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Memo to CFOs: Don't Trust HR

A professor says most human resources professionals are ill-equipped to carry out value-added workforce planning and transformation.

David McCann, CFO.com | US
March 10, 2009

Broad stroke...

The speaker paints a very broad picture of the HR field and I am surprised by his use of generalities with little documentation to support his conclusions. Mr. Beatty uses "HR people", "silly idea", "they don't think like business people" and dismisses being an employer of choice simply because "everybody and their dog's brother" will apply for employment. Mr. Beatty's arguments do ring true in part. One issue that impacts any executive's ability to effect the bottom line within a corporation is the amount of practical hands-on operational experience and success they have had, something I can't find very much of in Mr. Beatty's academic past. Wise organizations select HR professionals with business experience so they do "think like business people" because they are. If a corporation's HR group doesn't add value, trade them in along with any other group that doesn't and attain one that does. An experienced HR leader who has a solid understanding of value and how to obtain it is just as indispensible as a CFO with that knowledge and without it, just as dangerous and useless. My surprise isn't that HR professionals must find ways to add value, every group including Finance must do so, but that it seems as if a group of 300 CFO's along with CFO.com received Beatty's generalizations and audience pandering so easily....sans evidence. Beatty should have instead been speaking to and challenging 300 Directors of HR. Then again, maybe Beatty was pulling an old freshman HR trick that speaker and audience should refrain from both using and falling for, flattery.

Posted by Fred Millen | January 21, 2011 12:41 pm

HR vs Finance

I read with interest this article that was sent to me being an HR Professional. There has always been a struggle between finance and human resources as finance has always believed that they should have control of all HR functions.You must also consider the audience that the professor is speaking to and therefore how much is valid.Unfortunatly the perception that some individuals have of HR is due to their ignorance of what HR does and what we can do. It is those people such as finance who have this perception and ensure that it is cultivated throughout their organization, and therefore those in HR positions are not given the respect and credibility they deserve. It saddens me that one profession would take it upon itself to verbally bash another. We HR people would never do that, we are smarter.....

Posted by Sarah Gayer | December 05, 2009 04:08 pm

Just 'cause you're good with numbers, doesn't mean squat

I've posted a mini-essay online in rebuttal to your article: http://tinyurl.com/kngoko

Posted by Helen Luketic | September 23, 2009 03:05 pm

Employer of Choice????

Wow - being an employer of choice is a problem??? Hmmm, let's see who are the top employers of choice: Google, Apple...

Posted by Brooks Fisher | June 17, 2009 07:05 pm

Backwards

Most of the time of any HR group I've seen has been working on how to increase the pay and benefits of top management and lower the pay and benefits of everyone else. Most HR departments are little more than extensions of the CEO/CFO policy of increasing the next quarter's earnings at any cost. The reason many employee's attitudes aren't very good is that this has been going on for decades. Very few employees believe the rah-rah speeches after years of no raises and layoffs.

Posted by Nathan Herkowitz | May 23, 2009 08:28 pm

Had to be a CFO

The article had to be written by a CFO. In 31 years as an HR professional, I have found that many CFOs are purely bottom line oriented. Did Mr. Beatty not review the results of the Sears survey in 1992 which found that for each 5 point improvement on the employee attitude scale, there was a subsequent 1.3% improvement in customer satisfaction and a .5% increase in revenue growth. For Sears this equated to a $250 million increase in revenue. Yes, HR does try to treat everyone equally and fairly. Unfortunately, I have not yet found a way to quantify the dollars an organization saves because an employee does not file a discrimination lawsuit.

Posted by Paul Hilton | May 13, 2009 07:56 pm

Professor?

While this article makes several interesting points, I'm hard pressed to think that everyone gets into HR to help people. I also have become increasingly skeptical of "professors" and other people who arn't in the trenches. Is it still true that people who can't do teach?

Posted by Grant Clough | April 22, 2009 10:28 am

One Mistake For Another

Prof. Beatty is missing the point here. His point of view seems to be that HR focuses too much on broad based employee satifaction and not enough on attraction and retention of top performers. This is essentially swaping one soft subjective opinion for another. He should be thinking more about urging HR to be more quantitative and more focused on objective measures. Look for more at www.humanmarkets.com/blog The arguement that he knows better when he is only opining is the perfect example of the most common shortfall in HR today.

