Reinventing HR Practices in an Agile Organization
Many organizations are in the process of changing their way of working to improve responsiveness and to stay relevant in today’s digital age. This change affects the way companies are organized including a need to reinvent HR practices across their organization.
On the 27th of June, BlinkLane Consulting organized a roundtable in collaboration with ING Global Agile WoW. Together with 15 experienced HR executives of large organizations we discussed the topic of reinventing these HR practices in an Agile organization.
The development of HR practices
The development of HR is defined by focusing on four fundamental aspects of HR: Recruit & Staff, Develop & Growth, Reward, Monitor & Evaluate. HR practices derived from these aspects have evolved over time.
Explaining the model
Once, HR was primarily focused on defining and applying standards across the organization. The common belief was that HR aspects should be standardized and based on shared plans and systems, implemented and executed by a central HR department. Standards were provided for almost everything: roles and functions, growth paths, moments to evaluate and the growth of a salary was in most cases also pre-defined. Over time, companies realized that when business processes and HR share forces they can bring more value to the company. HR aspects should be tailored to business plans as well as individual needs and should be implemented and executed by managers in the business lines as a transaction with their employees. In their business planning, departments would include the planning of staff they would need in order to reach their business goal. In terms of development and evaluation, employees become able to set their own goals and objectives and their performance would be the justification for pay. HR support management in the implementation of these procedures.
As the employee base is shifting towards a new generation, that expects a more flexible and individual approach, companies are changing the way they work. In many organizations HR is currently in transition from ‘Supporting management’ to ‘Empowering people’. The first very visible change is that companies start hiring for cultural fit: skills can be learned, and knowledge can be obtained, but without cultural fit value will not be delivered to its full potential. Once started, individuals receive more responsibility and are in the lead of their own development. This requires a different approach towards reward management, where one thing is clear: money is not the only form of reward. The last state we have included in the framework is definitely not the end state. It is what we identified as the practices that fit an Agile organization as we see it from the current perspective.
Interactive exploration of the four themes - ‘What is the future of…’
We asked the participants of the roundtable to brainstorm on how they believe the future of the four topics mentioned in the framework would evolve. Discussions and experiences were shared, but one thing is sure: it is hard to predict and define HR of the future, as all aspects will continuously be subject to change. Less standardization and more flexibility seem to work best to be able to keep the liquid workforce relevant to the organization and be able to continuously improve.
To enable a liquid workforce, to empower teams to obtain the best talent, should be one main focus of HR practices. On the topic of recruiting and staffing, companies value soft skills, alignment with the company values and (learning) agility of the candidate over the perfect skills to perform the task. Team members will continue to take part in recruitment processes, making sure that their future colleague fits the team. One of the executives suggested to use the recruiting system similar to a dating agency – to match the person to the role or assignment and team with the best fit. “Assignments” in general seem to be the future of the way we staff, grow and reward talent. The group expected a shift from job or role-based staffing towards assignments-based staffing. An internal market place would make it possible for talent to work on those assignments that will help them to further develop.
Talent management will shift to ambition management, focusing on skills and competencies instead of content-based development. Employees develop towards M-shaped profiles, the next level of T-shaped profiles in which talent is stimulated to develop more than one expertise. Horizontal growth is more common, even as taking on different roles. The standard career path will disappear: you could go up in hierarchy, horizontal to broaden your horizon or diagonally. It is all based on the talented individual’s ambition. Because of continuous feedback loops talented people will be able to continuously improve themselves, but they are responsible for their ‘lifelong learning’ themselves. To get to this stage, there is still a lot of work to do: technical support using Artificial Intelligence and Big Data could potentially help to grow team members, how we use AI and Big Data is still to be explored. Also collaborating and learning from other companies should be more common in the future.
The HR executives expected that evaluating talent will be based on the value in the future. This can be value they add to the organization or to the client. Value of teams will be more important than the value of the individual. Several ideas were discussed such as team’s self-evaluation, a purpose driven approach, evaluation based on quantitative data (like NPS) and qualitative data. Overall it became clear that in the future we need to continuously listen to each other as well as asking and providing 360-degree feedback.
Rewarding is still, for most companies a conceptual topic. All HR executives see that rewarding needs to change, based on the way companies are being organized, but also because the workforce is changing. HR departments should focus on intrinsic motivation over external reward. The new generation seems to focus less on money as a primary motivator. They want autonomy and take the lead in their own development, so why not let them decide how they want to get rewarded? If someone does not feel the need to earn more money, but instead would like to have extra days off or get the opportunity to start a new education, that should also be possible to gain as a reward for work. There is a trending shift of different types of rewards that reflects the appreciation of the work done, which are often more embedded in start-up cultures and the positive effects are not to be neglected by corporates.
A base salary as a standard seemed to be the minimum each organization should have, but deciding on how to get that extra, like a bonus or reward showed different opinions among the participant of the roundtable. As one participant believes that extra rewards are to be shared within teams, meaning that the team decides which individual team member gets what part of the reward. Other participants suggested to base extra rewards on soft skills: it’s not only about what was achieved, but the process how they got there. Each organization is experimenting what works best. They are trying different things, applying their own approach. What works for one specific organization, does not necessarily work for the other. It is interesting to find out what works well and what doesn’t, and what are the unique and general aspects of success or failure.
Based on the round table it is clear that HR practices are subject to change as organizations are transforming the way they work to stay relevant in this digital age. Organizations are in the process of exploring how HR practices should support and propel this change. There is no blueprint on how to change these HR practices to meet the needs of these changing organizations. Our most important learning is that changing HR practices is a topic in all large organizations and that many of these organizations are enthusiastically experimenting and implementing new mechanisms. As we experiment and learn, we have to keep sharing our learnings to be able to effectively support and propel the transformation into a truly Agile organization.
Participants of the Round Table 27th of June
ING Group: Alize Hofmeester, Leonie Lubbers, Martijn Mark | ABN AMRO: Nathalie Hazenberg, Felix Bartelomij | Achmea: Stefaan Rodts | AFKLM: Contance Thio | HEINEKEN: Maayke van Houdt | Schiphol: Jelderik Schultz | VodafoneZiggo: Joris van Hulzen, Marine Krooder | PGGM: Manon Pernot | PostNL: Marleen Vollebergh | Agile coach: Gerda de Weerdt | Adviseur wendbaar en opdrachtgericht werken: Ruud van Rheenen