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HR Magazine - June 2000: Knowledge That Works

By Ben Rosen  6/1/2000
HR Magazine, June 2000

Vol. 45, No. 6

Research funded by the SHRM Foundation can help HR lead fast-growing companies, work better with line managers and leverage technology.

In today's fast-paced economy, HR professionals need the benefit of research that hits them where they live. That's why the SHRM Foundation has redirected its funding of research toward significant projects that meet its new "LIVE" criteria (Leverage, Impact, Visibility, Enhancing the Profession).

Several recent studies illustrate how Foundation research can help HR professionals make greater contributions to their organizations' bottom line.

One study gives practitioners insight into how they can best contribute in fast-growth companies by encouraging and sustaining employees' entrepreneurial skills. Another study suggests that HR can improve its relationship with line managers by getting out on the floor where "people problems" originate and by better communicating to line managers the big picture—the reasons behind HR policies.

A third study is now in the process of examining how technology affects the delivery and performance of HR services.

Contributing to Fast Growth

One of the SHRM Foundation's biggest projects is a multi-year grant as a research partner with Theresa Welbourne, an associate professor in the Organization Behavior and Human Resources Management Department at the University of Michigan Business School and its Samuel Zell and Robert H. Lurie Institute for Entrepreneurial Studies. Her research examines the role of HR management in creating and sustaining an entrepreneurial climate.

Welbourne and her colleagues have collected data from all firms going public in 1988, 1993, 1996, 1998 and 1999, noted whether they had a senior HR executive reporting to the CEO and tracked their performance.

The lessons learned from these fast-growth companies can be applied to HR departments in bigger corporations as well, because many large companies are trying to become more entrepreneurial.

It is employees' "non-job" roles—roles such as entrepreneur and team player—that really drive a company's long-term performance. Long-term competitive advantage "is a function of firm-specific resource development," says Welbourne, who worked as an HR practitioner for 10 years before joining academia. "If everyone is just doing their ‘jobs,' nothing firm-specific ensues. It's the synergy between people and new ideas that creates long-term competitive advantage."

Watching firms grow, Welbourne has learned that, at an early stage, entrepreneurial firms assume that people are doing the jobs assigned to them and that HR—either formally or informally—encourages high-performers engaged in critical non-job roles.

Signal of Destruction

Inevitably as growth continues—and particularly as an organization's growth slows down—someone decides to bring in "professional management" or "the suits," she says. When one of the suits is worn by a traditional HR professional, there's a big risk of losing the all-important entrepreneurial climate.

Part of the problem is that the first step usually involves job descriptions. Job descriptions may be HR's foundation for recruiting, selection, compensation and training, "but it's the signal of destruction to employees in entrepreneurial firms," says Welbourne, who will discuss her research in a concurrent session June 28 at the SHRM Annual Conference and Exposition in Las Vegas.

Seven years of research has taught Welbourne that "there exists good and bad human resource management. Good HR management helps keep the sense of urgency high, and it helps simultaneously create an environment where employees feel valued. They are valued because the company values roles that go beyond the ‘job' role."

Bad human resource management, on the other hand, focuses people on the job. Bureaucracy and rules guide behavior. An emphasis on legal regulations becomes more important than an emphasis on values and vision, according to Welbourne. "This type of HR management can kill a firm's entrepreneurial spirit."

HR management as a field needs to radically reposition itself, she concludes. "HR is called upon to do so much police work, so much that is controlling. HR is schizophrenic. How can you be a police person and a coach?"

Perhaps, she suggests, it's time to turn the police work that is truly necessary over to the company's accounting department and let HR do a better job of nurturing the entrepreneurial spirit that fuels a company's growth.

Line Managers Need Big Picture

Making HR's interactions with line managers more effective for the individuals involved and for their companies is the goal of another SHRM Foundation study. The study helps identify what HR managers and line managers expect and need from each other and provides important insights to HR professionals about how they can become more valuable partners, the guidance and support they can offer, and the issues they must address in working with line managers.

Debra J. Cohen, HR management associate professor at George Washington University, Washington, D.C., arranged interviews with a human resource manager and a line manager from 27 companies in 11 U.S. cities. The interviews addressed key questions such as:

  • What is the greatest HR activity for which line managers have responsibility—in terms of importance to the organization and in terms of time that it takes to complete?

  • What are some of the common questions line managers seek assistance with from HR?

