Human Resource Academy


Cultural Diversity

Training & Development

Recruitment & Selection

Compensation & Benefits

Compliance I

Compliance II

Violence in the Workplace

Sexual Harassment

Worker’s Compensation



Legal Letter Writing

Career Development

Los Angeles Valley College

Extension Program

Human Resources Assistant Academy

Introduction to Human Resources Management

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Introduction to Human Resources Management (HRM)


• Welcome/Introductions

• Networking Game

• The History of Human Resources

• Roles within HR Management

• HR Daily Activities/Compliance Concerns

• Careers in HR/Salary Information

• The current climate and challenges of HR

• Ethical issues

• Review Handouts and Materials

Homework Assignment: Write a one page paper answering ONE of the following


1. Why do you want to have a career in Human Resources?


2. What is your “dream job” to achieve some day?

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Common HR “Buzz Words” in Human Resources


Absenteeism – Any failure by an employee to report for work as scheduled or to stay at

work when scheduled.

Adult learning – Ways in which an adult learns differently than younger individuals.

Adverse impact – a situation in which a significantly higher percentage of member of a

protected group (women, African-Americans, Hispanics, etc.) in the available population

are rejected for employment, placement or promotion.

Adverse selection – Means that only higher-risk employees select and use certain


Affirmative action – Gives preferential treatment in hiring, recruitment, promotion and

training to groups that have been discriminated against in the past.

Affirmative action plan – A formal document that the organization makes available for

review by employees and compliance officers.

Alternate work arrangements – Non-traditional schedules at work that provide flexibility

to employees.

Applicant pool – Consists of all persons who are actually evaluated for selection.

Aptitude test – Measures the general ability to learn or acquire a skill.

Arbitration – A means of deciding a dispute in which negotiating parties submit the

dispute to a third party to make a decision.

Auto-enrollment – Employee contributions to a 401 (k) plan are stared automatically

when an employee is eligible to join the plan.

Autonomy – Extent of individual freedom and discretion in the work and its scheduling.

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Bargaining Unit – Two or more employees who share common employment interests and

conditions and may reasonably be grouped together.

Base Pay – Basic compensation that an employee receives, usually as a wage or salary.

Behavior modeling – Copying someone else’s behavior.

Benchmarking – Comparing the business results to industry standards. Measures your

practices to “best practices” in other organizations.

BFOQ (bona-fide occupational qualification) – A legitimate reason why an employer

can exclude persons on otherwise illegal bases of consideration.

Burden of proof – What individuals who file suit against employers must prove to

establish that illegal discrimination has occurred.

Business necessity – A practice necessary for safe and efficient organizational operations.


Closed Shop – Firm that requires individuals to join a uion before they can be hired.

Classification or grading system A job evaluation method that groups jobs together into

a grade or classification.

Complaint – Indication of employee dissatisfaction.

Co-payment – Requires the employee to pay a portion of costs for bother insurance

premiums and medical care.

Coaching – Observation with suggestionsn or training and feedback given to employees

by immediate supervisors.

Collective bargaining – Process by which representative or the organization meet and

attempt to work out a contract with representatives of a union.

Commission – Compensation computed as a percentage of sales in units or dollars.

Comparable worth – Requires that jobs with comparable knowledge, skills, and abilities

by paid similarly even if the actual duties differ.

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Compensation – The HRM function that deals with every type of reward that individuals

receive in return for performing organizational tasks.

Compensatory time-off – Time off given in lieu of payment for time worked.

Compressed workweek – A full week’s work is accomplished in fewer than five days.

Constructive discharge – When an employer deliberately makes conditions so intolerable

in an attempt to get an employee to quit.

Contributory plan – One in which the money for benefits is paid in by both employers

and employees.

Cross-training – Training employees to do more than one job.

Cumulative trauma disorders (CTDs) – Muscle and skeletal injuries that occur when

workers repetitively use the same muscles to perform task. (e.g. carpal tunnel syndrome

is a CTD)


Decertification – A process whereby a union is removed as the representative of a group

of employees.

