Views from 'the line' about the value of HR have deteriorated in the past year, suggesting that many UK organisations trying to cope with change will struggle due to poor relations between the two camps. Is this merely negative sentiment among put-upon middle managers during the recession, or symptomatic of a deeper malaise in British HR strategy?
"There is evidence of a sharp step backwards," says Jo Hennessy, director of research at the Roffey Park Institute, which produces an annual Management Agenda Report, based on 800 manager interviews, that plots attitudes within UK management. She points out that the number of (non-HR) managers who think HR adds value to their business has dropped eight percentage points in the past 12 months, from 68% to 60%, and that a massive 40% think HR is 'out of touch' with their needs, up from 37% last year.
"We think the reason for this devaluation is that HR has had less opportunity to do the positive things that might otherwise bolster perceptions of its worth," says Hennessy. "Throughout 2010, HR teams have been more involved in frontline recession-fighting, handling all the things that come with people management during a downturn and perhaps having to put more positively-viewed elements - such as learning and development, recruitment, reward and wellbeing programmes - on hold."
Roffey Park's full report covers all facets of management, but we asked the institute to look specifically at the relationship between line managers and HR. When it did so last year, we were able to report relations showing signs of improvement, so it is disheartening to discover that in its 2011 report that managers' views of HR have deteriorated.
"For only half of managers to see HR adding value to the business is a sad indictment and must be deeply concerning for the HR profession," says Penny de Valk, chief executive of the Institute of Leadership & Management (ILM). "But this is not a new issue; for decades now, the HR profession has been banging on the boardroom door, complaining that it isn't at the table. Possibly the reason for the recent decline is how capable, or not, HR is to quickly and flexibly deliver people solutions in a rapidly changing and highly ambiguous environment."
By separating out the non-HR managers' responses from HR managers' responses, the Roffey Park statistics reveal increased negativity year-on-year from the line towards HR regarding its ability to be proactive, to be influential, to be strategic, customer-focused and credible in the business. The one area of marginal improvement was that slightly fewer managers thought HR was too powerful this time (25%) compared to last year (26%). Meanwhile, HR managers are far more upbeat about their worth, with 88% saying HR adds value, although this is slightly down on last year when 90% thought so. "There are such wildly differing views between the line and HR that it raises the question: is HR kidding itself that it is delivering value, taking the right strategic approach and really meeting the needs of managers?" asks Hennessy. "We believe the good work HR professionals are trying to deliver is losing credibility, largely due to poor communication and poor execution of strategy." The 19% of HR managers who think the HR function is 'out of touch' are of particular concern.
Line managers have suffered in recent years, with additional duties expected of them, as HR seeks to devolve more of what are seen as 'non-strategic' functions downwards, while concentrating on strategic issues. This is probably why less than half of managers think HR produces 'timely and relevant initiatives' - the other half presumably feel swamped with red tape or under-supported. There's even more of a sense that HR is producing 'too many initiatives' this year (28% of managers thought so, compared to 25% last year). Problems typically arise when line managers try and fulfil day-to-day HR tasks, but are caught up in red tape and prevented from completing simple processes. A department head at a London further education college told HR: "They have to keep up with employment law, but it feels as though initiatives from the HR department slow everything down with unnecessary interference and enforced bureaucracy. Recently, it introduced new procedures for disciplinary action and hiring of temporary staff, as well as a complex bad weather policy. All these areas involve incredibly time-consuming forms that must be filled in. Getting things sorted out takes much longer than it used to."
Pressure is lessened if managers are dealing with engaged people - and that needs to be a company-wide priority, not just the responsibility of HR, argues Paul Cann, HR director of Groupama Insurances. "We've found that with the right support from HR, but more importantly a deep-rooted culture of engagement, the role of line manager can be less pressured and certainly more rewarding."
Hennessy at Roffey Park says recruitment freezes, pay cuts and redundancies are highly likely to have played a part in the worsening views of the HR function. "However, only very weak relationships were found between redundancies and ill-feeling, suggesting that recessionary measures themselves did not necessarily drive down perceptions of HR," she says. "The best views of HR came from organisations that had been handling cuts and redundancies well. Where HR handles redundancies more sensitively, it is better able to preserve its internal standing with the line."
Hennessy confirms that where employee engagement is high and wellbeing addressed, there were better perceptions of HR. "This suggests that line managers appreciate it when HR pays more attention to the 'employee champion' role - the human element of the HR function," she adds.