  • What needs to happen for line managers to be better at dealing with HR issues with which they come in contact on a daily basis?

  • If you could change HR's relationship with line managers in some way, what would you do?

The bottom line is that HR managers need to provide more ongoing communication to line managers about big picture issues relating to HR—that is, the "why" behind the policy or practice. Connecting with line managers on their own territory also would be beneficial.

The importance of staffing—including recruiting and attracting the right people, development and placement within the organization, and ongoing employment issues—kept coming up, Cohen says. Line managers expressed concerns about employee relations, including supervision, counseling and coaching, and motivation. Many line managers also said there was a need for more open communication with HR in order to accomplish company objectives.

Employee relations, performance management and recruitment were seen by line managers as the most time-consuming activities. With so many staff positions open, Cohen found that some line managers blamed HR, while others saw it as their own fault because they have failed to clearly define what qualities they want in employees.

Seeing People as Problems

"The amount of time people issues took caused many line managers to identify a need for greater interaction with HR advisors and consultants," Cohen says. "In fact, one solution that was suggested often was to have a ‘field' HR representative or someone from HR closer to where the people problems occur." With so much of their time being taken up in people-related issues, line managers tend to see many of the people activities that they engage in as problems, she adds.

Line managers said they want more assistance from HR and a greater understanding of what HR does. Several line managers called on HR to become more of an integral part of the line organization, by being decentralized, co-located or assigned to business units. They spoke of the need for accessibility and joint effort.

For their part, the HR managers saw a need for each side to have a greater understanding of the role played by the other. They want line managers who are more developed and educated and who understand what HR is all about so that the HR function can ultimately be more proactive rather than just reactive, according to Cohen. One thing that came up often in HR responses that was not evident in the line managers' responses was the concept of respect for each other's roles.

"Line managers are doing a whole lot of HR activities, yet they go into this pretty blind. They don't have the background and are thrust into this position, perhaps without necessary skills," she says.

In some cases line managers, who already see their job as almost overwhelming, would like the HR department to do all HR functions for them, Cohen says. "You have a push-pull situation. There are some things line managers would like to give back, but HR doesn't have the resources and the best place to do them may be at the line."

She finds that there is still an element of personnel administration in the HR function. But there are additional elements that are proactive and strategic. For a partnership to work, line managers must be able to handle more administrative duties and HR must be willing to take responsibility for strategic elements.

"It's clear to me that although for years we've been talking about partnership, after doing this research, I don't think we've come as far as we think we have. There have been some wonderful examples. But many issues—discipline, staffing, appraisals—aren't being dealt with effectively when looking at HR and the line."

HR in the Virtual World

Learning how companies can leverage investments in technology to enhance the delivery of HR services is the subject of yet another study being sponsored by the SHRM Foundation. It will examine where technology is perceived to improve HR effectiveness and where it may prove to be a barrier alienating managers and employees.

This study is being conducted by Kathryn M. Bartol, professor of organizational behavior and HR management at the Robert H. Smith School of Business at the University of Maryland; David P. Lepak, assistant professor; and doctoral candidate Sharyn Garner.

Using questionnaires and interviews with HR managers, line managers and workers, this study will address these fundamental issues:

  • How does information technology influence the design and delivery of HR activities?

  • How does the extent and character of information technology adoption influence employee attitude, HR effectiveness and firm performance?

  • What factors influence the degree and nature of information technology usage by HR?

The goal is to help practitioners understand how adopting information technologies for the delivery of HR activities can either enhance or diminish employee attitudes and performance, the effectiveness of the HR unit and the performance of the company as a whole. Of particular interest is how information technologies are influencing the delivery mechanisms of HR activities such as outsourcing payroll or partnering with specialists to deliver training programs.

The study will examine how issues such as the changing business context and the increased need for flexibility, speed, efficiency and customer responsiveness influence the decision about how to deliver HR services. The researchers hope to help practitioners recognize which factors will help or inhibit the design and implementation of successful delivery mechanisms for HR.

The SHRM Foundation will continue its effort to identify the most important research issues facing HR professionals in the 21st century by working closely with researchers, forming alliances with university research centers and partnering with consulting firms.

In the meantime, the SHRM Foundation has 20 additional research projects under way, addressing such critical HR issues as business ethics, global management, teleworking, the impact of diversity on firm performance, and HR's role in mergers and acquisitions. In all of these studies the emphasis will be on how the research can most benefit HR practitioners in their work.

