HR is Dead

Recently I searched for trends in HR. Turns out there are a lot of stories about trends in HR. Trends in HR have become a trend. Who knew. HR, it seems, is in a constant mode of change, renewal, and re-creation. Some call it transformation. But why? Here’s one perspective.

HR as a function is in a coma, teetering on its final days. What happened to HR? HR's demise began with a critical mistake, one of credibility. HR posed as friend-of-the-employee while being manipulated by leadership to get what they wanted out of employees. Think employee surveys, performance evaluations, and termination. Think HR representatives helping you with an issue with your manager. This misrepresentation cost HR its credibility and employees never trusted the function again. Every employee survey is statistically invalid, because employees distrust management and therefore provide the answers they think management wants to hear. You cannot get accurate data from a population if the population distrusts the researcher.

The second reason I believe HR as a function is all but dead has more to do with automation, Technology has automated key HR functions and enabled the delivery of most people related services as on-demand, online, and self service. Honestly, I believe some of the so called benefits of HR have no place in the organization in the first place, like healthcare. Think about it. What does your health have to do with your work relationship? Why does our healthcare have any relationship with our workplaces? The answer is simple. Corporations want to tie healthcare to work so that you'll need to work for them if you want healthcare. This is a negative incentive to work for corporations. And, it flies in the face of freedom of choice. In fact, it aligns closer to slavery than it does to freedom, from a principles perspective. 

Altogether, these changes have increased HR’s irrelevance. I realize that irrelevance is a strong word, but let’s not confuse the people of HR with the function itself. I am talking about the function. People are never irrelevant; we just have to find better things for them to do, and I'm confident that they will be more content with their lives when we do. By the way, if you want to make people feel irrelevant, refer to them as resources. Human Resources is a term I have always found to be insulting. What is an organization other than people? We are not resources or tools. We are the organization. Calling people human resources is like putting people on the same level as capital or real estate or some other asset. This runs against the fundamental belief that we as a society must protect the dignity of each and every person in our society.

Technologies like HR systems, software, and web-based services, have changed the landscape of HR. All functions from hiring and compensation to benefits and training have transformed. Self service is a reality. Today, HR functions can be carried out at the business unit manager level, where the critical decisions are made anyway. Today, managers can hire and compensate employees with a phone.

Our world is changing rapidly. We’re reinventing the world. But we’re not reinventing the organization, not fast enough to keep up. We need to apply disruptive forces to the design of organizations. HR as a function is a good place to start. Most business managers, after all, are keen to reducing costs and eliminating work that no longer provides a good return on investment. Once you take OD out of HR—where it never belonged—where’s the value? Allow me to quickly assess the core functions of HR: hiring, compensation, benefits, and training.

Hiring is a Local Thing

When it comes to hiring, if a manager needs talent, he or she knows what they need better than someone in HR. Managers can post positions on LinkedIn, GlassDoor, Indeed, and so on. Hiring needs to become a basic function of being a manager at the business unit level, and here's why. Interviewing and decisions to hire are made at the group level. The group has to schedule their people based on their calendars.

Hiring at the business unit level also makes sense when it comes to weeding out bad managers. If a manager keeps losing people because of their lack of relational skills or they're just not management material, doesn't it make sense that the burden of hiring falls upon them? Let's stop supporting bad managers.

With today's technology and using good process, once a hire is confirmed, the manager can input the new employee, including compensation, into a people system. The system can get them onto payroll. Employees can then self select benefits in the same system, and there you go. This is, after all, the promise of enterprise systems—self service.

So the only value of HR in the hiring process, then, is their role as gatekeeper—the people who select whom you will interview. HR as the gatekeeper? I’ve never been comfortable with the idea that HR people have some special ability to understand the human condition and human behavior and human personality, so much so that they should decide who comes through as a candidate. I’m a psychologist and I wouldn't presume to have this capability. I prefer to leave this for the team to assess. Surely we can ask more of Glassdoor and Monster and the likes, like creating and verifying precise criteria for who gets an interview time.

Is it possible that HR as the gatekeeper for selecting candidates for interviews was a mistake in role design, one that influences every candidate selection? We have been allowing HR people to decide who is a valid candidate, who becomes the company! Really? I'm reminded of our recent presidential election. How can you select the right choice when you only get those two choices? These decisions influence who your organization is—your identity, and what it becomes. So yes, I think it was a mistake.

We know that organizations get things done in teams. Team members can hire the people they need better than anyone else. So let’s bring that task down to the team level. While I'm on this stream of consciousness, let's tackle performance reviews. Stop it! Just stop. Personally, if my manager values our relationship and the work I'm doing, great. If not, let me know and I'm happy to go somewhere else where I am valued. I don't know any managers who want to use their valuable time for performance reviews. Let's transform this into a normal part of an ongoing conversation between a manager and their employee, all year long. Isn't it time to end this parent-child relationship pretense. We're all adults. Let's make the relationship so.

