Does Your HR Department Get No Respect?

One key aspect to successful organizations is their approach to valuing human capital. In many financial institutions much lip service is paid to the importance of people and team spirit. Unfortunately, actions do not follow the rhetoric, and the words come out hollow. As a result, the HR department is often not taken seriously and does not command respect. HR is perceived as a necessary evil and a function that should get minimal support, since it does not generate measurable, discernible benefits.

When banks become committed to better utilizing their human capital, handling the HR department is an important step toward achieving that goal. Several steps can be taken to change the image of the department and demonstrate the value it contributes as well as the role it represents for the team members.

1. Develop a mission and vision for the Department from its customers' perspective, including executive management, middle management, team members and outside customers. Is the HR department merely a payroll processing and recruiting machine, or does it contribute to the long term success of the organization? The right mission statement can help the HR department redefine itself as a line of business with its own customers and value proposition.

2. Identifying strategic initiatives. As a line of business, HR can develop its own strategic initiatives and accountability structure, incorporating three key elements:

   1. Providing value to its customers
   2. Investing in the team members
   3. Engaging in change

   Each company can customize the initiatives to its own environment. Change management and embracing is but one initiative that we all have co contend with. Others may include quality of work life, top performers’ turnover, better job matching etc. The initiatives that are selected should ultimately result in profitability and customer-centric orientation among the team.

3. Redesign of the HR department. The HR business needs to be molded to achieve the strategic initiatives defined above. In order to best achieve the results and to be viewed as a contributing line of business rather than an unproductive cost center. The following three steps may be taken:

   1. Discovery. Customer focus groups can be used to reveal how the major constituents of the Department view human resources, what they valued and what they wanted to see more or less of.

   2. Prioritization. Based upon the results of these customer interviews (which can include all levels of team members in the organization), key priorities for the Department can be developed that reflect customer perspective and are need based.

   3. Decision making process and an accountability structure can be used to build tactical plans and individual performance plans for department members.

Employing a process such as the one described above can facilitate the full integration of Human Resources in terms of benefits, compensation structure, information systems, communication and process management into the company. HR staff will better understand its clients’ expectations internally and will become customer- vs. self-centered. Further, by seeking line input into major HR initiatives, a collaborative process will ensure client satisfaction and better outcomes overall. Involving the customers in shaping their HR department both today and tomorrow not only increases the perceive value of the business but also improves the effectiveness of the entire team.

Last, specific measurements of the outcomes of HR activities that relate to the main goals of the Department should be developed, reported regularly and shared throughout the system. Items such as top performers; retention; percentage of open positions; turnover of "green" employees (6 months’ or less); are all directly related to overall team, productivity and can be measured. This level of accountability helps the HR department’s performance. It also builds respect throughout the organization (particularly if the results are good), as well as puts everyone on equal footing, line and staff functions alike.

Since the most critical production tool banks have is the people, it is important to raise senior management’s consciousness of the relevance of the company’s human capital as its only sustainable competitive advantage. Pay attention to your HR department. If it has no respect, change it until it responds to your needs more effectively. HR is a key resource in any Company. Make the most of it!