In today's fast-paced economy, HR professionals need the benefit of research that hits them where they live. That's why the SHRM Foundation has redirected its funding of research toward significant projects that meet its new "LIVE" criteria (Leverage, Impact, Visibility, Enhancing the Profession).

Several recent studies illustrate how Foundation research can help HR professionals make greater contributions to their organizations' bottom line.

One study gives practitioners insight into how they can best contribute in fast-growth companies by encouraging and sustaining employees' entrepreneurial skills. Another study suggests that HR can improve its relationship with line managers by getting out on the floor where "people problems" originate and by better communicating to line managers the big picture—the reasons behind HR policies.

A third study is now in the process of examining how technology affects the delivery and performance of HR services.

Contributing to Fast Growth

One of the SHRM Foundation's biggest projects is a multi-year grant as a research partner with Theresa Welbourne, an associate professor in the Organization Behavior and Human Resources Management Department at the University of Michigan Business School and its Samuel Zell and Robert H. Lurie Institute for Entrepreneurial Studies. Her research examines the role of HR management in creating and sustaining an entrepreneurial climate.

Welbourne and her colleagues have collected data from all firms going public in 1988, 1993, 1996, 1998 and 1999, noted whether they had a senior HR executive reporting to the CEO and tracked their performance.

The lessons learned from these fast-growth companies can be applied to HR departments in bigger corporations as well, because many large companies are trying to become more entrepreneurial.

It is employees' "non-job" roles—roles such as entrepreneur and team player—that really drive a company's long-term performance. Long-term competitive advantage "is a function of firm-specific resource development," says Welbourne, who worked as an HR practitioner for 10 years before joining academia. "If everyone is just doing their ‘jobs,' nothing firm-specific ensues. It's the synergy between people and new ideas that creates long-term competitive advantage."

Watching firms grow, Welbourne has learned that, at an early stage, entrepreneurial firms assume that people are doing the jobs assigned to them and that HR—either formally or informally—encourages high-performers engaged in critical non-job roles.

Signal of Destruction

Inevitably as growth continues—and particularly as an organization's growth slows down—someone decides to bring in "professional management" or "the suits," she says. When one of the suits is worn by a traditional HR professional, there's a big risk of losing the all-important entrepreneurial climate.

Part of the problem is that the first step usually involves job descriptions. Job descriptions may be HR's foundation for recruiting, selection, compensation and training, "but it's the signal of destruction to employees in entrepreneurial firms," says Welbourne, who will discuss her research in a concurrent session June 28 at the SHRM Annual Conference and Exposition in Las Vegas.

Seven years of research has taught Welbourne that "there exists good and bad human resource management. Good HR management helps keep the sense of urgency high, and it helps simultaneously create an environment where employees feel valued. They are valued because the company values roles that go beyond the ‘job' role."

Bad human resource management, on the other hand, focuses people on the job. Bureaucracy and rules guide behavior. An emphasis on legal regulations becomes more important than an emphasis on values and vision, according to Welbourne. "This type of HR management can kill a firm's entrepreneurial spirit."

HR management as a field needs to radically reposition itself, she concludes. "HR is called upon to do so much police work, so much that is controlling. HR is schizophrenic. How can you be a police person and a coach?"

Perhaps, she suggests, it's time to turn the police work that is truly necessary over to the company's accounting department and let HR do a better job of nurturing the entrepreneurial spirit that fuels a company's growth.

Line Managers Need Big Picture

Making HR's interactions with line managers more effective for the individuals involved and for their companies is the goal of another SHRM Foundation study. The study helps identify what HR managers and line managers expect and need from each other and provides important insights to HR professionals about how they can become more valuable partners, the guidance and support they can offer, and the issues they must address in working with line managers.

Debra J. Cohen, HR management associate professor at George Washington University, Washington, D.C., arranged interviews with a human resource manager and a line manager from 27 companies in 11 U.S. cities. The interviews addressed key questions such as:

  • What is the greatest HR activity for which line managers have responsibility—in terms of importance to the organization and in terms of time that it takes to complete?

  • What are some of the common questions line managers seek assistance with from HR?

  • What needs to happen for line managers to be better at dealing with HR issues with which they come in contact on a daily basis?

  • If you could change HR's relationship with line managers in some way, what would you do?

