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HR in the 21st Century:Challenges and Opportunities

A N I H R I M G O - T O G U I D E

M A Y 2 0 0 3

IHRIM, the World’s Leading Organization for

Human Resources Information Technology Professionals.

InternationalAssociation forHuman ResourceInformation Management

IHRIM

HR in the 21st Century:Challenges and Opportunities

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2

Facing the Primary Challenge: Being the Employer of Choice . . . . . . . .3

Winning the War for Talent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

Leveraging an Indispensible Player: Technology . . . . . . . . . . . . . . . . . . .7

Recognizing the Workforce as a Profit Center . . . . . . . . . . . . . . . . . . .12

Contributing as a Strategic Business Partner . . . . . . . . . . . . . . . . . . . .13

Cultivating Leadership e-Learning and Development . . . . . . . . . . . . . .13

Thinking Globally, Complying Locally . . . . . . . . . . . . . . . . . . . . . . . . . .14

Incorporating Flexibility and Adaptability . . . . . . . . . . . . . . . . . . . . . . . .15

About the Author . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16

Footnotes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16

InternationalAssociation forHuman ResourceInformation Management

IHRIM

As we enter the twenty-first century, expertscontinue to validate that it is the human asset,not the fixed asset, that will make the differ-ence for successful organizations. While it hashistorically been HR’s job to “own” thoseassets, the overall enterprise must take amore active role in the workforce experience.HR must continue to gain ground as the chiefpeople strategist by providing attraction andretention techniques that create an employer-of-choice environment. Simultaneously HRmust demonstrate a measurable ROI onhuman capital.

This article examines eight critical trends thathave solidified over the past year. Thesetrends will continue to present both challengesand opportunities for the HR and HRIS profes-sional over the next decade. The eightcategories include the following:

• Becoming the employer of choice

• Winning the war for talent

• Contributing to the organization as a strategic business partner

• Cultivating leadership through e-learningand development

• Recognizing the workforce as a profit center

• Thinking globally while complying locally

• Incorporating flexibility and adaptability intothe organization

• Embracing technology as the underlyingfacilitator

2 HR in the 21st Century: Challenges and Opportunities

Executive Summary

By Row Henson, a PeopleSoft Fellow

Challenge is always offset by opportunity.Today’s widespread market volatility, coupledwith layoffs, talent shortages and rapid shiftsin technology, points to heightened challengesfor human resources (HR) organizations.While appropriately leveraging HR has been akey topic of discussion for the past decade,organizations still struggle with how to makethis strategic shift as a department.

What will help HR most in running the peopleside of the business? Over the next decadethe HR profession will face a wide range ofissues, which can be consolidated into a list ofmajor hurdles. While the hurdles discussedhere might not be all-encompassing, addressingthese predominant issues provides impetusfor turning challenges into opportunities. As astarting point, one of the most important chal-lenges for an organization is becoming anemployer of choice. This involves creating anenvironment where people want to come andwork, contribute while they are there and staylong enough to make a difference. HR’s suc-cess in surmounting its challenges isevidenced by ROI not only in terms of money,but also in efficiencies, effectiveness andorganizational best practice. Undoubtedly,

technology plays a pivotal role in addressingany HR challenge by facilitating solutions thatoptimize success.

All great companies look for the best ways toperform HR-related tasks. However, thinkingabout HR only as a department obscures HR’senterprise-wide function, which permeatesthe entire organization. Just as finance touchesevery area of a business — usually in the formof a budget — human capital is an entity affect-ing the enterprise in its totality. Therefore,instead of regarding HR as an isolated depart-ment, great companies shift their focus towardenterprise-wide people processes, of whichHR is an integrated part.

Facing the Primary Challenge:Being the Employer of Choice

Becoming and remaining an employer ofchoice is the top-ranking HR-related chal-lenge organizations face today. Establishingemployer-of-choice status is HR’s responsibility,and if HR does this well, all other practicesbecome subordinate to this goal. The mostimportant objective on the people side of thebusiness is establishing a place where individ-uals want to work and remain working. HRshould be concerned with providing potential,

HR in the 21st Century: Challenges and Opportunities 3

HR in the 21st Century: Challenges and Opportunities

Culture strongly influences long-term relationships with employees, customers, and suppliers

Stockholders and Board

Management

Current, Past and Potential Employees

Customers

Vendors and Partners

current and even past employees with thisenvironment. Employees need a culture, aplace in which to grow and feel good abouttheir surroundings.

