Article (December-2018)

Articles

The biggest challenge is the relevance of what HR does to business

Prashant Sharma

Designation : -   President (Global Formulations Manufacturing & Operations)

Organization : -  Cadila Healthcare Limited, Ahmedabad

01-Dec-2018

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Do you think that  HRD function in organisations, conceived four decades ago in India, has evolved in the right direction. If not, what are the gaps?
PS HR indeed is moving in the right direction. However, is it moving in sync with rest of the business functions? I strongly feel CHROs are aware of the impact they can have on the ecosystem. Yet I feel they shy away from immersing themselves in true business scenarios and are happy to play the consultant. Their ego need to stay close to the CEO sometimes overcomes the need to be a part of the business. Over decades, HR was groomed as a function that could be the ears and eyes of CEOs, albeit for the wrong reasons. Thus it never inspired trust. Employees were wary of an honest discussion with HR department.
In my view, many CHROs were confused about the true function they were to play in an organization. When they were close to the CEO, employees distrusted them and when they were seen as "employee-friendly", the CEO was sometimes not amused. So, while it was evolving, HR itself was not sure what it to evolve into was.
So, HR should have evolved across two dimensions : Qualitative and Quantitative. Like human beings, who have spread across the world as communities and are mentally/emotionally evolved. So HR has indeed evolved beyond the IR and Timekeeping functions that were its origins into multiple functions deeply entrenched into the organization. OD&D, L&D, Talent Management and so forth. It deploys better tools, better science and knowledge in what it does. So indeed there are lots of things to talk about.
When I see HR leaders around me, for every "evolving" leader, I find multiple who are very uncomfortable with this change and these leaders who cling to the old HR. I find leaders who still shun modern assessment knowledge and pride themselves on evaluating a potential employee in 5 minutes. I still find L&D team members who evaluate training in terms of number of programs conducted and rating of the trainer.
The biggest challenge is the relevance of what HR does to business. Will business heads, if asked to, pay for HR initiatives? Since many HR leaders have never played a business role hands-on, their true sensitivity to what business asks is limited. They come up with programs created in their cabins with no real world connects. I have seen schemes being launched by HR for the field sales team where virtually no field sales person was consulted. And how does business respond? By sending the people they can easily spare to these programs! HR still loves playing the control function and that is a big kick. Only few organizations co-create HR policies with business and typically many policies find little traction at the business place.
I was following a large NBFC, Bajaj Finserv and how its HR policies were ahead of most industry leaders. This was almost 6 years back. No wonder it produced stupendous results and its business results have a huge correlation to a progressive HR function.
Until two decades ago, HR was taken up as a generalist function but now it has become more of a specialist function. Will it be good for the organisation as well as professionals to become as specialist of one branch only in future?
PS Excellent question! Well, you need both. You need to perhaps start off as a specialist. HR desperately needs those SMEs. Then hopefully move across specialisations and then settle down as a generalist. Or maybe continue as a deep specialist if that is your calling.
We have perhaps too many generalists in HR. Now they may be labelled as a Talent Acquisition guy or an OD guy. But if you ask what qualifications and training has prepared them for this role, many will not be able to answer. Dig deep into some real technical questions and you will draw a blank. Ask HRBP in-depth questions about their business, what are the levers that make the business go, and you may again be disappointed. It pains me because you have some HR leaders at the top who are brilliant at PR, brilliant at being at conferences and talking on general topics. When I speak to them, I feel the discussion would not have been very different if it took place 20 years back. Would you expect the same in IT or FMCG? The nature of discussion will change every 5 years there! Now these HR leaders are indeed setting up the right optics - TA teams, OD functions etc. But only very few companies are truly investing in making their HR team members functionally sound. Only very few are immersing their HR leaders in deep business experiences. How many HR leaders have moved into business roles? Real business roles? And how many business leaders have become CHROs? You can count them on your fingers!
So the future of HR truly lies in talent being functionally trained by specialists. You have the Aons, Hay Korn Ferry etc who come with good expertise and can upskill your people. Equip them to help fuel the organization. Let them be aware of various options. Let them know the difference between Payroll Management and true Comp & Ben design and then take Payroll to the next level of evolution. These leaders can then continue to be specialists or may become generalists. But like I said, you need both.
What could be the advantages and disadvantages of such trend?
PS Engaged HR leaders are who truly engage with business. It will mean that business will happily pay for its HR. They will see value being added. You will see HR initiatives move the business needle in a measurable way with high correlation.
Ask CHROs - how many CHROs and their n-1 have true business outcomes as their KRAs/KPIs? I mean real business outcomes. So is the Sales Training Head measured on number of training programs with rating x, or on how many freshly trained sales personnel achieve their targets and YPM improvement? If the training is good, it will cause better sales productivity. Right? So measure them on that.
