When I first started in HR, the person whose job I was replacing had held the job title of Personnel Administrator. Benefits and payroll were key to the transactional business function of the role. In this role, the implementation of an updated payroll and benefits system provided the foundation for more strategic HR functions.
Personnel department: HR as a business function
Similarly, in many other organizations, the HR function is now much broader than the traditional “Personnel Department” but this doesn’t negate the need for effective and streamlined payroll and benefits systems. At the very least, HR in an organization must provide effective management of employee data, payroll, time off and attendance, and organizational policies and procedures.
HR as a business partner
Companies that have streamlined and updated payroll and benefits systems are then able to focus on both reactive and strategic HR work, including recruitment, applicant tracking systems (ATS), online training systems, Org charts, complete job descriptions, HR portals for employee access to handbooks and policies, HRIS systems, learning and development, compensation design, HR metrics and reports, employee relations and internal communications. Automation of many of the tools and functions of HR management allow more time to focus on meeting business needs. At this level, the HR function is partially strategic and is valued as a strong business partner to the organization. This is the baseline for a successful and healthy HR function and the successful management of human capital.
Talent management: HR as strategic business integration
Business integration of the HR function occurs fully when the talent management system, including performance management, succession planning, competency management, systems integration, employee engagement, corporate culture, change management and leadership development is able to successfully align the development of the people in its system to meet business performance objectives. People operations and processes are designed to empower people to achieve development and organizational goals. Josh Bersin, in a 2007 article, offers a great summary of the history, principles, and processes of talent management, including a widely shared Evolution of the HR Function graphic.
While the business function—business partner—business integration is pictured as a linear model, organizations may need to focus on work at all these levels. Some organizations that start out with the HR business integration model will also need to ensure that they have the people and/or systems in place to secure business function and business partnership baseline strength as a platform for the integration and elevation of people processes within the organization.
Organizations that position their HR as a strategic business integration believe in developing leaders, driving employee engagement, identifying core competencies and aligning employees to the core values of their mission and values. Integration of the systems of HR and talent management, provides a snapshot of employee talent that allows senior leaders to make forward looking strategic decisions. This HR impact provides a transformational rather than transactional HR effect. Similarly, these organizations then aim for long term leadership and market position in their industry, rather than exclusively focusing on year to year profit. They believe that with the right strategy and the right people in the right positions, that the right outcomes will be achieved. The type of organizations that do this successfully are at the top of their industries and get high ratings of employee satisfaction. While profits are essential, these organizations also have other higher purposes that make their work meaningful and significant.
The real value added of HR and automated HR systems, is thus the combined ability of the business and the HR function to truly integrate and elevate people development as an inherently valuable aspiration and as a path to the achievement of strategic organizational goals.
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