Defined benefit plan – One in which an employee is promised a pension amount based on

age and service.

Defined contribution plan – One in which the employer makes an annual payment to an

employee’s pension account.

Directive interview – Uses questions that can be answered by “yes” or “no” answer.

Disabled person – Someone who has a physical or mental impairment that substantially

limits that person in some major life activities, has a record of, or is regarded as having

such impairment.

Discipline – A form of training that enforces organizational rules.

Disparate impact – Occurs when there is a substantial under representation of protectedclass

members as a result of employment decisions that work to their disadvantages.

Disparate treatment – Occurs when protected-class members are treated differently.

Diversity – The condition that describes the variety of people who comprise the

contemporary work force.

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Downsizing – Reducing the size of an organization’s workforce.

Due diligence – A comprehensive assessment of all aspects of the business being


Due process – Requirement that the employer use a fair process to determine employee

wrongdoing and that the employee has the opportunity to explain his/her actions.


Early Retirement – Retirement before the usual age of 65.

Employee Assistance Program (EAP) – program designed to help employees with

persona, family and work programs (short term confidential counseling).

Employee Engagement – The extent to which an employee’s thoughts and behaviors are

focused on the employer’s success.

Employment at Will – A common law doctrine stating that employers have the right to

hire, fire, demote or promote whomever they choose, unless there is a law or contract that

forbids this.

EEO – Equal Employment Opportunity – states that individuals should have equal

treatment in all employment related actions.

Equity – Perceived fairness of what the person does compared with what the person


Ergonomics – The proper design of the work environment to address the physical

demands experienced by people.

Essential Job Functions – The fundamental job duties of the employment position that an

individual with a disability holds or desires, but they do no include marginal functions of

the position.

Exempt – Employees that are not required to be paid overtime under the Fair Labor

Standards Act.

Exit interview – Asks those leaving the organization to identify the reasons for leaving.

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Flexible Benefits Plan – Allows employees to select the benefits they prefer from a group

of benefits established by the employer.

Flexible Spending Account – Allows employees to contribute pre-tax dollars to buy

additional benefits.


Garnishment – A court order that directs an employer to set aside a portion of an

employee’s wage to pay a debt owed to a creditor.

Glass ceiling – Discriminatory practices that have prevented women and other members

of a protected class from advancing to executive level jobs.

Golden parachute – A severance packaged that provides protection and security to

executives who may be affected if they lose their jobs if their firm is acquired by another


Green Circle Job – One in which the incumbent is paid below the rate for the job.

Grievance – A complaint formally stated in writing


Halo effect – Rating a person high or low on all items because of one characteristic

Headhunters – Employment agencies that focus their efforts on executive, managerial and

professional positons.

Hot stove rule – Relating to discipline – immediate and consistent response to

inappropriate action by an employee.

HR generalist – A person with responsibility for a variety of HR functions.

HR specialist – A person with in-depth knowledge and expertise in a limited area of HR.

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Illegal issues – Collective bargaining issues that would require either party to take illegal


Incentive – A compensative reward for an employee’s efforts beyond normal


IRA – individual retirement account.


Job description – Specified in written form the duties, tasks and responsibilities of a job.

Job posting – A listing of job openings

Job specifications – The knowledge, skills, and abilities an individuals needs to do the job


Just cause – Reasons justification for taking employment-related action.


Mentor – A guide/coach that assists with career development.

Mediation – Process by which a third party helps the negotiators reach a settlement.

Minimum wage – The federal minimum wage that must be paid in all States. Some

states, such as California have minimum wage requirements higher than the federal

minimum wage.

Moonlighting – Work outside a person’s regular employment.


Negligent hiring – Occurs when an employer fails to check an employee’s background

and the employee injuries someone on the job.

Negligent retention – Occurs when an employer becomes aware than an employee may

be unfit for work but continues to employ the person, and the person injures someone.

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Nepotism – Practice of allowing relatives to work for the same employer.

Nondirective interview – Uses general questions from which other questions are


Non-exempt employee – A person working in a job that is subject to the overtime

provisions of the Fair Labor Standards Act.