Compensation is a Personal Responsibility 

When it comes to compensation, responsibility needs to be revisited. People need to take responsibility for their compensation. I look at it like this. We have to know what we are worth based on our skills and knowledge and experience. I state my consulting rate or salary requirement upfront. If an employer wants to pay less, they can hire someone else. That’s fine. I’ll talk with someone else who understands the value I bring.

I bring up compensation during initial conversations to avoid wasting anyone’s time. In this way, when I’m hired I can focus on delivering value to the organization and to my team, because I’m getting paid what I know I’m worth and they are getting what they expect from my role. I view this as a simple agreement upfront about what compensation I need. Once agreed on, that amount is entered into a system by a manager as I’m brought onboard. Done. If at some point I need to negotiate, I'll have that conversation. Everyone needs to learn to represent themselves in such conversations. This is leadership development.

Learning too, is a Personal Responsibility

Let’s talk about training, which is really about? I think HR had this wrong from the beginning. This is about learning. Training is something someone does for you. Learning is something we do for ourselves. Individually, it is the responsibility of the person to have the right knowledge and skills for a position and to continue their learning on their own personal career path. Let’s teach people how to fish, if you get my drift. What organizations can do, and some are doing this already, is help people achieve their own personal development plans.

Let’s face it, organizations have a long history of not being great at people development. Have you ever had a development plan that was, ah, undeveloped? I see raised hands. We didn't do last year's plan, but let's ask them to develop another, year after year—more heads nodding. Personally, I need to be able to bring value to an organization. Continually upgrading my skills and knowledge is what allows me to ask for the compensation I want. I’m happy if an organization supports my path of learning. But it is my responsibility. Since I love learning, why would I not want to be in charge of it. Remove training from the organization. Let others do this. More savings for the organization. Is Wall Street listening?

Then there is this thing called organizational learning. I don’t believe in the concept of organizational learning. Organizations are people. People learn and they learn individually. A team may be doing something together and learning together, but actual learning is happening on an individual level. Each person on the team is incorporating the learning into their own personal history and experience, and so learning is different for each of us.

I believe learning is the primary role of every individual and every organization. I know. I just said that organizations don’t learn. Yes, and that’s true. Think of the concept of organizational learning as the total awareness, knowledge and experience of all its people. So while there's no stored knowledge, there is a present moment consciousness. How an organization shares its experience influences its awareness, intent, and behaviors, and speaks to an organizations current ability to be present in the moment and to act in the moment.

It is the present moment consciousness of an organization that enables all other capabilities. The more that is shared, the more that an organization creates a single consciousness. With the exception of the Peter Senge “learning organization” movement, and the companies who understood this and followed the lead, most leaders have simply missed the boat on this one.

One of the paradigm shifts we need to make organizationally is to refocus the organization on sharing as a primary task. Maybe it's giving. Successful families, I tend to think, are those who share well. They operate in a giving mode. What can we learn to help us compete, or understand our customers better, or develop higher quality products? How can we keep our people from leaving. How do we share what we experience with everyone? The answer is hidden in the process of community building. If everyone is involved in building the community, everyone suddenly becomes aware of what others are doing—shared knowledge and a shared vision spreads across the organization like a virus. 

We hear wave after wave of the new language about what organizations need to prepare for next. Today it is the digital revolution, tomorrow it will be something different, but it can all be distilled down to learning. Learning is the key and we do this best as a community. How fast can we observe, learn, and adapt as a process of continual transformation? This is the "how to" in becoming agile. This is the key to creating the most vibrant cultures and the most productive organizations. If you want to keep wisdom from walking out the door, the best thing you can do is create an open, vibrant, flourishing culture—a community. 

HR Benefits? 

What do healthcare or retirement have to do with producing laptops, iPhones, or any other widget or service? The role of organizations delivering benefits or financial services troubled me from day one. Take healthcare. I think healthcare is a basic right provided by any nation that cares about its citizens. I also think that everyone should have the same level of healthcare as everyone else. This is the principle of equality.

What I’ve never understood is how our nation’s signup process for healthcare ever landed in the organizations where we work. Why? What does our healthcare have to do with our work? To me, they are two entirely separate aspects of our lives. I have no idea why healthcare is tied to an employer. The relationship makes no sense and is problematic from the start. The design itself is just wrong.

We change employers and we do this more and more. If you've done this, then you know how difficult it can be, especially if there is a transition time between. It's a whole bunch of red tape and delays and costs, and entirely unnecessary. Today, while you are moving from one company to another, you can be charged outrageous prices for "transition" insurance coverage. If we had universal healthcare this would all go away. No more healthcare benefits in the workplace. Let's get healthcare out of the workplace, period. Doesn't belong there.

Also, we don't need insurance companies. It's just a fact. I need healthcare. Hospitals need patients. How does adding insurance companies improve the bottom line? That's a business model that makes no sense financially. Remove healthcare from employers and remove insurance companies, period. Healthcare is not a benefit my organization is giving me. It is a basic right of all citizens. It's an unwarranted relationship desperate for divorce. It's another social coma whose time has come. Remove the oxygen and let go. We have far better ways to handle healthcare as a nation.

Why do things that don't make sense continue?

