In the previous articles we tried to answer the following questions:
- What modern challenges determine requirements for HR professionals?
- How these requirements transform into specific HR competencies, knowledge and skills?
Trying to answer the first question we found out:
- people professionals should measure value the business adds. It is important as all stakeholders expect their fair share of value and HR professionals need to understand their needs,
- technology development makes intangible assets more important than ever. These assets are hard to control and measure. They also require a special management,
- the way value is created and delivered defines business model. The transformation of the business model is the strategic element, so HR professionals need to understand how to develop and implement both organisational and HR strategy.
Trying to answer the second question we reviewed the new CIPD model:
- CIPD Profession Map has clear requirements to have solid business knowledge, not just general and theoretical, but hands-on. HR professionals need to understand and add insights when working with people in Finance, Marketing or Operations.
In the next several articles we will review the value adding pyramid of Dave Ulrich. We will try to follow the thoughts of this business thinker from 1987 and understand why HR competency model changed almost every 5 years during this time.
HR competency model
Some might think that the practice of management had stalled in the past 20 years. Technology evolves at a much higher rate. Peter Drucker wrote everything worth writing about management and Balanced Scorecard is the last model of any practical significance promoted by academia.
Organisational Development is at the heart of the business
New CIPD Profession Map is a rare exception. Key competencies of HR are now the Employee Lifecycle, Organisational Development, Strategy, Analytics, Adding Value, Using Technology and Managing Change.
Organisation development and design (OD&D) is considered Special competence, not Core. However, OD&D is at the heart of any business, as it is on the intersection of strategy, marketing, workforce planning, so it is really a top management job.
On our workshops that we held since 2003 time after time we repeat that financial managers usually represent shareholders/owners and CEO usually has to balance interests of all stakeholders. But we look at the 9-factor model of Dave Ulrich we would see the Paradox Navigator competence at its centre.
HR professionals are increasingly asked to maximize ideas and outcomes that may be inherently in opposition with each other. These professionals must constantly manage the paradoxes or tensions that exist in work settings.
The tensions mentioned are:
- management control / rights and opportunities of employees,
- strategic goals / operational tasks,
- employee focus / client focus,
- personal needs / organisational business goals,
- collecting information / taking decisions,
- global / local tasks,
- change / alignment.
Essential elements of creating HR value
Dave Ulrich thinks that HR has three essential elements of adding value:
- transformation of essential HR blocks.
You can find more detailed information on the picture.
Evolution of HR competency framework
Dave Ulrich introduced his first model of HR competencies more than 30 years ago - in 1987. Since then this model changed, trying to provide answers for all challenges. The last model model was published in 2016. So Dave Ulrich offered 7 variants of his model (approx. once per 5 years). So in the near future we can expect the new model of HR competencies from Dave.
From the specific to the general
Let's do some 'reverse engineering' of Dave's thoughts. What was the purpose of designing all these HR models? In 1987 the purpose was to understand what competencies HR needed to perform. So the first question was simple:
What competencies HR professionals need?
In our later articles we discuss that Ulrich determined three main groups of competencies: Business, Chane and HR Delivery.
When main areas are determine (however they would change later) the next question arise:
Do HR professionals have required competencies?
So on this stage Ulrich needed to establish some sort of tool to understand and evaluate required HR competencies. After that, the new question arose:
What competencies have the most significant impact on individual performance and business results?
So for Ulrich it is not enough to understand domains of expertise of HR professionals. Expertise is useless without adding value and adding value should be linked to individual performance. But even when this link is established, individual performance in not enough. So the next question was:
What individual competencies impact performance and create value for stakeholders?
And only when all answers are found, in other words, when the link was found between individual knowledge/skills and added value. Ulrich raised the last question:
What should HR professionals do to better predict future performance and value?
The answer is the last 9-factor model Dave Ulrich presented in 2016.
The first model of HR competencies
Dave Ulrich presented his first HR competency model in 1987. It had three areas: Business Knowledge, Change and HR services. HR services were defined as "delivery". There is a significant difference.
HR Services vs. HR Delivery
As we all know services are not physical things and are therefore humorously said to be “something that you cannot drop on your foot”. HR practices like recruitment and training belong, according to Ulrich to the lowest level of the pyramid. They are more about How? In the more important third level, which answers the question What we deliver? we found Talent, Leadership and Organisational Capital. In other words, delivery has other metrics, than services, where you can only measure quality. As per Ulrich:
HR should not be defined by what it does but by what it delivers – results that enrich the organization’s value to customers, investors, and employees.
Source: Dave Ulrich, Human Resource Champions, 1997
Who is in charge?
The important moment we also should pay attention to is about responsibility.
The framework for delivering HRM is provided by the HR architecture of an organization, which consists of the HR system, HR practices and the HR delivery model adopted by the HR function. Within that framework the provision of advice and services relating to human resource management is the responsibility of the HR function and the HR professionals who are members of the function. Ultimately, however, the delivery of HRM is up to line managers who put HR policies into practice.
Source: Armstrong’s Handbook of Human Resource Management Practice» (2014), p.36
So, HR Delivery is not just about HR professionals, but more about line managers. HR professionals are responsible for providing tools of Human Resource Management. And line managers deliver and implement HR practices when they manage their direct reports.
The first model that had three areas for HR professionals - Business Knowledge, Change and HR Delivery - existed just five years. In 1992 Dave Ulrich published a new, extended model.
The second model
The author added one more competence, he called Personal Credibility. This change reflected the mainstream thinking - in 1990 the first book on Emotional Intelligence was published which highlighted the importance of soft skills for those who work with people, especially for HR professionals.
The third model
In the next several years Emotional Intelligence remained the hot topic in business. In 1995 Daniel Goleman published the bestseller "Emotional Intelligence". In this book, he provided a critical review on modern thinking on the matter and even presented the model of Emotional Intelligence of his own. The leadership models based on Emotional Intelligence followed. This new approach required re-thinking of management styles and organisational culture. And in 1997 Dave Ulrich added the Culture dimension.
The fourth model
In 1992 Robert S. Kaplan and David P. Norton published their famous article called Balanced Scorecard in Harvard Business Review. In 1993, the book with the same title followed. The new model of organisational planning and aligning business goals took the business world by storm. In 1997, just in five years Dave Ulrich added the Strategic Contribution dimension in his model.