Posted by William Strahan | April 17, 2009 07:14 pm

HR is efficient but lacks management support

In my past five years of experience I have experienced numurous times that, HR initiatives lack management support and that they generally tend to come out as more reactive measures than proactive. The reason for this is definitely not lack of motivation in HR professionals, as 90% or probably more HR execs I came accross are certainly self motivated and are living to carve a growth path , development oriented path for an organisation, instill practices which are more conceptually strong and which also give an organisation a perfect positive developing environment. However, these individual and groups most of the time lack management support and hence strategic direction from the top management. Top management does instigate them to continue working on their path, management seldom realises that this group is not a group that driven by its leaders but its a group that requires direction, support and cooperation from every individual in the organisation. Line managers fail to understand that, if they are good HR, they can be better managers also. work pressures and targets kill most of their time, HR processes still not matured enough to flow in the organisation as blood in the viens, driven by every act of an individual, they still seem to be more of a practice in the interest of the management only which should be met to comply. Organisations need to come out of this mode. Right from CFOs to, CEOs, and COOs and etc. everyone need to acknowledge that the HR group needs investment and their support and involvement more than anything else. At the same time even Hr executives need to be more precise and more quantitative while implementing any practice, generally line managers and other support management functions lose interest more because of lack of clarity and forecasted and assured factual benefits which they can stick to and follow up or monitor upon after a concept has been implemented. This is because not too many HR Execs are equiped and qualified professionally. Its something like first Train the Trainer to make the training more efficient. Every Hr Exec is not just expected today to network and keep himself/herself abreast of best practices but also is expected to leap forward by investing in their qualifications, specialisations and self development and their management must support them in these aaspects financially and ensure they also unlearn. All these certainly require great leadership at the top and support of every member in the top management. Top managements must realise that members who lack this inclination and belief must be first educated and made aware. I agree that in tough times its even tough to adhere to any nice to haves but its necessary to believe that investments in such processes is critical and essential for avoiding any such extingencies. Hope this helps ..

Posted by Venkatesh Kotikalapudi | April 15, 2009 01:05 am

Root Cause?

As myself and many of my colleagues have struggled over the past few years to overcome the stereotypes that have burdened the HR profession, I was appalled by Professor Beatty's comments. The main thought that kept running through my mind as I read this article was, "did the opening lines of this story say that Professor Beatty was a Professor of Human Resources?". Then, if any of his comments have merit (I would strongly argue against most if not all of them), would not most of the blame for any shortcomings fall at the feet of he and his colleagues? If HR is to become a profession as respected as finance or accounting, wouldn't Beatty and his peers be the ones charged with shaping the minds that enter the field? Instead of tearing down the profession in front a group of CFO's I think Professor Beatty would be better served addressing any shortcomings he has observed in front of a group of HR professionals and proposing solutions to advance the field. Dennis Hettinger HR Manager

Posted by Dennis Hettinger | April 13, 2009 10:06 am

Beattying a dead horse

Prof B's insights on "thinking outside the HR dept box" by investing more in selecting talent for high value roles, are timely and spot-on, in my view. Most companies have a number of multi-incumbent roles, where superior talent quality or availability makes a significant strategic difference, and creates/builds tangible value for the business. Our challenge in HR is to lead the way in identifying (& filling) these roles, so our organizations maximize increasingly scarce talent dollars e.g. ensuring our businesses don't invest too little in HR for talent segments with the greatest strategic impact, and too much for talent segments with the least business impact. Perhaps coincidentally---presumably Prof B wasn't condeming all of HR to "brand" his new book---this is part of the premise of Prof B's (& Huselid / Becker's) latest publication, "The Differentiated Workforce". That said, I believe Dr. Anna Erickson's comments summed it up best . . . loosely paraphrased, Prof B is tripping down memory lane . . . is the archaic phrase "job satisfaction" even on the HR dashboard screen anymore? Prof B & collaborators did not include it as a topic in their 2005 "Workforce Scorecard" book. Even if job satisfaction as a useful term has an unexpected resurgence, it in no measure equates to employee engagement, which Prof B seems to denounce. Yet, in discussing the linkage of employee training and performance, Prof B opined that, " . . . training may not be the problem - some employees may know what to do, but choose not to do it". The last time I looked, that's pretty much the definition of employee DISengagement. So, Prof B, does engagement matter or not?

Posted by Julius Schillinger | April 06, 2009 09:30 pm

Focus on Performance AND Accountability

Beatty recommends the corporations bypass HR, esp. in scouting for and retaining strategic talent. But even if a particular HR dept fits his stereotype of HR, bypassing the dept would be a passive aggressive tactic, leaving the corporation w/ a useless HR dept. An HR dept might not be best for hiring strategic talent, but it could still enhance employees' performance using methods that are (or can be) supported by data analyses. HR and loss prevention could also instill accountability and prevent waste & dishonesty, so top strategic talents don't become more of liability than an asset (e.g. Madoff). Speaking of 'loss prevention,' I'm looking for many more individuals to take this short survey on that topic: http://www.zoomerang.com/Survey/?p=WEB228YEWGJ74T It's for an undergraduate course project. Thanks!