Open Enrollment –A time when employees can change their participation level in various

benefit plans and switch between benefit options.

Orientation – the HR activity that introduces new employees to the organization.

Outplacement – a group of services provided to displaced/laid off employees to give

them support and assistance.


Pay class – A grouping of jobs that are similar in their work difficulty and responsibility.

Pay grades – Used to group together individual jobs having the same job worth.

Pay survey – A collection of data about compensation rates for workers performing

similar jobs in other organizations.

Performance appraisal – Process of determining how well employees do their jobs

compared with a set of standards and communicating that information to employees.

PERKS – Special benefits for executives that are usually non-cash items.

Phased retirement – Approach in which employees gradually reduce their workloads and

pay level.

Progressive Discipline – A program that proceeds from less sever disciplinary action to

very sever action (e.g. oral warning vs. termination). Each step in the progression

becomes more severe.

Protected class – Composed of individuals who fall within a group identified for

protection under equal employment laws and regulations (e.g. race, gender, sex,


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Ranking – Consists of listing all employees form highest to lowest in performance.

Rater bias – Occurs when a rater’s values or prejudices distort the rating.

Realistic job preview – Process through which a job applicant receives an accurate

picture of a job.

Reasonable accommodation – A modification or adjustment to a job or work

environment that enables a qualified individual with a disability to enjoy equal

employment opportunity to perform.

Recency effect – Gives a greater weight to recent occurrences when appraising an

individual performance.

Red-circle rate – Occurs when the incumbent is paid above the salary range.

Retaliation – occurs when an employer takes punitive actions against individuals who

exercise their legal rights.

Right-to-Sue Letter – a letter issued by the EEOC that notifies a complainant that he/she

has 90 days in which to file a personal lawsuit in federal court.


Selection – The process of choosing individuals who have relevant qualifications to fill

vacant jobs.

Separation Agreement – Agreement in which a terminated employee agrees not to sue the

employer in exchange for specified benefits (e.g. lump sum payment).

Severance pay – Temporary payments made to laid-off employees to ease the financial

burden of unemployment.

Sexual harassment – Actions that are sexually directed, are unwanted, and subject the

worker to adverse employment conditions or create a hostile work environment.

Structured interview – uses a set of standardized questions that are asked of all job


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Telecommuting – Working via electronic computing and telecommunications equipment

from a remote location.

Turnover – Occurs when employees leave the organization and have to be replaced.


Undue Hardship – Significant difficulty or expense imposed on an employer in making

an accommodation for individuals with disabilities.


Vesting – Rights of employees to receive certain benefits from their pension plans.


Wellness programs – Programs designed to maintain or improve employee health before

problems arise.

Wrongful discharge – Termination of an individual’s employment for reasons that are

illegal or improper.

Source: Adapted from Human Resources Management, by Robert L. Mathis, John H.

Jackson and Sean R. Valentine, 14th edition, Cengage Learning, 2014

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Why We Hate HR

By: Keith H. Hammonds

Fast Company, Issue 97; August 2005

In a knowledge economy, companies with the best talent win. And finding,

nurturing, and developing that talent should be one of the most important tasks in

a corporation. So why does human resources do such a bad job — and how can

we fix it?


Well, here’s a rockin’ party: a gathering of several hundred midlevel humanresources

executives in Las Vegas. (Yo, Wayne Newton! How’s the 401(k)?)

They are here, ensconced for two days at faux-glam Caesars Palace, to confer

on “strategic HR leadership,” a conceit that sounds, to the lay observer, at once

frightening and self-contradictory. If not plain laughable.

Because let’s face it: After close to 20 years of hopeful rhetoric about becoming

“strategic partners” with a “seat at the table” where the business decisions that

matter are made, most human-resources professionals aren’t nearly there. They

have no seat, and the table is locked inside a conference room to which they

have no key. HR people are, for most practical purposes, neither strategic nor


I don’t care for Las Vegas. And if it’s not clear already, I don’t like HR, either,

which is why I’m here. The human-resources trade long ago proved itself, at best,

a necessary evil — and at worst, a dark bureaucratic force that blindly enforces

nonsensical rules, resists creativity, and impedes constructive change. HR is the

corporate function with the greatest potential — the key driver, in theory, of

business performance — and also the one that most consistently underdelivers.

