR decision-science facility of organizations varies with the strategy they
pursue. Decision support and quality are more sophisticated in
high-involvement and sustainable management approaches. More sophisticated
HR decision support and quality is correlated with HR's role in strategy,
suggesting the strategic value of sophisticated human capital decisions.
There is room for improvement, as the average ratings of decision quality
in 2013 are near the midpoint of the rating scale. Yet, survey results
dating from 2007 show the positive association between an organization's
decision-science capacity and HR's role in strategy, particularly in
organizations pursuing management approaches and strategies that are
workforce-intensive and high-involvement.
6HR Organization
chapter abstract
The design of the HR organization has shown some change over time. The data
show significant growth in service units and centers of excellence, and
these design elements are related to HR's strong strategic partner role.
There is a trend toward less variation in HR practices across business
units and a greater emphasis on HR self-service. Yet, other elements that
relate to strong strategic partnership remain stubbornly unchanged,
including career movement of individuals into and out of HR and adopting
information technology. The relationships between the characteristics of
the HR organization and HR's role in strategy suggest what HR needs to do
to become more of a strategic partner: establish centers of excellence, use
joint task forces, use information technology, and develop HR talent. HR
leaders plan to use more teams, and improve their efficiency but these
design elements also remain stubbornly unchanged so far.
7Changes in HR Activity
chapter abstract
HR executives report their organizations are expanding almost all HR
activities, suggesting that HR is increasingly seen as a worthy investment
and a determinant of organizational effectiveness and competitive
advantage. Increased activity in design and organizational development are
particularly strong with greater strategic focus on knowledge and
innovation. Organization design and development is an area that has not
always been a focus of HR, despite its close relationship to organizational
performance and business strategy. Providing expertise in this area appears
to be a way for HR to become more of a business partner, particularly in
information- and knowledge-based business.
8Measuring Efficiency, Effectiveness, and Impact
chapter abstract
HR metrics and analytics remain uniformly rated at or below the midpoint of
usage, and yet are correlated with HR's strategic role. This suggests they
remain underdeveloped and underused. That said, the strongest relationship
with HR's strategic role is with traditional efficiency and effectiveness
measures, not decision-focused impact measures. The path forward appears to
be for HR to begin by enhancing traditional measurement areas and evolve
toward more advanced impact measures as constituents become more familiar
and sophisticated. There are also systematic variations in how HR measures
are used, and how they relate to HR's strategic role. Organizations that
emphasize high-involvement management approaches show greater use of impact
measures, suggesting an organization's management approach affects
receptivity to sophisticated HR measurement.
9The Outcomes of HR Metrics and Analytics
chapter abstract
HR measurement systems emerge as moderately effective, with slight but
notable effectiveness improvement since 2007. Effective HR measurement
continues to be consistently and strongly related to HR's strategic role,
so improvement in measurement effectiveness is linked to a more meaningful
HR role in business strategy. Yet, it appears that measurement
effectiveness in traditional HR functional and operational areas relates
more strongly to HR's strategic role than more advanced decision-support
and impact measures. The findings reinforce the conclusion from prior
surveys-that the potential for HR metrics and analytics to contribute to
HR's strategic value is significant, while the perceived effectiveness
levels remain stubbornly moderate. The findings also suggest that strategic
partnership is reinforced through a balanced approach that combines
effectiveness in logic, analytics, measures, and process.
10HR's Role in Sustainability
chapter abstract
Across all countries, HR is not very active in sustainability activities
but HR executives feel it should be significantly more active. HR
executives feel it should provide more support in the design of
sustainability programs, organization design, change management, and the
way business is conducted. HR executives also believe that sustainability
should be built into such HR processes as selection, rewards, and talent
development. HR is more involved in sustainability activities in
organizations with a stronger strategic focus on sustainability. When HR is
active in sustainability, it is much more likely to play a significant role
in strategy.
