Friday, May 2, 2008

Make More Money - Align Business Models with HR/People Models

People are responsible to carry out every business initiative.
People are the real profit creators in business.
Nothing happens that is not done by some person.
It follows that better people and better people systems produce better results.

This is usually the work of a company's HR department.

There’s a disconnect: Executives never think of HR to impact profit; they can't see past the old administrative personnel departments of the 1950s. Why? Business schools don’t teach the clear connection between people and profits.

Today’s typical HR people aren’t business people. This is a problem.

The very people chosen to handle HR responsibilities are usually ill-prepared or without appropriate authority to accomplish any development task. In fact, management often relegates “HR” to secretaries, clerks or other lower-level persons. Management doesn't think of HR personnel as strategic or profit centric.

In my work with Insperity today, I’ll walk into an organization and be introduced to the “HR” person. Interestingly enough, she/he is also the accounts payable person, or the receptionist, or the bookkeeper. This, also, is not hard to understand, because the very title “HR” that is "Human Resources," has nothing really to do with developing any resource at all. It is a euphemism for the real work being done in these operations, that is, the work of a personnel department.

Connect the HR models with the business model, and voila, profit abounds.

Everything a company does is impacted by some human's performance. Everything. Doesn't it make sense that Human Resource activities have something to do with those outcomes?

Alignment, placement, training, highly developed interest . . . the right people, doing the right job, in the right way, with the right focus.

These are the foundations for discretionary effort, the stuff from which high profit is made. You could have more happy customers, paying higher fees, if you had the best employees. Of course you would.

With a non-business view of HR, and an under-developed and unspecialized people focus, how can companies honestly expect any better productivity from their employees?

My experience says they can't, and they don't.

Such a waste.

1 comment:

Squaredime said...

This is so true, yet the practice is unbelievably ridiculous. Today's largely "Baby-Boomer" managers don't realize that what they call HR is nothing but a nice word for the old line personnel departments of the 1940s, and are equally ineffective at driving profitability.

Peolpe are threal assets, and need to be treated as such.

This will change, and it needs to fast.