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Introduction to HR
Welcome to the updated version of The Big Book of HR. You may be an HR professional just starting out in your career, or a manager or a business owner without HR support who needs to gather information on how to hire, develop, or fire an employee. This book is intended for anyone who works with people and who wants to maximize the impact employees have to ensure the success of the organization. Although there are strong links between HR practices, this book is designed so that each chapter stands alone. Where it makes sense, we refer you to other chapters in the book for more information or to the Appendix, which is filled with forms and other valuable information you can use to supplement what you are already doing in your organization.
The HR profession has had many names—industrial relations, personnel, HR—and now some organizations have invented new names, such as Google, where HR is “people operations.” HR used to be seen as only doing administrative work, but now HR (or whatever you call it in your organization) is actively involved in setting strategy around the people who do the work that move your organization toward the achievement of your mission, vision, and organizational goals. HR can and should serve as advisors to organizational leadership to develop strategic workforce plans that link to the organization’s strategic plan to ensure that the right people are on board so that the firm can meet its objectives and fulfill its mission. HR partners with line management to provide development opportunities to maximize the potential of each and every employee. HR advises management on total rewards programs (compensation and benefits), and rewards and recognition programs designed to minimize costly employee turnover and to maximize employee engagement and retention.
In order to add real value to organizations, HR professionals must understand the business they are in—not just their part of the business. They need to also understand the economics of business—how the organization is funded if it is a non-profit or how it makes money if it is a for-profit organization. A fully functional HR professional, like any other businessperson, should be able to read and understand a profit and loss statement, create and manage to a budget, and understand profit centers. Too often, HR professionals limit themselves by not actively participating in discussions around marketing, finance, and the operations of the organization. They only speak up when the discussion gets around to topics like pay or benefits. The late Pam Farr, the brilliant and highly strategic HR executive at Marriott International, used to tell the story that she would time herself in senior leadership meetings. She would wait at least 20 minutes before bringing up an HR-related issue. All the while, she would be actively engaged in the marketing or finance discussions. This positioned her as a valued partner to the other executives, who saw her first as a business colleague and then as the HR leader she was.
To really set yourself apart as a HR professional, think about how you can add value to your organization. Can you:
Actively participate with understanding in discussions around your organization’s business objectives?
Find a way to do something more efficiently than it is currently being done?
Determine how people and processes can contribute to the bottom line?
Partner with other leaders in your organization to maximize organizational efficiency?
Think strategically by anticipating challenges and resolving potential problems?
Ask the right questions to help your organization meet its goals and achieve its mission?
Lead change initiatives when required?
Communicate effectively in order to influence other leaders?
Manage costs related to employees?
Demonstrate your proficiency in HR related topics such as staffing, retention, HR analytics, compensation, benefits, total rewards, rewards and recognition, employee engagement, employee relations, employee development, leadership development, organizational development, labor relations, HRIS and more?
Lead the organization in an ethical fashion and protect the organization?
There are several topics of general interest that impact everything else in HR and in business that we want to introduce you to before you look at specific HR functions that are discussed in greater detail in this book:
Multiple generations in the workplace.
Globalization.
HR technology.
HR analytics or people analytics.
Organizational culture.
Multiple Generations in the Workplace
Because people are now living and working longer, we currently have five generations able to work simultaneously; and, we’ve become well aware of the issues of having several generations working together. The Millennial generation (Generation Y) is now the largest generation in the workplace since WWI Veterans and Baby Boomers. It is not unusual to have younger people managing older people, and this can lead to tension on both sides. Managers and HR professionals need to recognize this potential landmine and help employees acknowledge and appreciate that they each have a different set of skills and abilities that they bring to the workplace.
We’ve learned that the generations have both differences and similarities, and the most important thing to consider is how to maximize the similarities so that we can all work toward the mission of the organization. Organizations need to be aware of the makeup of their employee population and design strategies to attract and retain the talent needed—no matter what generation they come from!