The trend in the past decade has been to adopt a strategy of HR business partnering - pivotal HR players adopting a more strategic, specialist role while some of the day-to-day HR functionality is taken on by line managers and handled through HR IT systems and shared service centres. The report found 49% of firms with business partnering, compared to 42% in 2010. The majority of managers still reported it as mostly successful (60% versus 62% in 2010). "The HR specialists, such as recruitment or training, are valued far more than the other elements - shared service centres and HR intranet systems," says Hennessy.
Are line managers seeing any benefit from business partnering? The report shows that 'don't know' was selected frequently when managers were asked if business partnering improved HR performances. Managers reported they were getting considerably less benefit from business partnering this year, although 50% acknowledged cost savings (up from 45%) and 55% said they'd seen a reduction of HR headcount (up from 37%).
Quite damning is the fact that 59% are not getting better support from business strategy and 52% do not have an improved perception of HR, with further managers claiming they 'don't know' on these points. "Significantly improved performance could reasonably be expected by those who successfully implement HR business partnering," says Hennessy. "HR will be better placed to weather the recessionary storm if the model has been properly implemented." Line managers don't seem to see this. The fact that business partnering is being viewed as a means to reduce personnel and cut costs only serves to re-affirm the negative light HR is basking in.
More attention needs to be paid to designing line managers' roles and helping these individuals become high performers, urges a new book from Tom Davenport and Stephen Harding, senior practitioners at HR consultancy Towers Watson. Manager Redefined: The competitive advantage in the middle of your organisation explains what can be gained by better understanding the role of the manager and its impact on employee engagement. "Often fantastic sales people, accountants or technicians are promoted because they are good at what they're trained to do," says Harding. "But will they make good people managers? We are giving these line managers extra responsibilities and often cutting back on the HR department, but no-one's doing the maths around how much time they have at their disposal to tackle motivation and engagement in their team."
He believes HR must be involved right from the organisational design stage - recruiting, training and empowering supervisors and line managers with the aim of helping them deliver "a marketplace edge that competitors can't easily replicate". Firms that are switching from viewing line managers as an "inert organisation layer" to "manager-as-competitive-advantage" include Cisco, Southwest Airlines and software giant SAS, notably all US examples. "UK companies aren't thinking in this way yet," says Harding.
A recent document from AIM Research, in association with the Chartered Management Institute (CMI), expands on this concern.
Delivering the Promise of Management Practice explores why UK organisations fail to translate management practices into improved performance. "The experience of the individual employee is more likely to be shaped by their line manager than any amount of corporate strategy. It is always going to be better to have closeness between HR and the line, so strategy gets translated into practice," says Rick Delbridge, professor of organisational analysis at Cardiff Business School and an AIM Research senior fellow.
Bad feeling at the line has a lot to do with managers themselves thinking they are not valued enough, says Ruth Spellman, chief executive of the CMI. "I would like to see the HR industry have a dialogue about how to raise perceptions of the importance of line managers," she says. "They need more respect, so that they can take pride in what they do. Of course the current climate isn't helping. When we see plans unfolding for the NHS to cut out 40% of middle managers, it sends out a negative message about the role of management generally, suggesting it's not essential. "
She thinks "we could learn a cultural lesson from the US, where line management is more respected as a discipline, given more accountability, support and respect".
Enlightened HR directors already know this and are probably being held back by other factors. As the Roffey Park figures show, the majority think they can add value to the business. The question is, do they have the power and the resources to do so?
GROUPAMA INSURANCES - SUPPORT FOR THE LINE UNDERPINS ENGAGEMENT
"Our role in HR is to give line managers the skills and confidence to ensure their teams are engaged, happy and performing well," says Paul Cann, HR director of Groupama Insurances, a French-owned insurance company that employs more than 800 people in the UK. "For us, driving engagement is not an HR initiative and work around it isn't about ticking boxes. It's just business as usual - what it's like to work for Groupama - and our line managers buy into that. The incentive to manage people well is seeing great results. Ultimately, their job is easier and more rewarding to perform if their teams are engaged, motivated and delivering results."
Like many in the financial services sector, Groupama Insurances has had to face structural upheaval in the past year, working through a relocation and forced to make redundancies. Yet the company has handled this change competently and managed to maintain engagement levels. Third-party research shows that the company's efforts to encourage personal development, to communicate and consult well and to create a respected corporate culture where individuals are proud of where they work, has delivered impressive results to the bottom line. Groupama has achieved gold standard Investors in People (IIP) accreditation and continues to follow IIP principles to drive the business forward.
