The word “revolution” comes to us from the root Latin word “revolutio”, which means to spin or turn around. It later took on the meaning of rejecting the status quo in favor of a radically and transformatively different direction or approach. I believe that American industry and the Human Resources profession in particular needs a true revolution if we are going to enjoy success in the 21st century. While so much has changed in the world of business, very little has actually changed in the way organizations engage the people that comprise them.
As large organizations began to emerge as the dominant economic force in the late 19th and through most of the 20th century, our economy transformed from one that was primarily agrarian- and craftsmen-oriented to one that was driven by larger organizations. HR came into existence, evolved pretty much non-cognitively and 100 years later still tends to emerge in three basic forms.
1. The Bureaucrat
As companies expanded to a larger size, things that were once a mere task of an owner to now became full-time functions. From an HR perspective, this became a nearly all day, everyday job. Records for employees had to be established and maintained, checks or cash had to be distributed, and employee taxes had to be collected and deposited. Usually this job went to whoever maintained the finances of the company. Today you still see the vestiges of this heritage in organizations where HR reports to the finance function, ultimately headed by the CFO. Here, HR is heavily focused on payroll, compensation, benefits administration and record keeping.
2. The Cop
Tax laws evolved, unions started and benefits programs were introduced. The federal government and the state governments found it necessary to regulate employment and business, including wage and hour regulations. Thus, workers’ rights laws emerged. Companies had to create rules for how things were done, and someone had to monitor and police to make sure these rules were followed. You can tell a company is still in this evolutionary stage when they have lots of handbooks, policy manuals and compliance work. These things remain important and have evolved to levels where it is unwise not to have professionals doing the work.
3. The Social Worker
The next evolutionary step came when we gradually conceded that people are not machines and that organizations are not armies at war. It was acknowledged that there was a human side of the enterprise. The intellectual and motivational state of employees was recognized and employees were seen as a type of capital or resource. We were no longer “personnel” but “Human Resources”. In this phase, HR evolved to the management of people-related processes.
You still see some version of evolutionary process occurring in companies that are locked in the habit of doing things the same old way. I can usually walk into a company and tell you where a business is on this evolutionary scale in less than an hour. If most employees see the HR department and wonder what they do, feel that they are a necessary evil, think it best to avoid interaction or think they are a complaint department, then what you have is some hybrid of the roles I discussed above.
We have learned so much in the last few decades that point to a much better way forward. It is also a major opportunity. We know that many old approaches tend to sterilize the environment, not make it more productive.
Want to hear some good news? There are tried and true ways to change this thinking, and they don’t generally involve spending lots of money, such as:
- Replace antiquated performance reviews with meaningful metrics to manage performance in an empowering, real-time way rather than just doing an annual retrospective with employees.
- Shift decision making downward to empower capable employees to do a better job.
- Automate administrative work to eliminate unproductive exercises, reducing time lost to admin work and minimizing errors.
Ultimately, the list of things that can be done is substantial, but it is tried and true. With the exception of automation, most organizations are not doing these things, and that opens up the opportunity for a new, powerful competitive advantage. Engaged employees aren’t a little more productive, they are massively more productive. The opportunity here is huge, simply because you can be certain most of your competitors are still stuck in bureaucratic, cop and social worker mode.