Analysis of HR roles and structures

The personnel/HR function has developed considerably since its earliest welfare role, through a range of different incarnations. There is a long history of the specialist func­tion analysing its role in the organisation and promoting the way in which such roles need to develop in order for the function to gain greater power and credibility. Much emphasis has been placed therefore on a strategic role. If HR is strategic to business success (Boxall and Purcell 2003) then HR needs to be a strategic player and the role of business strategist will be a key role for HR specialists in the future (Cleland et al. 2000).

Analysing HR roles has been a useful way to reflect what is going on in the func­tion and how it is changing, but sometimes roles and role structures are used in the normative sense of what the function should be doing and where it should be aiming.

The function is again in a period of key change and this is reflected by the attention given to this topic in journals. For example a whole issue was devoted to this topic in Human Resource Management Journal (2001), in Human Resource Management (2005), and in Personnel Review (2006).

1. ANALYSIS OF HR ROLES AND STRUCTURES

One earlier well-known example of the analysis of HR roles is by Tyson and Fell (1985) who identified three roles using a construction management metaphor: architect; clerk of works and contract negotiator, but perhaps the most frequently quoted is Storey’s (1992) four roles (handmaiden, regulator, changemaker and adviser) which he identified at the threshold of the move from personnel management to HRM.

In 1997 Ulrich proposed an HR role set which has had a significant influence on the way in which HR has subsequently been structured in the UK, and elsewhere. On the basis of work with leading-edge organisations in the USA he proposed four HR roles, using the metaphors of employee champion; administrative expert; change agent; and strategic partner. He further identified the summary role of business partner, explaining that HR fulfils this role if the four roles above are all effectively achieved. Ulrich’s four 1997 roles are as follows:

• Strategic partner – aligning HR and business strategy, identifying HR priorities through organisational diagnosis.
• Administrative expert – the traditional role of designing the firm’s infrastructure to enable the design and delivery of HR processes, producing administrative efficiency.
• Employee champion – concerned with the day-to-day needs of employees, linking employee contribution to business success, and increasing commitment and com­petence. Involves personal contact with employees and provides a means for employees to voice their opinions, and helps maintain the psychological contract.
• Change agent – involved in transformation and cultural change such as identifying and framing problems and working to solve them.

One of the fundamental features of Ulrich’s approach is his view that HR effective­ness can only be achieved if all business needs relating to HR are met, and therefore all roles are fulfilled. Thus, Ulrich argues that HR must deliver on both an administrative level and a strategic level. This has been echoed elsewhere, with comments that opera­tional HR excellence is an essential precursor for the involvement of HR professionals at a strategic level (e.g. Caldwell 2003; CIPD 2006a). This is a clear change of thinking

from the earlier views which exhorted HR to move from administration to strategy, as in the characterisation of HRM as being in opposition to traditional personnel manage­ment (see, for example, Storey 1992) It has been argued that Ulrich’s model has been the biggest reconception of the HR function since the personnel versus HRM debate and a cursory glance at the advertisements in People Management will show the influence that it has had on job titles and the apparent structure of the HR function. However whilst making the case for strength from the combining of roles, Ulrich does acknowledge the paradox created by trying to fulfil all roles, such as representing employee needs at the same time as implementing a management agenda.

On the basis of further research Ulrich and Brockbank (2005a, 2005b) provided a view of the way in which HR roles had evolved since 1997, and this new analysis focuses on what an HR professional has to do to create value. In the new synthesis of roles, most of the roles have new titles. These are: Employee advocate; Human capital developer; Strategic partner; Functional expert; and the compound role of Leader. However, the roles reported in 2005 can be linked back to the earlier model, as shown in Table 32.1.

We can make some interesting observations about how roles have evolved, in Ulrich’s view, over the period. For example the Employee advocate role is now a single clear role rather than being combined with people development as in the old Employee champion role. This reflects the recent imperative to explore and understand the employee voice and employee well-being and a recognition that these are important for the individual and the organisation and were underrepresented in earlier thinking and practice in HRM.

The Human capital developer role reflects increasing attention to the management and development of human capital and the role of HR in this. It is resonant of role titles, both academic and professional, with ‘human capital’ in the title and in other analyses of HR roles such as the ‘human capital steward’ in Lengnick-Hall and Lengnick-Hall’s analysis, 2003. We discuss the concept of human capital in more detail in Chapter 2 and in Chapter 33.

