The Purpose of Human Resources
I can imagine no better place to begin this blog then to attempt to re-define, or at least clarify, the true purpose of the Human Resources function of a business. If you were to ask Joe Employee what HR does, I would guess he’d say something like this:
- “Well, they hire people and fire people and, um, stuff like that.”
- “Uhh, HR gives really boring presentations that wastes my time.”
- “HR screws up my bonus check every year; that’s all I know.”
- “Why would you ask me that? Did I do something wrong? Are you in HR? I have to go!”
As you can see, none of these are very accurate, and what I didn’t tell you is that Joe Employee is the CEO! The simple truth is that HR should (notice I didn’t say does) maximize the productivity of the workforce in a manner that justifies the cost of said workforce. Let’s analyze this a bit further.
If you are an HR person or a manager, ask yourself when you last discussed the productivity level of an employee, department, division, or the company in general. I’ll bet you can’t remember. Let’s get this straight right now: employees produce what the company sells. There’s no other way to look at it. You hire people, so they will produce something (ideas, products, services, etc.) that you can sell for more than what it cost to create. That is the essence of business - sell something for more than it cost to create it.
So, there should really only be four types of employees:
- Creators - Engineers, production workers, etc.
- Sellers - Sales, marketing, etc.
- Support - Employees that help the creators create or the sellers sell; supply chain, accounting, HR, etc.
- Managers - The people who decide who, what, when, where, how, and why we do things, and then see that it gets done
That’s it! All employees fall into those four categories. Duh, you might be saying. How is this relevant. Well, remember productivity? HR people should be asking the following questions all the time. In staff meetings, in ad hoc hallway conversations, on the golf course, behind closed doors.
- What are we creating, and how many people will it take to create it? Why?
- Where and how are we selling it, and how many people with it take to sell it? Why?
- What does it take to deliver the creation, and how many people does it take to deliver it? Why?
- Who is best capable of deciding these things, who is best capable of ensuring they get done (these are very different traits), and how many of each do we need? Why?
If you can answer all of these questions then you will be able to maximize the productivity of your workforce. However, while all of these things are asked separately and distinctly from one another currently (how else would anything get done?), they are not asked by Human Resources; even though HR is ostensibly responsible for their performance and well being.
Now let’s look at the second part of the definition - “in a manner that justifies the cost”. I intentionally didn’t say “while minimizing the cost”. You might argue that they are two ways of saying the same thing, and I might agree…or not, but the reason I delineated this is because of the robotic and sometimes inhumane way in which some people administer the “minimize” mentality.
Let’s look at an example of this. Let’s say engineer one is asking for $80k, while engineer two is asking for $60k. The market calls for $70k. All other things being equal, engineer two looks like a better deal. However, things are never equal. If engineer one was 50% more productive than engineer two, then the extra $20k is more than re-gained in productivity.
This is a silly example, and there are many things illogical about it (there’s very little correlation between pay and productivity), but my only point is to illustrate that “minimize” usually connotes spending less. This over focus on “less is more” is a plague in business in general, not just HR. The main reason I point it out in HR is because “minimize” usually means less money for an employee, which has broad ranging effects, including some ethical ones such as a company’s effect on it’s employee’s families, which are usually not considered.
OK, deep breath. To cap this initial post off, I want to suggest that for one week all HR persons reading should ask themselves this simple question at the end of every work day: did I make the workforce more productive today? If you can’t clearly draw a line between your activities and a more productive workforce, you should re-evaluate your efforts closely.
