A critical review of HR Business Partnering by Sascha Michel saschamichel.com

1. HR Business Partnering
www.saschamichel.com
saschamichel@gmail.com
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2. Table of Contents
1. Introduction. Pg.3
2. Hr Business Partners: raising the bar for HR Pg.4
3. A ‘ticking bomb’ and erosion of the HR function. Pg.5
4. References. Pg.9
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3. Introduction
With ever increasing financial uncertainty, changing business models, globalisation and
highly segmented and demanding customers, Human Recourse (HR) professionals are
confronted with the challenge of reducing bureaucracy, creating value and delivering results,
while at the same time driving enhanced employee performance, involvement and
commitment, aligned with business strategy (Ulrich, 1997; Ulrich and Brockbank, 2005). To
compete, organisations will need to harness and retain top talent, in turn creating
organisational efficiencies, responding to the speed of change, and innovating and developing
a leadership brand and culture of strategic clarity (Ulrich et al., 2008).
Traditional models of HR are transactional, centralised and bureaucratic. In emerging
competencies of organisational flex and rapid change, require an entirely new approach to
HR, focusing less on the administrative and functional side of HR, and leaning more towards
an empowered suite of HR roles and responsibilities. HR reinvented in this way, could help
to align business strategy across the whole organisation, moving away from traditional and
functional HR orthodoxy, decentralised, and contributing to front line management, by
responding and learning much faster than might have been experienced before.
While this shift into a new paradigm of strategic HR seems obvious, one cannot
underestimate the challenge of executing successful change within existing cultures, and
creating a shared mindset relevant to the organisational context. The potential for change is
usually led by deeply rooted capabilities evident in prevailing cultures and inherently the
‘way things are done around here’. Organisations and people are complex. One cannot
presume that a prescribed model promoting simplicity in redefining HR can be aligned and
integrated in every context as a ‘one size fits all’ approach. Success may be possible, but
through a deeper understanding and evaluation of the business context, leading to a more
‘hybrid’ approach, and then dissecting pertinent parts of the HR business model most suitable
to the given situation?
Notwithstanding the cultural issues of implementation, a ‘model within a model’, coupled
with outdated HR and Line management capabilities, could add further complexity and slow
down progress, where support in specific competencies and skills could help to deliver
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4. change in strategic direction (Ulrich and Allen, 2009). This paper critically evaluates both
these challenges as well as the valuable application of the HR business partner model when
organisations embark on a radical reorganisation of the HR function from the traditional
‘back office’ to the strategic front line.
HR business partners: raising the bar for HR
The Ulrich HR business partner model suggests a framework for less on the ‘doing’ and
administration of HR, and more on delivery of outcomes, strategy execution and capacity for
change, adding value, by building a competitive organisation defined along two axes:
processes versus people, strategic versus operational focus (Ulrich, 1997; Ulrich and
Brockbank, 2005, Ulrich et al., 2008). Ulrich (1997) outlines 3 distinct areas, which could
deliver strategic value, namely shared services, centres of excellence and business partners;
multiple roles are defined as the strategic partner, administrative expert, employee champion
and the change agent. Strategic partners translate business strategies into HR priorities and
administration experts reengineer organisational processes into ‘shared services’ (Ulrich,
1997). Employee champions deliver increased employee contribution, commitment and
competence, while ‘change agents’ manage transformation, ensuring capacity for culture
change (Ulrich, 1997; Francis and Keegan, 2006).
Moving from old bureaucratic forms of ‘personnel management’ to a more flexible and
integrated model, could allow greater maneuverability and deeper insights into the ‘people
side’ of business. Redefining and introducing new roles, brings new strategic and business
competencies, when in the past centralised, specialist administrators and technicians
supported, but less so in the delivery of strategic HR and operational decision making
(Becker et al., 2001). This quasi ‘distributed HR effect’ means that HR professionals can
have quicker access to knowledge and transference of strategic HR issues, while empowering
a culture of collaboration between departments and shared expertise in helping to engineer
successful strategies. This model suggests that people are the key drivers of value creation
and a focus on intangible competitive advantage can deliver value to shareholders and
stakeholders alike. However it must be noted that, Intangible, non imitable advantage, is
created and delivered more so in knowledge based areas of work, where as a much valued
recourse, employee competencies drive competitive advantage.