Whilst one of the key and differentiating features of the 1997 roles was the pro­minence of the Administrative expert role, in that it was of equal value to other roles, it is interesting to see that administration has now been subsumed in a role reflecting func­tional expertise. This may reflect a further distancing from administrative aspects as these are outsourced.

Note that while these new roles have been published much of the debate in profes­sional journals and in academia still relates to both the original 1997 roles and the new roles. This is due partly to publishing time-lags, but also to the huge impact that the original model has had, and reflects the gradual process by which organisations absorb and implement new ideas.

What has emerged from Ulrich’s work, much of which is suggested in the 1997 text, is a restructuring of the HR function into what is often referred to as the three-legged structure. This structure comprises:

• strategic/business roles working with senior managers and business leaders on business issues, strategic organisational change and design;
• shared service centres, outsourcing contractors, and HR intranet support, all focusing on administrative and routine issues; and
• centres of HR expertise providing specialist support to the service centres, providing expert advice and being involved in the design of HR policy and activities.

There is evidence that in many large organisations (see, for example, Robinson 2006) this structure has replaced the integrated model where one HR team carried out this full range of roles. The CIPD is beginning a research project to find out how widely adopted this structure is and what evidence there is of effectiveness.

2. HR STRATEGIC ROLE

There is much evidence that the strategic or business partner role is the one which has been most attractive to organisations. For example an examination of advertisements for HR posts in People Management at the time of writing shows that around 25-30 per cent of job titles advertised are Business Partner or Strategic Partner, compared with early 2003 when these titles were rarely, if at all, used. HR needs to be credible to offer a strategic contribution and it has been suggested that such credibility needs to come from being involved in a wider range of business agendas, and there is some evidence of this happening (see the Window on practice that follows).

It is worth noting however that the term business partner is often used as a synonym for strategic partner, and used interchangeably (Francis and Keegan 2006; Robinson 2006), although this is not what Ulrich was suggesting. In addition there is further evidence that different organisations are interpreting the role in a variety of ways. For example Pickard (2004), suggesting that business partners are emerging as the dominant model, explains how in Vauxhall ‘partners are working with the business, developing

close relationships with line managers and helping to solve issues’. In other organisations partners are roles of a more strategic nature, providing consultancy to senior managers and becoming involved in the wide range of business issues, as above, and in the Pruden­tial example quoted by Pickard in the same article.

In a local government context Griffiths (2005) reports an Employers’ Organisation survey which found that 68 per cent of senior HR managers had a strategic partner role as their primary role; however the survey report suggests reasons for this high figure, one of which is that there are varied interpretations of that role. Furthermore Truss et al. (2002) identify ambivalence over the precise meaning of the word ‘strategic’.

Articles and books abound on how to become a strategic partner (see, for example, Goodge et al. 2004; and Reilly and Williams 2006), with other roles seemingly down­played. One interpretation of this is that the HR function is finally gaining prized strate­gic involvement giving it credibility and power in organisations.

The focus on HR’s strategic involvement was a fundamental part of the move towards HRM from personnel management. However recent prescriptive literature appears to display similar levels of exhortation, and research suggests that while some progress may have been made towards strategic involvement there remains a wide gap between rhetoric and reality.

In addition to the lack of clarity about the nature of the strategic role, another prob­lem with assessing the extent of strategic involvement is that many surveys on the HR roles are completed by HR specialists alone, and it has often been demonstrated that others in the organisation will not necessarily share the view of the HR specialist on this, and other topics. A recent example of this is a survey which included an assessment of the HR strategic role in India, where Bhatnagar and Sharma (2005) found that line managers and HR managers differed significantly in their assessment of HR’s strategic partner role, with HR managers having a much more positive view of their involvement in this capacity.

Caldwell’s (2004) interviewees were mostly optimistic about the growing links between HR policy and business strategy, but this rarely was sufficient for them to be defined as a ‘business partner’, even though 16 of the 24 respondents were represented in the board­room. The general view was that HR people are at the implementation end of strategy. We must therefore question the extent to which changes in role titles actually reflect changes in roles carried out.