And I am here to find out why.

Why are annual performance appraisals so time-consuming — and so routinely

useless? Why is HR so often a henchman for the chief financial officer, finding

ever-more ingenious ways to cut benefits and hack at payroll? Why do its

communications — when we can understand them at all — so often flout reality?

Why are so many people processes duplicative and wasteful, creating a forest of

paperwork for every minor transaction? And why does HR insist on sameness as

a proxy for equity?

It’s no wonder that we hate HR. In a 2005 survey by consultancy Hay Group, just

40% of employees commended their companies for retaining high-quality

workers. Just 41% agreed that performance evaluations were fair. Only 58%

rated their job training as favorable. Most said they had few opportunities for

advancement — and that they didn’t know, in any case, what was required to

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move up. Most telling, only about half of workers below the manager level

believed their companies took a genuine interest in their well-being.

None of this is explained immediately in Vegas. These HR folks, from employers

across the nation, are neither evil courtiers nor thoughtless automatons. They are

mostly smart, engaging people who seem genuinely interested in doing their jobs

better. They speak convincingly about employee development and cultural

transformation. And, over drinks, they spin some pretty funny yarns of employee

weirdness. (Like the one about the guy who threatened to sue his wife’s company

for “enabling” her affair with a coworker. Then there was the mentally disabled

worker and the hooker — well, no, never mind. . . .)

But then the facade cracks. It happens at an afternoon presentation called “From

Technicians to Consultants: How to Transform Your HR Staff into Strategic

Business Partners.” The speaker, Julie Muckler, is senior vice president of

human resources at Wells Fargo Home Mortgage. She is an enthusiastic woman

with a broad smile and 20 years of experience at companies such as Johnson &

Johnson and General Tire. She has degrees in consumer economics and human

resources and organizational development.

And I have no idea what she’s talking about. There is mention of “internal action

learning” and “being more planful in my approach.” PowerPoint slides outline

Wells Fargo Home Mortgage’s initiatives in performance management,

organization design, and horizontal-solutions teams. Muckler describes

leveraging internal resources and involving external resources — and she leaves

her audience dazed. That evening, even the human-resources pros confide they

didn’t understand much of it, either.

This, friends, is the trouble with HR. In a knowledge economy, companies that

have the best talent win. We all know that. Human resources execs should be

making the most of our, well, human resources — finding the best hires, nurturing

the stars, fostering a productive work environment — just as IT runs the

computers and finance minds the capital. HR should be joined to business

strategy at the hip.

Instead, most HR organizations have ghettoized themselves literally to the brink

of obsolescence. They are competent at the administrivia of pay, benefits, and

retirement, but companies increasingly are farming those functions out to

contractors who can handle such routine tasks at lower expense. What’s left is

the more important strategic role of raising the reputational and intellectual

capital of the company — but HR is, it turns out, uniquely unsuited for that.

Here’s why.

1. HR people aren’t the sharpest tacks in the box. We’ll be blunt: If you are an

ambitious young thing newly graduated from a top college or B-school with your

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eye on a rewarding career in business, your first instinct is not to join the humanresources

dance. (At the University of Michigan’s Ross School of Business,

which arguably boasts the nation’s top faculty for organizational issues, just 1.2%

of 2004 grads did so.) Says a management professor at one leading school: “The

best and the brightest don’t go into HR.”

Who does? Intelligent people, sometimes — but not businesspeople. “HR doesn’t

tend to hire a lot of independent thinkers or people who stand up as moral

compasses,” says Garold L. Markle, a longtime human-resources executive at

Exxon and Shell Offshore who now runs his own consultancy. Some are exiles

from the corporate mainstream: They’ve fared poorly in meatier roles — but not

poorly enough to be fired. For them, and for their employers, HR represents a

relatively low-risk parking spot.