Delineating the Corporate CultureCorporate culture is a dramatic force behindevery employer of choice. Unique to eachorganization, culture has many drivers, suchas the organization’s leadership or the productor service produced. In cases when there aremergers or acquisitions involved, culturalredefinition might be required.

At the very least, HR should be the designatedkeeper of the corporate culture. At its best, HRcan be instrumental in creating or maintaininga culture that is truly great. HR must first clearlyidentify the kind of culture the company shouldhave, then define that culture for the workplaceand support the environment that emerges.An identifiable culture attracts employees,gives them a sense of purpose and offers abasis for participation in decision-making.

Whether investigating not-for-profit institutions,government employment, a large banking firmor start-ups, job seekers continuously evalu-ate whether or not a prospective employer isthe employer of choice for them. A suitableculture signifies different things to differentpeople — companies attract those who findtheir culture desirable. This attraction mightmean anything from having a lot of freedom toparticipating in business decisions to workingwith a mission to save lives.

What does it mean to be an ideal — or “cool”for some sectors — place to work? While anumber of criteria are involved in answeringthat question, in general the cultural imagessuccessful companies portray fully addressthese categories: work/life balance, sense ofpurpose, celebration of diversity, active partic-ipation in management and an environmentthat integrates continuous learning.

Creating a culture where people are treatedwell regardless of title is becoming more andmore important today. Whether baby boomersor generation X, almost every 21st centuryemployee at every level wants to be influentialin company decision-making. One of the manyways to achieve this is rewarding employeesfor innovative suggestions no matter wherethey are in the organization. Such a practicecan benefit the company as well. “What isimportant about the frontline workers’ view isthat these people capture a fuller picture ofwhat the organization faces and what it canactually do. In most cases, they see morechances for bold action than the executives atthe top.” 1

Inevitably, culture changes as a companygrows and its mission evolves. It is HR’s man-date to capture that culture and assure itsalignment with corporate goals and objectives.

Using Branding to Promote CultureBranding promotes culture. In the past brandingwas assigned to public relations or marketing,but it is indeed an HR function because of itspower to attract and retain employees.Working together with marketing, HR mustdevelop a compelling brand image for theworkforce.

Great companies do not create an externalbrand for customers and an internal brand toattract employees. Instead, they leverage theirexternal brand for internal recruiting.Southwest Airlines is an excellent example ofthis — it advertises around low-fare, no-frills,humorous service, and its employee populationloves to have fun with customers. Southwestdoes an excellent job of branding for its cus-tomers and leveraging that same image to drawlike-minded employees.

Branding that pervades a company’s web con-tent communicates brand image not only tocustomers but also to prospective employees.Messaging should work to attract both simul-taneously. For example, when posting jobs to


the site for recruiting, HR must work with sitedesigners to make interesting, creative postingsthat tie into company branding. Although inter-net-driven recruiting is still in its early stages,it can pull together a wide range of elementsand help ease the burden on HR while pushingout to prospects the branding and critical datathat speeds selection decisions. Today’s col-lege graduate looks at every prospectiveemployer’s website before applying for a job.In many cases, a website supplies an appli-cant with his or her very first image of acompany.

HR must take a pivotal role in branding duringmergers and acquisitions. When AOL-TimeWarner merged two strong cultures, HR’s taskwas to take the best of both organizations’messaging and develop a third survivable,sustainable culture that resulted in a newbrand.

Most HR organizations today do not considerthemselves branders. They think of them-selves in the people practice, but beforegetting to the people practice, HR must firstidentify necessary actions in terms of buildinga culture and branding. Such actions result inthe attraction and retention of the right kind ofemployees to support the organization’s goalsand mission.

Staying Attuned to Changing DemographicsThe workforce has changed and will continueto do so. Employers of choice recognize andunderstand the dynamics of the “new work-force,” where for the first time four distinctgroups of workers labor together under onevirtual roof. The over-50 baby-boomers lendthemselves to loyalty and sacrifice, those intheir 40’s believe hard work will take them tothe top, 30-somethings seek a balancebetween work and home, and new workers in


The demograhics of working men and women are changing with respet to both numbers and age ranges.