Posted by Nina Lee | April 04, 2009 11:22 am

Reply to article

Note to CFOs: You CAN trust your HR professionals! My experience in working with internal HR professionals all over the world, has been different than what was cited in the review. First, I want to make clear that not every job within the HR function should be a strategic role that requires analytics. Some jobs within HR truly are transactional and serve the purpose of executing on a strategic HR plan. If every HR role was strategic, there would be no one left to do the tactical day-to-day work. Sure, we want people to think and to consider what they are doing, why they are doing it and look for efficiences, but that is true of every job in every functional department and is not what we are speaking of with regard to using analytics to make strategic workforce decisions. Secondly, I have had the great pleasure of traveling to conferences all over the world, meeting with HR professionals from great and small (but still great) companies and find that HR professionals are bright, thoughtful and indeed using data and analytics such as ROI to measure the impact and return-on-investment of their human capital programs. Measuring financial impact and ROI of human capital programs is not easy, but it can be done. HR Professionals all over the world are implementing the Phillips ROI Methodology in their organization and continue to sharpen their skills in this difficult, but doable methodology. Check out the great work at the ROI Institute (www.ROIInstitute.Net), take a look at the book I co-authored, Managing Talent Retention: An ROI Approach (www.ManagingTalentRetention.com) and you'll see what I mean. CFOs, you can trust HR.

Posted by Lisa Edwards | March 30, 2009 01:45 pm

Reality check - why then do small businesses prosper?

Consider the many small businesses led by entrepreneurs that rely on employee engagement. Don't be fooled - engagement is important to performance in the long term. Bigger companies tend to be far less engaging because of their sheer size and impersonal processes. Engaging people through conventional HR practices are really just another impersonal channel to your employees. As an employee years ago I never once felt that HR added value for me. They were out of touch and for the most part just pushed paper to feed other business processes. I put it to you that thinking global while acting local applies internally as well. Personal connection is what counts, just as it does for small businesses.

Posted by James Picknell | March 29, 2009 04:40 pm

To Have HR or Not to Have HR that is the question!

Some of the observations in the article are right on and we as HR professionals need to pay attention, but Finance needs to consider the rest of the story. Some of us have been way ahead of Richard Beatty for years and know about the weaknesses that can be seen in HR departments. Many of us have been correcting that issue and there are many ?world class? HR departments that do a great job! The fact is that the reverse argument can be made about CFOs and the Finance profession in general. Often times thinking in the Finance Department is so linear that considerations about people and the value they add to the bottom-line are missed completely. Numbers tell part of the story, but do not give a complete picture. Granted we must focus on top and bottom-lines of companies as key metrics. Personally, I have been successful in HR, business operations, and have run my own company. I hold an MBA from a top University. In many situations my grasp of the business and finance in general is much more CEO like than the CFO. Some CFOs are so left brained that any thoughts coming from the right side of their brains is unimaginable. Businesses need balanced brain approaches to solve complex business issues and to be successful. HR often times brings balance to the CFOs office. There are people in HR who seem to think that we need to be "nice" to people and rescue nonperformers. However, the vast majority of HR leaders know that the primary mission of HR is positive people and organizational performance. We work hard to ensure the company performs well. I have espoused for years that HR needs a one word mission and that is PERFORMANCE. As for Dr. Beatty's argument about the Talent Management part of the business, his thinking needs some work. HR's role is to facilitate that process and Business Leaders have a key role in the finding and selection of great talent. It is a partnership! In addition, it is true that we need to ensure we have great performers, however we also need to be sure the people we have are performing well. My philosophy is that many people can perform well with the right processes and systems and an organization made up of super stars alone is impractical and is frankly a pipe dream. Great leaders can get wonderful work out of their people. By the way, there is nothing wrong with being nice to people as long as you treat people equitably and consistently. As a matter of fact, I don't know anyone who would love to work in an organization that is "mean" to people!

Posted by John Eve | March 27, 2009 05:13 pm

Reality Check

I think we need a reality check -- and a logic check. SHRM claims to have about 250,000 members. Not all HR professionals belong to SHRM. Let's just say 250k members. Now, are the good professor and the responders to the article really going to claim that none of those 250,00 professionals are capable of doing good analytics? Would you even seriously claim that the majority can't? It defies reality. Also, we have the good professor & various responders making allegations about the motivations of HR professionals (as, they like helping people), their competencies (other than analytics), etc. Again: you are generalizing about more than 250,000 people. On what conceivable basis -- on what hard evidence -- can the good professor & the responders generalize about so many people? The answer is: they can't. Should I assume, given the economic mess we have now, along with the number of finance types who have been indicted (and who are in jail) that all finance professionals are either incompetent or unscrupulous? I think not. Therefore, I am left to assume that the good professor and the responders are making themselves feel good by insulting another group of people. Is this what we should expect from finance professionals?

Posted by Patricia Bellace | March 27, 2009 01:46 pm

Teach it?

The only thing I have to say is: "If you canıt do it teach it!"