11Outsourcing HR
chapter abstract
HR outsourcing shows little increase in recent years. Organizations may be
missing an opportunity to improve their HR activities. Outsourcing can
allow access to knowledge and expertise that they lack and cannot develop,
and create economies of scale. Despite these potential advantages, the slow
growth of outsourcing may be due to challenges in achieving sustained cost
and quality advantages. The findings show that HR executives rate moderate
outsourcing as most effective. While it is popularly stated that
outsourcing creates resources to enhance strategic partnership, our results
show only a slight relationship between the amount of outsourcing and HR's
strategic role. Outsourcing might grow in the future but its failure to
grow during a historically severe recession makes it difficult to predict
what might cause it to increase.
12Information Technology in HR
chapter abstract
Information technology is still used most effectively for the traditional
purposes of providing transactional tools for HR administration. There is
slow movement toward more integrated HR information systems that improve
decision making, but HRISs are not rated as more effective in 2013 than
they were in 2001, and they are rated as only moderately effective overall.
Yet, the drumbeat of big data and analytics, and the promise of
technology-enabled efficiencies continue to raise expectations about what
HRIS can and should deliver. HRISs are clearly most effective when they fit
the strategy of an organization. They are particularly likely to be
perceived as successful in companies with knowledge and information-based
strategies. The strongest finding is that HRIS's are perceived as more
effective the more things they do, and the more services they perform.
13HR Skills
chapter abstract
The highest rated skills in importance for HR managers are business
understanding, interpersonal dynamics, and change management. These have
not changed significantly over time. Yet, HR professionals continue to
suffer from a skills deficit that limits their role in business strategy
development and implementation. There is only moderate satisfaction with HR
skills. No skill rating is higher than 3.9 on a 5-point scale, and that
level was reached only by one of the most traditional HR capabilities -
interpersonal skills. Of particular concern are the relatively low ratings
given to business partner skills, since they are most strongly related to
HR's significant role in strategy. A hopeful sign is an improvement in some
business partner skills. Yet, there is much work to be done to enhance HR
skills and to develop a common understanding about the required skill level
to have an effective HR organization.
14Effectiveness of the HR Organization
chapter abstract
The HR function in organizations is rated as only moderately effective, and
that rating has not changed in over a decade. HR executives continue to
report that HR is most effective in traditional arenas such as delivering
HR services and being an employee advocate. The data show there are many
important areas where HR falls short. HR is not rated highly in business
and strategy effectiveness. This may be due to HR's low rating on analyzing
HR and business data. HR executives say that a strong emphasis needs to be
placed on HR's role as a business partner and on improving decisions about
human capital, areas of relatively low effectiveness for HR. There is a
tremendous opportunity for HR improvement in areas that are related to the
strategic involvement of the HR function. This potential remains untapped,
as HR has not improved its effectiveness since 1995.
15Determinants of HR Effectiveness
chapter abstract
There are a number of relationships between the effectiveness of the HR
function and the way it is organized, managed, and staffed. Overall, the
findings tell an important story. HR effectiveness is associated with a
wide array of HR activities, structures, systems, and skills that are
within the control of HR. HR can do a lot to make HR more effective. Yes,
it needs to be sure its administrative processes work well, but its best
opportunities for improvement appear to be in the business partner role and
in strategy. Unfortunately, these are also the areas that emerge as least
effective and advanced in most HR organizations.
16Determinants of Organizational Performance
chapter abstract
Organizational performance is related to how HR is organized, managed, and
staffed, and how it spends its time. The amount of time spent on strategic
issues is positively related to organizational performance. Having a human
capital strategy that is integrated with the business strategy is also
associated with high performance. Having an integrated HRIS system,
employing metrics and analytics that measure the impact and quality of HR
programs, and processes and talent decisions are associated with
organizational performance. High performance organizations also have a high
level of decision science sophistication with respect to talent and its
impact on organizational performance. Overall, high-performing
organizations have more effective, strategic and sophisticated HR. The
typically moderate levels of HR activities and effectiveness in these areas
suggests significant untapped potential for HR to enhance organizational
performance.
17How HR Has Changed
chapter abstract
HR wants to be a strategic partner and the door is open because of the
growing recognition that talent is a key determinant of an organization's
effectiveness. But HR cannot get through the door in many organizations,
much less get a seat at the table. The good news is that there is a pattern
of HR activities, skills, and relationships that are associated with HR
effectiveness and a stronger strategic role. They include approaches to
designing the HR function and improving the skills of HR managers and
executives. Difficult as it may be to make them happen, the changes that
are required emerge consistently and are easy to identify.