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their 20’s are realists wired for technology.However, today’s employees are even nowexperiencing a metamorphosis. The role ofwomen and other minorities is expanding,median age is increasing and there is a rise inthe contingent workforce.

Organizations are changing as well, creatingwidespread shifts in work attitudes across agegroups. HR’s task is to stay attuned with thechanging workforce and changing companyvalues and make sure company culture isappropriate to the desired workers. For example,because Ford Motor Company benefits fromloyalty — as do most employers of an olderworkforce — its culture and branding do notsupport rapid change and high turnover.Likewise, companies based in Silicon Valleyare concerned with development and productionspeed, and turnover is often higher than aver-age. HR’s challenge is to strategically matchthe employee population with that of the orga-nization’s culture.

Winning the War for Talent

An employer of choice has already come along way toward winning the war for talent,which is another significant HR challenge.There is no truce in this war, regardless ofeconomic conditions.

Recruiting and Retaining Over TimeGiven suitably competitive offerings withrespect to compensation, culture is an organi-zation’s number one recruitment and retentiontool. In an employer-of-choice environment, itis not necessary to pay top dollar if other keyfactors are in place.

Great companies know not to stop seekingthe best talent in a downturn. When the stockmarket is down, many people are afraid toinvest — but that is the best time to do so. Thejob market is similar.

Top companies always see value in pursuingthe best and brightest. Simultaneously, futuretalent shortages and the expense of recruitingover retention give these employers a consis-tently keen eye for keeping their topperformers. According to Jac Fitz-enz, founderof The Saratoga Institute, “Every six middlemanagers a company replaces costs $1 millionin the time and expense it takes to recruit,train and develop replacements to a pointwhere they can be as productive as those wholeft.” 2

Great companies make every employee in thecompany a recruiter. At a cocktail party, some-one who is energized about his company anddiscusses it in a positive light promotes thatcompany. Cisco is a good example of top-quality referrals. Because Cisco’s employeereferral program generates 60 percent of allnew hires, the company realizes great savingson the high cost of recruiting and simulta-neously finds prospects with good personalreferences.

Customer relationship management (CRM) isa good model for human capital management(HCM). The steps involved in attracting andretaining customers parallel the activitiesinvolved in the war for talent. Where millionsare spent on the customer relationship, has asimilar emphasis been placed on employees?

Understanding the WorkforceStatistics show that the size of the workforceis diminishing — when the economy comesback, there will be fewer candidates fromwhich to choose. Although there is an eco-nomic slowdown now, in the next 10 yearsdemand will outstrip the supply. During adownturn, if companies that are not hiringeliminate their focus on recruitment, they canmiss golden opportunities to secure the highperformers who might be instrumental in thefuture.


Winning the war for talent requires knowingthe workforce. For example, by 2050 there willbe fewer people available to work, and themajority of these will be older than 50. Thecontingent workforce will also be more criticalin the future. Therefore, why not innovate bycreating a temporary or part-time environmentin which the 50-plus population will want towork? What about giving the new mom or dadthe opportunity to balance hours at work andat home?

Leveraging an IndispensablePlayer: Technology

Meeting today’s HR challenges would beimpossible without technology, a critical prac-tice in and of itself. Most people want to workfor companies that have good technology. Forexample, college graduates accustomed tousing the internet for their work, research, thesis,and case studies expect the latest technologyon the job. Given the widespread availability oftechnology, a company lacking in this compo-nent will not qualify as an employer of choicefor the emerging workforce.

Technological development is in every compa-ny’s best interest. According to Cedar Group,“Organizations continue to report highdegrees of success in using technology tomeet objectives of business improvement,employee satisfaction and elevation of HR’scontribution as a strategic business partner.” 3

Using Technology as a FacilitatorGreat companies know how to use technology.Instead of accumulating an excess of technol-ogy for technology’s sake, they invest intechnology specifically as it facilitates accom-plishment of their objectives. For example, anemployer of choice will leverage the companywebsite to add momentum to branding efforts.

