In business, there is never one “right” way to organize your people, your work, or your processes. Much of how you organize depends on your size, your business cycles, your industry, and your expected growth. And what may work for you in one year may not be optimal the next.
Good leaders will experiment with different organizational structures to see how they can maximize the talents of their employees. This results in a dual win, of sorts. The business wins because it has harnessed the full talents of its people. The employees win because everyone likes to be in a role where they can fully utilize their smarts, talents, and capabilities. With that said, there are some basic guidelines for how to organize your HR organizational structure to help you reap the benefits of having HR as a true strategic partner.
In a fully formed HR organization, the organization can be looked at in two main parts: Corporate HR and Line HR.
Corporate HR contains the functions that normally one associates with HR, such as Staffing, Compensation, Benefits, and Learning and Development. In a more robust HR function, you would also find in the Corporate group HR Information Systems (HRIS), Internal Communications, and Employee Relations. These Corporate Groups are what I term the “Architects”, designing and creating programs, processes, and tools that support the business.
These Corporate HR functions are clearly important to the delivery of HR services within a company. Employees need to be recruited, get paid appropriately, achieve access to benefits, and receive the necessary training in order to do their jobs. At a minimum, the role of the Corporate HR team is to provide these things.
Many people erroneously, however, think of the HR structure as a version of “Maslow’s Hierarchy of Needs”. Maslow’s hierarchy consists of five levels, with physiological needs at the base and moving up to self-actualization at the top. Maslow’s theory holds that one cannot begin to think about needs at any of the higher levels until the needs at the lower levels have been fulfilled. As various needs are met, an individual’s focus moves up the pyramid until she is fully focused on self-actualization activities.
In this analogy, Corporate HR functions are at the base of the pyramid and these corporate needs must be met before any investment in additional HR infrastructure and services, such as Line HR, can take place. The next level up from the base level requirement of HR work is a further refinement of the core HR work until one reaches the top of the pyramid, which for lack of a better term we’ll call organizational development and effectiveness. At this level, the organization can finally begin to pay attention to such “nice to haves” as organizational design, team building, talent management, culture shaping, etc.
Through the years, social psychologists have taken issue with Maslow, arguing that human needs are actually non-hierarchical. n the context of human resources, I would argue the same. The need for a thoughtful performance management system is not predicated on having a thoughtful compensation system. One can have either, both, or neither. It certainly helps to have critical Corporate HR systems in place in building your HR organization but leaders should not believe that growing an HR organization should take place in a pyramidal fashion.
The Corporate groups can’t and shouldn’t create programs in a vacuum. The impact of this imbalance is that Corporate designs programs that simply mirror what they have created previously or what they imagine will support the needs of the business. Such ivory tower thinking results in frustration for the business at the point of implementation.
To prevent this frustration, it is important for there to be a robust Line HR function, as well. Line HR contains organizational effectiveness experts generally called “HR Business Partners” (HRBPs). These HRBPs are responsible for working closely within the business units to deeply understand both the business and the goals of the business. With this information in hand, the HRBPs act as “Translators”, feeding back the business requirements to the Architects and partnering with them to create the programs and services the business needs.
The connection between the Architects and the Translators is a symbiotic one: one cannot be effective without the other. Theirs is a true partnership where each informs the others actions. Any disconnect between these two groups shows up at the business level either as ill-conceived programs or wholly inappropriate tools. It is imperative that while these two groups are divided for the sake of an organization chart, their actions be seamless and fully integrated.
The HR Business Partner role has been labeled many things over the years as the role has evolved, including “HR Generalists” or “HR Advisors”. The name Business Partner has begun to stick in recent years due almost certainly to the desire for HR to help brand itself as being knowledgeable about business issues. As HR Executive Search expert Valerie Frederickson notes, “The very fact that there are people walking around with the title of “HR Business Partner,” and yet nobody whose business card reads “Finance Business Partner” or “Marketing Business Partner,” shows how far there is to go.”
A typical HRBP will have a matrixed reporting relationship. He will most often have a solid line reporting relationship into the HR Leader and a dotted line relationship into the Business Leader(s) he supports. Sometimes this reporting relationship is reversed.
Whatever the reporting relationship, each relationship is critical for the HRBP’s success. The HRBP must immerse herself in the business, learning the business as well as anyone within the organization to the extent that the HRBP should be capable of delivering a presentation to any audience on the state of the business.
What this requires, then, is both access to the business, as well as the ability to question freely on topics related to the business. There should be few, if any, standing meetings on the business in which the HRBP should not participate. The HRBP is the conduit through which business information is shared and related with the rest of the HR team. This role is critical if HR is to deliver programs and services that ultimately help deliver business results.
Conversely, the HRBPs must be equally connected with the Corporate HR team, as well as to each other. In general, there is tendency for corporate functions to become too isolated from the business. Creating strong connections between Line and Corporate HR help ameliorate that isolation and ensure that Corporate HR understands the business context and environment in which it’s operating.
Finally, the HRBP’s must build links to each other so that no one is operating in a silo and working either duplicatively or at crosshairs with one another. While this is true of all corporate functions, it is especially true of HR. As we will discuss in later chapters, one role of HR within a company is too help the organization stay focused on the big picture and help point out patterns when others only see random bits of data. Many business people get so focused on an individual tree that they miss the forest. It is the role of the HRBP to constantly paint the picture of the forest. By staying linked with one another, the HRBP’s are able to constantly sharpen their understanding of the business climate and provide more accurate coaching to their client groups.