Major Teoh’s Blog

March 5, 2007

From efficiency to effectiveness

Filed under: Alex Yong,Guest Writers — Major (Rtd) Teoh @ 11:53 am

From efficiency to effectiveness

By ALEX YONG

THIS article discusses some of the challenges that Human Resource (HR) must address if it is to remain relevant to business. For a long time, HR managers have taken comfort in managing their HR function by tending to the basic administrative HR needs for the organisation. This intimate relationship with procedures and rules that started way back when the country’s manufacturing base grew will need to be re-examined in light of the fierce competition that Malaysian businesses face today. There is an urgent need to think how HR can support business better.  

The HR fraternity has awakened to the need for HR to play a strategic role in the organisation. Contributing to the clarion call are those who are outside organisational HR who highlight this urgency to support business needs. This is a good sign but if HR is to play a strategic role, there must be efficiency first within the function before it considers this more challenging role about effectiveness. HR cannot think about effectiveness if its efficiency is in doubt. 

Unfortunately, many organisations are still at stage one: getting the HR basics right.  

The emphasis on efficiency deals with transactions and is often focused on the management of workflow, data, HR costs, and activity reporting. On the other hand, the emphasis on effectiveness is about defining the HR vision, re-aligning and integrating its processes to deliver change, managing performance to deliver business results, and developing and rewarding talent. These are like the two faces of the same coin – the organisation needs the strategic and administrative efforts of HR if it is to stay competitive.  
 
The HR vision 

HR has to think business, understand business and be business focused. It has to understand how it is going to develop, motivate and reward people in the organisation to play their chosen roles. It has to think of the right mix of competencies to build the organisation’s competitive edge. This HR realisation of supporting business results has to be driven from the top of the HR function.  

The HR vision must be clear and relevant to the business and is constantly reinforced in the HR team. No one is left out of this vision and every person in HR understands what he needs to contribute. 

HR professionals have to understand that at the end of the day, HR is about the business of the organisation and not more organisation of the business. 

A commitment to strategising HR to support the business is not a mere wish – it has to be supported by identifiable and clear objectives and sound strategies. You will need the right sort of people to support the change within HR –change HR first before you think about changing the organisation. In most situations, this will require new hiring or even changing the leadership of HR. 
 
The HR People 

To some extent, the collective HR experience has become a trap for HR and it impedes its ability to manage change. There is simply too much emphasis placed on experience and not enough on imagination and trying out new things. 

Those who have not been investing in their self-renewal would want to believe that all they have is all they need to have. What used to be HR’s strength could now be its weakness!         

As HR has developed over the years, the type and quality of HR people have also grown. The HR market has two types of HR professionals: people on the supply side and people on the demand side. 

On the supply side, there are three categories of HR people: the seasoned practitioner, the process expert/consultant, and the theorist. The organisation that wants to transform its HR would have to make careful decisions about acquiring the right sort of HR people.  

Most administrators in HR are seasoned practitioners who have acquired their administrative know-how through years of learning on the job and, consequently, their strength lies in their knowledge of labour laws, HR procedures and HR housekeeping. The process experts know specific HR processes by being exposed to consultancy training and the application of proprietary products, but they lack systems understanding and practical problem solving. 

Theorists tend to operate in a very niche market. Administrators who moved from the staid administrative environment to the more vibrant competitive scenario, either by choice or through organisational renewal, are going to find difficulty in delivering the results to match new expectations. This is so because basic administration relies heavily on rules and precedents and tries to provide consistency by relying on the past, whereas managing change always asks: How can it be better?  

On the demand side are visionary strategists. They are fewer in number and have the know-how and vision to facilitate HR change to support the business. 

These visionary HR people understand the big picture and have depth of knowledge and diversity of experience to manage difficult situations. They think business and are forward looking. They hire the best HR support they can get and are not afraid to hire people who are more qualified than themselves. 

The HR visionary is able to motivate his HR subordinates and empower them to perform their best not just through the lure of monetary gain, but often, by encouraging others to learn and enjoy the work and set challenges for themselves.  
 
The HR Choice 

Giving reality to your HR vision does not come from the rules that you have crafted. Many HR managers think that to re-invent HR is to make better rules and introduce more controls, or for that matter, to purchase a computerised payroll software. That is totally incorrect. 

Also, some corporate leaders still live in the past by thinking that if you can build a more powerful command-and-control model of management you would get better business results! 

For HR to become effective, the first decision affecting HR is the choice of the right leader. One cannot expect an administrator to become a strategist after attending a HR seminar. It is not that easy. Without the right leader, nothing significant is going to happen.  

The second HR choice is about the roles that HR will play. This should see HR expand its role from being a controller and administrator to become a business partner and change facilitator. 

To play the strategic role, HR would need to shift a couple of gears higher and think about the strategic initiatives that are essential to transform the change. The acceptance of the organisation’s vision should see a total commitment to the vision. 

Steps must be taken to build the organisation’s competencies and value system. To achieve this, performance expectations have to be aligned and the measurement of performance has to be objective and quantifiable.  

HR should shift its focus away from performing transactions to aligning and integrating processes. It should evaluate how much of automation is necessary. It is critical that HR reorganise its structure to support business strategy. 

After three decades of HR learning, we have many ideas of what the HR function is all about. 

We know that basic administrative HR has many limitations and is unable to cope with the demands of the competitive environment. If the HR function is to deliver value, then the HR deliverables and employees’ performance indicators must be identified and the processes to achieve that objective must be put in place. 

There must be a radical realisation by HR leaders regarding their new roles and the core competencies that would spell organisational success.  

While the HR fraternity recognises people as assets and the key factor to organisational success, there appears to be more talk than action. Businesses must begin to translate HR ideas into powerful processes and linkages that contribute to competitive advantage. Unless this is done, HR will lose its relevance to the organisation. 


 
 Alex Yong is a HR consultant and author. He is author of MALAYSIAN HUMAN RESOURCE MANAGEMENT that was published by the Malaysian Institute of Management. That book has gone through three reprints and the new revised edition will soon be launched. He is also author of the best selling strategic HR book titled STRATEGIC HR: INVENT AND INNOVATE. Prior to this, he was director of human resource in Ernst & Young, Malaysia. He was also an external resource person for the Malaysian Institute of Management (MIM) and have lectured and done training for MIM for many years.  
 
Alex Yong has over 35 years of work experience in both the private and public sectors. He graduated from Curtin University of Technology, Western Australia. He can be contacted at ay-hrm@yahho.com

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