The best companies also wield an educatedvision, establishing cutting-edge solutionssuch as pure-internet systems that providelongevity and interoperability with futureadvancements. Preferred for ease of collabo-ration, pure-internet systems require only abrowser — no code on the workstation — andsupport a number of standards. Web-basedsolutions are ideal foundations for portals,self-service, and collaboration because they


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can continually draw from a single repositoryof enterprise-wide data.

Entering the Portal GatewayCritical to the employer of choice, portals provideorganized, efficient access to the customizedcontent, knowledge, reporting structures, ana-lytics capabilities, and transactions eachemployee needs. An enterprise portal is thegateway to all company functions and offerspersonalized, role-based access with respectto who employees are, where they are located,what they do, and why they do it. Third-partysources of content such as salary surveys orjob boards can also be accessed through aportal.

One of the most compelling aspects of portaltechnology is that it serves as a primary HRtool for establishing image, culture, and brand-ing. Role-based portal designations allow HRto push out messaging to specific groups, andall recipients see the same information simul-taneously. Distributed information can includebalanced scorecard data, total reward andincentive status updates, company news andpromotions, quotes-of-the-day, and other cul-ture-based messaging. More than any otherform of technology, this communication toolhelps replace the concept of HR as a depart-ment with a true sense of the pervasive,enterprise-wide nature of human capital.


Portal technology can serve as a valuable HR tool for establishing image, culture, and branding

HRMS

ServicesSpending

PerformanceManagement

Finance

Incentive Monitoring

and Adjustments to

Performance

Opportunity Analysis

Project Trackingto Task and Target

Revenue-to-TargetSpending Allocation

Variance

Employees use a portal to seamlessly accessworkflow, event-driven processing, transac-tions, analysis, and more. Because portalinformation is filtered based on role, employeessee only the relevant information they need todo their jobs. Where before an individual hadto enter a password for each application, portalsrequire only a single sign-on for access to allcompany functions. This saves time and effortand promotes increased productivity.

Establishing Self-Service and CollaborationPeople want to work for and stay at companiesthat empower them to do their jobs, and self-service and collaboration do exactly that.Employee self-service makes HR and otherwork-related transactions easily accessible 24x 7, granting increased workforce autonomyand lightening the HR administrative load.

Self-service has been gaining momentum.According to Towers Perrin, “Despite recentworld events, the economic downturn andactual results to date with self-service, half tomore than two-thirds of responding compa-nies, polled in November 2001, plan to step upinvestments across a wide variety of HR appli-cations.” 4 According to the Cedar 2001Human Resources Self Service/Portal Survey,self-service has resulted in a 60 percent aver-age reduction in both cycle times and averagecosts, a 50 percent increase in employee sat-isfaction, an up to 70 percent reduction inheadcount changes, and a 90 percent drop inservice-center inquiries. The Cedar 2001 HRsurvey reports a 100 percent ROI in less than22 months based on implementing multipleapplications.5


Studies show rapidly increasing evidence of the benefits of employee self-service.5

Source: Human Resources Self-Service Survey 2001, Cedar Group.

Extending HR-Related CollaborativeApplication to the Workforce

Savings Realized Using Self-Service

Enroll in benefits $109.48 $21.79 80%

Enroll in training $17.77 $4.87 73%

Change home address $12.86 $3.39 74%

Apply for a job $21.31 $11.85 44%

Change compensation $44.67 $18.26 59%

Approve a promotion $48.64 $14.01 71%

Create a job requisition $36.89 $11.11 70%

Task ManualCost

SavingsSelf-ServiceCost

In addition, the Watson Wyatt 2001 studyrevealed that a significant one standard devi-ation (1 SD) improvement in focused HRservice technologies created a positive 6.5percent market impact: “Our research showsthat if HR groups use new technology for thefundamentals — improving accuracy, serviceand cost-effectiveness — it pays off in 6.5 per-cent higher shareholder value.” 6

Web-based collaboration streamlines commu-nication by connecting the disparate systemsof all constituents — company-based andthird-party — for integration with back-officeapplications and content suppliers. Improveddecision-making and effective workflow resultfrom integration of knowledge-base access,transactional information, analytics, teaminput and more.

