Facing and Correcting the HR Domino Effect

Aethos™ finds that poor support in one specific HR duty may start a negative domino effect

Alignment has been a commonly spoken “business mantra” for years, although Human Resources professionals would agree that misalignment is a common issue that is neither comprehensively discussed nor addressed in today’s workplaces. That performance gaps and lapses in resources exist is not debated. What’s now needed to advance the conversation is evidence-based guidance on identifying and rectifying the catalysts of misalignment.

Aethos Consulting Group™ recently surveyed a highly targeted group of sixty-eight (68) senior HR professionals (60% women, 40% men) from major hotel (54%), restaurant (34%), casino-gaming (7%), travel-tourism (3%), and other types (2 %) of hospitality companies. These respondents, all of whom currently holding senior-level regional roles in all four corners of the world, answered candid questions about the degree of alignment between performance expectations and the resources allocated to their HR departments.
We discovered both good news and concerning trends that HR and senior leadership should understand when tackling the goals for 2016. At the heart is a major risk factor – poor support in one specific HR duty may start a negative domino effect that undermines the strategic efficiency, effectiveness and ROI of the HR function.

Common acknowledgement of HR’s evolving role
Traditionally, HR tends to be perceived as a tactical department at best, and at worst, as an administrative, “necessary evil.” Yet, these survey results suggest this perception is changing in ways important for their entire organization. On a monthly basis, respondents reported that 60% of their time is devoted to administrative aspects, including fixing problems or maintaining the status quo, although 40% of their time is spent addressing strategic aspects, such as proactively creating solutions to organizational challenges or driving innovation. This ratio may not be ideal, but it does hint at the increasingly strategic role HR is playing in today’s corporate cultures.

Most importantly, this potential for business impact is apparently acknowledged by senior leadership. In particular, in our sample the findings indicate that…

• 93% agreed that senior corporate leadership views human capital as a key success factor to achieve business goals
• 94% agreed that management considers HR a true business partner
• 94% agreed that HR’s perspectives are voiced at the board table

This seems to be good news, but where acknowledgment of HR’s value add is strong, it seems the actual degree that HR is supported and thereby properly leveraged remains an area for opportunity. For example, 67% agreed that HR constantly fights internal battles for the necessary resources to achieve its mandates.

This is not to say that HR is reported to be under-resourced in all aspects. To be sure, the findings clarify where the lapse seems to begin. The concerning news is that lesser support or resources for certain KPIs may well be the catalyst for an unanticipated but serious domino effect of misalignment between corporate mandates for HR and the daily realities HR faces and must address.

Identifying misalignment in resources
Our findings suggest that HR is well supported in ways where generosity and flexibility are more easily permitted, namely peer support and the deadlines placed on the execution of initiatives. On the other hand and perhaps not surprisingly, Figure 1 shows that Staffing and Budget are less well supported. In other words, there is arguably a mixed or double message from senior leadership heard by HR professionals, “You’re recognized as a strategic business partner, but do more with less.”

Of course, a predictable complaint of probably any department or function is a lack of staff or budget. The 2007-2008 global crash undoubtedly hit a reset button on the way companies organize and function – lean and mean is often the new and enduring SOP. However, new research published in the Harvard Business Review notes some negative trends that come from the philosophy of “do more with less.” For instance, the study in question speaks about a phenomenal explosion in collaborative intensity over the last ten years. Part of that explosion is attributable to technological innovations like email and social media, which make it easier to connect with co-workers across the globe in real time. But a less obvious factor is the way organizations are evolving on a structural level to more matrix-based management and dual-reporting systems, which means that employees might be responsible to and receive assignments from at least two managers. HR serving both administrative and strategic roles would seem to be a prime candidate for this set of challenging circumstances.

Aside from this theoretical pitfall, a dilution of both HR’s focus and energy that comes from attempting to “do more with less” seems to contribute to a very real and impactful “domino effect” that distorts the expected versus realized priorities of HR.

The hidden “domino effect” – and battling it
Following from the above, it’s revealing to see how the survey respondents ranked-ordered six key HR tasks – indicating how HR spends its time on these tasks compared to the priority of these tasks set by perceived corporate mandate. The good news is that the daily reality of HR starts off well-aligned to corporate mandates. Building the talent pipeline and building engagement and culture (two interrelated activities and goals) are of prime importance. The bad news is that as this stage, derailment seems to occur in that handling issues associated with Employee Relations takes priority over Training/Development/Performance Feedback responsibilities.

When Employee Relations assumes greater attention and energy, the higher priority corporate mandates of Training and Development and then Developing and Implementing Succession Planning fall like dominoes in terms of their daily importance to HR. Unfortunately for both the strategic and tactical aspects of HR, these two KPIs (Training/development and Succession planning) should naturally coincide with and reinforce talent pipeline and engagement initiatives.

Precisely where this domino effect starts makes sense considering that HR is responsible for both corporate and field-based operations. Therefore, employee relations is an ongoing challenge up and down the org chart and across a portfolio of assets. Senior HR leaders who should be focused on strategic initiatives may find themselves constantly pulled into tactical issues and field-based minutia.

There are at least two key take-aways from this survey. First, assuming these results generalize to your organization, it appears that the biggest ROI in adding staff or budget to HR is hiring or training field-based, regional or director level professionals who are competent and earmarked, in part, specifically to handle Employee Relations issues. This one tactic will allow senior HR leadership to focus on big-picture, strategic initiatives or tactical programs that reinforce the building of the talent pipeline, training/development of incumbents, and succession planning to ensure ongoing bench-strength.

Second, we understand that the issue of Employee Relations may not be a catalyst for negative domino effects in all hospitality companies. That said, this research does underscore the issue of general misalignment between success metrics and allocated resources to achieve targets. Addressing potential or actual misalignment in strategic planning or candid 1:1 discussions seems a prudent way to kick off the New Year. Gaining and maintaining alignment is the responsibility of all senior leaders, but it is up to HR leaders to conduct their own assessments of the congruency between mandates and resources and to make targeted recommendations to senior leadership so that HR is positioned for strategic and tactical success.