Others enter the field by choice and with the best of intentions, but for the wrong

reasons. They like working with people, and they want to be helpful — noble

motives that thoroughly tick off some HR thinkers. “When people have come to

me and said, ‘I want to work with people,’ I say, ‘Good, go be a social worker,’ “

says Arnold Kanarick, who has headed human resources at the Limited and, until

recently, at Bear Stearns. “HR isn’t about being a do-gooder. It’s about how do

you get the best and brightest people and raise the value of the firm.”

The really scary news is that the gulf between capabilities and job requirements

appears to be widening. As business and legal demands on the function

intensify, staffers’ educational qualifications haven’t kept pace. In fact, according

to a survey by the Society for Human Resource Management (SHRM), a

considerably smaller proportion of HR professionals today have some education

beyond a bachelor’s degree than in 1990.

And here’s one more slice of telling SHRM data: When HR professionals were

asked about the worth of various academic courses toward a “successful career

in HR,” 83% said that classes in interpersonal communications skills had

“extremely high value.” Employment law and business ethics followed, at 71%

and 66%, respectively. Where was change management? At 35%. Strategic

management? 32%. Finance? Um, that was just 2%.

The truth? Most human-resources managers aren’t particularly interested in, or

equipped for, doing business. And in a business, that’s sort of a problem. As

guardians of a company’s talent, HR has to understand how people serve

corporate objectives. Instead, “business acumen is the single biggest factor that

HR professionals in the U.S. lack today,” says Anthony J. Rucci, executive vice

president at Cardinal Health Inc., a big health-care supply distributor.

Rucci is consistently mentioned by academics, consultants, and other HR

leaders as an executive who actually does know business. At Baxter

International, he ran both HR and corporate strategy. Before that, at Sears, he

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led a study of results at 800 stores over five years to assess the connection

between employee commitment, customer loyalty, and profitability.

As far as Rucci is concerned, there are three questions that any decent HR

person in the world should be able to answer. First, who is your company’s core

customer? “Have you talked to one lately? Do you know what challenges they

face?” Second, who is the competition? “What do they do well and not well?” And

most important, who are we? “What is a realistic assessment of what we do well

and not so well vis a vis the customer and the competition?”

Does your HR pro know the answers?

2. HR pursues efficiency in lieu of value. Why? Because it’s easier — and easier

to measure. Dave Ulrich, a professor at the University of Michigan, recalls

meeting with the chairman and top HR people from a big bank. “The training

person said that 80% of employees have done at least 40 hours in classes. The

chairman said, ‘Congratulations.’ I said, ‘You’re talking about the activities you’re

doing. The question is, What are you delivering?’ “

That sort of stuff drives Ulrich nuts. Over 20 years, he has become the HR

trade’s best-known guru (see “The Once and Future Consultant,” page 48) and a

leading proponent of the push to take on more-strategic roles within corporations.

But human-resources managers, he acknowledges, typically undermine that

effort by investing more importance in activities than in outcomes. “You’re only

effective if you add value,” Ulrich says. “That means you’re not measured by

what you do but by what you deliver.” By that, he refers not just to the value

delivered to employees and line managers, but the benefits that accrue to

investors and customers, as well.

So here’s a true story: A talented young marketing exec accepts a job offer with

Time Warner out of business school. She interviews for openings in several

departments — then is told by HR that only one is interested in her. In fact, she

learns later, they all had been. She had been railroaded into the job, under the

supervision of a widely reviled manager, because no one inside the company

would take it.

You make the call: Did HR do its job? On the one hand, it filled the empty slot. “It

did what was organizationally expedient,” says the woman now. “Getting

someone who wouldn’t kick and scream about this role probably made sense to

them. But I just felt angry.” She left Time Warner after just a year. (A Time

Warner spokesperson declined to comment on the incident.)

Part of the problem is that Time Warner’s metrics likely will never catch the real

cost of its HR department’s action. Human resources can readily provide the

number of people it hired, the percentage of performance evaluations completed,

Rev. April 2014 Page 16

and the extent to which employees are satisfied or not with their benefits. But

only rarely does it link any of those metrics to business performance.