The extent to which the HR function becomes involved in both organisational and human resource strategy development is dependent on a range of factors, the most often quoted being whether the most senior HR person is a member of the board of directors. The ultimate in strategic involvement is the presence of an HR board director and this has previously been used as a proxy for strategic involvement. Sparkes (2001) identifies a key role for the HR director as promoting the connection between organisational strategy, culture and people strategy. He maintains that being an HR director means that ‘we can almost guarantee that a human element is built into everything strategic from the start’ (p. 45).

There is some historical evidence to suggest that HR board membership has increased and surveys suggest that around three-fifths of larger organisations have an HR director (see, for example, Hall and Torrington 1998), although some surveys indicate lower percentages. However we found, as did Truss et al. (2002), that strategic HR roles can come and go depending on the context. Recent examples of HR directorships doing just this include Arcadia (Topshop, Burtons and other high street names), where the HR director for over 10 years resigned and will not be replaced by another HR director, with no reasons being given (People Management 2006d); and Thorntons who scrapped the HR director post believing it to be a luxury the company could not afford (Griffiths 2004b). Griffiths (2005) quotes Warner (the corporate director of people and property at Hertfordshire County Council) who says that HR has dropped off the top table in recent times, but who also suggests that HR should not have an automatic right to be on the board, and that the function has to earn its place.

Saratoga, the human capital metrics business of PwC, in its Key Trends in Human Capital Survey 2006 found little evidence of an increasing strategic influence for HR: in fact the number of HR board directors of FTSE 100 companies had fallen to six, and Phelps, the partner in HR services at PwC, said one of the reasons behind the trend was the lack of skilled, strategically minded HR professionals (People Management 2006b).

There is evidence that HR managers have to prove themselves before being given a seat on the board (see, for example, Hall and Torrington 1998) so building key com­petencies is essential. Barney and Wright (1998) suggest that one of the real reasons why HR professionals are not involved in strategic planning is that they are not displaying the required competencies. This continues to be an issue.

It is suggested that HR managers need to use business and financial language; describe the rationale for HR activities in terms of added value; use strategic thinking, act as a business manager first and an HR manager second; appoint line managers into the HR function; concentrate on priorities as defined by the business; understand the business they work in, display business acumen, use relationship building and networking skills, and offer well-developed change-management skills that can be used immediately

Sheehan (2005) argues that the business expertise and credibility of the senior HR specialist can either support or prevent strategic HR integration. Vicky Wright (President of the CIPD) considers that HR will never get to the strategy table unless it delivers at a basic operational level, and identifies the most common problem as HR’s lack of busi­ness understanding. She also points to the need to link business priorities with the HR strategy agenda (using creativity and innovation), and to develop personal competencies to ensure that they can interact successfully with bosses and peers at board level. At a 2006 CIPD seminar three themes emerged when HR directors talked about their rela­tionship with their chief executives:

building their confidence and interpersonal skills; preparedness to take accountability; use of analysis and information to support their argument. (Wright 2006)

In our own research we found (Hall and Torrington 1998), as did Kelly and Gennard (1996), that board membership was generally identified as desirable, for as Sparkes (2001) suggests, it improves HR’s understanding of the business context in which HR strategies need to be developed and implemented. However, board membership does not guarantee the involvement of specialists in strategy, and it is not necessarily seen as essential to strategic involvement. This is perhaps why currently very little attention is given to assessing the percentage of organisations with an HR director.

Other factors influencing the role of the HR function in strategic concerns include the overall philosophy of the organisation towards the value of its people, its culture, the mindset of the chief executive, and the working relationship between the chief executive and the most senior HR person.

These influences are not particularly easy to manipulate, but what the HR function can do is look for opportunities in these areas, and use them. Building a good working relationship with the chief executive is critical. For example Stiles (2001) confirms the power of the chief executive in selecting who should be appointed to the board.

Guest and King (2001) argue that, as senior managers and board members appear to have limited knowledge of research linking people management and performance, there is an opportunity for enthusiastic HR managers/directors to feed new ideas to chief executives. Increasingly, HR managers need to become closer to their accounting colleagues. In addition, the function needs to prepare itself by thinking strategically, identifying a functional mission and strategy and involving line management in the development and implementation of human resource strategy.

The extent to which the HR function makes a strategic contribution to the organisa­tion is the focus of Case 32.1, ‘People issues are central to the success of any organisation’, on this book’s companion website, www.pearsoned.co.uk/torrington.

