For the last 30 years, HR transformation centered around a simple theme: HR is not about HR but about delivering value for employees, customers, and investors. Many who focus on HR transformation (also called disruption, re-imagination, renewal, or the latest term) almost exclusively emphasize how to organize the HR department. We believe that upgrading the HR department goes far beyond HR design.
My colleagues and I have performed empirical research with over one hundred thousand respondents, trained 1,000 of HR professionals, and provided advisory services to dozens and dozens of Senior HR leaders. We have distilled nine dimensions of an effective HR department.
Nine Dimensions of an Effective HR Department
1. HR Reputation: What is the HR department known for by all stakeholders?
2. HR Success: What and who defines HR success?
3. HR Strategy: What is the purpose, mission, or strategy of the HR department?
4. HR Design: How is the HR department organized?
5. HR and Organization Capability: How does HR create the right organization capabilities for the business?
6. HR Analytics: How can HR access information through digital HR to make better decisions?
7. HR Practices: How does HR design and deliver HR solutions?
8. HR Professionals: What do HR professionals need to be, know, and do to be effective?
9. HR Work Style: How does HR go about doing its work?
These nine criteria for an HR department may be seen as delivering value at four stages (see Victory Through Organization book):
1. Foundational/Administrative: HR focuses on efficiency.
2. Functional: HR focuses on best practices.
3. Strategic: HR focuses on delivering strategy.
4. Outside-In: HR focuses on stakeholders outside the organization.
These nine dimensions and four stages result in a matrix (see figure) that can be used to audit the overall effectiveness of your HR department.
Using the nine domains by the four stages of HR departments matrix, you can assess where your HR department is today by putting an “X” in the cell in each row that represents your HR Department. This assessment helps you know where you currently focus and where you can improve by moving more to the higher phases. For HR departments to live up to their potential to deliver value to customers, investors, and business, they can use this assessment to guide their transformation.