John W. Boudreau, a professor at the University of Southern California’s Center

for Effective Organizations, likens the failing to shortcomings of the finance

function before DuPont figured out how to calculate return on investment in 1912.

In HR, he says, “we don’t have anywhere near that kind of logical sophistication

in the way of people or talent. So the decisions that get made about that resource

are far less sophisticated, reliable, and consistent.”

Cardinal Health’s Rucci is trying to fix that. Cardinal regularly asks its employees

12 questions designed to measure engagement. Among them: Do they

understand the company’s strategy? Do they see the connection between that

and their jobs? Are they proud to tell people where they work? Rucci correlates

the results to those of a survey of 2,000 customers, as well as monthly sales data

and brand-awareness scores.

“So I don’t know if our HR processes are having an impact” per se, Rucci says.

“But I know absolutely that employee-engagement scores have an impact on our

business,” accounting for between 1% and 10% of earnings, depending on the

business and the employee’s role. “Cardinal may not anytime soon get invited by

the Conference Board to explain our world-class best practices in any area of HR

— and I couldn’t care less. The real question is, Is the business effective and


3. HR isn’t working for you. Want to know why you go through that asinine

performance appraisal every year, really? Markle, who admits to having

administered countless numbers of them over the years, is pleased to confirm

your suspicions. Companies, he says “are doing it to protect themselves against

their own employees,” he says. “They put a piece of paper between you and

employees, so if you ever have a confrontation, you can go to the file and say,

‘Here, I’ve documented this problem.’ “

There’s a good reason for this defensive stance, of course. In the last two

generations, government has created an immense thicket of labor regulations.

Equal Employment Opportunity; Fair Labor Standards; Occupational Safety and

Health; Family and Medical Leave; and the ever-popular ERISA. These are

complex, serious issues requiring technical expertise, and HR has to apply

reasonable caution.

But “it’s easy to get sucked down into that,” says Mark Royal, a senior consultant

with Hay Group. “There’s a tension created by HR’s role as protector of corporate

assets — making sure it doesn’t run afoul of the rules. That puts you in the

position of saying no a lot, of playing the bad cop. You have to step out of that,

see the broad possibilities, and take a more open-minded approach. You need to

understand where the exceptions to broad policies can be made.”

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Typically, HR people can’t, or won’t. Instead, they pursue standardization and

uniformity in the face of a workforce that is heterogeneous and complex. A

manager at a large capital leasing company complains that corporate HR is

trying to eliminate most vice-president titles there — even though veeps are a

dime a dozen in the finance industry. Why? Because in the company’s

commercial business, vice president is a rank reserved for the top officers. In its

drive for bureaucratic “fairness,” HR is actually threatening the reputation, and so

the effectiveness, of the company’s finance professionals.

The urge for one-size-fits-all, says one professor who studies the field, “is partly

about compliance, but mostly because it’s just easier.” Bureaucrats everywhere

abhor exceptions — not just because they open up the company to charges of

bias but because they require more than rote solutions. They’re time-consuming

and expensive to manage. Make one exception, HR fears, and the floodgates will


There’s a contradiction here, of course: Making exceptions should be exactly

what human resources does, all the time — not because it’s nice for employees,

but because it drives the business. Employers keep their best people by

acknowledging and rewarding their distinctive performance, not by treating them

the same as everyone else. “If I’m running a business, I can tell you who’s really

helping to drive the business forward,” says Dennis Ackley, an employee

communication consultant. “HR should have the same view. We should send the

message that we value our high-performing employees and we’re focused on

rewarding and retaining them.”

Instead, human-resources departments benchmark salaries, function by function

and job by job, against industry standards, keeping pay — even that of the stars —

within a narrow band determined by competitors. They bounce performance

appraisals back to managers who rate their employees too highly, unwilling to

acknowledge accomplishments that would merit much more than the 4%

companywide increase.