Posted by Jorge Hughes | March 26, 2009 06:38 pm

HR Professionals Must Deliver

HR has focused too long on what they do: compensation, benefits, organization design, EEO etc. It is time for HR to show the results of their work, not explaining the methods used. If HR is not taking on accountability for these 4 roles the value of HR is to be questioned: 1. Become a strategic partner - take a role in creating a org. to accomplish business outcomes (provide an example) 2. Become an administrative EXPERT - revitalize the business & Hr processes provide an example) 3. Become an employee champion - engage the workforce so their minds as well as their bodies are functioning for the company (communicate to management what they do not want to hear from the workforce)(provide an example) 4. Become a change agent - build the firm's competency and capacity to change (provide an example) Now list the outcomes that HR has accomplished in the 4 categories - notice I said outcomes not activities. And your decision is ? Milan Moravec www.Moravecglobal.com

Posted by Milan Moravec | March 26, 2009 05:24 pm

Flawed Logic

I appreciate Dr. Beatty's frustration about the shortcomings of HR. We've all heard these complaints. But I'm confused by his logic. In one breath he says the average employee doesn't matter, in the next he talks about the bottom line impact of outstanding vs less than average employees. And by avoiding the "employer of choice" label, where does he think these outstanding employees are going to come from? By having fewer candidates to choose from, the quality of those candidates will improve? Really? Finally, Dr. Beatty is decades old in his understanding of the research around the impact of employee attitudes. He is mistaken to equate job satisfaction with employee engagement. His argument that there is no relationship between job satisfaction and performance was the current thinking when he was in graduate school in 1970 - but much research has been done since then. For a great review of the literature, research, and history of employee engagement and it's impact on performance, see this white paper: http://www.questaroig.com/pdfs/White_Paper_Engagement.pdf. It discusses the road from Dr. Beatty's understanding to a more current understanding of this relationship. For those more scientifically minded, there is a very comprehensive study published in the Journal of Applied Psychology demonstrating the relationship between engagement and business outcomes: Business-unit-level relationship between employee satisfaction, employee engagement, and business outcomes: A meta-analysis. Harter, James K.; Schmidt, Frank L.; Hayes, Theodore L. Journal of Applied Psychology. Vol 87(2), Apr 2002, 268-279.

Posted by Anna Erickson | March 25, 2009 07:17 pm

Stereotypes!

Thank you for enforcing those stereotypes we all know and love about how business minded HR professionals are and how attached we are to employer of choice and "wanting to help people". My further comments are at my blog: http://breathingspacehr.co.uk/blog/index.php/2009/03/25/memo-to-cfos-dont-trust-hr/

Posted by Suzie Bogle | March 25, 2009 12:30 pm

Oh come on!

Has Mr. Beatty never worked with quality HR professionals? I have for most of my career and the following statement couldn't be further from the truth. "They don't think like business people. Many of them entered human resources because they wanted to help people, which I'm all for, but I'm also for building winning organizations." Please! Those in Finance who accept that view of the HR profession should all put on their green eye shades and start counting beans so they can fit the stereotype of their own discipline. For me, I will continue to follow the path of working constructively with business people of all functions, drawing from our collective experience to build the best company we can. By the way, where is the balance in this reporting?

Posted by Ed Goldfinger | March 24, 2009 08:50 am

And what about shared purpose?

This article reinforces typical perceptions often found in organisations: Finance do analytics and not people....and HR its vice versa. I wonder how helpful this is for the organisation as a whole? Of course individuals in Finance "can do people"..and of course people in HR.."can do analytics". This is unlikely to happen whilst these collective perceptions are perpetuated. I wonder what would happen if the HR and Finance functions realised that they work for the same organisation and share the same purpose, and focused on why they perceive each as they do.....and how they could harness their collective talents and skills for the whole.

Posted by Ellie Oakes | March 23, 2009 07:33 am

Stereotypical

Professor Beatty's remarks seem very stereotypical and unsupportive of the HR community. He claims that typical human resources activities have no relevance to an organization's success. To some extent that is true, but there is no discussion of those HR professionals who engage at a truly strategic level. Yes, there are some HR folks who are business minded and are very good at data analytics. Who in their right mind would not want to be an employer of choice, especially in today's economy? It is true that these employers draw many applicants, but technology has been available for years that allows HR professionals to quickly weed out the unqualified ones. Although he has had extensive interface with many organizations, Professor Beatty would have much more credibility with me if he had any true HR experience outside of the academic and consulting environments. Perhaps a more appropriate message to the CFO conference would have been one of how to form better strategic alliances between Finance and HR.

