Measuring the impact of the strategic HR business partner

By Peter Reilly.

Peter Reilly will be speaking at the Successful HR Business Partnering Conference on the 5th November in London. Don’t miss his presentation on “Measuring the impact of the strategic HR business partner”.

Does the old adage ‘if it moves measure it’ apply to HR business partners? It is certainly not so easy to measure their contribution as it is to measure the activity of administrative staff – their error rates, response speed, customer appreciation, etc. And there is always a tendency to measure those things that are easier to measure, like
service inputs, than outcomes, like strategic impact.

But I suspect the issues of business partner impact measurement go deeper. Is the problem that to assess what the business partners do begs the fundamental question of what are they there for? Our research and consultancy experience suggests this is far from clear. We have seen business partners operate along a continuum that starts with at one end something pretty indistinguishable from the Senior Personnel Officer (providing operational support to managers on recruitment, training, employee relations, individual case work, etc) to at the other end a strategic contributor (sitting on a large business
unit’s management team, engaging in the people aspects of the business strategy, working out the people dimensions of change and developing talent/workforce strategies). The former type of business partner sees their role as a support to managers and is intimately involved in delivering HR stuff. The latter is likely to function as a coach to senior management, as a critical friend and a facilitator on people centred activities, but also as a conscience (on values) and challenge (to poor practice).

Against that background how do you judge the effectiveness of the business partner? It is easier to assess the operational business partner type. Inputs from customers on their ability to help solve people problems should give a good indication of how well regarded they are by their clients. Since their role is one of client support that should suffice. There is a complication if the business partner is well regarded by the line, but in some sense is not doing what corporate HR wants. This may be because the corporate centre has a different conception of the role to the business partner and their customers. If this is the case, clarity on the role specification should come before performance assessment. If the business partner is seen as being too ‘hard’ or ‘soft’ in the treatment of staff by the HR Director, then again this is something that should be tackled between the HR function as a whole and the Management to regulate what sort of culture they want: crudely unforgiving ´hire and fire´ or nurturing and developmental?

Another area of measurement much used by organisations to judge HR performance is employee data on absence, turnover, discipline, grievances, disputes and employee engagement, etc. Whilst HR may contribute to good or bad figures, we believe it is line management who should be held accountable for these results. We have not yet heard of an employee resigning because of the behaviour of an HR business partner! Or indeed going the extra mile.

When we switch towards assessing the strategic business partner, the measurement process becomes more complex. At the level of inputs we want to know how much time the business partner is spending on strategic as opposed to operational or, worse, administrative activities. This can be captured via a diary or structured regular time coding. In terms of outputs, we would like to hear from managers on their perceptions of influence and added value. Care needs to be taken with standard customer surveys. The risk is that some customers might mark the business partner down because they have been challenged but do not like it. This of course demonstrates another adage that an appraisal tells you more about the appraiser than the appraisee. So to guard against this situation, selective interviews should be used to support/inform an electronic survey.

Another source of information may come from analysis of management meetings where the business partner is a member of the team. How much time and attention is given to people management activities? What is the level of engagement in HR led processes such as performance appraisal, bonus determination, succession planning, etc. Do business decisions take account of people issues? In signing off a change initiative is there consideration of people related risks (eg strikes or resignations)? Do business plans have a well worked out workforce component to implementation specification?

Much of a review such as this may be based on qualitative information, but it should be evident whether the business partner has encouraged fellow managers to take HR as seriously as Finance. Moreover, often business partner assessment has a strong relative component: who did Ms M compare with Mr N. In making this judgement, the HR Director will need to take account of the business team with whom the individual is working – sympathetic to people or needs convincing.

It is probably impossible to attribute organisational performance improvement to the work of a HR business partner. This sort of causality can just about be established for line managers in certain types of business (like retail) where they can directly affect the attendance, productivity and contribution of staff and this flows through into customer behaviour. HR business partners can only have an indirect effect on organisational climate, often through how they encourage management colleagues to adopt good people practice. It is that connection we should focus on when assessing the value of a true business partner.

About Peter Reilly

Peter Reilly the Director of Research and Consultancy at the Institute for Employment Studies. He joined IES in 1995 after a 16 year career with Shell where he held various HR posts in the UK and abroad including both generalist jobs (eg as Personnel Manager for Shell UK’s Information and Computing division) and specialist roles (eg in compensation and benefits, recruitment and career development, and industrial relations). At the Institute he leads its work on the HR function and significantly contributes to the Reward and Performance Management theme. He has given consultancy support to organisations on issues in this area and is a regular speaker and commentator.

He is graduate in history and politics from Cambridge.

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