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Crisis in HR

If HR truly wants to add value to business and improve its reputation, it must transcend its functional boundaries

Sayantani Kar  |  Mumbai 

A human resources professional in a was once asked to manage the flagging operations in one of its territories. Many thought it was a way to sabotage his career. How he turned it into a stepping stone to become the bank's chairman and managing director, is, of course, Anil Khandelwal's story of ascension at

But not many HR professionals get to wear Khandelwal's shoes. Indeed, you can actually count the number of corporate chiefs in India who have a background in HR. The level of under-representation of HR professionals in the top jobs is surprising, given the key role they play in the life of an organisation. As they say, a company is only as good as its people. HR, then, is on the front line when it comes to hiring, managing rewards and retaining employees. So why is HR seen as less strategic than other support functions? Why is the human resources department in most corporations still seen as the last bastion of bureaucracy?

Part of HR's image problems relates to the prevailing fuzzy thinking on the subject. R Suresh, managing director, Stanton Chase, says the of human resources has become transactional in nature with misleading concepts such as attrition rate being used to measure success. "Even mature companies can become theoretical in their HR approach and zeal to ramp up," he adds. K Ramkumar, an who is now an executive director with ICICI Bank, is blunt: "HR has given itself a serious identity crisis because a lot of people choose it for the wrong reasons. One can't see the profession as a soft job, nor get entangled in evangelistic HR jargon. One has to be a business person first."

Think about it: what is the role of HR in an organisation? If you go by theory (take Dave Ulrich's 1996 book, HR Champions, as a starting point), the role of an HR manager can be categorised as under: formulating and executing strategy (strategic partner); building an efficient infrastructure (administrative expert); increasing employee capability and commitment (employee champion); and creating a renewed organisation (change agent). However, if you look at the general practice, HR's role as a strategic partner is largely given the go-by, whereas its role as administrative expert is usually assigned the highest priority.

The net result: The brief of recruiting, retaining, and if necessary, replacing people, gets translated into administrative tasks. So, if a new employee joins, impress her with elaborate on-boarding training programmes; if an old-hand is unhappy with her remuneration, tell her she needs to upgrade her skills; an employee gets posted in a remote corner, get her family to be with her; someone is leaving, foist a 40-page exit questionnaire on her. If the team is particularly enthusiastic, they will send birthday wishes, organise cultural programmes or the odd training session. These things don't address the core issue - that of improving employee productivity, which have a direct bearing on the company's top and bottom line is clearly measurable - and are eminently outsourcable. Professor T V Rao, chairman, of TV Rao Learning Systems, and adjunct professor, IIM-Ahmedabad, says, "The problem lies with Indian HR professionals who do not perceive their role as important. They get busy with mundane tasks."

Get to the core
Why, then, don't we see more HR professionals connecting the dots - from their work to the revenues that a company earns? Two things came out strongly from our conversations with company and with HR chiefs. First, it is a classic case of not practising what one preaches - staying back to thrive in a company. Second, to get a seat at the table, HR needs to do a lot of internal marketing, be viewed as fair and knowledgeable, and not being unnecessarily intrusive.

Take the first point, first. Rao says, "Unless the HR person sticks to a company for some time, she won't be able to deliver nor demonstrate the effects of the work done. Building leaders happens in the long term, you can't build quarterly leaders. Those in HR need to stick around for it. When they don't, they get involved in administrative tasks."

Unlike a technical field, where much of your professional learning is portable with you, in HR you can take only so much of your effectiveness from one organisation to the next. Unlike some other functions, the effectiveness of your role in HR depends on the trust you can establish with your network of stakeholders and the knowledge you have of them as individuals. "When an does not stay back long enough to capitalise on that goodwill and understanding, she is short-changing her own career," says Visty Banaji, CEO of Banner Consulting, and a former HR chief at Godrej and Telco (now Tata Motors).

As a result, HR often ends up buying leaders instead of building them in a company. A fancy pay-packet does not sow commitment the way an actual bench does, leading to not just exits at the lower echelons but even at the top level. The company then has to stare at re-adjustments and low involvement among its people. HR, however, can borrow from global best practices and introduce rewards for people - from getting mentored by a senior to offering tailor-made training programmes.

But dealing with people and their differences can complicate an HR manager's job. "We say that every support function has to be a partner of the business. HR is no exception but we must not forget that HR has an equally important mission to champion the employees," says Banaji.

Tough Love
Following from this, HR should have the wherewithal to offer the required products and services to support the company's employees. This partnership has to be underwritten by mutual respect, trust and meaningful two-way conversations between HR managers and employees.

Being seen as do-gooders-only can backfire if operation managers do not take them seriously. Khandelwal, who applied HR insights to his banking assignments, says what works is 'tough love'. "I was tough on performance; leaders had to deliver results but I would also care for employees, be around when they needed my help, speak up on their behalf when needed." Khandelwal had found that zonal managers often got asked about their deposits. However, no one seemed to ask what he asked as a zonal manager, "How can I help you be a better competitor in the market? Is there any training that you need? How can I help you achieve your targets?" This is how HR can create confidence and trust in the people it deals with, reminds Khandelwal.