Posted by Charles Matthews | March 22, 2009 08:14 pm

Get Real

I partially agree with the professor about the "employer of choice" issue, however, for different reasons than he states. I agree that it is not worth investing heavily in employment branding for B2B companies as the results do not justify the cost. However, he misses the point about "employer of choice" campaigns for consumer product companies. It is commonly understood that employment branding campaigns like "employer of choice" in consumer companies is not just about hiring. McKinsey and other influential business consultants have affirmed that employment branding can be an effective part of a larger effort to increase brand awareness and customer loyalty and ultimately sales, in consumer product companies. Beatty also needs a reality check with regard to his comments about "this market" being a great opportunity to attract better talent. Really? Are we to assume then that companies are laying off their best talent? Is the real talent to be found in companies going out of business? In my experience, it was difficult to attract top talent in the broadly based recessions of the early 90s and 2001/2002. And, it's even worse now. The reason is the same. The best candidates are generally employed professionals at the top of their game in good companies. They are understandably reluctant to switch jobs in a down economy since they know the grass is not necessarily greener elsewhere. Do we really want to hire people dumb enough to jump ship for no good reason other than a bad economy, or to get options at a lower price? And, unfortunately, the few stars who happen to be available due to no fault of their own may not fit the needs, or there is simply to few of them to make a true difference in this hiring market. Companies trying to control expenses won't throw money at hiring great available talent just for the sake of it. And, if they do, will those same money-conscious people just leave when things get rosy again. And where's the data to prove the professors assertion that "HR isn't very good at data analytics." The myopic opinions by Professor Beatty in this article are understandable given visibility is very limited from an ivory tower. If nothing else, he's made a good case for not hiring his students. Rutgers may be better served by paying Professor Beatty not to come to work. But, what's most disappointing is the lack of balance coming from CFO.com.

Posted by Bob Spoer | March 19, 2009 09:34 pm

HR- Trust & Strategy

Its a universal truth that no system can please everybody in the same way. If some are for it, others, complain about it. This is "the human nature". Individuals think differently from each other, act differently from each other. In a situation like this, there is no hope that all employees in an organisation have job satisfaction. Some are satisfied and some are not. The idea behind employee engagement is to motivate the employees to perform better which impact is directly related to mental status of an individual. This could be better understood if one has read the Maslows Hierarchy of Needs (http://www.netmba.com/mgmt/ob/motivation/maslow/). Most people at the top level have reached their heights through a long term training, which is self learning & through experience. For any to reach a point in life has to undergo training in one way or the other, be it sef, education or training. Present day HR professionals believe that such learning can be condensed to training sessions. This is so to cut time and produce competant workforce. Again, a educated and trained HR professional will not just look to hire competant workers but also will align himself to the strategic goals of the company, and, for which reasons it may not necesarily bring job satisfaction to all employees. Now-a-days there are many number of employees who claim themselves to be HR professionals who begin their career in HR without any relevant qualification or training. And, in most cases such professionals fail to recognise the value that can bring-in in strategic alignment of HR policies with that of the company policies. The statement- "Dont Trust HR" will be taken negatively by many HR professionals who would fall under the non qualified or the non trained. But, the trained & qualified will look and nod away with a smile for trust, honesty & strategic move will always be their symbol.

Posted by Nutan Bhasme | March 18, 2009 02:22 pm

Blanket statements...

I can understand HR taking offense at the statements. But each firm/organization is different w/ different priorities and issues. A large company like IBM is going to have a different environment and culture than the smaller firms. At least segment some data to measure impact by firm size, then at least dive into market segment, and then dive into....it never ends. But blanket statements about HR will never fit every case. Ben Peterson http://www.humanserviceshq.com

Posted by Ben Peterson | March 17, 2009 01:34 pm

Schizophrenic Reaction

I am having two radically different reactions to this article. The first is "right on!" One of the reasons we (HR professionals) are not taken seriously is because we do not take the time to speak our customer's language: numbers, budgets, ROI. This is why I travel around the country giving talks about how HR leaders should go about earning a seat at the strategic business table. My other reaction? Outrage. It is belligerant, insulting articles and comments like this that stifle the progress HR is trying to make within organizations. By writing this, you are giving CFOs and your readership permission to insult their HR professionals instead of having constructive conversations about differences. If you've had a bad relationship with your HR folks, tell them about it. If they aren't demonstrating/communicating value, tell them about it. But this is not what happens. What happens is CFO's talk to the CEO and other executives about how much HR stinks. It becomes an us vs.them and no one wins; not you, not the employees, certainly not the HR staff and not the company. It's playground politics at it's absolute worst.

Posted by Alicia Arenas | March 16, 2009 06:55 pm

Business Case for Employee Engagement Spend

DDI did an excellent job presenting a summary of research that builds the business case for employee engagement. Although I don't work for DDI, I'm sure it will not mind if I give you the link to its report on employee engagement (see the section entitled "Building the Business Case.)" http://www.ddiworld.com/pdf/ddi_employeeengagement_mg.pdf Many organizations have taken a look at the research on employee engagement and concluded that it is irrational not to develop an organization that has engaged employees. I recently spoke at GE, Lockheed Martin and General Dynamics about employee engagement. These are all data-driven, rational cultures that concluded that employee engagement affects performance. Michael Lee Stallard President E Pluribus Partners www.michaelleestallard.com