Pressure on HR to connect with business can also have some interesting ramifications. Some of us get confused between Employee Engagement and Employee Affiliation. The IT sector was struggling with high attrition at a point in time. While some of them invested in cutting edge HR initiatives, some confused HR initiatives being limited to colourful canteens, Friday parties, birthday cakes etc. I have still not met anyone who left because the office party did not have good samosas! This is employee affiliation. Employee engagement begins with understanding EVP and working on it.
It is generally said that element of human is no more left in HR function and it is reduced to resources only? Is it correct? What are the dangers of such mindset?
PS I do not agree. There are many brilliant HR leaders around, some solid CEOs who are committed to building better organizations through building people. Larger organizations will indeed need to rely on technology, automation, processes etc. However, people are your true neural network. You can eventually only reach your people through people. The best of processes can be brought down by mediocre people. Similarly moderate processes can be uplifted by an engaged workforce. In my view the trick is in making the entire organization think that they are also a part of the HR function. Blur those lines. Empower line managers through better HR processes in making transparent and agile people decisions. There is no way a team of 200 HR managers can provide a soft touch to an organization of 15,000 employees. But surely 15,000 HR managers can serve 15,000 employees in a very connected way. That is the dream HR should chase.
The danger of creating a sterile, purely technology driven organization is that your decisions will lack emotive quotient. Because we are dealing with people who perform best when they feel happy, it is unlikely that exclusive bias towards either tech or only human touch will achieve these results.
In this era of technology advancement, How HR professionals can keep them strongly connected with people without sacrificing the potential and advantages of technology in HRD function.
PS If HR leaders truly understand their business and also technology, they will rationally deploy automation. For example, AI can play a great role in short listing CVs (at a certain level); Psychometric tests and assessment tools can help you get deep insights into preferences and behavioural choices of a candidate. But a good behavioural event interview can offer you insights into a person which few automated tools can offer, so use tech by all means as a tool. It is the body of the cake. Icing is the human touch.
Much of repetitive transactional HR can be outsourced to automation. That frees up the HR leaders to invest in themselves, immerse in business projects to learn business and help evolve the business. Tech will help you uncover talent blind spots across the organization. It will help draw solid lines between latent business needs and your L&D interventions, and truly measure its impact.
We evaluated an AI based proposal which works on team dynamics and team composition; it works on thousands of data points to evaluate which teams work best together on shop floor to highest productivity and quality. It proved that while experienced people liked to work with other experienced people that did not necessarily produce the best results. It created better combinations that improved the shop floor productivity. Now this kind of work creates a shop floor free of supervisory bias, brings diversity in teams. BUT the change management in deploying this on the shop floor is a human process and cannot be outsourced to automation. If you hide behind science and deploy this, it may bomb. Couple these insights with a sensitive human touch and you have a winner on your hand!
Do you also agree that HR function is going to extinct in near future? If so, What HR professionals should do to keep them relevant in business world?
PS HR function will never be extinct. HR department, as it exists today may indeed be extinct. But that has been true for almost all functions. HR leaders must understand their business better. They must be able to demonstrate that they have the ability to run a business or work in a business role successfully. This is the biggest determinant. They must keep themselves technically updated on latest developments in HR.  
Do you think that industrial relations function is separate from HRD and they are not intertwined? How both functions can supplement each other for employees' holistic development?
PS These are intertwined. Traditional IR, as I experienced it, was quite insular in its approach. It assumed a top-down approach as ideal, and was perhaps based on "I Am Ok - You Are Not Ok" premise. HR works on "I Am OK - You Are Ok" premise. Thus for IR to be truly effective, it must work with HR principles of today.
At Zydus, we have inverted the pyramid. The medicines you consume all depend upon how engaged and committed our shop floor employees are. The intent of the senior management and the resources we provide are important but are not the final determinants of good quality. That is perhaps true for most organizations. So we ensure that we try to connect with our shop floor employees with the same dignity and respect that any other employee deserves. Traditional IR may not create an environment conducive for shop floor employees to speak up. Many of the issues that the pharma industry faces today are because the past was suffering from an environment that did not foster an open culture, an ecosystem which bred open bottom-up dialogue and challenge sessions. Shop floor employees did not get training investments beyond the basic SOP and GMP trainings. They did not feel they were truly a part of the organization in true sense and that they had the power to change the direction of the organization. Today they know they influence organizational outcomes directly and feel a strong bond with the organization.