This video will compare and contrast administrative HR activities with strategic HR activities and provide examples.
- Do you know HR came to be? I'll give you the quick version. During the Industrial Revolution, quick and cheap production was a high priority for many industries. Employees, many of which were children, were overworked, underpaid, and mistreated. After much labor unrest, strikes, and egregious treatment of employees, the personnel department was born and was responsible for compliance and work safety. By the 1970s, while personnel was conducting administrative duties, the interest in civil rights was booming. People were concerned about things like equal pay, and protection from discrimination, and thus personnel had to start paying attention to keeping employees happy.
It was during the 1990s that personnel evolved into human resources, which meant HR was playing a bigger role in the strategic direction of organizations. As technology created a truly global marketplace, we have quickly evolved into strategic human resources. So let's take a look at two HR professionals in order to understand what we mean by strategic HR. John is the office manager for Acme, a cog manufacturing company, and he looks at HR as a transactional function. As the office manager, John's duties include serving as the executive assistant to the CEO and human resources.
Acme's leaders get together and develop a five year strategic plan. The plan identifies two goals: to reduce production costs by 10%, and to increase sales by 30%. When the CEO asks John how he can help make the plan a reality, John explains that he will make himself available to hire new people as sales increase, and he says he'll review his own work and determine if there are places he can reduce his own costs of functioning. In other words, John's answer is transactional. Now let's replace John with Kate, who sees her HR duties as strategic.
When the CEO asks Kate how she will help reduce production costs by 10% and increase sales by 30%, Kate offers up a three part plan. First, she'll conduct a learning needs analysis for the sales team, in order to determine if there are gaps in their knowledge that are currently hurting sales. For example, could some or all of them improve in up-selling, and negotiation skills to increase sales? Second, because employee engagement increases productivity, she will conduct an employee engagement survey.
Using the survey results, she will develop a plan to increase engagement where necessary. Third, she will conduct a job analysis on the manufacturing jobs to determine if production costs can be reduced in some way. Kate's response to the CEO's same question is much more strategic than John's. Kate sees herself as a strategic partner in the business, so she takes on strategic initiatives. Human resources involves both transactional and strategic work. HR generalists, HR assistants, and office managers who do HR, often engage in only transactional duties.
Transactional HR duties include ensuring compliance with the law, compensation and benefits administration, writing and enforcing workplace policies, taking grievances, investigating workplace issues, recruiting and hiring, and exiting employees. If you want to take your HR responsibilities to the next level, consider how you can become a strategic HR professional. How can you partner with your leaders to help them meet organizational goals? That is the question you must answer. For example, if Acme company's strategic five year goal is to become the industry leader in cog manufacturing, a strategic HR business partner will focus his or her efforts on building an engaged workforce with superior talent, and leaders who can make this goal a reality.
On a final note, being strategic means measuring the success of your efforts. Referring back to Kate, her efforts can be measured by the increase in sales, engagement, and production. So take a look at the exercise files for this course, where you will find a sheet that compares and contrasts compliance, transactional, and strategic HR. From there, take some time to think about your own HR duties. How can you move past functional duties and become a more strategic business partner to your leadership?
- Tying HR to your company's vision and mission
- Strategic planning
- Measuring training program success
- Building engagement
- Creating culture