3. THE ROLE OF LINE MANAGERS IN HR

The literature has for some time been replete with articles about the decentralisation and devolution of HR management as methods of integrating HR activities with day-to-day line management. We use the word devolution here to mean the reallocation of HR tasks to managers outside the HR function, keeping this separate from the relocation of HR specialists to lower levels of the business, in order to work closely with line man­agers in specific departments or sections in the organisation (which we consider to be decentralisation). Here we concentrate on the line taking ownership of HR activities, enabling HR specialists to act as a consultant, coach, facilitator and strategic partner, which has been identified as a key plank of HRM, being different from a traditional personnel management approach (see, for example, Storey 1992). Such devolution of operational day-to-day HR tasks has been described by Hope-Hailey et al. (2005) as devolving the employee champion role.

The advantages of this approach to restructuring HR activities have been identified as allowing HR specialists to focus on strategic rather than operational concerns, and a strengthening of the relationship between the employee and his or her manager, result­ing in a more positive management approach to employee performance. The importance of the role of the line manager in delivering HR is well documented, especially by Hutchinson and Purcell (2004), as in their research they found that first-line manager behaviour is:

the most important factor explaining the variation in both job satisfaction and job discretion, or the choice that people have over how they do their jobs. It is also one of the most important factors in developing organizational commitment. (p. ix)

Hutchinson and Purcell suggest that line managers bring HR policies to life, and in the extract quoted above show how line managers have a direct impact on employee performance.

However, the difficulties of devolving HR activities to first-line managers have also been consistently highlighted. In our research, we found that implementation was difficult, sometimes being described as a game of tennis where although there was a deliberate policy to devolve HR activities, and managers were encouraged to take them on, these often bounced straight back to HR specialists (Hall and Torrington 1998). The idea that line managers need to take on more day-to-day HR activities has been countered by line managers’ lack of skills and interest in this. For example Hope-Hailey et al. (2005) on the basis of their research found that line managers neither were motiv­ated nor had the ability to take on people management responsibilities. Interestingly McConville (2006) in the context of the NHS, the Armed Forces and the Fire Services, found that middle managers wanted to be proactive in HR, were committed to it, and exceeded their job requirements to carry out HR activities, but their already substantial workload created the greatest barrier. Caldwell (2004) found that managers resisted taking full ownership of HR and conversely HR professionals wanted to retain control over HR policy. His interviewees were generally reluctant to take devolution ‘too far’, as ultimately too much devolution may result in the HR role itself being devalued. Our evidence supports this, that HR specialists were keen to hand over the responsibility for day-to-day HR activities, but were less keen to hand over authority for them and the associated budgets. A number of aspects of line manager involvement in HR activities have been identified as problematic, including the lack of consistency of HR decisions and lack of integration resulting in more difficulties in implementing HR strategy.

Maxwell and Watson (2007), on the basis of their investigation into line manager and HR manager perspectives of line management involvement in HR in Hilton Hotels, propose three types of line manager buy-in which are key to their active involvement in HR activities. These are:

• a conceptual understanding of the reasons for their involvement;
• the ability to implement these activities effectively through a clear HR role and having sufficient capability; and

• belief that their involvement in HR is valuable.

Interestingly the authors also found a general lack of shared understanding between line managers and HR specialists about the role of line managers in HR, and some indica­tions that the more similar the perceptions of HR and line managers, the better the hotel performance, whereas the more divergent their perceptions, the weaker the hotel performance.

4. CRITIQUE OF THE DEVELOPMENT OF HR ROLES AND STRUCTURES

The evidence suggests that while it is difficult successfully to change HR roles, as they are socially constructed and depend on the expectations of other members of the role set (see, for example, Truss et al. 2002), there have been changes in the overall level of line manager involvement in HR, in the use of outsourcing and shared service centres and in the emphasis on strategic roles.

