November 30, 2007
The HR function – on the table

by Suzanne Joachim 30.NOV.07

Part I

An activist from the Kellogg Foundation once said “If you are not AT the table, you are ON the table”. Human Resource Management (HRM) in the Caribbean, particularly in the lesser developed islands, suffers the latter fate. HRM, at present, is not allowed to realise its full importance within the Caribbean business community.{{more}}

There have been many reasons put forward as to why HRM in the Caribbean is still ON the table rather than AT it. It seems as if there is simply a lack of understanding of the significant contribution made through systematic human resource management and development and its role as a strategic business partner.

Moreover, the universal recognition that organisational management, including human resource management is a vital ingredient in securing improved business performance is practically absent. The fact that Human Capital is treated as an overhead expense rather than an asset results in a debilitating effect on the systematic management of that very asset.

In order for the HR function to maximise its impact on an organisation, HR-related issues and HR executives need to be “At the table” – both a challenge and a strategic imperative here in St.Vincent and the Grenadines and the wider Caribbean.

The recognition that people are a resource to be managed as efficiently and effectively as any other resource has led to the term human resource management, which can be read in two ways, according to Margaret Foot & Caroline Hook. Hard HRM, that is, “the primacy of business needs that human resources will be acquired, deployed, and dispensed with as corporate plans demand, or Soft HRM where “all potential must be nurtured and developed, and programmes which pay due notice to knowledge about the behavioural aspects of people at work are developed in order to gain a competitive advantage through the workforce”.

Whether the implementation of HRM is hard or soft or a combination of both, historically, unlike “vital” functions as sales, marketing or operations, it has not been viewed as a key business driver. It has been seen as being completely unrelated to the overall health and success of the company or organisation, and as a tactical back office function titled toward personnel administration. Today, it has become the strategic business partner, and is now an integral part of the business, not a separate undertaking.

Thus strategic activity becomes a major focus for specialist in HRM; they are required to operate at a level where strategic business alternatives are being discussed. Now, more than ever, in order to have effective input into the corporate strategy, the HRM specialist will require a high level of business acumen in addition to knowledge of personnel strategies and programmes. This new role has significantly impacted the compensation and benefits package for HRM specialist, making them second after CEOs, according to the Economist fact sheet on compensation and benefits for the top 500 companies during 2006.

Indeed, the HRM landscape has evolved and will continue to do so. According to Jim Kochanski and Donald H. Ruse “Human Resources functional leaders have increasingly been joining other leaders at the business decision-making table”. This positive trend recognizes the importance of Human Capital along with Financial Planning, Product Development and Customer Service as the fundamental building blocks of organizational success.

Nonetheless, this process is taking its time in St.Vincent and the Grenadines and

the wider Caribbean. That is, there are still some vestiges of the nineteenth century view that the HRM/personnel practitioner’s activities are welfare work. The boundaries between personnel administration and human resource management are still blurred. As a matter of fact, the HR function in our region is synonymous with personnel administration – Punto Final.

The strategic activity is not in focus and HR does not operate at a level where strategic business alternatives are being discussed. HRM is not an integral part of the business activities; rather, it is a separate undertaking. A preliminary scan informs that there is possibly only one company in St. Vincent that allows HR to sit at the Board level. Moreover, the demonstrated success in human capital measurement and analytics, enabling more precise understanding of how the workforce contributes to business success, coupled with data driven decision-making, is simply non-existent. Still, human resource planning, including succession planning, performance management

systems, and HR Audits, among other HR interventions, is the exception rather than the rule.

Throughout the 1980s when the concept of human resource management first appeared and 1990s when it grew, business leaders, particularly in the developed world, have come to accept more and more that competitive advantage can be achieved only through the efforts and creativity of the people employed by them. In companies that follow through with the logical conclusions to this statement, rather than simply paying lip service to the rhetoric, developing strategies for human resource will inevitably play a prominent role when they are formulating the corporate strategy, and senior managers will want to call on the expertise of an HR specialist to get the best input possible.

In the Caribbean region, however, the use of specialists is not common – neither as a Consultant nor within the organisation itself. In fact individuals who have moved up through the organisation invariably without the requisite business fundamentals and skills manage the entire spectrum (talent acquisition, deployment, development and dispersion) of the HR function. In most cases, little is done to ensure that these individuals are trained or allowed the opportunity to access development training that will help them to take on their new roles or tasks.

To be continued