Posted by Michael Stallard | March 16, 2009 01:39 pm

HR's Time Horizon for Measurement

Initially the comments noted by Beatty are somewhat legitimate. HR still has trouble demonstrating value. To point to one study of one company, however, lacks a quality review; and financial firms do not have a record of best practices within HR. The issue is that most initiatives dealing with people have a measurement period of 3 to 5 years. Most will not wait (or fund) such activities. However CFO's, and CEO's, continue to proclaim human capital as the company's best asset yet fail to fund HR activities (or cut them). Strategy is 20% vision and 80% execution. HR tends to be held to the execution without a say in the vision. And the C-suite (still not containing enough HR leadership)want to focus on quarterly data and benchmarks instead of creating value specific to the organization for the long term. There are many studies, metrics/analytics and programs to demonstrate the ROI (or other value) residing inside HR. What happens, however, is that the duration to show impact tends to be longer than the funding period or before the initiative leadership changes. How many idle plans in HR, operations Lean/Six Sigma, and other, are on your shelves never to be seen again? We have analysts on Wall Street, impatient management and armchair quarterbacks to thank for that!

Posted by Geoffrey Dubiski | March 14, 2009 09:56 am

Excellent Information

Finally someone has challenged the HR orthodoxy with some cold hard facts. Most non-HR people suspected that a lot of their touchy-feely garbage was worse than useless and finally someone has pointed out that the emperor has no clothes.

Posted by Richard Bassett | March 13, 2009 03:40 pm

Interesting

I always knew there was a disconnect between Finance and HR but this article is completely demoralizing to the HR function and what they provide to an organization. Beatty's comments are contradictory. For example, being an employer of choice is to attract the enthused and those who are interested in the company and what they do and not just a job or as he stated a place to "hide out". You have to be strategic on the talent you are trying to attract and build from there. If you have an efficient HR department there will be no need to outsource to a $7Billion dollar talent management company. Unless you want the same robotic individual to work for a "plant". What I'm trying to say is this article is stereo typing HR and is not true to many successful companies who do "work" with HR to engage employees, retain the valued employees and build on the successors to make sure that no matter what there are no short falls and the company remains successful. It's building company culture...more than numbers.

Posted by Anna Bernstein | March 13, 2009 02:29 pm

Measurement

The point is not so much whether HR is helping or hurting the company, but rather how do we accurately measure contribution by employees. HR is not equipped for this as they are already 1 or mores steps removed from the context of the employees daily activities. His comments on retention & low turnover are valuable. The fact is that for new hires you only understand what you have after working with them, and finding how quickly they understand issues, and questions. I think there is very interesting work to be done similar to Deming, but establishing different metrics using Complexity Theory, or what might be thought of as soft science (comparative measure).

Posted by Gary Overgard | March 13, 2009 06:34 am

Better Job with Hiring Process

I am seeing more and more CFO's entering stage left and taking over HR Metrics and departments and stepping in and implementing strategic solutions that generate ROI. I just posted an article about hiring that might make sense to check out http://blog.keenhire.com/

Posted by Margaret Graziano | March 12, 2009 05:19 pm

Metrics CEOs & CFOs care about

Weıve done our own research on bridging the gap between HR and Finance, finding: * Human Resources Must Take a More Strategic Role in the Business * Employee Recognition Drives Engagement and Therefore Impacts Retention, Productivity and the Bottom Line * Creating a Universal Recognition Platform for Global Companies Is Difficult * CFOs Are Not Aware of How Much They Are Spending on Recognition Programs * Talent Officers and the CFO Must Work Together to Chart the Course for the Future We did another study of CEO perceptions of recognition programs as they relate to corporate objectives within their organizations, as well as the human resources reality of these programs. The survey revealed organizations still have a long way to go in aligning recognition programs with their companyıs mission, values, strategic objectives and goals. Key findings included: * 88% HR respondents their recognition programs need improvement and that their CEO would agree. * While an encouraging 58% of HR leaders believe their CEO would say their recognition programs reinforce the strategy, values and appropriate behaviors of the organization, an alarming 42% say their programs offer no strategic benefit to their organizations, indicating a tremendous waste of resources and misappropriated recognition investment that have no effect on employee engagement and motivation. * Overall, HR leaders (45 percent) feel their programs fall short in driving bottom line results. Why? Not only are companies clearly not building their recognition programs to ıCEO codeı ı a program that is aligned with the organizationıs strategy, mission, values and behaviors ı but also a staggering 38 percent of all organizations surveyed are not measuring their programıs results in any way, leaving CEOs in the dark on the effectiveness and true value of their recognition programs. All of this points back to analytics. Measurement for measurementıs sake will never prove the value of HR initiatives. Metrics that show HR initiatives impact on factors CEOs care about such as productivity against strategic objectives, customer satisfaction and engagement, will prove the value. Far more on this topic of measurement and engagement is available on my own blog here: http://globoforce.blogspot.com/search/label/measuring%20recognition%20and%20engagement.