18What the Future of HR Should Be
chapter abstract
The opportunity for HR to add value is great, but it remains more promise
than reality. HR executives need to develop new skills and knowledge, while
maintaining effectiveness in traditional human resource management and
administrative activities. The results of this study show that doing the
basics well remains the platform on which the HR organization needs to
build its role as a business partner. However, HR must also make strategic
contributions to the organization. As organizations adopt new definitions
of sustainable effectiveness that include social and environmental impacts
and face the need to embrace constant and dynamic change, there is an
increasing necessity for a new business model for HR, and this necessity
has been accepted and acknowledged by most HR executives. Yet, the reality
of today's human resource profession appears to reflect only the beginning
of the changes that will put that new model in place.
1What HR Needs to Do
chapter abstract
The world of work is changing rapidly and dramatically. A strong case can
be made that the HR function in organizations needs to change as well. It
needs to take a more strategic role and develop new talent management
approaches. If it doesn't change, it could end up as an administrative
function that manages an information technology driven HR system. If it
changes it can become a driver of organizational effectiveness and business
strategy.
2The Role of HR
chapter abstract
HR has not significantly changed how it allocates its time since 1995. It
remains a function that spends the majority of its time on services,
controlling, and record keeping. This is true in the United States and in
the other countries studied. HR executives perceive that they spend more
time on strategic partnership, but the data show little change. Data on
management approaches and strategy provide one likely reason why there has
not been much change. Bureaucratic and low-cost organizations have HR
functions that spend the most time on services, controlling, and record
keeping. Management approaches and strategies such as innovation and
sustainability have a more strategic HR role, but are only now gaining
"market share."
3HR's Engagement with Boards
chapter abstract
HR has a limited role when it comes to supporting boards in all countries.
When it does provide support it is typically in executive compensation and
succession. HR Board support is more frequent and covers more diverse
arenas in high-involvement and sustainable management organizations, and it
is rarer and less extensive in bureaucratic and low-cost-operator
organizations. Providing support to boards is clearly an area where HR
could do more, which would lead to a larger role in the formulation and
implementation of business strategies.
4Business Strategy and HR
chapter abstract
In most organizations, HR remains a limited contributor to the business
strategy, development, and implementation process. The 2013 results are
remarkably similar to the 1998 results. Despite massive changes in the
business world since 1998, the data suggest that HR has changed little.
Yet, the direction of business changes would seem to lead to HR being more
of a strategic partner. The data show that HR executives are active in some
areas that directly affect the strategic direction of organizations, such
as human capital recruitment and development through organization design
and strategy development. Yet, the role of HR is too often separated or
subsequent to strategy formulation. The challenge for HR is to evolve
toward a balance of activities that support strategies after they are
developed as well as direct involvement in strategy formulation, as a full
partner in the high-value-added area of business strategy development and
implementation.
5HR Decision Science
chapter abstract
Decisions about human capital are a vital outcome of HR functional
leadership. HR executives rate human capital decision making in their
organizations as moderately effective, both inside and outside of HR. The
HR decision-science facility of organizations varies with the strategy they
pursue. Decision support and quality are more sophisticated in
high-involvement and sustainable management approaches. More sophisticated
HR decision support and quality is correlated with HR's role in strategy,
suggesting the strategic value of sophisticated human capital decisions.
There is room for improvement, as the average ratings of decision quality
in 2013 are near the midpoint of the rating scale. Yet, survey results
dating from 2007 show the positive association between an organization's
decision-science capacity and HR's role in strategy, particularly in
organizations pursuing management approaches and strategies that are
workforce-intensive and high-involvement.
6HR Organization
chapter abstract
The design of the HR organization has shown some change over time. The data
show significant growth in service units and centers of excellence, and
these design elements are related to HR's strong strategic partner role.