Human resources, in other words, forfeits long-term value for short-term cost

efficiency. A simple test: Who does your company’s vice president of human

resources report to? If it’s the CFO — and chances are good it is — then HR is

headed in the wrong direction. “That’s a model that cannot work,” says one top

HR exec who has been there. “A financial person is concerned with taking money

out of the organization. HR should be concerned with putting investments in.”

4. The corner office doesn’t get HR (and vice versa). I’m at another rockin’ party:

a few dozen midlevel human-resources managers at a hotel restaurant in

Mahwah, New Jersey. It is not glam in any way. (I’ve got to get a better travel

agent.) But it is telling, in a hopeful way. Hunter Douglas, a $2.1 billion

Rev. April 2014 Page 18

manufacturer of window coverings, has brought its HR staff here from across the

United States to celebrate their accomplishments.

The company’s top brass is on hand. Marvin B. Hopkins, president and CEO of

North American operations, lays on the praise: “I feel fantastic about your

achievements,” he says. “Our business is about people. Hiring, training, and

empathizing with employees is extremely important. When someone is fired or

leaves, we’ve failed in some way. People have to feel they have a place at the

company, a sense of ownership.”

So, yeah, it’s corporate-speak in a drab exurban office park. But you know what?

The human-resources managers from Tupelo and Dallas are totally pumped up.

They’ve been flown into headquarters, they’ve had their picture taken with the

boss, and they’re seeing Mamma Mia on Broadway that afternoon on the

company’s dime.

Can your HR department say it has the ear of top management? Probably not.

“Sometimes,” says Ulrich, “line managers just have this legacy of HR in their

minds, and they can’t get rid of it. I felt really badly for one HR guy. The chairman

wanted someone to plan company picnics and manage the union, and every time

this guy tried to be strategic, he got shot down.”

Say what? Execs don’t think HR matters? What about all that happy talk about

employees being their most important asset? Well, that turns out to have been a

small misunderstanding. In the 1990s, a group of British academics examined

the relationship between what companies (among them, the UK units of Hewlett-

Packard and Citibank) said about their human assets and how they actually

behaved. The results were, perhaps, inevitable.

In their rhetoric, human-resources organizations embraced the language of a

“soft” approach, speaking of training, development, and commitment. But “the

underlying principle was invariably restricted to the improvements of bottom-line

performance,” the authors wrote in the resulting book, Strategic Human

Resource Management (Oxford University Press, 1999). “Even if the rhetoric of

HRM is soft, the reality is almost always ‘hard,’ with the interests of the

organization prevailing over those of the individual.”

In the best of worlds, says London Business School professor Lynda Gratton,

one of the study’s authors, “the reality should be some combination of hard and

soft.” That’s what’s going on at Hunter Douglas. Human resources can address

the needs of employees because it has proven its business mettle — and vice

versa. Betty Lou Smith, the company’s vice president of corporate HR, began

investigating the connection between employee turnover and product quality.

Divisions with the highest turnover rates, she found, were also those with

damaged-goods rates of 5% or higher. And extraordinarily, 70% of employees

were leaving the company within six months of being hired.

Rev. April 2014 Page 19

Smith’s staffers learned that new employees were leaving for a variety of

reasons: They didn’t feel respected, they didn’t have input in decisions, but

mostly, they felt a lack of connection when they were first hired. “We gave them a

10-minute orientation, then they were out on the floor,” Smith says. She

addressed the weakness by creating a mentoring program that matched new

hires with experienced workers. The latter were suspicious at first, but eventually,

the mentor positions (with spiffy shirts and caps) came to be seen as prestigious.

The six-month turnover rate dropped dramatically, to 16%. Attendance and

productivity — and the damaged-goods rate — improved.

“We don’t wait to hear from top management,” Smith says. “You can’t just sit in

the corner and look at benefits. We have to know what the issues in our business

are. HR has to step up and assume responsibility, not wait for management to

knock on our door.”

But most HR people do.

