Strategy misaligned to HR
Throughout my working career I have been consistently struck by the misalignment of organizational goals and organizational practices. I first came across this during the “teamwork” era. Organizations were investing thousands of dollars developing the team skills of their staff. At the same time they maintained highly individualized goal and reward structures that actually put staff at odds with each other. The result was that the reward structures had more impact than the skills training.
This week I was helping a colleague figure out what their human resources data was telling them and how to put this into a report. The first place to start was the organizational goals and where they wanted to get to.
So this organization wanted to be an employer of choice and increase its employees’ level of engagement. However, at the same time they were intending to make reductions to headcount and reduce the overall resources available to HR. A look at the data presented a relatively quick and easy storyline: HR will not hit its goals if you keep reducing its budget.
The organization was spending less than most of its competitors on HR and had productivity numbers that were better, so reducing the spend on HR would put them at a disadvantage to their competitors and potentially reduce the productivity they currently had. They did have retention challenges based on the dynamics of their talent market. The longer-term workforce was stable, but the turnover at one or two years of service was very high. These challenges would not be solved by reducing the number of recruiters or spending less on recruitment, let alone having fewer HR people and less money to effectively operate retention programs.
Finally, there is substantial research evidence to show that any program of forced layoff will have a negative impact on employees’ perceptions of the organization. Therefore if an organization has a genuine drive to remain an employer of choice whilst going through such a restructuring phase, it would require a substantial over-investment in HR to ensure that the mitigating effects that HR practices can have in these circumstances are in place.
In the past, these types of misalignments between strategy and action have led to debates on theory. Armed with the data, this HR group were off to have the debate based on substance. I put their chances of winning substantial higher.
Ian J. Cook