Cann says having HR business partners working closely with line managers, backed up with talent management and learning and development specialists, gives a solid framework for success at the line. "We have just launched a management development framework that provides line managers with 35 training modules, ranging from basic management skills to high-level specialist skills that will bolster their abilities and confidence further," says Cann.
Key findings from Roffey Park Institute's Management Agenda Report 2011
In 2011, line managers aren't convinced that HR will deliver for them
Do managers think HR is influential? It's only 56% this time, compared to 69% last year.
Is HR thought to be strategic? Just 43% of managers thought so, compared to 49% last year.
Is HR proactive? 42% of managers said yes; the figure was 50% last time.
Is HR out of touch? 40% thought so, compared to 37% for 2010.
HR managers are confident of their worth, with only minor slips in perception since 2010
Do HR managers think HR is influential? Slightly fewer, 71%, feel they are influential this time, compared to 79% in the 2010 report.
Do HR managers think their work is strategic? It's 67% this time, compared to 70% last year.
Do HR managers think HR is proactive? Slightly more, 74%, think so this year than last year (71%).
Do HR managers think HR is out of touch? Almost a fifth, 19%, of HR managers think so, compared to 15% last year.
THE ACADEMIC PERSPECTIVE
These findings indicate a fundamental disconnect between what HR sees as important and value-creating and what the business needs, believes Penny de Valk, chief executive of the Institute of Leadership and Management. "Ultimately, HR's contribution and value will be judged by its ability to sit alongside line colleagues, helping them to become great managers and get the best out of their people. It will not be through the relentless launch of flavour-of-the-month initiatives or hobbling managers with process and controls," she says.
Rick Delbridge, professor of organisational analysis at Cardiff Business School, believes the findings should be viewed in the context of the economy. "HR departments are managing problems to do with decline, such as redundancies, which won't be viewed as adding value. There's also no denying that, because of the rise in the legislative and regulatory burden on businesses, HR is widely viewed as the bureaucratic watchdog within a workplace, forcing line managers to complete ever increasing processes and paperwork."
"Both line managers and HR managers are under the same pressure to watch costs and do more with less in today's climate," adds Ruth Spellman, chief executive of the Chartered Management Institute. "It would be a tragedy for HR to become any more distant from the line. So my hope is that from the start of 2011 HR managers will prioritise time and resources, look closely at the business plan and focus on areas where the most support is going to be needed. Get alongside the line and have dialogues about what's working and what isn't and, at the pressure points, provide the human touch and show understanding. Ask how you can help."
"Line managers are pivotal, because they provide the link between the organisation's aspirations and what actually gets delivered," says Stephen Harding, senior practitioner at Towers Watson. But HR must be involved more directly in performance management to gain competitive advantage. "That means knowing exactly what's required of the role before it is filled, knowing how managers spend their time to maximum effect and rewarding appropriately. There's a lot of talk about 'manager capability' but in truth the US is well ahead of the game and all the examples of best practice are from the US."
HR VISION INTERVIEW
Jo Hennessy, director of research, Roffey Park:
"Our research shows that 40% of line managers feel HR is not in touch with their issues. From talking to managers, we know that right at the top of organisations there isn't a divide, but it's lower down where managers can begin to feel remote. There are certainly organisations where there's been insufficient communication about what is expected of line managers and people are feeling they haven't been trained to do the work. For us, it's an issue of organisational change. If the evolving role of line managers was managed as a change project, I think you'd get much more buy-in from the line."
Tanith Dodge, HR director, Marks & Spencer:
"We operate a model of HR business partnering, where our HR colleagues have to be closely aligned with the strategy of the business, but are focusing on the people implications within that. Our HR business partners work incredibly closely with line managers, so in the general merchandise department, for instance, the HR business partner will sit alongside that senior team, attending monthly meetings, being involved and contributing directly. They really understand the business and the customer, as well as the people implications.
"Secondly, we have 'centres of excellence' that provide areas of expertise - in remuneration, employee relations, talent management - for the HR business partners to draw on, offering line managers a seamless service. It works because we are able to demonstrate that this HR relationship with the line is value-added and delivers a return on investment. It is clearly a commercial initiative, rather than a new human resources idea."