But weighing in on people's needs and tying them up with a company's business performance is easier said than done. Some experts go as far as to blame the quality of HR education in India. Banaji points out, "The foundations of HR lie in psychology, sociology, anthropology and may be even, political science. An MBA degree in HR does not equip students with these. So, there is a huge gap between our ability to fathom what has been done successfully elsewhere and coming up with relevant solutions based on the first principles of human behaviour to tackle the situation at hand."

This brings us to an important aspect of an HR job - get a handle on the business. Apart from their own career growth, it also helps them to understand how people can contribute to the business. Says, ICICI Bank's Ramkumar: "Merely imparting behavioural training doesn't work. One needs to hold a class on the nuances of business in the company. For example, I learnt credit, debit, mortgage, bank guarantees and so on. Also, HR talk has to be a part of your repertoire and not the only component."

Otherwise, the HR becomes just a bystander noting the outcome of low performance rather than taking the onus of improving productivity on themselves. Santrupt Misra, who is the director of global HR at Aditya Birla Group and is the CEO of the Carbon Black Business, says, "At times, you have to lay out the consequences and take a pre-emptive step. Not all action will lead to returns in terms of money, but there are factors such as job satisfaction and retention which affect the company's brand and hence, getting better candidates in the future."

Some believe job rotation for HR managers in operations could sensitise them to the trappings of the business. Also, as Khandelwal says, "With specialisation just in HR, you cannot aspire to be a CEO. You have got to walk on fire and take up a business role and succeed."

Attention, Mr CEO
Getting heard by the C-suite is a tall task. Familiarisation with operations will help HR become credible business partners. Ramkumar is pragmatic, "If you speak up only when there is an HR issue, in a room with five other C-suite people, then they will quickly categorise you as just HR. Also, many an HR person gets caught up in bombastic language such as engagement indices etc. You do all of them but in the boardroom, you have to speak equally in the language of productivity, of turnaround times, of margins."

Once you've familiarised with the business, you can earn your seat by showing up at meetings prepared with concrete analysis of how HR impacts business functions and is in sync with the company's larger goals. Say, if an executive proposes a new product launch or acquisition, the HR manager should explain the cost versus value from the effort and how the decision could impact human capital in areas like hiring, research or even employee morale?

This is how board members and business owners think and speak, and that's the only way HR can expect to be heard by the CEO.

It is really not difficult picking up the ins and outs of business if the HR manager puts her mind to it. Indeed, many of the administrative processes in HR can be outsourced, writes Lance Haun, an and editor of SourceCon, in a post on Then, HR can direct its focus to three critical, strategic roles: a workplace process and productivity expert, a functional and effec-tive ombudsman, and an employee life cycle manager.

Even after all this an invitation to the top-level meets may take some time in coming. Stay the course nonetheless.

EXPERT TAKE: Anil K Khandelwal

A question that is often asked is whether HR professionals can occupy the corner ofice. We must first understand the role of the CEO in the current context. The in these challenging times cannot be just number crunchers and control-compliance types, but collaborative and inclusive. They need to work on building people, leadership, brand, governance, culture and technology. They also need to display high degree of business acumen, strategic mindset capable of orchestrating a vision to create sustainable organisations. Bureaucratic with emphasis on rules, procedures and hierarchy cannot align their organisation to an environment, which requires speedy leadership. Thus, the whole paradigm of CEOs' work is today undergoing a metamorphosis.

Only CEOs who can multiply passion, and who are communicative, team players and sensitive to people processes, can deliver in turbulent times. Viewed in this context, CFO, CTO, CHRO stand equal chances to compete for the CEO's position. Similarly, those HR professionals who have demonstrated skills in people and have contributed in making their organisations transit to operate in a competitive environment successfully, can aspire to the corner office. However, mere HR skills are not enough to reach the CEO position.

My own professional journey from being an HR professional to becoming a CEO of two public sector banks - Dena Bank and - could be facilitated only when I took up the challenge to move to banking operations and demonstrated successful business outcomes in a difficult industrial relations environment. Here, I discovered the connect between HR and business in the real sense. My learning in the operational assignment provided insights as to how employee attitudes affect customer acquisition, retention and loyalty, how communication culture affects the business growth, key concerns of analysts, investors, employees, customers and how they affect business growth and finally how competitor strategies impact our business.

In my operational assignment, I successfully deployed my HR skills to work with customers in a more meaningful way. It was the successful handling of the operational role that eventually helped me to reach the CEO position. My background in HR helped me to transform by focusing on building innovative human resource practices, rebranding of the Bank including logo change, customer centric initiatives (such as 8 am to 8 pm banking, 24-hour banking), deployment of technology, improving internal processes, talent and leadership development and engagement of staff, resulting in dramatic business outcomes and a positive change in the perception of analysts and investors.

The background helped me to diagnose and design appropriate interventions, energise employees and lead execution with precision. Twenty first century CEOs have to be change leaders, ever transforming their organisations and, therefore, they need to possess extraordinary and strategic orientation to human resources apart from business acumen.

Human Resources executives can certainly aspire to move to the CEO role, provided they are not averse to soil their hands in business operations and demonstrate successful outcomes at some stage of their career. Organisations would do well to plan the career of HR executives and offer them early opportunity in handling important business roles.

Finally, HR executives will have an edge over others as Change Leaders on account of their background.

Anil K Khandelwal, former chairman & managing director of Bank of Baroda, author of the book, Dare To Lead: The Transformation of Bank of Baroda

First Published: Mon, April 15 2013. 00:30 IST