Competency study: Is HR on the ball?
David Kryscynski and Michael Ulrich, November 30, 2015
Some useful work here, and a good articulation for the most part of the capabilities required if HR is to add value. I would just challenge the ‘compliance manager’ description, as this is redolent ...
Read More Andrew Lambert
November 30, 2015 14:24
We exclusively reveal the results of round seven of the HR competency study, and how these affect value creation
For almost 30 years the HR competency study (HRCS) has empirically defined the competencies of HR professionals and how those competencies impact performance. In this round we collected more than 30,000 surveys rating the competencies and performance of more than 4,000 HR professionals from around the world, working in more than 1,500 organisation units. The results simultaneously build upon insights from prior rounds and generate new insights for the HR function.
We found that about 50% of the perceived performance of HR professionals in our study comes from their perceived competencies.
HR professionals deliver business value through nine competencies (see diagram below). Corporate success comes when we can effectively translate business strategy into the right employee actions.
HR professionals who help the organisation translate strategy into action must first be competent strategic positioners – they must have and apply knowledge of business context and strategy. Strategic positioners are able to accurately set the agenda for action within the organisation by helping to point people in the right direction.
In addition to pointing people in the right direction, however, HR professionals must also be credible activists – they must have relationships of trust and influence with key people in the organisation. Credible activists are able to get people moving in the required direction. Strategic positioners set the direction and credible activists actually get people moving that way. Both of these competencies are critical for driving performance.
A new competency in this round of research is paradox navigator – the ability to navigate the many embedded operational tensions (e.g. long-term vs. short-term focus, centralised vs. decentralised operations, internal vs. external focus). HR professionals are constantly wrestling with embedded tensions that must be resolved in some circumstances and cultivated in others in order to help the business move forward. Wisely navigating these many embedded tensions becomes one of the central challenges for modern HR professionals.
HR competency enablers
In addition to the three core competencies there are also six HR enablers: competencies that enable the translation of business strategy into individual action. Three of these enablers focus on building a strategic organisation:
- Culture and change champion: Able to make change happen and to weave change initiatives into culture change.
- Human capital curator: Manages the flow of talent by developing people and leaders, driving individual performance, and building technical talent.
- Total reward steward: Regulates employee wellbeing through financial and non-monetary rewards.
The other three enablers focus on tactical delivery:
- Technology and media integrator: Able to use technology and social media to drive and create high performing organisations.
- Analytics designer and interpreter: Utilises analytics to improve decision-making.
- Compliance manager: Manages the processes related to compliance by following regulatory guidelines.
Each of these competencies is important for the performance of HR professionals. However, in more fine-grained analysis we see that some competencies seem more critical for certain stakeholders. Creating value for internal stakeholders such as line managers and employees requires HR professionals to be credible activist. Creating value for external stakeholders such as investors and customers means being a strategic positioner.
In addition to exploring how HR competencies relate to the perceived performance of HR professionals, we also explored the demographic characteristics and career histories of those individuals. We were intrigued to learn that about 35% of the perceived performance of HR professionals comes from their demographic and career histories.
One of the most critical findings relates to the poor quality of self-report data. Self-ratings had almost no relationship with performance, while other ratings had a very strong relationship with performance. This suggests non-self-ratings may be particularly important when determining how competencies are linked to performance.
Perceived performance drivers
We also studied how the HR competencies in HR departments and the activities of those departments related to the value HR creates for different stakeholders. A key finding was that the activities of HR departments consistently explain more of their performance than the competencies of the professionals within them (see Table 1 below).
This is particularly true for internal stakeholders. We believe this starts to indicate the relative importance of the team rather than the individual. We can have great HR people, but we need the HR department to be doing the right things if we want impact.
We explored the HR activities that most impact value creation for key stakeholders and organised them into four domains:
- Employee performance: HR activities that help workers develop their skills and abilities (e.g. appraisals, training, engagement)
- Integrated HR practices: Activities that offer integrated and innovative solutions to business problems (e.g. developing an HR strategy linked to business strategy, offering integrated HR solutions to business problems, HR being a cultural role model for the organisation)
- HR analytics: HR activities related to a scorecard for the HR department
- Information management: HR’s role in managing information to make better business decisions (e.g. bringing external information into the organisation, using information to drive competitive advantage, using data for decision-making).
In Table 2 we demonstrate that integrated HR practices have the most impact on internal stakeholders (employees and line managers), but HR’s role in information management has more impact on external stakeholders.
These findings suggest that HR professionals should learn to work together to create HR practices that offer integrated solutions when serving line managers and employees. However, when positioning HR within the external business context they need to master the flow of information to drive business results.
Conclusion and implications
CEO surveys increasingly point to businesses leading through differentiating themselves through organisation and people. Competitors can more readily match access to capital, strategic intent, and operational excellence. In this research we have identified what individual HR professionals should know and do to respond to these business opportunities.
HR professionals need to be paradox navigators who effectively manage the inherent tensions in the business. They need to be both strategic positioners who understand business context and credible activists who influence through relationships of trust. HR professionals must also understand and master strategic and foundational HR enablers. These findings have implications for who is hired into HR, and how HR professionals are trained, promoted, and paid.
In addition, we found that HR professionals have more impact on key stakeholders when they work as an effective HR department. The old adage ‘I like my HR professional but I hate HR’ needs to change because HR’s activities have more impact on all stakeholders than individual HR professionals. In particular, managing information and integrated HR solutions shape the agenda of an effective function.
We are confident that these findings and the subsequent implications for developing HR professionals and creating HR departments will enable HR to continue to add value.
David Kryscynski is an assistant professor of organisational leadership and strategy at Brigham Young University’s Marriott School of Business. Mike Ulrich is a PhD candidate studying international human capital and management at the Darla Moore School of Business, University of South Carolina