Good question. Yet, the coma continues and we continue to do things that make no sense. Don't ask why, because you know the answer. People prefer the comfort of keeping things as they are, even though nothing stays the same. “Why change if we don’t have to?” Hmm … well, because everything else around us is changing, everything, all the time. The nature of reality is change and process. Denial does not change reality. When denial doesn’t work, we have a tendency toward coma mode, a state of unconscious indifference, apoplexy.

One of the reasons for social comas is what I call paradigm systems theory—a system of beliefs defined by institutions and patterns of behavior. Once a paradigm becomes a cultural norm, the paradigm is difficult to unseat because so many people and institutions, even nations, have an investment in this particular set of beliefs. The scientific belief that the world was round was actually difficult to sell, way back when, because so many leaders and scientists had staked their careers, their entire lives, on the belief that the world was flat. The simple reality is that most leaders are not experts in either learning or change. Diffusing a long standing function like HR into the rest of the organization seems like a monumental task if your head is always buried in the busyness of revenue and profits.

In terms of origins of social and organizational comas and why they persist, one final reason. With change comes risk, or so the perception goes. It is true, but there is just as much risk in not changing or waiting until there's no longer a choice, and maybe more. People worry about their jobs if things go south. Unfortunately, the understandable desire to keep one’s job drives far too many decisions and drives what is not invented and why change does not happen. Social comas persist in part because we just don’t like change, and the process of change, real change, takes time. As William Bridges pointed out in his well traveled Transitions book, there are three phases to a change. First, there is a letting go. We must let go of something that is ending. Then there is this messy phase, this time of uncertainty and discomfort–essentially the bargaining stage of grief. And finally, the new form emerges and transformation is complete.

Psychologically, social comas are about fear, the fear of making decisions that may come with personal loss, like derailing one’s career or the loss of one’s job. And so, organizations continue to suffer, nations suffer, progress suffers, and people suffer through meaningless work. As we’ve seen so many times, organizations resist change for as long as they can, until they can no longer afford to not change. By then, it is imperative. People scramble, budgets are approved, a charter is created, people are hired, the kick off meeting occurs, and somewhere in the middle of all this commotion, someone calls an organizational change consultant like myself. Imagine if we could eliminate fear. How would the world differ? How would decision-making differ? The possibilities are unimaginable because we've been so far from that possibility for so long.

Part of the solution is for we as a society to create an environment where people can willingly sacrifice themselves—their positions—for the sake of the greater good, for the organization to progress. But who wants to improve the way things are done if the end result means eliminating their own job? I think people are capable of doing this, even happy to do this, but our system doesn’t have a safety net to cover them. This may be a pitch for the basic wage idea. If we had a basic wage that was paid no matter our job may be, or whether we had one, we could be more courageous. The system doesn’t encourage courage. What a shame, because this reality is the cause of comas and the constraint that eliminates or slows the invention of better solutions. Sadly, this occurs on such a grand scale that if we were to take a closer look and be honest with ourselves, we would feel shame for all the lives we’ve nearly bored to death from work that has no meaning.

But do we really have a choice not to change? How wonderful it would be if we adopted the Starship Enterprise mission: “To explore strange new worlds. To seek out new life and new civilizations. To boldly go where no one has gone before”. Organizations are stuck in a paradigm that no longer supports human needs of learning, connection, and community. We can do better. We can boldly go where no one has gone before and reinvent the organization’s mission and structure in relation to society.

“It is becoming increasingly apparent that the structure of modern organizations is at odds with the chaotic, fast-changing reality of today’s world. Corporations still tend to be built on an industrial-age hierarchical model that seeks to achieve stability and success through centralized control and up-front planning. It’s a model that was effective in the simpler times for which it was designed, but as management expert Gary Hamel points out, ‘The world is becoming more turbulent than organizations are becoming adaptable. Organizations were not built for these kinds of changes’” (Allen, 2016).

Suffice it to say that organizational structure needs to change. There are new models, less structured and more collaborative. The Holacracy model used by companies like Zappos, the David Allen Company and hundreds of others is one. It's too early, though, to know whether these new forms will succeed in creating the learning capability and the ability to change, in step with the changes around them. We have along way to go. We cannot afford to hold onto the comfort of structures that we know when they do not allow the organization to change and flow with everything around them.

Yes, I believe that the function of HR died a couple of decades ago, and the darn thing just doesn't know it. All these trends in HR are symptoms of the need for change, but it is a different change than all the swirling that we see today. The coma will end only when we find the honesty and courage to make the right decisions around structure. This includes larger structures of social change, as in social structure change.

To bring this to fruition, we need new social structures to protect people’s income in the midst of constant change. We need to embrace the process of transformation as the way of life for organizations, just as it is for everything else in our world. We need to shift the organization and its activities toward learning. Everything that's happened since the coma has been a desperate attempt to keep something alive for the sake of comfort, for fear of change, and for economic and political reasons. Until we find a way to be honest with what’s going on in organizations and honest about the influence and impact of money and fear on decisions, we’re going to keep circling around and wasting precious lives. A perspective.

Hans Kuendig, Principal & Founder, Mindshift Consulting


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