The bottom line is that HR managers need to provide more ongoing communication to line managers about big picture issues relating to HR—that is, the "why" behind the policy or practice. Connecting with line managers on their own territory also would be beneficial.

The importance of staffing—including recruiting and attracting the right people, development and placement within the organization, and ongoing employment issues—kept coming up, Cohen says. Line managers expressed concerns about employee relations, including supervision, counseling and coaching, and motivation. Many line managers also said there was a need for more open communication with HR in order to accomplish company objectives.

Employee relations, performance management and recruitment were seen by line managers as the most time-consuming activities. With so many staff positions open, Cohen found that some line managers blamed HR, while others saw it as their own fault because they have failed to clearly define what qualities they want in employees.

Seeing People as Problems

"The amount of time people issues took caused many line managers to identify a need for greater interaction with HR advisors and consultants," Cohen says. "In fact, one solution that was suggested often was to have a ‘field' HR representative or someone from HR closer to where the people problems occur." With so much of their time being taken up in people-related issues, line managers tend to see many of the people activities that they engage in as problems, she adds.

Line managers said they want more assistance from HR and a greater understanding of what HR does. Several line managers called on HR to become more of an integral part of the line organization, by being decentralized, co-located or assigned to business units. They spoke of the need for accessibility and joint effort.

For their part, the HR managers saw a need for each side to have a greater understanding of the role played by the other. They want line managers who are more developed and educated and who understand what HR is all about so that the HR function can ultimately be more proactive rather than just reactive, according to Cohen. One thing that came up often in HR responses that was not evident in the line managers' responses was the concept of respect for each other's roles.

"Line managers are doing a whole lot of HR activities, yet they go into this pretty blind. They don't have the background and are thrust into this position, perhaps without necessary skills," she says.

In some cases line managers, who already see their job as almost overwhelming, would like the HR department to do all HR functions for them, Cohen says. "You have a push-pull situation. There are some things line managers would like to give back, but HR doesn't have the resources and the best place to do them may be at the line."

She finds that there is still an element of personnel administration in the HR function. But there are additional elements that are proactive and strategic. For a partnership to work, line managers must be able to handle more administrative duties and HR must be willing to take responsibility for strategic elements.

"It's clear to me that although for years we've been talking about partnership, after doing this research, I don't think we've come as far as we think we have. There have been some wonderful examples. But many issues—discipline, staffing, appraisals—aren't being dealt with effectively when looking at HR and the line."

HR in the Virtual World

Learning how companies can leverage investments in technology to enhance the delivery of HR services is the subject of yet another study being sponsored by the SHRM Foundation. It will examine where technology is perceived to improve HR effectiveness and where it may prove to be a barrier alienating managers and employees.

This study is being conducted by Kathryn M. Bartol, professor of organizational behavior and HR management at the Robert H. Smith School of Business at the University of Maryland; David P. Lepak, assistant professor; and doctoral candidate Sharyn Garner.

Using questionnaires and interviews with HR managers, line managers and workers, this study will address these fundamental issues:

  • How does information technology influence the design and delivery of HR activities?

  • How does the extent and character of information technology adoption influence employee attitude, HR effectiveness and firm performance?

  • What factors influence the degree and nature of information technology usage by HR?

The goal is to help practitioners understand how adopting information technologies for the delivery of HR activities can either enhance or diminish employee attitudes and performance, the effectiveness of the HR unit and the performance of the company as a whole. Of particular interest is how information technologies are influencing the delivery mechanisms of HR activities such as outsourcing payroll or partnering with specialists to deliver training programs.

The study will examine how issues such as the changing business context and the increased need for flexibility, speed, efficiency and customer responsiveness influence the decision about how to deliver HR services. The researchers hope to help practitioners recognize which factors will help or inhibit the design and implementation of successful delivery mechanisms for HR.

The SHRM Foundation will continue its effort to identify the most important research issues facing HR professionals in the 21st century by working closely with researchers, forming alliances with university research centers and partnering with consulting firms.

In the meantime, the SHRM Foundation has 20 additional research projects under way, addressing such critical HR issues as business ethics, global management, teleworking, the impact of diversity on firm performance, and HR's role in mergers and acquisitions. In all of these studies the emphasis will be on how the research can most benefit HR practitioners in their work.

Ben Rosen is Hanes Professor of Management at the University of North Carolina's Kenan-Flagler Business School in Chapel Hill, N.C., and is the SHRM Foundation Board of Directors' vice president of research.  

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