Tuesday, January 8, 2008

Paradox of 'HR Systems'

"But I don't need HR systems", said the senior business manager. I had gone to this gentleman to seek his buy-in (and sponsorship, if possible) for implementing an internal HR product/ solution that I was managing at that time. The main selling point for the HR product was that it would improve the effectiveness of core HR systems in the organization (like Staffing, Rewards and Training). I had just finished my sales pitch and then I was hit with this response. Actually, he was not being difficult. He had a point. This gentleman was managing one of the most profitable units in the organization. This unit had a relatively small number (as compared to the total headcount in the organization) of employees - but with a highly specialized (and difficult to find/retain) skill set. His point was that because of the nature of the skill set and high business impact of the positions in his unit, key people related decisions (hiring, rewarding, training etc.) are directly handled by him and his direct reports in a highly individualized manner and this has been working very well. So any (standardized) HR system/process would be more of a hindrance for him in running his unit !

While the above scenario is not representative of the typical organization context in which HR systems function, it brings us to an interesting paradox in 'Human Resource Systems/ Processes'. There is a clue in the name itself. The words 'system' or 'process' convey an impression of standardization/ consistency. The word 'human' implies a unique individual. As I have mentioned earlier (while discussing the various terms used for HRM), the new business environment has forced organizations to pay more attention to the 'human' part (as opposed to the 'resource' part) of 'human resource management'. This has resulted in a quest for more individualized approaches for managing people (See here for an example in the domain of career development. Another example could be the shift/progression from 'level/grade-based' to 'position-based'' to profile-based' to 'individual-based' approach in compensation and benefits management.). Now the question is that "how can standardized processes/systems be effective in managing unique individuals?" But we can't jump to the conclusion that HR systems/ processes are not required. Absolute chaos can result if there are no HR systems/processes - especially in the case of large organizations. Moreover, how can we forget what we have learned about 'procedural justice' ! However, it has also been established that human beings are managed most effectively in small units. This again brings us back to the importance of customised approaches to managing people - at individual and small group levels - even as many organizations are becoming larger in size. Thus we have a paradox in the true meaning of the term - multiple perspectives/opinions (doxa) that exist alongside (para)- each of which is true - but they appear to contradict/to be in conflict with one another.

One 'solution' that has evolved/emerged in response to this paradox (which is often seen in MNCs) is to establish well-defined processes across the organization and also to give a lot of decision making power to the managers. For example, the process (steps/procedure) for giving a salary increase (or a promotion) would be very clearly defined; but the manager has absolute freedom to decide on the quantum of salary increase for a particular employee (or to decide whether or not to promote a particular employee) subject to an overall salary increase/ cost of workforce budget for the entire team. Thus, highly individualized approach can be taken for managing a particular employee while maintaining standardization at the group level.

People management is a field which is full of paradoxes (for more examples of such paradoxes please see paradox of 'hiring good people and letting them decide' and paradox of potential assessment). . The 'human' dimension of the issues in this domain is one of the main contributing factors. Also, any system (including a human system), when it becomes sufficiently complex, becomes difficult to 'manage' in the normal sense of the term 'manage'. As I have mentioned earlier (while exploring the behavioral science foundations of HR), a key prerequisite for managing is the ability to predict. In the case of complex systems, we face a dilemma - predictions about the behavior of the system that can be made accurately are not very relevant/helpful in managing the system and predictions that are relevant/helpful in managing the system can't be made very accurately ! However, a paradox per se is not a bad thing. If there were neat/linear solutions to problems in people management there wouldn't have been many deep-specialist jobs in HR (which in turn would have forced many of us to look for jobs in other domains !). Paradoxes also contribute to the richness of the domain. However, managing paradoxes might require approaches that are different from traditional problem solving methods. They might need approaches similar to those that I have described in posts like 'Making problems disappear' , 'Wisdom-level consulting' and 'Of problems, paradoxes, koans and wisdom' - approaches that reflect simplicity at the other side of complexity !

Any ideas/comments?

Related posts : See here and here for related posts.


Anand said...

My two cents on this tho' I have not gone through your previous posts fully.
The paradox is heightened by the fact that while HR attempt to standardize and unify, certain situations call for decentralization and hence HR feeling overwhelmed by the momentary loss of control when a certain business owner of a unit attempts to exercise hegemony over his unit. In fact some have even gone on to say, Give me the tools and info I need, and get out of the way. The risk exists and what is needed is a "soft long" touch rather than a frenzied battle for control.

Prasad Kurian said...

Thanks Anand.

Interesting that you mention about 'momentary loss of control' and 'soft long touch'.

It has been argued that 'boundaries' actually set people free. The idea is that once you have defined boundaries for your freedom (or once limits/ boundaries for your empowerment/ authority have been clearly defined), you can act more freely/ spontaneously - without having to justify each decision you make (either to yourself or to someone else)- within the boundaries. So, in reality you might 'experience' more freedom !

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Amit Bhagria

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