HR: Whose responsibility is it?
Without a doubt, HR is a CEO’s job. Why?
This is simply because so many companies claim that employees are their greatest assets.
Shouldn’t it always be the CEO’s job to take care of the company’s greatest assets?
Let’s assume a hypothetical scenario whereby a CEO helms the HR function and that they can do the job better than a HR professional.
Performance, performance, performance…
Since ancient times, the success of great leaders has always depended on their ability to maintain a high performance team of key position holders. This is analogous to a CEO who makes sure that the performance of the top brass is checked and managed.
In fact, if you do not already know, your HR team members are always talking among themselves about why some top people are assigned certain roles, which seem like poor fits. Probably, HR folks have more feedback and information coming from a range of sources. The sad thing is that even though one is a poor fit, the person is most probably there to stay, and since they are in the top brass, there is nothing HR can do about it.
The CEO could do a better job in ensuring the performance system is fairly applied to the top brass as well, and this is crucial, as a key position holder has significant impact on the effectiveness of the organisation.
Architect of culture
The top leader and not HR, usually sets, defines and reinforces the company culture. The CEO is the most visible leader in the organisation, and their decisions, actions and behaviour directly personify the company culture.
For example, there is no way a company will have a high performance culture if its key position holders are deemed as non-performers by the on-the-ground staff. Normally, sentiments coming from the ground tell an important tale.
Take for another instance, where a company wants to create a culture that recruits, engages and retains talents but is unwilling to pay competitive wages, invest in human capital or empower its staff. All its efforts will be reduced to empty talk and a waste of time and energy. Such practices will almost guarantee that talents do not stay. The CEO should personally eliminate such incongruence of practices that are incompatible with the desired culture they want to build and reinforce.
Applying business acumen
The HR profession generally attracts people who enjoy working with other people, but who are typically shy of numbers and lack financial acumen. This is why many HR professionals focus all their efforts on HR issues independent of important business-related issues, and are often not present when major business decisions are discussed.
The problem with this is that the human capital dimensions are often lacking in the discussions. There is no one at the table to make sure the company has enough people, with the right skills and knowledge to complement the business strategy.
Thus, instead of always expecting an HR employee (who probably has the least idea on how to run a business, operations and manage financial aspects) to have business acumen, this trait is a “must-have” for a CEO and they will be able to apply business acumen to their HR strategy and align it to the business strategy.
For example, if it is a business strategy to acquire a technology through a merger or acquisition exercise, it is imperative that the company has a complimenting HR strategy to make sure that it does not take over redundant staff, is able to control and retain key personnel, and is also able to assimilate new staff into its culture.
If the company takes over redundant headcount or undesirable staff in an acquisition due to its unwillingness to pay compensation to release these employees, the negative impact these staff have on the culture and operational efficiency of the organisation will far outweigh the cost of compensation, as it might even result in the eventual demise of the organisation.
Making such HR decisions requires a lot of business acumen. Sometimes, money spent on HR related matters is well worth it but can be difficult to substantiate with facts. In reality, the focus of mergers and acquisitions is geared towards operations and finance, neglecting the HR aspects which have a far-reaching impact on the success or failure of the deal.
Getting staff to “believe”
HR has a long list of policies, standard operating procedures, and work standards to uphold, of which I am quite sure most are based on two key principles: “logic” and “fairness”.
However, these are just ink on paper.
What really matters are the actions and behaviours of the top management. For example, if the CEO allows members of the top management to behave badly, such as through bullying, being disrespectful to subordinates, or granting or receiving special treatment, these actions override what the policies are trying to achieve: putting across the message that the company upholds and practices fair systems and approaches.
As such, I would say that although HR is often the steward of rules and standards, the CEO is really the person who gets the company to “believe” that such rules and standards exist.
While this is just a hypothetical scenario, I am sure the above resonates in many HR professionals. It boils down to one question: “Is HR empowered enough to do its job effectively?”
In reality, the HR professional supports the CEO in managing the HR function. However, in order for the HR professional and for any of the HR initiatives to be effective, the CEO and management must first understand the rationale and impact of these initiatives and take ownership of their execution.
In fact, these key position holders, especially the CEO, must be HR-savvy so as to not only align HR strategies to compliment important business strategies, but to also incorporate business acumen into HR strategies and then “walk the HR talk”.
Ultimately after all, “employees are the company’s greatest asset”.
About the Author
Douglas Tan is an experienced HR practitioner specialising in local as well as overseas HR projects and has been particularly successful in setting up HR frameworks for startups, listed companies and multinationals. In his current portfolio as Group HR Director, Vicplas International, he oversees the HR function of the region.