There is a trend toward less variation in HR practices across business
units and a greater emphasis on HR self-service. Yet, other elements that
relate to strong strategic partnership remain stubbornly unchanged,
including career movement of individuals into and out of HR and adopting
information technology. The relationships between the characteristics of
the HR organization and HR's role in strategy suggest what HR needs to do
to become more of a strategic partner: establish centers of excellence, use
joint task forces, use information technology, and develop HR talent. HR
leaders plan to use more teams, and improve their efficiency but these
design elements also remain stubbornly unchanged so far.
7Changes in HR Activity
chapter abstract
HR executives report their organizations are expanding almost all HR
activities, suggesting that HR is increasingly seen as a worthy investment
and a determinant of organizational effectiveness and competitive
advantage. Increased activity in design and organizational development are
particularly strong with greater strategic focus on knowledge and
innovation. Organization design and development is an area that has not
always been a focus of HR, despite its close relationship to organizational
performance and business strategy. Providing expertise in this area appears
to be a way for HR to become more of a business partner, particularly in
information- and knowledge-based business.
8Measuring Efficiency, Effectiveness, and Impact
chapter abstract
HR metrics and analytics remain uniformly rated at or below the midpoint of
usage, and yet are correlated with HR's strategic role. This suggests they
remain underdeveloped and underused. That said, the strongest relationship
with HR's strategic role is with traditional efficiency and effectiveness
measures, not decision-focused impact measures. The path forward appears to
be for HR to begin by enhancing traditional measurement areas and evolve
toward more advanced impact measures as constituents become more familiar
and sophisticated. There are also systematic variations in how HR measures
are used, and how they relate to HR's strategic role. Organizations that
emphasize high-involvement management approaches show greater use of impact
measures, suggesting an organization's management approach affects
receptivity to sophisticated HR measurement.
9The Outcomes of HR Metrics and Analytics
chapter abstract
HR measurement systems emerge as moderately effective, with slight but
notable effectiveness improvement since 2007. Effective HR measurement
continues to be consistently and strongly related to HR's strategic role,
so improvement in measurement effectiveness is linked to a more meaningful
HR role in business strategy. Yet, it appears that measurement
effectiveness in traditional HR functional and operational areas relates
more strongly to HR's strategic role than more advanced decision-support
and impact measures. The findings reinforce the conclusion from prior
surveys-that the potential for HR metrics and analytics to contribute to
HR's strategic value is significant, while the perceived effectiveness
levels remain stubbornly moderate. The findings also suggest that strategic
partnership is reinforced through a balanced approach that combines
effectiveness in logic, analytics, measures, and process.
10HR's Role in Sustainability
chapter abstract
Across all countries, HR is not very active in sustainability activities
but HR executives feel it should be significantly more active. HR
executives feel it should provide more support in the design of
sustainability programs, organization design, change management, and the
way business is conducted. HR executives also believe that sustainability
should be built into such HR processes as selection, rewards, and talent
development. HR is more involved in sustainability activities in
organizations with a stronger strategic focus on sustainability. When HR is
active in sustainability, it is much more likely to play a significant role
in strategy.
11Outsourcing HR
chapter abstract
HR outsourcing shows little increase in recent years. Organizations may be
missing an opportunity to improve their HR activities. Outsourcing can
allow access to knowledge and expertise that they lack and cannot develop,
and create economies of scale. Despite these potential advantages, the slow
growth of outsourcing may be due to challenges in achieving sustained cost
and quality advantages. The findings show that HR executives rate moderate
outsourcing as most effective. While it is popularly stated that
outsourcing creates resources to enhance strategic partnership, our results
show only a slight relationship between the amount of outsourcing and HR's
strategic role. Outsourcing might grow in the future but its failure to
grow during a historically severe recession makes it difficult to predict
what might cause it to increase.
12Information Technology in HR
chapter abstract
Information technology is still used most effectively for the traditional
purposes of providing transactional tools for HR administration. There is
slow movement toward more integrated HR information systems that improve
decision making, but HRISs are not rated as more effective in 2013 than
they were in 2001, and they are rated as only moderately effective overall.