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5. Becker et al (2001) affirm that value has shifted from the physical to the intellectual, with
people being the main source of competitive advantage, acting in a new economic paradigms;
characterised by speed, quality, short cycle times, highlighting the importance of intangible
assets such as brand recognition, knowledge and human capital. Ulrich’s model tries to build
the case for establishing and integrating the HR function as a key strategic component. Ulrich
(1997) highlights the need for integration and value creation, by not only devolving strategic
functions, but by also creating efficient transactional cost control centres of shared expertise
and knowledge. The value from separating shared services and centres of excellence from the
strategic and transformational, means that organisations could in effect benefit from; business
partners who are free to enable and execute strategies, increased profitability and efficiencies,
doing more with less, and cutting costs by outsourcing payroll and transactional services
(Ulrich, 1997; Ulrich et al., 2008).
This flexible but evidently competing model of centralisation versus decentralisation, as a
delivery model, may also suggest an underlying desired outcome that ‘the ability to execute
strategy may be more important that the strategy itself’ (Becker et al., 2001, Pg.9). With
shared expertise and devolution of HR to the line, global organisations are better positioned
to align themselves with different national cultures, and have the ability to create shared best
practise and a global mindset, whilst still being able to act locally, responding much quicker
to customer needs (Ulrich, 1997). With new responsibilities and an increased perception of
status and prestige, HR business partnering succeeds in raising the bar for HR professionals
(Francis and Keegan, 2006). However, the persuasive rhetoric and an essentially delivery
characteristics of the model do little to warn against possible implementation challenges. The
very impermeable nature of organisational culture, changing business models and paradoxical
role ambiguities could create tension. Can HR business partnering realistically ever fully
deliver on strategic formulation or should more be said about evaluating viability set against
different organisational culture and context?
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6. A ‘ticking bomb’ and erosion of the HR function
Ulrich’s (1997) persuasive rhetoric is that organisations need to measure results in terms
of business competitiveness, with a move from employee comfort and consolidation to
cultural and strategic transformation. While this alludes to a new direction for HR
professionals, this does raise the question around its potential disruptive nature, without any
recommendation or empirical diagnostics for assessing suitability when dealing with
impeding cultures or different business contexts. Culture change is not easy; is complex,
timely and costly. This is in counterpoint to Ulrich's overarching rhetoric of HR needing to be
agile and effective while doing more with less (Ulrich, 1997). As HR business partners find
themselves at the cultural epicenter of the organisation, impacting on operational and
financial performance, one cannot delineate from these critical cultural elements, which bind
structural models and drive organisational performance (Losey et al., 2005). HR practitioners
need to understand the prevailing culture before implementation, while levels of solidarity
and acceptance from line managers, partnering with HR colleagues could determine higher
levels of success (Hennessy, 2009). Ulrich's unitarist model could do more to help reduce the
likelihood of failure, by providing empirical evidence for successful implementation, and
prescribing solutions to possible challenges, one may encounter in dealing with these
complexities
In a survey carried out of HR business partnering in 40 UK companies, two thirds
adopted the model to support strategy and performance, a third gave headcount reductions
and cost saving, and when this was the case, a lower proportion reported success than for the
reasons Ulrich intended, namely raising the game of HR and delivering increased value
(Hennessy, 2009) Ulrich’s model suggests a ‘one size fits all’ approach, whereas it is likely
that a hybrid of forms might be more suitable when dealing with integration challenges,
possible by selecting only those parts which are aligned with prevailing cultures and
structures. Ulrich and Allen (2009) in latter years agreed that to successfully align with
strategy and to fundamentally transform the identity and culture, the model ‘within an
existing business model’, in part might only be suitable to structure. For example if the
structure is centralised, HR should be centralised, similarly if it is decentralised. Ulrich and
Brockbank (2005) as cited in Caldwell (2008) argue that the implementation of HR business
partnering has rarely followed a single model, and there is growing concern regarding the
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7. efficacy of the more generic and context-independent competency frameworks propounded
by advocates of business partnering. It seems that selecting HR business partnering for the
right reasons, suitable to the business context, notwithstanding possible tensions, can help to
drive more realistic expectations of success
Ulrich’s unitarist approach evidently creates a number of tensions, not only between
employee goals (Acceptance) and organisational ones (Alignment), but also between
centralisation and decentralisation, functional versus transformational, delivery versus
strategic and lastly role ambiguities. Ulrich takes for granted that employee well-being and
organisational goals can always be aligned (Francis and Keegan, 2006). Can we realistically
expect an HR individual to have the necessary capacity required to take on new capabilities
and changing multiple HR roles? A paradox exists between employee and management roles,
especially where they can move from one side being the operational and employee function,
to more strategic partnership and cultural change. Caldwell (2003) highlights these tensions
suggesting that Ulrich’s prescriptive vision might be unrealistic and not fully deliverable and,
‘…may be a form of pragmatic post rationalisation intensified role ambiguity and conflict in
the face of new uncertainties’ (Caldwell, 2003, pg. 988). This also raises the question around
where to position these new business partners’ roles? And is it simply a delivery model rather
than a strategic one?
