Submitted by: Artur Victoria

If we consider the analogy to the distinctions between marketing and customer service or between the corporate finance function on the one hand and the accounting/comptroller function on the other. We generally see fairly clear organizational distinctions drawn between those who are responsible for helping an organization formulate its strategies for reaching markets and creating brand equity on the one hand, versus those who manage routine transactions with customers on the other hand. Similarly, most organizations have fairly clear distinctions (in organizational subunits, career paths, etc.) between those who formulate financial strategy and steward the company’s fiscal resources versus those who process routine accounting transactions.

To the extent possible, the mundane, foot-soldier, low-judgment, low-ambiguity tasks should be sent elsewhere in the organization. Outsourcing these tasks is well worth considering. Setting up an “Employee Services Department,” in analogous fashion to Customer Services, might be considered. Shipping these things off to a joint Payroll/Comptroller Function is yet another option worthy of consideration. The human resources departments at the corporate level, at the division or regional or business unit level, and at the subunit (i.e., plant) level-should be reduced in size, upgraded in status, staffed with people closer to general management, and focused on those human resources tasks that require the serious exercise of judgment and knowledge of the business.

Unhappily, it’s considerably easier to write the previous paragraph than it is to follow through on this recommendation, because of the murky boundaries between mundane bookkeeping tasks and high-value-added judgment tasks, and because the delivery of employee services will have an impact on how much value does get added by the high-value-added judgment calls. Tasks on the boundary the selection of health plans, the design of specific training programs-will have to be assigned to one side or the other. It makes some sense for an employee to have a single human resources contact to turn to, whether to do career planning in with the high-value-added or to register complaints about mistreatment by the organization human resources. So at least a dotted-line relationship between our hypothetical “Employee Services” department and the human resources department will be useful. And a direct reporting relationship is not ridiculous.

Nonetheless, there are some serious advantages in trying as much as possible to push the mundane tasks out of human resources. These are service tasks, and the same mindset and incentives that make for good customer services ought to make for good employee services. Indeed, our suspicion is that having the more routine operational aspects of central human resources report into the organizations that oversee customer care and/or internal audit and control would promote several useful objectives:

a) Help clarify the internal “clients” for those activities;

b) Facilitate economies of scale (e.g., in the use of communications media employed by those in customer service or the use of information systems technologies employed by the accounting function); and

c) Create back pressure to outsource as much of this activity as possible.

Human resources will no longer be known as the folks who handle benefits, fill out forms, and buy the chips and dip for the office parties. Instead, they will be the people who set up employment policies and then make the nontrivial calls about what those policies mean in specific cases.

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