Académique Documents
Professionnel Documents
Culture Documents
February 2015
Changing HR
operating models
Contents
Foreword 2
Executive summary 3
Thought pieces
A modern HR operating model: the world has changed 5
Josh Bersin, Bersin by Deloitte
You cant put in what God left out: not everyone can be a strategic 12
HR business partner
Nick Holley, Henley Business School
The strategic role of HR: What does a strategic HR function look like? 15
John W. Boudreau and Edward E. Lawler III, University of Southern California
CIPD viewpoint 39
Useful information 40
As the world of work grows to champion better work and to step up, to evolve and adapt, to
ever more complex, diverse and working lives. But to do that we attract new talent to the function,
ambiguous, traditional models need a shared understanding of and to invest more in building the
of working are starting to give what this means and what it might capabilities we need to define a
way to more flexible forms of look like in the context of new stronger future.
organisation and employment. and varied forms of employment
Technology, globalisation, relationship. We believe that there This collection of thought pieces
changing workforce demographics are basic principles that constitute brings together some of the most
and skills shortages add to the good people management and recent arguments in the debate.
challenges facing organisations. In development regardless of the Weve published them to surface
this context the role of HR must context, and are continuing our some of the challenges and
evolve and grow to play a greater research in this area. From there opportunities for the HR function,
part in developing organisations we can explore what this means and to make sure that ongoing
for the future. As widely for the HR function of the future debates about our future are as
accepted norms for managing and develop a set of principles comprehensive and well informed
the employment relationship that define good practice and as possible. Over the coming
change, so the pressure will grow professionalism. months well be following all these
for HR professionals to develop debates very closely and gathering
a deeper understanding of the In support of all of this, the way insights from successes and
global context, business needs and the HR function operates must failures as organisations try out the
strategy, and to innovate more continue to evolve. Some observers different models. But at the same
to be not just efficient, but more seem to want to dismiss the future time, well be going back to first
effective of the function, breaking it up principles with some new research
or separating out the strategic to define HRs role in championing
At the CIPD, our goal is to capabilities. Given the macro issues better work and working lives.
support HR professionals and organisations are facing, I would
the organisations they work for argue that the role of HR will only Peter Cheese
on this journey. Our purpose is grow in importance. But we have CIPD chief executive
Acknowledgements
The intellectual property in the individual thought pieces is retained by the authors. We would like to thank them
all for their contributions to this report.
This is a collection of thought with the business and business the HR business partner, the role
pieces about HR operating models needs, and that we have the right in HR most aligned to the business
(also known as HR structure, HR capabilities in the right places. and the role argued to enable
delivery models, HR architecture, HR to bring strategic value to an
HR systems). Here when we use In this collection, Edward Lawler organisation. The implementation
the term HR operating models, and John Boudreau from the of this role is varied. What
we are talking not only about the Center for Effective Organisations, does this role actually do? Is it
organisational structure of HR but Marshall School of Business, specialist or generalist? A lot of
the roles within that structure, the University of Southern California, the discussion about this role has
capabilities required to deliver present the findings from research been focused on the required
those roles, the processes within looking at the relationship between competencies to perform the role.
the structure, and the enablers the design of the HR function Nick Holley from Henley Business
such as technology, governance and HRs role in organisational School, drawing on the work
and measurement. The authors of strategy. Their research found of organisational psychologist
these thought pieces may have a correlation with the essential Elliot Franks, raises an interesting
a slightly different definition, but elements of the so-called Ulrich debate about how we could be
essentially the debate is the same. model the existence of centres asking some HR business partners
What will the HR function of the of expertise, decentralised HR to operate at a level thats beyond
future look like? generalists supporting business their intellectual capability.
units and administrative processing This is particularly relevant and
This collection brings together centralised in shared services interesting where HR functions
a number of lead thinkers: units and a strategic role for have renamed HR generalists
academics, practitioners and HR. Allan Boroughs from Orion from the old personnel model
consultants who are active in the Partners reflects on the success to HR business partners without
debate about the future of the the Ulrich model has had in driving building their capabilities, or
HR function. We asked them to efficiency in the delivery of HR fundamentally changing the
talk about HR operating models operations. But with the need for activities they perform from being
from various angles to provide a HRs focus still to shift more from administrative to strategic. It is
summary of the key themes for HR the administrative to the strategic also interesting for the debate on
practitioners. and to the development of HR competencies and the myriad
organisational capability and talent. courses and books designed to
So what does the HR model of the The centres of expertise need to be help HR business partners develop
future look like? Theres no dispute the focus moving forward. the necessary skills. According to
that the model synonymous with Holley, HR might just need to be a
Dave Ulrich, a model of shared HRs role in the business is bit more realistic with the business
transactional services, centres of evident. Josh Bersin of Bersin about what it can deliver based
expertise and HR business partners, by Deloitte talks about their upon the capability of the function
has dominated conversations about research-informed high-impact and its HR business partners.
