Tuesday, April 05, 2005

Changing role of HR

An interesting thought on the role of HR by John Boudreau and Peter Ramstad in the HBR of April 2005:
As organizations increasingly compete through talent, their investments in human capital will determine their competitive positions. Yet HR's way of managing this key resource stands in sharp contrast to how other organizational functions operate. Marketing, finance, and most other functions have well-developed methodologies for generating the information managers need to make strategic decisions. HR, however, often focuses principally on its own performance, carefully measuring cost per hire, the ROI on its programs, and how its initiatives affect skills and attitudes. It's time for HR to shift its focus from what it does to the quality of the talent decisions it supports. (...) HR should be able to help leaders answer critical questions such as:
  • Where does our strategy require talent that is better or more plentiful than our competitors?
  • In what new business ventures do we have a strategic advantage because of our talent?
  • What talent gaps do we need to close in order to keep our competitive advantage?
  • Where would a change in the availability or quality of talent have the greatest impact?

Do you agree with Boudreau and Ramstad this is the HR function we need in modern companies? If your company is pioneering in this respect, or if you can share a best practice / methodology that supports the above, be sure to drop a Comment!

Why many HR Managers don't make it to the top

UCLA management professor Sanford M. Jacoby says in his book "The Embedded Corporation: Corporate Governance and Employment Relations in Japan and the United States" that in Japan HR departments have often been springboards to top executive postings - including CEO - as well as to board membership. Studies from the 1990s showed Japanese CEOs emerging from HR more frequently than from R&D, engineering, or overseas jobs. In addition, one-fifth of directors in Japanese manufacturing firms and one-third of those from other industries claimed past stints in HR.

HR managers in the United States become CEOs or directors only very rarely; so why have they reached the top of the charts in Japan? For one thing, the Japanese consider HR a good place to get to know leaders and managers throughout the organization. But more important, Jacoby explains, Japanese HR managers are often generalists who spend much of their careers in other functions, including accounting, finance, strategic planning, production, and sales. In other words, they are well-rounded, Jacoby says. Perceived as a narrow specialty in the United States, HR in Japan is a place to go to get ahead.
Is HR in the US indeed such a narrow speciality? Or are there other reasons why HRM managers don't make it to the top in the US?