Never before has the role of human resources (HR) been more critical to the mission and overall success of organizations worldwide. And never before have there been so many major issues vying for attention:
- pressure to grow through e-commerce, global expansion, and mergers and
- the increasing scarcity of employee talent and effective leadership; and
- rapidly changing work force dynamics.
Amid the chaos, there’s one thing that’s increasingly clear: successful organizations of the future must strategically leverage their HR resources.
More and more organizations recognize HR as a key driver of intangibles, such as in-house leadership development, change management, and organizational culture. To make the most of this HR transformation process, it is critical to measure the impact of HR activities on an organization.
The following areas of focus define the content and structure of the benchmarking study. Sponsors collaborated with study personnel and subject matter expert Richard Beatty to refine this scope. The framework for this study is based on demonstrating how the HR function can contribute to the economic value of the organization. The HR department of the future will add measurable value through the following capabilities.
1. Strategy execution: aligning with the firm’s strategy
2. Change agency: the impact and progress of change management efforts
3. Employee advocacy: building strategic work force capabilities
4. Administrative expertise: efficiency of HR systems
To demonstrate value, HR needs to evolve and measure the value it adds to organizational growth and performance. An important step in doing this is demonstrating results through a standard and meaningful measurement system. HR will also need to focus on the business drivers and bottom-line issues in order to improve its partnership with line operations. To support HR in its evolution, this study also focused on the following key questions.
1. How can HR measure its impact on organizational performance? By measuring its results, HR can focus its efforts on the areas of greatest impact: improving senior management confidence in HR and laying the foundation for a greater strategic role.
2. How can HR become a better strategic partner in the organization? HR can leverage its strengths as a change agent for leadership development and culture to enable the organization to best mobilize its human capital. This comes from participation in, and alignment with, the strategic goal setting of the organization.
The findings of this study are reported in terms of the five categories of the study scope. Within these five categories, 11 key findings have emerged.
1. HR needs to identify a few key leverage points where it can impact the business and invest its resources and energy. This includes defining its role in strategy execution.
2. Communication contributes to more effective partnerships that allow HR to develop its agenda from the business goals and communicate this agenda back to the work force.
3. HR must develop key competencies, such as business acumen and systems thinking, to effectively partner with the business.
4. Best-practice organizations structure their HR departments to improve the chance for successful partnerships.
5. HR must actively alter perceptions to build necessary support within HR and the line organization.
6. HR’s role in change varies based on the organization’s strategy and the culture needed to support this strategy. Taking these factors into account, HR must provide the tools and processes to support change.
7. Best-practice organizations understand the importance of quickly, accurately, and effi- ciently managing administrative and transactional work, thus freeing resources for more strategic thinking.
8. Best-practice organizations make HR self-sufficient by pushing the onus down to line managers and making it their responsibility to manage human resources.
9. It is not only important to measure what HR can deliver; it is also critical to measure how HR can add value within the organization.
10. Best-practice organizations build comprehensive evaluation and measurement systems to prove HR’s worth. These systems include traditional measurements and also create alternative approaches that greatly impact the organization’s opinion of HR.
11. Proving the value of HR requires a solid infrastructure and a disciplined effort to measure.
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- Sponsor and Partner Organizations
A listing of the sponsor organizations in this study, as well as the best-practice (“partner”) organizations that were benchmarked for their innovation and advancement in enabling human resources as a strategic partner
- Executive Summary
A bird’s-eye view of the study, presenting the key findings discovered and the methodology used throughout the course of the study. The findings are explored in detail in following sections.
A brief look at the issues at the heart of this study. A foreword is provided by the study’s subject matter expert.
- Study Findings
An in-depth look at the 11 key findings of this study. The findings are supported by quantitative data and qualitative examples of practices employed
by the partner organizations.
- Partner Organization Case Studies
Background information on the partner organizations, as well as their strategic practices.