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A Critical Look at HR Management

© Ronald J. Rakowski, SPHR, CELS

Those of us who work in human resources (HR) are often required to walk a shaky tightrope between those who we report to (senior executives/owners/shareholders) and those who we are charged with representing and supporting (employees). Whether we work for a nonprofit organization, a government employer, a private company, or a public company, our job remains the same: to provide management with access to the concerns of employees; to design and implement contemporary people-related plans, programs, and policies; and to effectively communicate the reasons behind positive, as well as negative, mangement actions that affect the organization's employee population.

For a human resources professional to focus only on the desires and designs of management and/or the bottom line often spells disaster for the employer as well as the HR professional. For example, a few years back a major public company decided to convert its traditional defined benefit pension plan to a more "cost effective" cash-balance pension plan favoring "portable" employees over long-sevice employees. Either the company's top HR professional convinced management to adopt a cash-balance plan to save money, or management, looking closely at the bottom line, directed the HR professional to implement the conversion. Whatever the reason, the decision enraged a large percentage of the company's senior employee population and the company publicly retreated from its initial pension policy announcement, not just once, but a couple of times. The company's HR professional should have certainly understood in advance how senior employees would react to such a change and advised management what to expect when the pension conversion was announced. Armed with that advanced knowledge, management may have proceeded slower and saved themselves a lot of bad press.

Earlier, that same company informed its executive secretarial staff that their annuual pay, somewhere in the neighborhood of $75,000, was excessive and that they would all face a pay reduction to bring them in line with what executive secretaries at other companies were being paid.

Those of us who have had compensation responsibilities know that employees don't set their own pay levels. Only company managers, typically in coordination with the HR department, have the authority to set pay levels and were, therefore, responsible for letting executive secretarial pay get out of hand. Certainly the company could have come up with a more even-handed method of addressing this concern that would have kept the issue out of the national business press. For example, red-circling the current rates of pay until the competitive market caught up and/or attrition reduced the number of affected incumbents would have been one option. The down side to this option is that by not rewarding superior performance by some of those included in this group of employees may have negatively affected their productivity and the quality of their work. But giving outstanding performers an annual cash performance award in recognition of their contributions would have addressed this problem without affecting base pay rates.

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