BM: 4-2 Human Resources

What does Jim Collins mean when he says: “First Who, Then What.” In his best-selling book, Good to Great, Mr. Collins talks about how great companies understand the value of people, and that all great ventures should begin with great people.

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What does “business is about people” mean? In Good to Great, Mr. Collins says to “get the right people on the bus”. And not only that but make sure they are in the “right seats,” meaning put people in roles that align with their interests, skills and experience, and where they will be productive and fulfilled. He suggests doing all this even before you try to figure out where to drive the bus. So “First Who, Then What.” His theory is, with all the uncertainty and constant change in the world, the best “strategy” is to have the right people on the bus ready to adapt and solve the problems that they are faced with. Because great vision doesn’t really matter without great people to adapt and respond should difficult circumstances arise.

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What is HR? Human Resources is often called “HR”. And HR is one of the six business functions. HR refers to the people who work in an organization, and the group that staffs the organization, maintains personnel records, and administers benefits like medical insurance.

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What does HR do? HR is involved is in so many key areas of the business, but all focusing on the people assets in the company. Here is a list not in any particular order: “Recruiting”, which is the active searching for the appropriate candidates to fill open positions within an organization. “Staffing”, which means to recruit, interview, hire, and orient the appropriate people to fill organizational roles. For some companies, instead of using job titles like Recruiter or Staffing Specialist, you might hear titles like Head of Talent Acquisition. Human talent is what companies are looking for. Great companies are looking for rock stars to join their band. Legal issues: HR and anyone involved in the hiring process needs to know the dos and don’ts when hiring people, for example, the Equal Employment Opportunity Act (EEOA) prohibits the interviewer from asking questions that might lead to even the appearance of discrimination, like asking about age, or country of origin or marital status. “Job Descriptions”: These are explanations and expectations of the duties and responsibilities of a job. Orientation and Onboarding: “Employee orientation” is a process in which new hires are introduced to a company, their fellow employees, and the work environment. But “employee onboarding” is a strategic plan and process for new employees to learn the company’s culture, mission, vision, systems, processes, goals and expectations, and become contributing members of the team. So while orientation is about getting familiar with the company, onboarding is about being a contributor within it. Orientation is mostly a one-time event, often handled by HR, while onboarding can go on for many months and includes the involvement of the department the new employee is working in. Training and Professional Development: HR is involved in “training”, which is the process of teaching the necessary skills and knowledge needed to be successful in a certain job role. Professional Development, or PD, is on-going training and education that an individual takes to enhance or improve the skills or traits necessary to excel in their career/profession. Performance Management: Speaking of excelling, HR ensures proper performance management processes are in place and are complied with. For example some companies give performance reviews and appraisals twice per year. Those are primarily handled by a direct supervisor, but also may include feedback from fellow employees. “Compensation”: This means the total cash and benefits that an employee receives in exchange for their work performed for the organization. HR Departments conduct periodic research to ensure they know the going market rate of pay for each type and level of job so that they can compare their own rates of pay to their employees. “Company Culture”: Culture means the shared beliefs, values, goals, attitudes, and behaviors of a company’s employees; a company culture combines employee feelings about their work with how it motivates them to serve the company’s mission. Every employee affects the culture of a company. HR ensures the company walks the walk and talks the talk of the company values, in order to maintain good employee morale and relations. Employee Terminations: HR also gets involved with employee terminations, which again requires proper legal knowledge and care as employees have many rights and protections. So it’s important for HR to keep good records and documentation on personnel performance so that any claims of wrongful terminations can be properly defended. Exit Interviews: These are a conversation a company has with an employee who is leaving the company, to find out the reason for the decision, and to use this information future improvement. Employee Benefits: HR administers the employee medical benefits plan (if offered), any 401K plans, and other benefits and services that may be provided by the organization.

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Know what you are looking for: It is really expensive to recruit, interview, do background checks, hire, orient, and train a new employee only for it to not work out a few months later, for any reason. So to avoid spending all that money, it is a good practice to be methodical about hiring new employees. Be clear about the job description and expectations. Know exactly the type of person you are looking for, including education requirements, experience, and skills. It is also a good idea to include more than one interviewer in the process, to share notes and evaluate the candidate. Various personality surveys and aptitude tests are helpful and are often used.

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Have you seen the TV show Survivor? If and when you make a bad hire, often the new employee votes themselves off the island, to use an analogy from the TV show Survivor. Meaning, they know when it isn’t a good fit and they quit. But when a bad hire is made, or if any employee doesn’t seem to be fitting in or isn’t “getting it”, then it’s important for HR to ensure all training has been thoroughly given and understood, and that performance appraisals have occurred for HR’s records. But for some employees, it takes a little longer to “get it”, and that’s ok. It is usually less expensive to train and retrain, than to go through the hiring process again. And often these employees that you spent extra time with become some of your more productive and loyal employees.

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HR is a HR job. Because it deals with people at all stages in their careers. But it is a very important business function. Business is about people. HR is complex because HR deals with humans! We are complex creatures!

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