Human resource is the bookkeeping term widely used to refer to people in a work environment. Managers employ human resources to achieve their objectives and the Human Resources (HR) function supports managers in all aspects having to do with these human resources.
The scope of the HR function encompasses all activities required to get and keep the right individuals on board and to equip them to be successful (the people side of HR), while at the same time helping to build strong teams of individuals, capable of dividing and coordinating the work amongst each other (the organization side of HR).
The Powerhouse Framework (People & Organization Working to Enhance Results) outlines the six key tasks of the HR function, showing each as an ongoing cycle, all linked together. The six can be read as a 2X3 matrix. The upper three cycles deal with the organization side of HR, while the lower three focus on the people side. The left two cycles are about design activities (structuring), the middle two about development activities (growing), and the right two about deliver activities (mobilizing).
The six cycles of HR are the following:
- Organizing Cycle: How to structure the organization? The first task of HR is to assist in translating new business plans into changes to the organizational design. This requires an understanding of how adjustments to the business model effect business processes and the necessary capabilities. Implementing and evaluating the changes are part of this cycle.
- Staffing Cycle: Who do we need? The second task is to translate the organizational design into job profiles and to cross-reference these with the existing workforce to identify mismatches, leading to redundancies and job openings. The recruitment and onboarding of new employees is also part of this cycle, as is the regular evaluation of the talent pipeline.
- Learning Cycle: How to improve the organization? The third task is to get the organization to continuously improve, by building better joint capabilities and training managers and employees. Part of this cycle is to also learn from each other, sharing best practices and managing collective knowledge. Which capabilities to build is linked to the organizing cycle.
- Development Cycle: How to grow each person? The fourth task is to also get individuals to continuously improve, appointing them to a succession of more challenging jobs and training them along the way. Equally important is giving them developmental feedback and coaching. Regular competence assessment is also part of this cycle.
- Engagement Cycle: How to motivate the organization? The fifth task is to energize the organization by winning hearts and minds. This requires the involvement and empowerment of people and inspiring guidance by leaders. It is further strengthened by celebrating success, building mutual confidence, and reinforcing team belonging.
- Performance Cycle: How to get results? The sixth task is to ensure that everyone delivers the necessary performance, by clarifying which key performance indicators will be used and how performance will be evaluated. Great working conditions, effective conflict resolution processes and stimulating compensation and benefits are also part of this cycle.
- HR is about more than separate activities. HR is not a checklist of standalone activities but consists of six interlocked cycles that work together as a system. HR professionals need to understand how (vertically) the organization-level cycles interact with the people-level cycles, while at the same time seeing how (horizontally) the design, develop & deliver cycles are linked.
- HR is about more than just operations. While the six HR cycles are themselves closely interlinked, collectively they need to be tightly aligned with the business (on the left with the business plan, on the right leading to business performance). This requires an HR strategy that ensures a tight fit between the business and people & organization.
- HR is about more than just people. In many organizations the HR function focuses exclusively on the people-side of HR, ignoring the organization-side, leading to a general neglect of the organizing, learning and engagement cycles. This narrow interpretation of the scope of HR should be avoided. Changing the name from Human Resources to People & Organization can be a good way to signal this broader responsibility.
- HR is about more than just staffing. In many organizations the HR function is even narrower still, focusing almost exclusively on hiring personnel and ensuring their salaries are paid. This stunted definition of HR leaves many value-adding activities unattended to.
- HR is about more than just support. While HR is a support function, assisting business managers in dealing with people and organization issues, this doesn’t mean that HR should be reactive and/or submissive. As steward of all human aspects of the business, HR should play a proactive and challenging role vis-à-vis business management. In most cases, the Chief People & Organization Officer should be member of the Management Team.