Posted by Derek Irvine | March 12, 2009 03:44 pm

Hiring Metrics

I find it interesting the huge push on retention and being an"Employer of Choice". The bottom line is Retention begins with Selection and all of us committed to being profitable MUST put an emphasis on choosing their talent wisely!

Posted by Margaret Graziano | March 12, 2009 02:36 pm

Differentiation is a Metrics Opportunity

Dr. Beatty has achieved a measureable level of success from his comments. All this wailing and gnashing of teeth is proof. He is asking us to look through a new filter, change our perspective. By challenging what some may say is convention wisdom; he has emotionally engaged the audience. The simple fact is there are a small number of companies that actually measure, collect and analyze data to document performance drivers, or differentiators as Dr. Beatty prefers to label them. Every company likes to say 'We are different from our competitors.' However, very few companied engage in the rigor and discipline to identify those factors. The CEO and CFO all too often settle for anecdotal evidence versus empirical evidence. As such very limited research and analysis is actually conducted. Alternatively, I offer a model that invites CFO-CHRO collaboration. Here is an example opportunity. 78% companies report turnover as a percentage (1). 80% of companies do not report 120 day turnover. (2). The CFO and CEO should not allow either of these practices. Under these scenarios, no one owns the budget for staffing waste and staffing rework. Percentages obscure the financial implications of turnover and blur the lines of accountability. Hiring decisions that fail in 120 days or less are an extremely expensive drain on resources. The CFO and CHRO should collaborate and define new accounting codes and reporting methods to document staffing process yields such as investment to proficiency, waste & rework, and performance variation. Dr. Beatty speaks about staffing practices as a differentiator. Objective candidate evaluation is the measurement discipline for the business process called staffing. If the CFO and the CHRO chose to integrate their measurement disciplines, more objective differentiation and higher levels of profit could be achieved. Differentiation is a metrics opportunity. Think about it. (1) (2) Shaker Consulting Group and SHRM Turnover Survey. Contact me for a copy joe.murphy@shakercg.com Joseph P. Murphy Shaker Consulting Group Developers of the Virtual Job Tryout(R)

Posted by Joseph Murphy | March 12, 2009 02:17 pm

And why isn't he teaching his preaching?

I suspect that Mr. Beatty made these remarks to provoke some thought and dialogue. Unfortunately, some of his conversation starters are, well, non-starters (or at the least self-contradictory), when it comes to reality outside of the class room. Consider his remark about striving to be an employer of choice; "You want people who are excited, enthused, and understand how to contribute to what you do, as opposed to those who simply want to find a good place to hide out." If you are not an employer of choice, then why would these excited, enthused people even look to work for your firm in the first place? And as to people looking for a place to hide out, well, if your employee population is nothing more than retirements in place, you aren't really an employer of choice. And we haven't even gotten into the discussion of an effective recruiting team doing their due diligence and selecting those enthused, excited people who understand how to contribute to what you do - also known as "engaged" by the way if we are to scrutinize Beatty's thoughts about the business value of an engaged population of employees. He has far too many "usually" and "most" hyperbolic, blanket statements absent the numbers to bolster those comments. I strongly disagree that HR people don't think like business people. This is far too dismissive a comment, and an offensive one at that, for him to toss out on the table without any data (the language of numbers after all) to substantiate this effrontery. What strong HR people do, at least those of us who think like business people, is examine the high performers and build recruiting profiles based on those competencies. I could go on here though perhaps my remarks are best addressed to Mr. Beatty. Perhaps I'll submit a presentation entitled, "Don't trust the academicians...they aren't teaching what they're preaching".

Posted by Todd Noebel | March 12, 2009 01:48 pm

Valid points

Professor Beatty makes some valid points but I feel the logic is flawed. He cites employee surveys, an HR analysis tool, to make an argument against HR doing analysis. That seems to be a self-defeating argument. Shawn www.nbrii.com

Posted by Shawn Devlin | March 11, 2009 05:58 pm

This Professor is Not A System Thinker

This approach is well intended I am sure, but is flawed by premise. The professor apparently has not read or does not agree with the Deming thought that work should bring joy, and joy is found in a system. However, understanding that different people work differently is no reason to abandon attempts to engage employees in the process.

