KARL MOORE – This is Karl Moore of the Desautels Faculty of Management at McGill University, with Talking Management for The Globe & Mail. Today I am delighted to speak to Ed Lawler who is a senior professor at the Marshall School at the University of Southern California.
Good morning, Ed.
ED LAWLER – Good morning, Karl.
KARL MOORE – Ed, you and a co-author, for a number of years now, have put out a regular book on HR (Human Resources) around the world and where it is today. What is the latest thinking about HR in today's world?
ED LAWLER – Probably the biggest gap in the world of HR is between what HR aspires to be and what it actually is in corporations today on a global basis.
HR continues to talk about being a strategic player, an innovative and involved business partner but our data, which we have been collecting now for over 15 years across the globe, tends to suggest that it still is stuck in a bit of a transactional mode and in a bureaucratic mode that often prevents it from being at the table and having an influential role in key business decisions even though we are in a world in which everyone says, "Human capitalism is the most important asset," etc. So HR has not, I think, done a good job of becoming an innovative partner in business development and business strategy.
KARL MOORE – You know I've heard, Ed, this from you and people like David Ulrich for years. What can HR do to get out of the mud and get real traction and get at the table with the other executives?
ED LAWLER – It starts with two things, I think – talent and organizational design or organizational structure.
HR has not got a history of recruiting the best and the brightest. You and I both teach in business schools and all too often the highest salaries, the prime jobs, are not HR jobs. So that has to change. HR, which actually controls the employment in companies, has to begin to say, "We are not the poor step child when it comes to talent. We are a leading absorber and utilizer of MBA talent and people in HR are as talented and as highly paid as people elsewhere in the organization." Typically they haven't been and if you are coming out of your MBA program with $80,000 worth of debt you are looking for some income, chances are. Therefore you are not looking at HR, at least not in the States because it's not as high paying. But I think it's more fundamental, in some ways, then talent – talent is a key issue.
The other is the way the job is structured and the way the function is structured. I have sort of given up, if you will, on traditional HR ever converting to something that is more strategic and more organization design effectiveness oriented. I think perhaps those two things just don't go together.
The skills that it takes to run the bureaucratic administrative side of HR are different, the people who go into it seem to be different, and it has a sort of demand character in a sort of day-to-day crisis. How do I get out of this, what do I do about this government regulation, how do I pay this person who has got a job offer from somewhere else? It absorbs, even at the very top level, the time, energy and intelligence of some very good people who are in those positions. They will say, "Oh yeah, gee, I am really concerned about strategy and we ought to move here BUT for the moment I need to put this fire out."
I've been writing recently that we need to perhaps split the job and realize there is an administrative crisis transactional piece that is separate and that should have its own head on its own and there is something else, call it organizational effectiveness or whatever and that should have things like business strategy, organization design, organizational change management as its major agenda items. That should report to the very top level, that's the other piece of it of course. In many organizations the HR function doesn't report to the CEO, it's one level below that. So obviously it's hard to get to the table when you are not at the level that goes to the table.