According to Nicole Lipkin, author ofY in the Workplace: Managing the “Me First” Generation, “What we’re witnessing is not a generational thing. Who doesn’t want flexibility? Who doesn’t want to understand the context for their work? Who doesn’t want better work/life balance? The only difference is that Generation Y is finally saying what every other generation is thinking.”1
There is a great deal of information available on the four generations including in The Essential HR Handbook: A Quick and Handy Resource for Any Manager or HR Professional.2 Millennials and the iGen want a constant stream of feedback. They want to know how they are doing on every project every day. This is not a generation who will sit back and wait until their annual performance appraisal to hear what you think of them. And, they won’t wait for you to give them feedback; they’ll ask you up-front. According to an article in the Harvard Business Review, “Millennials view work as a key part of life, not as a separate activity that needs to be ‘balanced’ by it.”3 This translates into their need for finding work that excites them and where they can have friends at work. They also want to be able to learn new skills and connect to something that is meaningful to them personally.
This is a generation that is accustomed to being praised for anything they accomplish. Many of them have been serious over-achievers from a very early age and thrive on praise for a job well done. Millennials like to work in teams—they are used to working in teams—but they also can work alone. (Consider all the time they’ve spent playing video games while growing up!) They want to be recognized for good work and they respond well to being mentored.
Millennials love to try new ideas; accordingly use their enthusiasm to bring along some of your other employees who don’t easily embrace change. Also, Millennials have been volunteering all their lives, so be sure your organization offers them opportunities to continue that passion.
Obviously, your organization needs to provide Millennials with state-of-the-art technology in order to really engage them in their work—or get them to help you find good technology solutions.
You need to be honest with them, starting with your website and continuing on through the hiring process and how you on-board them and, according to Bruce Tulgan in Not Everyone Gets a Trophy: How to Manage Generation Y, “There are few things Gen Yers are more sensitive to than false advertising. They will spread the word if they feel duped.”4
The newest generation (iGen) are people who were born after 1995 and have been totally influenced by the rapid changes in our world. They tend to be tolerant, socially active, and committed to causes such as the environment. They have strong ties to their parents and have been raised in a media-saturated world. To say they are dependent on technology would be an understatement, so be sure your communication strategies include mobile applications because this is a generation that finds email too slow!
The impact the generational differences have on the workplace can be a challenge for managers and for HR, but as long as we acknowledge that each generation has distinct behavior, habits, expectations, and attitudes, and we understand those differences, HR can help organizations to smooth out the differences and use the strengths that each employee brings—whatever generation he or she belongs to. With the variety of multigenerational employees in today’s workplace, organizations can achieve a strategic advantage by embracing the diversity the various generations bring to the workplace. HR professionals need to be innovative and develop novel solutions such as introducing reverse mentoring (where a younger employee mentors an older employee in the latest technology).
Globalization
The world and the business climate have experienced rapid globalization in recent decades, which now requires HR to shift perspectives in many ways, including recruiting globally and managing in different cultures. HR professionals or managers who work in global organizations must be highly flexible and adaptable to survive and thrive in the ever increasingly complex world we now work in. Working now requires a global mindset—an awareness of cultural differences and that doing business in other countries can be (and most likely is) significantly different from the way it is done in the United States or wherever your home country is. We need to learn local laws and regulations, and also learn how to influence and appreciate the culture in which we are working. As stated in Managing Across Cultures, “It simply can’t be overstated: You will not succeed in global business today if you don’t understand, appreciate, and know how to manage across cultures.”5
To thrive in the global economy, we must all be highly flexible and must adapt to current situations, including when and how work is done, and the language in which it is conducted. A lot of issues around managing in a global economy result from the fact that many times we are managing people we can’t see or perhaps have never met other than on Skype.
As Stephen Covey put it in The 7 Habits of Highly Successful People, “Seek first to understand, then to be understood.”6 It is essential that you understand your organization’s culture as well as your headquarters’ culture. Once you are clear on that, it is time to begin to understand cultures in other places and other businesses. It is not just the visible things such as business card protocol in Japan; it is the deeper issues of how people behave, and how they interact with others, according to Lance Richards, GPHR, SPHR, vice president of global workforce solutions at Kelly OCG.