Posted by Charles McLean | March 11, 2009 05:16 pm

Vibrant Online HR Community

There is a vibrant community of HR professionals who are online and making a difference at the companies. You can read about them at http://blogs.HRMtoday.com http://www.fistfuloftalent.com http://YourHRGuy.com http://HRWench.Blogspot.com http://PunkRockHR.com Those are just a few. The next generation of HR leaders understand the challenges. We're just waiting for some of the boomers to retire. :)

Posted by Laurie Ruettimann | March 11, 2009 04:27 pm

Careful about pointing fingers

First, I'm not an HR professional but to target them negatively is unfair, unprofessional, and untrustworthy. Moreover, I'd like to see raw data to support your claims and research findings, including the validity and reliability of the employee survey. All industries and workforces have been blown away by recent upheaval and turmoil. You did not mention the critical need for Industrial / Organizational psychologists who are highly trained in psychometrics based on their expertise and practices. Financial experts are vital for successful outcomes that align with just that- financial analysis, projections, recommendations, etc. However, they are not trained to use statistical methods that fit work processes, selection and hiring, professional education, and how to do more with less. Your biases are transparent and clearly uninformed. I'll stop with this question: What is the role of HR and how can we better improve job descriptions and employee engagement in order to maximize the talent that is the popular buzzword yet to be understood at all levels of the organization? As a scholar and business analyst, surely you know the value of a good argument.

Posted by Nancy Woodring | March 11, 2009 03:35 pm

Memo to CFO's: You Need a Strategic HR Business Partner

While I agree there are poorly run HR functions that exist, shame on those who throw up their hands and don't expect the same impact employees in their HR function that they do in the rest of their organization. There are plenty of quality HR professionals that do know how to build programs that positively impact an organization as well as the bottom line. On the flip side, I can assure you that there are many organizations that are not forward thinking enough to know how to attract, retain or even assess these types of impact players. Luckily, there are many companies that are and they are likely the ones that are benefiting from this type of HR function already. Watch for them - they are the ones with the real competitive advantage because they attract and retain top talent across their entire organization.

Posted by Chris Havrilla | March 11, 2009 03:28 pm

Lack of Knowledge

As an HR Professional and Manager of Recruiting for over 25 years, what I have found most annoying is that the role of HR is not understood by Management. We are there to help Managers "manage". To guide them through process and policy. To keep the company safe from lawsuits. I can not tell you how many times I worked with managers who did not want to follow the company policy. It was only after making them aware of the potential fall out of thier approach to an employee issue that they agreed, unwillingly, to follow the company process or policy. I think it is management that needs to learn from us. We are not supposed to be good at data analytics. We are supposed to be good at helping craft the decisions they want to make, based on the data analysis, so that they stay within the law and the policies and procedures the company has in place. Also, Management has to learn how to take responsibility for its mistakes and not use HR as a whipping post.

Posted by Marc Santucci | March 11, 2009 03:20 pm

Here We Go Again

The professor quoted in the article appears to be either relying on information that is out of date or seriously out of touch with the impact that a well run HR function can have on an organization. An article that suggests that all or every of something is useless has little credibility, as it is much too general to be taken seriously. Consider a statement such as "all academics are out of touch with the realities of corporate America". Is this statement fair? Accurate? Credible? I would agree that an HR function that is too focused on retaining every employee, keeping every employee engaged, or training all underperforming employees is not serving its purpose. The audience of the professor's speech would have been better served to hear about the types of HR activities and programs that may be a waste of money, and contrasting those with the practices that do contribute to results. Value added HR professionals, of which there are many, are focused on hiring, retaining, and developing top talent to drive organizational results. They are working with managers to determine why an employee is not performing in an effort to decide if they can be made more productive or should exit the organization.

Posted by Mike Higgins | March 11, 2009 02:25 pm

Bull-loney

I would respectfully suggest that he review the stock performances of the public companies that are ranked in Fortune's Top 100 Companies to Work For. He would find several years worth of data that unequivocally refutes his position.

Posted by Ralph Kinder | March 11, 2009 02:05 pm

Bull-loney

I would respectfully suggest that he review the stock performances of the public companies that are ranked in Fortune's Top 100 Companies to Work For. He would find several years worth of data that unequivocally refutes his position.

Posted by Ralph Kinder | March 11, 2009 02:05 pm

Surprised?

Some things simply don't need to be studied. There's a reason why most key finance positions are filled through the use of an outside recruiter specializing in finance: most HR employees within corporations have no idea what type of experience and ability is necessary to close the company's books, produce a 10-K, or to perform useful financial analytics made possible because of an individual's foundation in finance/accounting. I highly doubt there are many CFO's reading this article regretting they let an HR department drive any of their key hires.

Posted by Benjamin Algeo | March 11, 2009 12:48 pm

Hire a Higher Calibre HR Professional

The solution is to hire a higher calibre of HR professional. Believe me, there are lots of quality HR people who use analytics to make both strategic and operational HR decisions that truly enhance the bottom line at many organizations. You want a business partner, not a paper pusher. Hire right and you'll do a 180.

Posted by Becky Regan | March 11, 2009 11:38 am

????

Beatty's done some great work and written some good stuff so I'm hesitent to say too much before reading the Differentiated Workforce - which I've been looking forward to doing. But Beatty's suggestion that there is "no evidence that engaging employees impacts financial returns" simply isn't true.

Posted by Jon Ingham | March 11, 2009 10:28 am

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