One interpretation of these developments is that the HR function is finally gaining prized strategic involvement giving it credibility and power in organisations. However not only do we need to separate the rhetoric from real changes, but these developments in the function are not without their problems. As Hope-Hailey et al. (2005) suggest on the basis of their investigation into the banking industry, the HR function may be able to become more strategic, but the employee experience may deteriorate. The concentra­tion on strategic roles appears to have gone hand in hand with the abandonment of the role of employee champion. There is considerable evidence to suggest that the employee champion role is still equated with tea and sympathy, and that concern for employee well-being is seen as a signal that the HR function is being dragged back to its old wel­fare role (see, for example, Francis and Keegan 2006; Beckett 2005; and Pickard 2005), with consequent loss of status and credibility. In an interview one senior CIPD adviser stated that ‘nobody wants to be an employee champion. They all think it’s ideologically unsound’ (Francis and Keegan 2006).

In case studies of the HR function in large local authorities Harris (2006) found increas­ing use of self-service and outsourcing which appeared to undermine the role of employee champion. She suggests that as the HR function becomes distanced from the workforce and line managers, the consequent loss of knowledge on operational issues means that the function is less able to act as an employee advocate. She found that employees were less likely to see HR as a form of support and advice and suggests they are more likely to approach the union or use legal redress, making the employment relationship more adversarial. She proposes that this loss of touch hinders rather than enables a strategic role.

Along the same lines Francis and Keegan (2005) in their research, which involved interviews with key CIPD staff, HR practitioners, HR course leaders, students and union representatives, found the employee champion role was disintegrating in almost all of the organisations they looked at. They found growth of the business partner role and the parallel restructuring of the HR function which appeared to downgrade the employee-facing role, a reduction in the number of HR specialists (as can be seen also in our Window on practice examples) and the devolution of face-to face HR to line man­agers. They identified a loss of employee trust and confidence and a cost to employee well-being. Respondents believed employees were losing out because line managers did not have time to prioritise HR issues, or their training, and often HR advisers were geographically distant. As HR specialists vanish, they suggest, employees are more likely to turn to unions for support and advice.

The unions are already aware of this trend and Harry Donaldson (Regional Secretary of GMB Scotland) commented that unions were worried about HR shifting its focus away from the workforce and away from ‘traditional HR’ which was associated with welfare and trust. Given that line managers do not always have the necessary skills, he suggested that the chasm thus created between HR and the workforce would be filled by the unions (People Management 2005a).

Not only do these developments have potential consequences for employees, they also have consequences for HR practitioners. Francis and Keegan (2006) found that HR practitioners do not consider employee champion roles as career-enhancing moves, and in 2005 Francis and Keegan reported that HR professionals were further concerned that the ‘people’ element of the job was diminishing. They suggested the people ele­ment is a key reason why many enter the profession, and that changes are resulting in disenchanted HR professionals. In addition they found evidence of an increasing split between strategic and non-strategic HR roles. Not only does this split hinder strategic parts of the role and therefore the fulfilment of the HR role overall, but HR professionals perceive that people are parachuted into the top HR jobs from outside the profession (Francis and Keegan 2006), a development which clearly limits career progression for HR professionals.

In terms of the HR function as a whole devolution (to line managers) and decentral­isation (from the centre to specific business units) create problems for consistency and integration. Caldwell (2003) also suggests that the decentralisation of HRM to the business unit level has resulted in HRM being under more pressures associated with costs, value and delivery and suggests that this has been the driver for the fragmentation or balkanisation of HR into specialist subtasks with some parts outsourced externally or to the line. Caldwell suggests that the main risk here is de-professionalisation of the function, and that decentralisation may cause the HR contribution to constantly shift, thereby diminishing the clarity of its role or function. He suggests that the function remains dogged by ambiguity and conflict.

There is however a view that Ulrich’s work has been misinterpreted and that by roles he meant tasks to be achieved rather than discrete jobs. In spite of this the current focus on Ulrich’s roles and structures appears to be based on the assumption that what is good for the organisation is good for the employee. Francis and Keegan (2006) put this well when they say that current models, like earlier ones, are premised upon the assumption of mutuality of interests between all stakeholders – employees, managers, consultants and HR professionals. And Hope-Hailey et al. (2005) suggest Ulrich’s conception of roles is at best unitarist or at worst naive. The emerging consensus appears to be that there is too much emphasis on models and not enough on skills, people and delivery in context, and that there is a need for the HR function to be agile and flexible in response to the needs of the organisation and consequently for the less rigid application of models (see, for example, CIPD 2006a).

Source: Torrington Derek, Hall Laura, Taylor Stephen (2008), Human Resource Management, Ft Pr; 7th edition.