Welcome to the 21st century, where we now all live in what has become a global village. The global economy touches every aspect of our lives and particularly our businesses. There was a time when global or international HR was a specialty that only impacted a few U.S. businesses, reports Melanie Young, GPHR, SPHR, vice president of the Global HR, Corporate and Global Business Group for Arror Electronics. Now it is a fact of life for most of us. Consider these interesting (and real) challenges:
You work for a global organization and are asked to serve on a global task force with people from your own county, the country where your organization is headquartered in Europe, and others from South America and Asia. Your first challenge is to find a time when you can meet by teleconference or on Skype! There are huge cultural differences on the project team—different approaches to problem-solving. You learn quickly that you have to modify your communication style as you can’t be too direct, and you certainly can’t talk about how wonderful things are in your country because most everyone else feels that their way of doing things is right and has been working quite well!
Working for the same global organization as in the previous point, you have the responsibility for designing a new performance management system that will be used around the world. Suddenly, you need to get up to speed on work councils in Europe and privacy laws in various countries. You learn that in some countries performance reviews can’t be shared with anyone in the organization, including HR, and that some other countries require disclaimers that might be illegal in the United States.
You are recruiting for a global organization and discover that their way of interviewing involves asking personal questions including age, marital status, religion, and other topics that are illegal in the United States. Your organization constructs a new job portal that asks candidates about their religion, race, nationality, age, and other such information.
You are meeting with a group of global employees and tell what you think is a humorous story, and it is met with stony silence.
Your organization is considering moving into other countries and you are on the planning team. You need to consider what kind of government exists in the potential locations and what the economy is like, as well as the size and skill level of the available labor pool. You then need to become fully knowledgeable in international, regional, and local laws that will impact your business. All this should be done before a final decision as to where to locate is made.
You are sending some of your headquarters employees to work for an established period of time in another country. You need to prepare a compensation and benefits package that will work for your organization and the individual employee.
These are just a few examples of what HR professionals are dealing with in our global marketplace. They illustrate the complexity of the challenges HR is facing and will continue to face; therefore, HR professionals need to learn to think and operate differently.
According to Silvia Bagdadli, an associate professor of organization and human resource management at Bocconi University and the director of the executive master in strategic human resource management program at the SDA Bocconi School of Management in Milan, Italy, as reported in the May 2011 issue of HR Magazine, “Global HR professionals need to have several competencies: knowledge of HR strategies, models, methods and techniques; problem solving skills; people management skills; and, finally, the ability to adapt to international contexts.”7
So what can HR professionals do to gain the experience needed to work in the global arena? Consider:
Keeping up with international news and issues by reading publications that cover global issues, such as the International Herald Tribune, New York Times, Washington Post, and Wall Street Journal, and major business magazines, including The Economist, Fortune, Forbes, and the Harvard Business Review. Read daily newspapers from other countries online. (Many countries publish news in English, or Google has a translation service.)
Networking with colleagues who have international background or experience. Consider asking one or more of these colleagues to serve as your mentor on global issues.
Volunteering to serve on international task forces or committees to gain experience.
Learning a foreign language either online or by taking classes.
Taking an assignment in a less-desirable location to gain valuable experience with the hope of using that experience as a springboard to a better position someplace else in the world.
Enrolling in a global HR master’s program or taking international business classes.
Taking advantage of global HR information on the Society for Human Resource Management (SHRM) website (www.shrm.org).
As you begin to work in other countries or with coworkers from other parts of the world, it is critical to understand that how we communicate is important for all aspects of working globally, because it impacts relationship-building, and is a key to how much influence and creditability you can gain. How you communicate with people from other countries can be more important than if you speak a common language. You’ll want to be sure to share your message in a way that will acknowledge and show respect for the difference in culture or business environment. Without being condescending or patronizing, try to use simple words and concepts, brief sentences, and graphics to allow for consistent understanding. Using over-sophisticated language or overly complicated slides or templates may confuse your listeners and also come across as arrogant. Take the time before you meet or present to someone new or to an unknown group, to get to know enough about them to decide how and what to present.
