A Great HR Organization

Everyone in the technology industry seems to agree that people are paramount, yet nobody seems to be on the same page with what the people organization—human resources—should look like.

The problem is that when it comes to HR, most CEOs don’t really know what they want. In theory, they want a well-managed company with a great culture. Instinctively they know that an HR organization probably can’t deliver that. As a result, CEOs usually punt on the issue and implement something that’s suboptimal, if not worthless.

A high quality human resources organization cannot make you a well-managed company with a great culture, but it can tell you wen you and your managers are not getting the job done. You want to look at this through the lens of the employee life cycle. From hire to retire, how good is your company? Is your management team world-class in all phases? How do you know?

A great HR organization will support, measure, and help improve your management team. Some of the questions they will help you answer:

Recruiting and Hiring

  1. Do you sharply understand the skills and talents required to succeed in every open position?
  2. Are your interviewers well prepared?
  3. Do your managers and employees do an effective job of selling your company to prospective employees?
  4. Do interviewers arrive on time?
  5. Do managers and recruiters follow up with candidates in a timely fashion?
  6. Do you compete effectively for talent against the best companies?

Compensation

  1. Do your benefits make sense for your company demographics?
  2. How do your salary and stock option packages compare with the companies that you compete with for talent?
  3. How well do your performance rankings correspond to your compensation practices?

Training and Integration

  1. When you hire an employee, how long does it take them to become productive from the perspective of the employee, her peers, and her manager?
  2. Shortly after joining, how well does an employee understand what’s expected of her?

Performance Management

  1. Do your managers give consistent, clear feedback to their employees?
  2. What is the quality of your company’s written performance reviews?
  3. Did all of your employees receive their reviews on time?
  4. Do you effectively manage out poor performers?

Motivation

  1. Are your employees excited to come to work?
  2. Do your employees believe in the mission of the company?
  3. Do they enjoy coming to work every day?
  4. Do you have any employees who are actively disengaged?
  5. Do your employees clearly understand what’s expected of them?
  6. Do employees stay a long time or do they quit faster than normal?
  7. Why do employees quit?

What kind of person should you look for to comprehensively and continuously understand the quality of your management team? Here are some key requirements:

  1. World-class process design skills. The head of HR must be a masterful process designer. One key to accurately measuring critical management processes is excellent process design and control.
  2. A true diplomat. Nobody likes a tattletale and there is no way for an HR organization to be effective if the management team doesn’t implicitly trust it. Managers must believe that HR is there to help them improve rather than police them. Great HR leaders genuinely want to help the managers and couldn’t care less about getting credit for identifying problems. They will work directly with the managers to get quality up and only escalate to the CEO when necessary. If an HR leader hoards knowledge, makes power plays, or plays politics, he will be useless.
  3. Industry knowledge. Compensation, benefits, best recruiting practices, etc. are all fast-moving targets. The head of HR must be deeply networked in the industry and stay abreast of all the latest developments.
  4. Intellectual heft to be the CEO’s trusted advisor. None of the other skills matter if the CEO does not fully back the head of HR in holding the managers to a high quality standard. In order for this to happen, the CEO must trust the HR leader’s thinking and judgment.
  5. Understanding things unspoken. When management quality starts to break down in a company, nobody says anything about it, but super-perceptive people can tell that the company is slipping. You need one of those.
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