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Building an Effective HR Model for your Company

  Mar 18, 2015

by Carol Musyoka

Sam walks into his boss’s office and says “Sir, I’ll be straight with you, I know the economy isn’t great, but I have over three companies chasing after me, and I would like to respectfully ask for a raise.”

After a few minutes of haggling the boss finally agrees to a 5% raise, and Sam happily gets up to leave. “By the way,” asks the boss, “Which three companies are after you?” “The electric company, water company, and phone company!”

I have always found human resource practice a fascinating aspect of organizational management. To the inexperienced eye, HR is that department at the corner of the building that deals with salaries and disciplinary matters. But it’s much more than that and many organizations often get it wrong much to their painful regret. A good HR department will actively segregate compensation and benefits from talent acquisition and management, organizational design, learning and development, employee relations as well as diversity and workforce planning. These are specialist areas that a good CEO should ensure are effectively represented within his or her HR department. A key strategic and specialist area is that of workforce planning. The CEO through the office of the HR manager has the tripartite role of forecasting employee needs, identifying potential sources of employee supply and, finally, balancing demand and supply throughout the organization’s lifetime.

Thus it was with great fascination that I happened to have 3 separate conversations last week that generated an interesting conclusion: HR management is a key strategic objective of any CEO regardless of business size. The first conversation was with a business owner of an extremely large distributorship of fast moving consumer goods. After enduring a long and painful cycle of hiring and firing sales representatives, she came to the conclusion that the fundamental mistake she was making was in hiring university graduates for that role. As the goods required to be transported by lorry, a sales representative was required to primarily be in the lorry at all times since the goods were simultaneously sold and delivered. The business owner eventually realized that university graduates would find a lorry as their main office demeaning and would quickly quit the job after a few sales cycles. She has now found her optimal balance: up skilling lorry drivers with sales and negotiation skills. Since she landed on this model her attrition rate has reduced, her lorry drivers are better motivated as their job descriptions have an enlarged scope and her staff costs have reduced since some graduate level jobs have been eliminated.

The second conversation was with a business owner of a security company with over 5000 employees. Due to the large unemployment rate, it was inevitable that university graduates would show up at their doorstep seeking any job including those of security guards. The business owner, over time, has found his optimal staffing model. The firm now employs staff over the age of 28 years with a maximum educational level of a diploma. The firm has arrived at this model after realizing that university graduates (who having “tarmacked” for a while will take any job they find) are naturally ambitious and will ditch the security guard job at the first chance. They also observed that employees aged between 21 and 27 years were prone to theft and bribery more often than not as they had not settled down to family responsibilities. The firm has found that women are best suited at middle management, as they tend to be highly focused and productive. The reason for their higher productivity levels, the CEO mused, was that women know that they have limited time to get their work done as they want to leave at 5 p.m. sharp to go home and take care of their children. “We have never had an incident of complicity in theft cases where a woman was involved,” was his final observation. Age, gender and educational level were clearly defined parameters for the success of this security firm.

My third conversation was with the director of a customer-facing department for one of Kenya’s leading corporates. At the department’s inception, they adopted a model of only hiring university graduates with upper second class degrees. “The model backfired on us,” she humorously recalled, “as the graduates wanted to be promoted every two years and were very picky.” Apparently if there were no promotions occurring, the number of disgruntled employees would rise. But she made a startling observation: students who had received a “C” grade at the KCSE level, followed by a diploma were the best employees in her department. These students, who were marked for life by the Kenya National Examinations Council, were determined to shed off that image of being average students and would invariably work twice as hard as the “A” grade graduate students. Now this was an interesting observation from a large employer. The “A” grade graduates had also been marked for life by KNEC as being the best. That mark led to a sense of entitlement for deserving the best in the workplace thus making them very difficult to work with. Diploma level, with a large emphasis on average students has now become the parameter for success for this customer-facing department.

It wasn’t difficult to draw my conclusions after these three random conversations. Once you have defined your optimal human resource model, you are halfway on the route to the success of your organization. Balancing the demand for employees and the supply of the best-suited people to fill those roles is not an easy task by any definition, nor should it be left to a HR manager to decide. Monitoring productivity and attrition rates of staff should be a key deliverable of the HR function that is actively overseen by a CEO as a strategic tool for driving the organization. As a CEO, if you have the wrong backsides warming employee seats in your organization, you only have yourself to blame if your front door spins faster than a helicopter’s rotors.

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