the structure for HR for the past HR, which focuses on the need Lawler and Boudreau also
decade or so. The driving force for to bring specialist skills into the highlight some interesting findings
the most part has been efficiency business where they can drive on the relationship between HRs
and standardisation, but we need the most value. Bersin talks about strategic role and the career paths
to move on and focus more on these as networks of expertise of professionals working in HR.
effectiveness adding value to the because of how highly connected
enterprise, and playing our full part the specialists are despite being HR operational efficiency although
in shaping its future direction. And aligned with and embedded in no longer the main driver, remains
that means challenging the operating different parts of the business. A important within organisations,
models for HR, to ensure they align lot of focus has been on the role of particularly as many organisations
2 http://www.cipd.co.uk/cipd-hr-profession/profession-map/building-capability-my-hr-function.aspx
Yes
No
77
25
3 JACQUES, ELLIOT (1997), Requisite Organisation: Total System for Effective Managerial Organisation and Managerial Leadership for the 21st century. London: Gower
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Challenge ble
na
tai
S us
Capability
4 HAMMONDS, KEITH H. (2005) Why we hate HR. Fast Company. August. Available at: http://www.fastcompany.com/53319/why-we-hate-hr
5 CHARAN, R. (2014) Its time to split HR. Harvard Business Review. July. https://hbr.org/2014/07/its-time-to-split-hr
6 BOUDREAU, J. (2014) Its time to retool HR, not split it. Harvard Business Review. August. https://hbr.org/2014/08/its-time-to-retool-hr-not-split-it
7 LAWLER, E.E. and BOUDREAU, J.W. (2015) Global trends in human resource management: a twenty-year analysis. Stanford, CA: Stanford University Press. http://www.sup.org/books/title/?id=24277
8 BOUDREAU, J. (2010) Retooling HR: using proven business tools to make better decisions about talent. Los Angeles, CA: Center for Effective Organizations, University of Southern California.
http://ceo.usc.edu/news/retooling_hr_-_new_boudreau_bo.html
Holding
company
Business organisation In sync
Diversified/allied
business
Most common
Single business/
In sync
functional
organisation
Corporate Shared Dedicated
functional HR services HR
HR organisation
as intangibles. The HR department single line of business, HR expertise Hathaway owns or controls
should be governed to ensure that most logically resides at corporate, Dairy Queen, NetJets, GEICO
these capabilities can be defined establishing company-wide policies Insurance and Fruit of the Loom.
and delivered. (there are no centres of expertise, Or another example of a holding
but functional specialists), with company could be News Corp that
In evolving the HR department, HR generalists in the plants or owns to name a few companies
we start with HR as a business divisions responsible for the HarperCollins, News UK (that is, the
within a business. As such, the HR implementation of these policies. Sun, The Times) and BskyB. Each of
organisation should be structured They do so because there is no these separate businesses has their
in a way that reflects the structure meaningful differentiation between own independent HR organisation
of the business. Companies the business and the corporation. with a full range of HR specialists
typically organise along a grid of Smaller businesses are functional serving that business. There are
centralisationdecentralisation, organisations by scale and probably few corporate or generalist HR
which leads to three basic ways 20% of larger businesses continue professionals.
in which a company operates as functional businesses.
(see Figure 7): holding company, Diversified/allied businesses:
functional organisation or Holding company: When the Most large companies are neither
diversified/allied organisation. company is composed of multiple, pure single businesses nor are
The HR department should mimic unrelated businesses that are they true holding companies. They
the structure of its business managed independently, it is best lie somewhere in between, either
operations. described as a holding company. in related or unrelated spectra
While pure holding companies of diversification. They create
Functional organisation: When are rare (probably about 10% operating or business units to
the company comprises a single of all businesses), we see some compete in different markets, yet
business, it competes by gaining resurgence of holding company try to find synergy among them.