Yet, the drumbeat of big data and analytics, and the promise of
technology-enabled efficiencies continue to raise expectations about what
HRIS can and should deliver. HRISs are clearly most effective when they fit
the strategy of an organization. They are particularly likely to be
perceived as successful in companies with knowledge and information-based
strategies. The strongest finding is that HRIS's are perceived as more
effective the more things they do, and the more services they perform.
13HR Skills
chapter abstract
The highest rated skills in importance for HR managers are business
understanding, interpersonal dynamics, and change management. These have
not changed significantly over time. Yet, HR professionals continue to
suffer from a skills deficit that limits their role in business strategy
development and implementation. There is only moderate satisfaction with HR
skills. No skill rating is higher than 3.9 on a 5-point scale, and that
level was reached only by one of the most traditional HR capabilities -
interpersonal skills. Of particular concern are the relatively low ratings
given to business partner skills, since they are most strongly related to
HR's significant role in strategy. A hopeful sign is an improvement in some
business partner skills. Yet, there is much work to be done to enhance HR
skills and to develop a common understanding about the required skill level
to have an effective HR organization.
14Effectiveness of the HR Organization
chapter abstract
The HR function in organizations is rated as only moderately effective, and
that rating has not changed in over a decade. HR executives continue to
report that HR is most effective in traditional arenas such as delivering
HR services and being an employee advocate. The data show there are many
important areas where HR falls short. HR is not rated highly in business
and strategy effectiveness. This may be due to HR's low rating on analyzing
HR and business data. HR executives say that a strong emphasis needs to be
placed on HR's role as a business partner and on improving decisions about
human capital, areas of relatively low effectiveness for HR. There is a
tremendous opportunity for HR improvement in areas that are related to the
strategic involvement of the HR function. This potential remains untapped,
as HR has not improved its effectiveness since 1995.
15Determinants of HR Effectiveness
chapter abstract
There are a number of relationships between the effectiveness of the HR
function and the way it is organized, managed, and staffed. Overall, the
findings tell an important story. HR effectiveness is associated with a
wide array of HR activities, structures, systems, and skills that are
within the control of HR. HR can do a lot to make HR more effective. Yes,
it needs to be sure its administrative processes work well, but its best
opportunities for improvement appear to be in the business partner role and
in strategy. Unfortunately, these are also the areas that emerge as least
effective and advanced in most HR organizations.
16Determinants of Organizational Performance
chapter abstract
Organizational performance is related to how HR is organized, managed, and
staffed, and how it spends its time. The amount of time spent on strategic
issues is positively related to organizational performance. Having a human
capital strategy that is integrated with the business strategy is also
associated with high performance. Having an integrated HRIS system,
employing metrics and analytics that measure the impact and quality of HR
programs, and processes and talent decisions are associated with
organizational performance. High performance organizations also have a high
level of decision science sophistication with respect to talent and its
impact on organizational performance. Overall, high-performing
organizations have more effective, strategic and sophisticated HR. The
typically moderate levels of HR activities and effectiveness in these areas
suggests significant untapped potential for HR to enhance organizational
performance.
17How HR Has Changed
chapter abstract
HR wants to be a strategic partner and the door is open because of the
growing recognition that talent is a key determinant of an organization's
effectiveness. But HR cannot get through the door in many organizations,
much less get a seat at the table. The good news is that there is a pattern
of HR activities, skills, and relationships that are associated with HR
effectiveness and a stronger strategic role. They include approaches to
designing the HR function and improving the skills of HR managers and
executives. Difficult as it may be to make them happen, the changes that
are required emerge consistently and are easy to identify.
18What the Future of HR Should Be
chapter abstract
The opportunity for HR to add value is great, but it remains more promise
than reality. HR executives need to develop new skills and knowledge, while
maintaining effectiveness in traditional human resource management and
administrative activities. The results of this study show that doing the
basics well remains the platform on which the HR organization needs to
build its role as a business partner. However, HR must also make strategic
contributions to the organization. As organizations adopt new definitions
of sustainable effectiveness that include social and environmental impacts
and face the need to embrace constant and dynamic change, there is an
increasing necessity for a new business model for HR, and this necessity
has been accepted and acknowledged by most HR executives. Yet, the reality
of today's human resource profession appears to reflect only the beginning
of the changes that will put that new model in place.