An excellent example of collaboration is therecruiting process, which extends from postinga requisition to communicating with and makingan offer to the candidate. Online collaborativeprocesses create documented evidence ofwhat took place, which is helpful in recallingdetails and evaluating workflow success.

Analyzing All the DataAnalytics statistically measure what is andwhy, and also provide data as to what shouldbe, what could be, and what will be. By draw-ing from a central repository of all pertinentinternal and external company data, work-force analytics enable organizations to model,simulate, report, compare and leverage themetrics most important to HR and the entireorganization.


Analytic tools help HR leverage enterprise-wide data to develop workforce planning cycles thatmaximize productivity

• Administrative• Historical perspectives• Stand-alone system

Transact

• Strategic measurement• Enterprise-wide view• Cause/effect relationship

Set Goals

• Comparative/Trending• Multi-dimensional• Integrated

Measure

• Strategic Planning• Model scenarios• Simulated outcome

Make Plans Take Action:


Workforce analytics also help measure HReffectiveness, support processes for address-ing gaps in skills and labor, derive metrics fortrend and benchmark analyses, assist withtalent development, provide compensationand retention planning tools for proactiveanalysis, and much more. The time is now toleverage analytics. According to Gartner,“Enterprises that want to out-perform theirindustry competitors should understand theimplications of Corporate PerformanceManagement and immediately start buildingtheir strategy.” 7

Great companies use analytic tools to man-age human capital, calculate its value, andalign the workforce for maximum productivity.These tools are instrumental in anticipatingthe impact of inevitable external and internalbusiness trends that precipitate change and inrealizing savings by strategically allocatinghuman capital.

Workforce excellence comes from having the best workforce and deploying it for advantage.8

Source: Meta Group Workforce Management Study 2001.

0%

Time & Labor

Acquisition

Development

Growth Factor

Recruiting

Labor Scheduling

Performance/Skills Mgmt

Workforce Planning

Contingent Workforce

Employee Self-Service

Manager Self-Service

e-Learning

Workforce Analytics

20% 40% 60% 80% 100%

Recognizing the Workforce as aProfit Center

Historically undervalued, human capital is inreality a strategic asset. Watson Wyatt’s 1999-2001 Human Capital Index survey of over 750international companies statistically provedthat implementing HCM best practices is aleading — not lagging — factor in increasingshareholder value. “Effective human capitalpractices drive business outcomes more thanbusiness outcomes lead to good HR prac-tices,” stated Bruce Pfau, Ph.D., author of thestudy.9

Accounting for People: a NecessaryExpense?Watson Wyatt provides clear evidence of thesuccess of effective HCM.10 Yet, if optimizedhuman capital is powerful enough to drivesuccess, why is it common that the only exec-utive-level mention of human capital is an

expense line on the income statement? Suchan approach forces inverted behavior. Forexample, a company might employ the fewestpeople at the lowest cost simply to enhancethe income statement. However, this“enhancement” is a hidden stress on overallperformance.

“Oddly enough, while economists and busi-ness strategists agree that intellectual capitalis the key to success for companies in today’sknowledge-driven economy, there is currentlyno generally accepted means of quantifyingthese assets and accounting for them on acompany’s balance sheet,” states Dr. CharlesE. Grantham, Founder, Institute for the Studyof Distributed Work.11

Quantifying the Intangible: Human CapitalSince the early 1980’s, companies’ predomi-nant source of market value has shifted fromtangible fixed assets to intangible assets.


The Human Capital Index study provides evidence concerning HR

The Impact of HCM on Market Value

Sample size: 750 companiesExpected change in market value associated with

a significant one standard deviation (1 SD) improvement in HCI dimensions.

Total rewards and accountablilty 16.5%

Collegial, flexible workplace 9.0%

Recruiting and retention excellence 7.9%

Communications integrity 7.1%

Focused HR service technologies 6.5%

Practice Impact onMarket Value

Intangibles include human capital, structuralcapital, customer capital, and organizationalcapital, with human capital contributing by farthe biggest portion. Great companies areusing HCM to leverage human capital by tyingindividual performance to key organizationalobjectives and are seeing the difference incorporate profits — the workforce is indeed aprofit center.