leverage and focus. The role of structure associated with the rise They have shared services, centres
HR in the single business is to of large and well-capitalised private of expertise and embedded HR. Like
support that business focus in its equity and investment firms such any professional services firm, the
people practices. As long as the as Carlysle, Berkshire Hathaway and job of HR is to turn their knowledge
organisation remains primarily a Blackstone. For example, Berkshire (in specialised centres) into client
Services orientation Standardised services across Tailored to business needs Unique services for each
the corporation with consistency through business
learning and sharing
Flexibility Mandates use of internal Has flexibility as governed by Each business creates what is
resources the centres of expertise required
Chargebacks Business units pay an Business units pay for use of Business units fund their own
allocation of HR costs service HR costs
Location Strong corporate presence Wherever makes sense Small corporate HR office, with
with HR generalists on site HR staff at local level
Skills requirements for Technically expert in design Design expertise, but also Business expertise and
HR and delivery consulting and support technical specialty in business
Wealth-creation Corporate shareholder value HR value-creation for line Business unit profitability
criteria managers, employees,
customers and investors
results (through embedded HR HR department challenge. Some Clearly, the democratic Way of
professionals). This is the dominant have misinterpreted our work as Resourceful Humans has emerged
logic for many HR organisations advocating that HR should be as the most exciting alternative
today in large multi-divisional organised through shared services to structure a vanguard Human
companies. Some have called it the in all business settings. One well- Resources strategy beyond the
Ulrich model, although I did not intended study interviewed HR Predict & Control derived HR
create it, but observed, researched leaders in government agencies Business Partner concept.
and wrote about it. HR leaders used and SMEs and they critiqued the
this model to offer more granular shared services logic. Duh! These I cherish innovative HR thinking and
HR solutions to business problems. organisations were functionally practice by building on and evolving
driven and should not create an HR what exists. HR business partner
In recent years, some have tried organisation that is different from logic starts with how to win in the
to figure out whats next in the business organisation. marketplace, emphasising how to
how HR departments will be win with customers and investors.
organised. The challenge again Many have created a straw man Creating better talent, leadership
starts with the business and the of the business partner logic by and organisation capabilities
most basic question is, how saying that it is outdated, but then remains at the heart of this logic. It
will the business be organised? proposing exactly what the HR is useful to learn and move forward
The basic business structure business partner logic proposes. in the HR field by defining new
challenge remains grounded in This week, I received this blast required organisation capabilities
the centralisationdecentralisation email: and ways for HR to deliver these
grid and debate, and so does the capabilities.
There seems to be no HR function and GE and soon after adopted Barry Fry (MD
Slumbering Giants) Barry
that is not embarking on, is not by strategy consulting firms. Why
has significant global
part-way through, or has not these methodologies have not experience in the design
recently completed major change become part of the core knowledge and implementation
in the way it organises itself and base of HR is the subject for of major business
transformation projects,
how it delivers its services to the another paper; however, the
including globalisation,
organisations it supports. purpose of this one is to advocate complex international and national mergers,
and illustrate the benefits of fundamental restructuring, culture change
Much has been written on how to applying methodical organisation and major re-skilling initiatives and has held
roles in a number of HR transformations.
implement the ubiquitous Ulrich design to the reshaping of HR and
model. Billions have been spent on its operating model, an approach Barry was previously Global Director of
outsourcers, consultants, advisers that both starts and ends with the Organisation Development at BOC Group,
Global Line of Business HR Director at BOC
and technology platforms that enterprise as a whole. Group and Global Organisation Development
have apparently transformed HR. Director at The Linde Group. Barry is also an
Many hours of reflection have been Almost by default the drivers for experienced trainer, facilitator and consultant.
spent by businesses wondering functional improvement come from He combines mastery in instructional design
with deep subject matter expertise and
why the first, second or even third beyond the function itself, imposed ensures that there is humour and fun in his
rounds of HR transformation have on HR: internal instructions to programmes.
not achieved what they wanted, cut costs, cut numbers, improve Barrys previous clients include the BBC,
both for the function and the ratios, adopt the enterprise-wide Virgin Media, Orange, EE, Yell, SIG, Sanofi,
organisation itself. The What comes technology platform, get the Pfizer, Atkins, Dentsu, Aegis Network, Alvarez
after Ulrich? question has been basics right, standardise, simplify, and Marsal and University of Southampton.
floating around for a few years outsource and offshore. And a
now, but few coherent propositions cacophony of external voices: use Anton Fishman has
spent the last 30 years
have arisen and even fewer us as we know better than you say advising and working
fully implemented as alternative the armies of consultants, use our alongside HR functions
operating models for HR. technology, its better than theirs as they improve people
say suppliers, follow our star say processes, enhance
their HR functional
Our belief is that HRs struggle the gurus, and so the external voices capability, and learn to
with what comes next, and the go on. And so HR frequently follows. lead and manage their own function as well
near mono-culture we now see in as providing support to the business.
the way HR organises itself, is a More appropriately some Anton has has an MBA from Cranfield and
direct consequence of HR failing to enterprise-wide organisation has held previous roles in Hay Group. He
take a systematic and methodical changes do require HR to follow founded a successful change management
consultancy called Regenesis and its
approach to the organisation design suit and change its structure business psychology offshoot Corporate
of its own function. This would lead and ways of working: rapid Insights. He then became a partner
to designs that they themselves organisation growth, mergers, in Boyden Interim Management and
are the architects of and that are acquisitions, divestments, latterly co-founded Crowne Finch, the HR
transformation consultancy, helping establish
anchored in the current and future retrenchment, relocation, change it as a leading international provider of
needs of their businesses. of ownership, the introduction of consulting services to HR before becoming
matrix structures, centralisation, its chairman in 2013.
