Traditionally Human Resource professionals have been managing the organizations workforce rules and regulations. Policies and procedure focus first on preventing increased labor related legal and insurance costs. Both legislative changes as well as litigation caused the shift from managing labor to managing labor related risks. Many human resource managers are trying to keep up with the increased risks, while their resources are being cut, and often times part of their tasks like payroll and benefit administration are being outsourced.
Outside the Human Resources department of an organization we see a shift in how management perceives the workforce. More and more the workforce is being seen as the Human Capital. The human impact of strategic decisions, need to be evaluated. The boardroom is looking for an expert who can support them in creating high performing highly engaged workforces who support the strategic direction of an organization and are looking to the Human Resources Department.
Focusing on limiting the (financial) risk of the workforce on one hand and integrating human resource management into business decisions and business processes on the other hand seems for many Human Resource professionals almost undoable.
When we look at other areas of an organization we see immediately how managing risk and creating an engaged workforce creates value for an organization. Organizations who have implemented a Lean culture have encountered business processes aligned with strategy, increased employee engagement and reduced rework and red tape.
But what is Lean? “Lean” is a practice that believes that the use of resources for any goal other than the creation of value for the end customer is wasteful and so should be eliminated. Working from the perspective of the customer who consumes a product or service, “value” is defined as any action or process that a customer is willing to pay for. By eliminating the waste out of the process, you can do more with less.
Looking at the human aspect of a Lean based culture brings us closer to understand what Lean can do for Human Resources. Lean believes that when you improve processes, you should engage with the people who are actually doing the work. By engaging the direct involved employees in the process improvement discussion and encourage them to come forward with improvements, they automatically feel accountable for making sure that the new process that they have co-developed will work. In other words, when you engage the people, you can eliminate waste out of the process and increase the quality and quantity of that same process.
Let’s take a side step to research done by M.I.T that shows that awarding people with money for great performance is not effective, but how three other factors can create an engaged workforce. Those factors are autonomy, mastery and purpose.
Autonomy is the desire to be self-directed. The Lean culture encourage employees to come up with improvements, make decisions in their own pre-approved areas, without the need of approvals to move forward. When looking Human Resources we see that dependency is a common way of managing HR processes. Managers need many approvals from Human Resources to manage their people. Oftentimes this step is implemented to monitor risk, and assure equal treatment of all employees. Because managers do not understand the role of HR in those decisions, they might move forward without the approval of Human Resources, causing the creation of another processes that eliminates this risk.
Mastery is the urge of getting better at something. In the lean manufacturing you can see that an employee that is being the expert of his piece of the production line and is recognized for his specialized knowledge will try to get better in it, every time. The expert will connect with higher level experts to learn how to become better, oftentimes even when not at work.
By not providing managers with the knowledge they need to understand the human resource process, they are not able to become experts in managing people as they always miss a certain piece of information. Human Resource professionals are traditionally tasked to enforce standards, without understanding how this standard or procedure relates to the bigger picture of the organization.
The last factor is purpose, more and more companies do realize that when the money part of the business is not aligned with the purpose of the business the company will lose at many areas. During an implementation of Lean it is often times implemented with the major focus on eliminating waste. This creates the feel that it is all about the money. When employees go through the process; they realize that the purpose is focusing on what the customer wants. And by that they learn that improving the process, being engaged in the process will create opportunities for them.
When we look at the role Human Resource should play in the Purpose part of the organization, they often times are left out of the decision process. They have to explain decisions and not surprisingly, the persons who were closely involved in the decision process are telling a different story. Needless to say this creates a very weak link between the purpose of the organization and the money, decreasing employee engagement rapidly.
Now we have explained how employee engagement and a Lean culture can support HR in their organization, what are the steps HR can take to implement Lean HR?
Know when to bend and when to enforce
Human Resources Professionals should first of all become all-round business partners, instead of the traditional recognized Human Resource Generalist. The characteristics of an HR Business Partners is that they know when to uphold the standards and when to treat standards as guidelines while coaching their line managers on how to create an high performing team, while staying compliant. The first word that should pop up, when a manager would like to do something is “how” instead of “risk”.
Make managers masters of the legal risks
When Human Resource professionals explain briefly in easy to understand language to managers the monetary risks, litigation and labor laws, those managers understand why certain processes are in place. More important those managers are able to provide assistance in improving a process, so it actually will better do what it is supposed to do. The Human Resources professional doesn’t have to spend their time on being a hawk on everything a manager does with its workforce, the manager understand when it is time to call in the experts, and when they can move forward on their own.
Get a voice in the board room, not just a seat
Often times Human resources managers do have a seat in the boardroom, but because of their lack of understanding of business drivers not a voice at the table. When HR Professionals develop business acumen and an understanding of their important role at the table, they will be able to support the organization in aligning the Human Capital to the purpose and the money of the organization.
Look serious at all human resource processes and cut out the waste
Finally Human Resources need to work with representatives from each group in the organization that is involved in Human Resources Processes. Together they need to look at where Human Resources can increase the quality of their service so that redundancy can be eliminated, the number of approvals can be reduced and accountability can be moved over to the line.
An example: The Performance Review Process
In a Lean based Performance Review process, the process starts with a presentation of the organizations 3 year goals and organizational chart. Then each employee has to come down with their own development plan. During the performance review with the manager, they discuss what support the employee needs and what the employee realizes that needs improvement. In this model a manager is a coach that provides feedback. After a maximum of an hour and half, the manager and employee know if the employee is in the right role and has a realistic development plan. The employee is accountable for their own destiny. This reduces multiple meetings and approval rounds for two processes within the Human Resources arena, creating capacity for HR to focus on the strategic site of the business, and truly coaching managers.
When HR is able to change to a Lean Culture, they are able to deliver services that their customers (the workforce and the board room) are asking for. Time will become available to focus on coaching managers and employees and to create a strong connection between business drivers and Human Capital strategy. This will create high engagement at the HR Level.
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Mirjam IJtsma is the president of Cultural Chemistry, A human Resources firm focused on creating high performing workforces by providing coaching and training and Lean consulting to small businesses in New England. Mirjam can be reached at [email protected] or (603) 623-3633.