The standard deviation of top- and high-potential performers represents twice theproductivity of the average performer. Statesfounder Bill Gates regarding Microsoft, “Takeaway our 20 most important people, and I tellyou we would become an unimportant com-pany.” 12 The critical value of key people is allthe more reason to invest in human capital,HCM, and supporting technologies.

HR responsibilities include many specificdetails involving compensation, workforcetrends and so on. However, it is critical that HRcan answer questions such as:

• Who are our top performers and how canwe retain them?

• Who are our high-potential employees andhow can we develop them?

• Who are we at risk of losing and how canwe reduce that risk?

Contributing as a StrategicBusiness Partner

Although there is emphasis today on gettingHR out of record keeping and making HRmore strategic, a lot of HR people are notequipped for this. Often a company wants anHR representative to think like a businesspersonbut does not give them the respect, time, toolsand other provisions to do so.

HR’s role as a strategic business partnercomes from both the company and HR’s owninitiatives. One factor that supports HR infunctioning better in the business world and

becoming a key business partner is appropri-ate use of the right technology. Technologycan help HR assess opportunities, managerisks, take action, and communicate withemployees.

Measuring performance and tying it to overallbusiness objectives is essential for demon-strable results at the corporate level. Yet anunfortunate number of performance evaluationcriteria have nothing to do with overall companyobjectives. Measuring things like clocking inon time and getting along with co-workersdoes not provide tangible data that tiesemployee performance to overall companysuccess. HR needs to evaluate the factors thathave direct impact on corporate objectives.

HR takes on significant responsibility duringmergers and acquisitions. In the recent acqui-sition of Compaq by HP, it is unthinkable thatHR was not examining culture, benefits,salaries and employee skill sets to make theacquisition work.

Cultivating Leadership: e-Learningand Development

Today’s college graduates are less concernedwith starting near the top as they are withbeing empowered to learn and make companydecisions. Most people instinctively want tolearn, which is very different from being“trained.” Learning is an environment that pro-motes the ability to gain knowledge, whethervia a course, access to expertise in the form ofmentors, or participation in innovative projects.

Loyalty to a single company is rapidly becominga thing of the past. While culture attracts anew hire, the reason an employee stays on isbecause the working environment is challengingand meaningful, engendering growth anddevelopment. The number one reason anemployee leaves a company is lack of respectof the immediate supervisor. The culprit is theaging workforce, which causes organizations


to promote younger individuals before theymight be ready to be managers.

Organizations can address this retentionissue on both the employee and managerialsides by creating an environment that contin-uously fosters learning and development. Thishelps train supervisors to be effective and pro-vides learning employees eagerly embrace.Instead of secluding a new hire in months ofconstant training, this environment letsemployees learn as they go using supportivetools and technology.

While technology is better today than ever,today’s e-learning is only in its infancy. In thisnew world, people learn what they need tolearn on their own time, at their own pace.Right-brain people can have more on-the-joblearning, while left-brain thinkers can do moreanalytical learning online. Usually e-learningis accessed via collaborative self-service thatleverages third-party expertise and/or content,which is what many are calling knowledgemanagement today. In the future, e-learningwill simply be a way the workforce is devel-oped on an ongoing, just as needed basis.

In the new organization of the future,“Adaptive virtual organizations replace rigidorganizational structures, and the organizationat any one time consists of the sum total ofpeople and companies involved in successfulcompletion of a project. […] Individuals recog-nize that continuous learning and nurturing ofskills are vital to productivity and professionalsatisfaction. People seek opportunities tostretch themselves while employing theirunique abilities, choosing jobs and projectsthat provide them with the best learning expe-riences and opportunities to excel.” 13

Thinking Globally, ComplyingLocally

Even small organizations deal increasinglywith customers and employees on a globalbasis. Great companies know how to thinkglobally and comply locally. They act like aglobal organization, yet an understanding ofthe local environment permeates every relationship.

Making global differences a part of corporateculture is a valuable endeavor. Indeed, diver-sity itself is a source of greatness.Organizational headquarters that have theattitude that “corporate knows best” will have adifficult time instilling a viable culture.Education and awareness make all the differ-ence, especially in the following areas:

Legal and regulatory issues — It is importantto be familiar with laws and regulations inlocations where the organization has a pres-ence. For example, in some countries trackingreligion is mandatory, while in others it is illegal.

