Column by Dr YRK Reddy - HRD Newsletter

I MET a traveller from an antique land
Who said: Two vast and trunkless legs of stone
Stand in the desert. Near them on the sand,
Half sunk, a shatter'd visage lies, whose frown
And wrinkled lip and sneer of cold command

Tell that its sculptor well those passions read
Which yet survive, stamp'd on these lifeless things,
The hand that mock'd them and the heart that fed.
And on the pedestal these words appear:
"My name is Ozymandias, king of kings:
Look on my works, ye mighty, and despair!"
Nothing beside remains: round the decay
Of that colossal wreck, boundless and bare,
The lone and level sands stretch far away."

P.B. Shelly (1792 - 1822)

About a decade ago, the typical HR/Personnel Chief for the big corporation was awesome. He symbolized the company's standing and was its face in the HR community, employment market, management institutes, labour lawyers, labour department, social service organisations, and, of course, the party circuit. If Ozymandias had a frown, a wrinkled lip and the sneer of cold command permanently etched by the sculptor, the HR chief had the measured drawl, the stiff gait and the model-like élan in adequate measure to reflect the stature of the company amidst his publics. He often was in a narcissist enamor with his wrinkle-free shirt, the contrasting tie and himself. Wife adored, of course. The children felt "my daddy strongest"!

He often believed that he was the company - he was a good model of "companyism" that HBR mentioned some years ago. The swanky office, the shiny car, the well-dressed chauffeur, the club and the large retinue of his staff appeared to be saying. …look on these symbols, ye mighty and despair!

He inspired a dream in young HR professionals of becoming Boss someday soon for all the pyramidal power, perks and the prominence. But changes are creeping in to destroy several such dreams of attaining the power and prominence, even if the perks remained. The nature of the corporation has been changing as also its design thus affecting the HR Chief's traditional role, empire and the sense of well-being. Some say that this is the curse of the liberalization and globalization, which has brought in hyper competition and the derived hypertension. The HR Chief is being hassled by peers and bosses to answer difficult questions of cost, timeliness, quality, trends, goals, benchmarks and comparability. "LPG" apart, there are two other major reasons for the increasing threat to the traditional role and power of the HR Chief - (a) the impact of transparency and measurability of people related information and (b) the emerging new forms of corporations.

(A) The traditional HR Chief had the constituency of "people business" firmly under control. He nurtured it well, especially if there were apprehended threats from collectives or actions by the Labour department. He was privy to "sensitive" information, which was mostly in verbal form and if in writing, mostly in the confines of confidential files. He, his large staff and his function were a monopoly in the company.

The information technology along with the ISO/quality manuals and BPR have encroached upon the privacy and the right to haphazard accumulation and dissemination of information on reasons of confidentiality and "professional"/best judgment. The information is now forced into a system that is fairly well accessible and organized. If the ERP were in place and most of the HR systems also on line, the transparency is greater and so is its accessibility for the concerned.

Thus, in an ideal situation, a line manager can know about all the vacancies, the job descriptions, the job evaluation system, the goals for the people under his control, the achievements against them, training needs, training programmes available, best employees of the season, productivity trends, man power cost for a particular department and the like. Most of the HR Chiefs` information is no longer power. It is for this very reason that, at times, there is resistance to open sharing of information and the pedestrian attempts to magnify "risks and uncertainties" related to people.

The process of decentralization and democratization has been cited as one of the major causes of the fall of both corporate as well as national regimes. The overthrow of Marcos dictatorship and the communist governments have been attributed to the impact of the IT, even in its early stages. Theorists argue that the new technology is deadly to all forms of ill-conceived hierarchy, aggrandizement of power and authority. The wise among the HR Chiefs has realized this and has been redesigning firms in the name of making them flatter, leaner and flexible, even if it meant shooting oneself in the foot - possibly with the hope that even if the limbs are lost the head will remain.