Hunter Douglas gives us a glimmer of hope — of the possibility that HR can be

done right. And surely, even within ineffective human-resources organizations,

there are great individual HR managers — trustworthy, caring people with their

ears to the ground, who are sensitive to cultural nuance yet also understand the

business and how people fit in. Professionals who move voluntarily into HR from

line positions can prove especially adroit, bringing a profit-and-loss sensibility

and strong management skills.

At Yahoo, Libby Sartain, chief people officer, is building a group that may prove

to be the truly effective human-resources department that employees and

executives imagine. In this, Sartain enjoys two advantages. First, she arrived with

a reputation as a creative maverick, won in her 13 years running HR at

Southwest Airlines. And second, she had license from the top to do whatever it

took to create a world-class organization.

Sartain doesn’t just have a “seat at the table” at Yahoo; she actually helped build

the table, instituting a weekly operations meeting that she coordinates with COO

Dan Rosensweig. Talent is always at the top of the agenda — and at the end of

each meeting, the executive team mulls individual development decisions on key


That meeting, Sartain says, “sends a strong message to everyone at Yahoo that

we can’t do anything without HR.” It also signals to HR staffers that they’re

responsible for more than shuffling papers and getting in the way. “We view

human resources as the caretaker of the largest investment of the company,”

Sartain says. “If you’re not nurturing that investment and watching it grow, you’re

not doing your job.”

Rev. April 2014 Page 20

Yahoo, say some experts and peers at other organizations, is among a few

companies — among them Cardinal Health, Procter & Gamble, Pitney Bowes,

Goldman Sachs, and General Electric — that truly are bringing human resources

into the realm of business strategy. But they are indeed the few. USC professor

Edward E. Lawler III says that last year HR professionals reported spending 23%

of their time “being a strategic business partner” — no more than they reported in

1995. And line managers, he found, said HR is far less involved in strategy than

HR thinks it is. “Despite great huffing and puffing about strategy,” Lawler says,

“there’s still a long way to go.” (Indeed. When I asked one midlevel HR person

exactly how she was involved in business strategy for her division, she excitedly

described organizing a monthly lunch for her vice president with employees.)

What’s driving the strategy disconnect? London Business School’s Gratton

spends a lot of time training human-resources professionals to create more

impact. She sees two problems: Many HR people, she says, bring strong

technical expertise to the party but no “point of view about the future and how

organizations are going to change.” And second, “it’s very difficult to align HR

strategy to business strategy, because business strategy changes very fast, and

it’s hard to fiddle around with a compensation strategy or benefits to keep up.”

More than simply understanding strategy, Gratton says, truly effective executives

“need to be operating out of a set of principles and personal values.” And few

actually do.

In the meantime, economic natural selection is, in a way, taking care of the

problem for us. Some 94% of large employers surveyed this year by Hewitt

Associates reported they were outsourcing at least one human-resources

activity. By 2008, according to the survey, many plan to expand outsourcing to

include activities such as learning and development, payroll, recruiting, health

and welfare, and global mobility.

Which is to say, they will farm out pretty much everything HR does. The happy

rhetoric from the HR world says this is all for the best: Outsourcing the

administrative minutiae, after all, would allow human-resources professionals to

focus on more important stuff that’s central to the business. You know, being

strategic partners.

The problem, if you’re an HR person, is this: The tasks companies are

outsourcing — the administrivia — tend to be what you’re good at. And what’s left

isn’t exactly your strong suit. Human resources is crippled by what Jay Jamrog,

executive director of the Human Resource Institute, calls “educated incapacity:

You’re smart, and you know the way you’re working today isn’t going to hold 10

years from now. But you can’t move to that level. You’re stuck.”

That’s where human resources is today. Stuck. “This is a unique organization in

the company,” says USC’s Boudreau. “It discovers things about the business

Rev. April 2014 Page 21

through the lens of people and talent. That’s an opportunity for competitive

advantage.” In most companies, that opportunity is utterly wasted.

And that’s why I don’t like HR.

Keith H. Hammonds is Fast Company’s deputy editor.


Copyright © 2004 Gruner + Jahr USA Publishing. All rights reserved.

Fast Company, 375 Lexington Avenue., New York , NY 10017


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