Building an Ownership Culture
Companies whose managers have more ownership of talent management processes are more effective. And talent managers who focus on acting as stewards rather than owners of their people processes can reap the benefits.
In April, advisory and consulting firm The Hackett Group released an analysis of 200 companies for its annual HR Book of Numbers. The data from top performing companies showed that HR partners with business line managers on change management, organizational effectiveness and cultural alignment activities 69 percent of the time, compared to 32 percent at their lower-performing peers.
In performance management, that rate is even higher. At high-performing companies, HR partners with line managers 73 percent of the time versus 38 percent at other companies. That partnership, and the greater ownership of key talent management processes such as employee development and performance management that goes with it, benefits the business and the individual employee, said Brian Hults, vice president of global organization and people development at Newell Rubbermaid.
"There's a hard benefit in terms of ensuring alignment of the organization's objectives, [ensuring] resources [are] allocated properly and that type of thing, and then there's a soft benefit in terms of substantially improving employee engagement in the organization," Hults said.
In principle, having line managers take greater ownership of talent management makes sense to boost individual and organizational performance. In practice, it is necessary to deliver results in a time of tightened HR budgets and lean talent management departments.
"The truth is there just aren't enough of us in the organization to effectively manage performance and development of all these people," Hults said. "In our organization our ratio of HR professionals to operating managers is over 100 to 1. No HR person can manage performance and development for a hundred people. The operating manager has to do that."
Having line managers step up also ensures that managers don't abdicate their responsibility for people management to an often-distant HR organization and are therefore more effectively leading business operations.
Centralizing Process, Decentralizing Ownership
At Newell Rubbermaid, a $5.8 billion producer of consumer and commercial products including brands such as Rubbermaid, Sharpie, Levolor, Paper Mate and Goody with more than 22,000 employees, Hults and the central talent management team work with HR generalists embedded within the company's three core product groups to implement processes.
"Our human resource philosophy or approach to these things is we develop them centrally, then decentralize them to the extreme," Hults said. "The generalists take the lead role in educating our operating partners on execution, and they're executed via the operating partners."
For this approach to be successful business unit leaders need to take ownership of management processes for their employees.
"That means everything from managing their performance, managing their development, helping them with their career aspirations - all of that stuff put together is critical in terms of engaging people and developing them to their fullest potential so they can be successful in their current roles and in their future," Hults said.
The level of ownership can vary depending on the capabilities and proclivities of any leader. To counteract this variance, Hults said the most effective HR generalists at Newell Rubbermaid embed performance management and development into the "operating rhythms" of a business. In one business unit, the HR generalist meets monthly with the division president and senior staff to review employee performance and development.
"It's reinforcing the message that the onus is on them to execute the processes she's helping them learn and manage and also quality checking to be sure they're being executed effectively," he said.
Hults said successful execution of the basics, such as reviewing objectives, evaluating employee reviews and preparing leaders for objective-setting and performance management meetings is about 90 percent of what's needed, but those processes are often ignored in the hectic pace of day-to-day management.
Regular meetings are a reminder and useful quality check on talent management. They give HR managers the opportunity to offer critical feedback and advice, such as ensuring employee performance objectives and required behaviors are clearly set and defined. Effective business ownership of talent management is more than just regular meetings and reminders, however. Busy operating managers focused on growth and revenue need help to manage their people in the form of easily executable processes and procedures.
"One of the things my department does ... is we give people really streamlined tools [and] templates," Hults said. "We do a tremendous amount of training around all these processes - the idea being to enable our operating partners to execute these processes in as efficient and effective a manner as possible."
That means stripping out clutter, removing complicated issues such as compensation from succession planning and focusing on key roles, such as identifying the strengths and weaknesses of incumbents, determining successors and what needs to be done to get them ready.
"That has tremendous face validity for our operating partners because they can directly see how this process helps them in terms of filling their key roles over time as they come open with quality candidates," Hults said.
Boston-based IT storage company EMC takes it a step further. Employee learning and development is structured as a partnership between development experts and business leaders.
"They view us as a trusted adviser, and they view the education function at EMC as theirs," said Tom Clancy, vice president of education services and productivity for the company. "We're not some training organization that's over in the corner taking orders. We are fully engaged, fully immersed into the business."
EMC ensures alignment by having business leaders like Clancy, a veteran of the company's sales department, run employee development. This approach creates a two-way partnership where learning and development experts teach business leaders to effectively manage employee development and business people keep development focused on the organization's needs.
"The business people taught the learning people how to be better aligned and how to meet audience requirements," Clancy said. "It was really a teamwork approach."
That close alignment of employee learning and development ensures talent management produces results and raises its profile within the organization.
"We've built it in such a way that it's really their education organization," Clancy said. "They're making the investments, and they expect to have a huge ROI on education."
The Benefits of Greater Ownership
In addition to better alignment with corporate objectives, business manager ownership of critical talent management processes brings additional benefits, such as more effective performance management.
"When you think about performance management in its purest sense, it's really an organization development activity to ensure that resources and people are effectively aligned to the strategic plan of the business," Hults said. "By having your operating leaders own the cascading of objectives through the organization, you optimize that alignment." Business managers have a far deeper understanding of each employee's performance relative to objectives than an HR person who is not engaged directly in the work. That closer connection results in better feedback.
"It's really a problem-solving system and a performance improvement system so the operating managers and the employees can talk about, 'What are my objectives, what am I doing today, how's it going, and how can we as a team, the leader and the associate, be more effective in the execution of these objectives,'" Hults said.
Greater manager ownership also enhances the organization's ability to respond to rapid change.
"The only way you can do that is to have strong alignment with the business," Clancy said. "We knew that right from the start, so we made sure we put the right people in place that were interfacing with the business units so we could truly understand what their requirements are."
At EMC, that alignment and focus resulted in higher customer service scores. EMC's education organization ranks at the top of customer ratings for loyalty and impacts the company's Net Promoter Score, a measure of how likely customers are to recommend EMC to others. According to Clancy, customers who receive training from EMC are seven times more likely to recommend the company than those who don't use its education services.
While talent managers should work to build ownership of strategic HR processes among business managers, that doesn't mean they forfeit responsibility. There's still a pivotal role to be played.
Assessment and evaluation in particular require the kind of special expertise only experienced talent managers can provide. "It's one of the more difficult and technically complex areas of human resources and one where some gaps are pretty evident," Hults said.
While the gaps are relatively easy to work through, it's important to have expertise to determine the development required to turn a person into a general manager or group president, for example.
"That's one area where in certain situations you may want to bring in experts within the organization or outside the organization to help the operating leaders," Hults said.
In addition to providing clear benefits for employee engagement and organizational and individual performance, greater business ownership of talent management processes positions HR as a talent consultant that can help business leaders focus on critical imperatives.
"The big criticism of HR - and in a lot of instances it's warranted - [is] it's HR for HR's sake," Hults said. "We're more concerned with the functioning of our internal processes and policies to serve our own needs versus putting in place processes and systems and then working to support the success of our operating leaders."
Decentralizing processes and building ownership among managers raises a talent manager's profile and casts him or her in a new, positive light with business managers. "They can see the HR person as a supporter of them in terms of the effective execution of these processes, supporting their personal success and the success of their operating unit," Hults said. "That's a powerful combination."