(B) The comfort of the yesteryears has been that the HR function was a monopoly and there was - to borrow an economic term - no "contestability". The HR function was done almost all under one roof from pre-entry to post-exit of employees. The "area of darkness" (with apologies to Sir.V.S.Naipaul) for other functions was the happy hunting ground for the HR profession till two related developments began, apart from the IT impact. One is the new forms of organizations and the other is the connected induction of competition for the HR function.

There is some controversy whether the traditional monoliths will survive, as we know them today. The aspect that is not contentious at all is that organizations are getting redesigned very rapidly and that structures are increasingly becoming open systems. General Motors, which was the first to have developed organisational concepts and structures over eighty years ago and became the model for all corporations, is rethinking its shape and experimenting with newer organisational models. Such models may imply outsourcing, joint branding and networks all of which open competing sub-systems.

Some, believe that the new networks will make corporations look like a confederation and a web of contracts than a one-stop vertical monolith. Such a prospect is best exemplified by Monorail, which sells computers without owning factories, warehouses, or any other tangible assets, and operating from small leased premises in Atlanta. Its computers are designed by freelance workers, sold through the Internet, with logistic support by Federal Express and all financial settlements through the Sun Trust Bank. The implication is that there will be limits to the size of HR function even in a seemingly big corporation.

The related aspect that threatens the traditional HR Chief is the induction of competition for HR by the prospects of out-sourcing. The current belief is that hiring, firing, training, performance management, wage administration, pension services, and the like will be increasingly handled by specialist organizations. The proposed changes in the Contract Labour Act and the recent judgment of the Supreme Court only add to the inevitable process of dismantling the monopolistic HR regimes to open competition.

The USA is probably a precursor to what promises to be the inevitable global trend. It is reported that more than 2 million American workers are getting services not by the HR departments of their companies but by professional external organisations. Exult, which was founded less than four years ago now manages the HR practice of several Fortune 500 companies. The industry, which has begun rather tentatively, is growing at a rate of 30 per cent and it is no wonder that Indian corporates like the Infosys are reportedly in hot pursuit of this business. McKinsey believes that such competitive outsourcing can reduce people cost by 30 per cent and also increase employee satisfaction. This process demolishes the monopoly of the HR department by indirectly induced competition and openness.

Apart from competition from the external agencies is there an enemy for the traditional HR Chief within? There was a debate in the late 80s whether HR as a function will last very long at all. Some argued that most of the HR processes will have to integrate into the line function and hence HRM will have a shrunken agenda in the corporations of the future. The prospect of self managed teams and project teams imply that some of the support functions will be taken over by the operating teams. That, in fact, is the heart of empowerment which requires reorganization of communications and decision-making authorities so as to enable teams to take charge.

There is some degree of new accounting, costing and pricing logic as well in this: That the costs of support function, whether fixed or variable, must be explicitly committed and tracked by the operating people who shall also be accountable for them. This is a departure from the tradition, when the labour cost was an aggregated sum, usually discovered at the end of the year and loosely budgeted for the following year without much accountability. The practice of performance management system makes the project teams, team leaders, section heads, shop superintendents directly accountable and hence require them to be far more "hands on".

The collapse of hierarchy and the formation of horizontal teams imply a different conception of HRM and its practice. That HR is a service provider for the internal customer has been a good philosophy and yet the very beginning of what portends to be a massive reorganization.

This specter leaves one wondering whether the HR Chief of the romantic era will increasingly be like the Ozymandias of Egypt, mighty at one time and overseeing a desert and a lost empire. To escape this prospect the HR profession needs to get to the roots and rediscover a new edifice, new pillars and eventually a new role for the HR managers and the chief.

The new role may call for competitive internal salesmanship, IT and process discipline and management of multiple external contracts. Instead of being king he must look increasingly like a good stage manager.

February, 2002 Issue
Copyright © 2000 Yaga Consulting Pvt. Ltd.