If businesses start to associate the model with ‘delivery characteristics’ then this could
lead to HR being be eroded and fractured as a function, as non strategic transactional
functions i.e. shared services, centres of excellence and change agent are potentially
outsourced to reduce cost. It could be argued that even the strategic roles could be inherited
by existing line managers. Caldwell (2004) warns that one has to be careful and balance
tensions between devolution and bottom line performance as not to lose credibility and
influence, which with too much progress could also be a radical devaluation of the HR role
itself. If HR responds to strategy formulation by developing supporting processes and
capabilities rather than influencing strategy from the top, then this also suggests a more
reactive delivery model, rather than a co-creator resolving strategic dilemmas (Losey et al.,
2005) Is HR business partnering simply a system of prescribed role definitions, in which
existing management, not just HR personnel, could take on new responsibilities, while
functional areas are outsourced to deliver value? It is clear that any attempt in delivery of
strategic HR is fraught with danger and one has to be prepared for any amount of ‘mess’;
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8. assessing resistances in prevailing cultures, understanding the business context and structure,
while not underestimating role tensions and the potential fracturing or erosion of the HR
function itself.
Summary
In summary, this paper explored the critical dynamics between a flexible, collaborative
and visionary model and a possible disruptive, transformational and ‘messy’ one. HR’s
involvement as a strategic partner is encouraged, hoping to evolve business strategy and
create shared cost control centres of transactional processing, ready-made for outsourcing.
Nevertheless, a word of caution was raised, assuming that Ulrich’s unitarist ‘one size fits all’
approach struggles to achieve perfect strategic fit for all organisations, cultures and
structures. Integration of this culturally sensitive model in certain context could prove
challenging and unsuccessful, alongside tensions of centralisation and decentralisation,
functional versus transformational and multiple role ambiguity, leading to further erosion of
the HR role itself. What could be seen as a resurgence of status and prestige for HR
professionals, could by its own demise and progress, dissolve from intended strategic
function, in favour of a delivery model promoting cost reduction and outsourcing, and a
support role in response to business strategy (Francis and Keegan, 2006, Caldwell, 2004).
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9. References
BECKER, B. E., HUSELID, M. A. & ULRICH, D. (2001) The HR scorecard : linking
people, strategy, and performance, Boston, MA, Harvard Business School Press.
CALDWELL, R. (2003) The Changing Roles of Personnel Managers: Old Ambiguities, New
Uncertainties. Journal of Management Studies, 40(4), 983-1004.
CALDWELL, R. (2004) Rhetoric, facts and self-fulfilling prophecies: exploring
practitioners’ perceptions of progress in implementing HRM. Industrial Relations
Journal, 35(3), 196-215.
CALDWELL, R. (2008) HR business partner competency models: re-contextualising
effectiveness. Human Resource Management Journal, 18(3), 275-294.
FRANCIS, H. & KEEGAN, A. (2006) The changing face of HRM: in search of balance.
Human Resource Management Journal, 16(3), 231-249.
HENNESSY, J. (2009) Take your partners and advance. People Management, 15(3), 24-27.
LOSEY, M. R., MEISINGER, S. R. & ULRICH, D. (2005) The future of human resource
management : 64 thought leaders explore the critical HR issues of today and
tomorrow, Alexandria, Va.Hoboken, N.J., Society for Human Resource Management
;John Wiley & Sons.
ULRICH, D. (1997) Human resource champions : the next agenda for adding value and
delivering results, Boston, Harvard Business School Press.
ULRICH, D. & ALLEN, J. (2009) Grow your own. People Management, 15(25), 32-34.
ULRICH, D. & BROCKBANK, W. (2005) The HR value proposition, Boston, MA, Harvard
Business School.
ULRICH, D., BROCKBANK, W., JOHNSON, D., SANDHOLTZ, K. & YOUNGER, J.
(2008) HR Competencies: Mastery at the Intersection of People and Business, Society
for Human Resource Management.
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