Building relationships with people from other countries and cultures is done the same way you would if you wanted to get to know a coworker in your own country. Ask questions to get to know your fellow employees. If asked, participate in activities where you get to know the employees and how they spend their time outside of work. This will give you great insights into their culture. Whenever possible, involve people in what you are doing. For example, seek input on how they prefer to organize meetings, solicit ideas for the agenda, and ask who they suggest should be included in the meeting. If you are scheduling an international conference call, go with the time that works best for the majority of participants, even if this means an early or late call for you.
In most cultures, if you get a chance to meet face-to-face, food and the meal event is an important relationship-building step. Do your best by trying the local food. Most often they will serve dishes that are known to be acceptable to Americans unless you let them know you are willing to try something new.
HR Technology
One of the core competencies of an HR professional is the ability to understand how technology impacts current processes and how technology can be used to maximize efficiency while not damaging the strong interpersonal relationships required to do business. HR needs to look at the challenges of technology and the impact it has on the work we do. For example, who could have imagined the impact social media has had on recruiting? And what about the unique challenges we now face in managing people who don’t work in the same place we do—maybe not even in the same country—and how we can keep connected using a wide variety of technological solutions.
We use technology to develop our employees by using virtual meeting software and other high-tech resources to keep employees up-to-date on new policies and procedures. We rely on intranets to share valuable information with our employees. Employees enroll and manage their benefits online. They make changes to their personal information such as marital status or benefits changes without HR having to fill out a form or enter data. We use technology to upload information to get employees on payroll, to make changes to deductions, or to enter paid time off information. We use technology to track applicants, capture EEO data, create skills inventories, and conduct background investigations on applicants. We rely more heavily on technology every day. Some forward-thinking organizations are even moving to paperless employee filing systems!
With our ever-increasing dependence on technology, it is important to be sure that privacy is maintained and that all employee data are kept secure. HR and IT can work to ensure critical data integrity is maintained. Therefore, HR needs to be able to have strong links with their technology partners in order to maximize the products used. An increasing number of firms specialize in technology products for HR, and SHRM is a good source for up-to-date information on new and innovative products. SHRM has a practice area around HR technology that can be found at www.shrm.org.
HR Analytics or People Analytics
Organizations need reliable data to make good decisions and HR needs to embrace analytics and do it as quickly as possible. Google has been a leader in this area. They’ve figured out that data can help assess the effectiveness of programs and processes, and most importantly, help organizations make better decisions about what is important both to the organization and to its people. It’s about using data to drive everything related to your employees.
Organizations used to make decisions based on what we thought was the right thing to do—and that might have been based on research but most often was based on the latest trend or newest product out there! Now, we can use real data to make better decisions.
This trend has been difficult for a lot of HR professionals who don’t feel comfortable with data. However, we need to get on board with analytics and understand that using data to make better decisions makes us more valuable to our organizations.
You will need to understand your own organization and how it operates in order to determine which analytics you need to study. Using data to make your point can be extremely powerful and make you a much more impactful HR leader.
Some of the data you need will be available from your HR systems; however, you may need to collect additional data using surveys or focus groups. Take the first step and learn what you already have available and then fill in the gaps.
Organizational Culture
It’s extremely important that you understand your organization’s culture and why it’s critical to your success. It’s amazing how many people think their organization doesn’t have a culture. It does, and even if you’re not aware of it, your employees know your organization’s culture. Your culture is the unique set of values that define your organization, including how you:
Lead and manage your employees.
Are organized (lots of layers, flat, etc.).
Communicate.
Reward and recognize performance.
Handle mistakes.
Empower your people.
Participate in your community.
Encourage innovation.
Your culture is significant and impacts everything you do, including the ability to attract, engage, and retain the best available talent in your field; so, don’t underestimate its importance. HR plays a part in developing and disseminating your culture to your employees.
Business only gets more complicated—doesn’t seem to ever go the other way. Managing people is not an easy process, and we’ve tried to give you as many tips and suggestions as possible to help you do your best. Because things change so quickly, follow us on the web at www.TheHRBigBook.com for current information and a blog with updates on emerging HR trends and issues.