Prof. Beatty's assertion "don't trust HR" is over the top.

A recent article in CFO magazine had Prof. John Beatty of Rutgers University made incendiary remarks about the HR profession, going as far to claim that typical HR activities have no relevance to the succes of an organization, or in his words, I quote: "there is no evidence that engaging employees [through HR] impacts financial returns". Oh yeah? As Executive Search Consultant I have come across the opposite case several times.

Let's look at the following quotes

"the language of organizations is numbers, HR isn't very good at data analytics"

and

"They don't think like business people. Many of them entered human resources because they wanted to help people, which I'm all for, but I'm also for building winning organizations."

Just like in sales, marketing or operations, one will find in the HR profession executives with varying skills and competence. In some firms, HR is regulated to an administrative role, overseeing labor regulation, its implementation, and various pay-roll issues. In others HR is an integral part of the company business. I have come across HR Professionals working for Microsoft, Cisco and GE who were actively involved in the business, to such extent that they volunteered or were offered to take up positions in sales, customer care, even operations.

A good HR professional knows and understands the business he works in, and he or she can point out exactly how HR adds value to the business. Those HR executives furthermore have a good grasp of analytics, and are aware of the importance of measuring the critical parameters related to employee performance. I know HR executives in very large organizations which retained consultants to implement EVA (Economic Value Add) performance measurement systems across the enterprise, which involved a significant participation of IT into setting up the system, in this particular case, across one of the largest banks in Turkey. Those HR executives have an understanding of business process analysis, change management and organizational effectiveness.

Are there, as Professor Beatty asserts, HR executives that have no clue about business analytics, or about the actual business of their company ? Yes there are such individuals, however, most of them lack that know-how because their company treats HR stepmotherly and see HR as a paper-pushing gatekeeper function between executive management and employees.

Good managers understand what HR can bring to their companies beyond pay-roll management and labor regulations. That is how I or collegues were retained, to find them great HR who understood a particular business, sector, region and culture; and who could put in place effective and efficient performance measurement and organizational development systems. A good read on measuring HR related matters can be found in "The ROI of Human Capital. Measuring the Economic Value of Employee Performance"

One advice for HR executives: mix with the business people in your company. Learn, understand and participate in the business; get what makes it tick, and how your responsabilities translate in effective added value for the company.

Comments

[Greg Kwolek]

Peter, in quite a stupid (but wide spread and surprisingly often applied) anecdote, HR person in the organization is the one to deliver the "no" of the management to the employees. I assume prof. Beatty had luck of meeting too many of those on his way - as I had in my career.
One of the Fortune 500 corporation I previously worked with used precisely this model (with some extra proactive "no" coming directly from HR). The HR manager's role was to make sure people don't get what they want and what they should get - would it be a new job description, an appraisal, salary increase or the scholarship /which were budgeted, but never spent/. The manager was supported only by the organization's VP - condition sufficient to keep the role for 4+ years and the team's morale low for that time plus few days before the new HR manager started his job.
All in all - if HR can't count, but understand the abstract "more is better" and less abstract "good proffessor won't always make a good sales person, works both ways" there is a fair chance of organization profiting from the "typical" HR activites, not to mention the "non typical" ones.