The disciplines and toolkits for localisation. Though HR is not Anton is now consulting in the HR, OD,
organisation design were developed often enough the architect of the capability and culture domains as MD of
and pioneered in the early 1970s new enterprise-wide restructuring, Fishman & Partners Ltd.
by internal change agents at IBM these topdown changes provide
Inflection
point
10
ARNEY, B. and DUNDON, T. (2006) Capturing complexity: developing an integrated approach to analysing HRM in SMEs. Human Resource Management Journal.
H
Vol 16, No 1. pp4873.
11
AWLER, E.E. and BOUDREAU, J.W. (2015) Global trends in human resource management: a twenty-year analysis. Stanford, CA: Stanford University Press. http://www.sup.
L
org/books/title/?id=242777
In the last two years I have been partnering success and to set a clear
working with the CIPD in general, strategic agenda for the function.
and Dr Jill Miller in particular, This will change the way that HR
on a project called Beyond the functions will work, and the way that
Organisation. In this work we have they organise and deliver their HR
built up a picture that shows the services.
wide-scale reliance on collaborative
Paul Sparrow is the Director of arrangements in the economy In a forthcoming research report
the Centre for Performance-led today, and the increasingly from the Centre for Performance-
HR and Professor of International inescapable need for organisations Led HR at Lancaster University
Human Resource Management at
to understand how to better and the CIPD entitled Realising
Lancaster University Management
School. He has worked as manage collaborative working. HRs Vital Role in the Success of
a Research Fellow at Aston Partnering Arrangements, we
University, Senior Research Employers are increasingly finding examine six different case study
Fellow at Warwick University,
that they not only have to manage settings across the public and
Consultant/Principal Consultant
at PA Consulting Group, Reader/ their own workforces, but also private sectors. In the private
Professor at Sheffield University have to manage workforces across sector we looked at industry-wide
and while at Manchester Business the partnering network. These partnerships in the nuclear industry
School he took up the Ford
responsibilities are becoming too at the Nuclear Decommissioning
Chair from 200204 and was
Director, Executive Education complex to be managed solely Authority/Sellafield Ltd. We have
200205. He has consulted with through contracts and formal studied developments at Shell in
major multinationals, public governance arrangements. Informal response to the complex portfolios
sector organisations and inter-
mechanisms that ensure good- of joint ventures in the oil and gas
governmental agencies, was an
Expert Advisory Panel member to quality and trusting relationships sector, and we have examined the
the UK Governments Sector Skills are vital to the success of the pursuit of collaborative business
Development Agency and was network. Yet customers expect and models at Rolls-Royce Aerospace
voted in the Top 15 Most Influential
need the relevant organisations and their use in the co-creation
HR Thinkers by Human Resources
magazine from 2008 to 2012 and to be brought together and to of value in aircraft engines. But
was voted in the Top 10 Most collaborate effectively, by operating operating in a collaborative world
Influential HR Thinkers by Human in a coherent and an integrated is not the preserve of the private
Resources magazine in 2014. His
way. This is leading to an expansion sector. In the public sector we see
research interests include cross-
cultural and international HRM, of responsibility, and heightened the pursuit of multi-agency working
HR strategy and the employment exposure to the risks of poor in local government, the growth of
relationship. He is co-editor of co-ordination and control across strategic collaborations in police
the Journal of Organizational
partnered arrangements. forces and the move from direct
Effectiveness: People and
Performance and Editorial Board provision to a commissioning model
Member for Human Resource The main business issues faced in the National Health Service we
Management, International Journal in partnering arrangements are have looked at West Sussex County
of Human Resource Management,
threefold: risk, governance and Council, Dorset Police/Devon and
British Journal of Management,
Cross-Cultural Management: capability-building. All three Cornwall Police and NHS East
An International Journal, issues are highly people-centric, Cheshire/Avarto in this context.
International Journal of Cross- and dependent on relationships
Cultural Management, European
and management behaviour. HR Our initial review of existing work
Management Review and Career
Development International. therefore has the opportunity to in this area uncovered six main
make a significant contribution to issues for HR to consider when