Data security and data flow — Organizationsmust not only obey regulations with respect todata, but they must also be aware of how sen-sitive and important the security of personaldata is in most of the world.

Culture — Each country has a differing set ofcultural values apart from company culture.For example, some base their attitudes onlove/hate polarities, while others useapproval/disapproval. It is very important forsmooth global operations that HR under-stands discrepancies between country cultureand company culture and implements theappropriate processes.


Culture-based motivation — Incentive pro-grams for people of different cultures shouldpresent true incentives by offering valuedrewards. While pay for performance motivatesUS workers, in Germany title is motivational.In Japan, “the nail that sticks up gets ham-mered,” so individual performance is valuedless, while efforts toward achieving groupgoals receive stronger reinforcement.

To help an organization efficiently leverage theglobal workforce, HR must acknowledge thatone size does not fit all. While legal compli-ance is critical and can be greatly assisted bya global portal, the main focus is culturalawareness and sensitivity.

Incorporating Flexibility andAdaptability

For years companies have been moving awayfrom hierarchical, structured environmentsbecause they are neither effective for organiz-ing nor comfortable for employees. HR needsto mirror this movement by allowing employees— particularly managers — to be flexible,

adaptable, and nimble. For example, insteadof restricting a creative requisition that straysfrom an exact, predefined job description andsalary range, HR can allow for variances thatfit special circumstances.

Guidelines, rules, and benchmarks are impor-tant, but flexibility is even more critical,particularly where people are concerned.Collaboration with all constituents requiresadaptability. Organizations today are lessabout physical structure than logical structuresupported by technology.

Before doing anything else, HR must create aflexible environment where top prospectsseek to be employed. This is a place whereemployees look forward to coming to work,enjoy working while they’re there, feel theyplay an important role in the company, andwant to stay because the company is continuingto develop them and care about them.

In great companies today, HR ties in all theingredients for success and leverages tech-nology to capitalize on economic andorganizational change. Successfully turningHR challenges into opportunities to becomean employer of choice creates a dynamicplace where people want to work and chooseto remain. Efficiency, effectiveness, and mon-etary return are characteristic of the employerof choice in the 21st century. These lay thegroundwork for world-class HCM.


Row Henson has been instrumental in humanresources and human resource managementsystems for the past 30 years. For eight yearsshe served as vice president of HRMS GlobalProduct Strategy at PeopleSoft, advancing theflagship human resources product line. Afterretiring in July 2000, Ms. Henson became aPeopleSoft fellow and continues to provide

PeopleSoft with advice on its HRMS suite.Widely published, she is a frequent speaker atsuch HR associations as IHRIM, IQPC,SHRM, APA, The Conference Board, ASPM, andHR Technology. Ms. Henson can be reachedat [email protected] or via thecompany’s website at www.peoplesoft.com.


About the Author

1 Keith H. Hammonds, “5 Habits of HighlyReliable Organizations,” Fast Company,May 2002, p. 126.

2 Jac Fitz-enz, The Saratoga Institute,June 6, 2002.

3 “Cedar 2001 Human Resources SelfService/Portal Survey.”

4 “Web Self-Service Technology Begins toDeliver Results…,” Towers Perrin e-TrackSurvey press release, Towers Perrin,January 16, 2002.

5 “Cedar 2001 Human Resources SelfService/Portal Survey.”

6 “Watson Wyatt’s Human Capital Index:Human Capital as a Lead Indicator ofShareholder Value, 2001-2002 SurveyReport,” Watson Wyatt Worldwide, p. 9.

7 Nigel Rayner, Lee Geishecker, Gartner,“Corporate Performance Management:BI Collides with ERP,” December 2001.

8 META Group Inc., “WorkforceManagement Study,” 2001.

9 “Study Identifies Certain HR Practices as Leading Indicators of FinancialSuccess,” Watson Wyatt 1999-2001Human Capital Index Survey pressrelease, Watson Wyatt Worldwide,October 29, 2001.

10 “Watson Wyatt’s Human Capital Index:Human Capital as a Lead Indicator ofShareholder Value, 2001-2002 SurveyReport,” Watson Wyatt Worldwide.

11 “A Framework for the Management ofIntellectual Capital in the Health CareIndustry,” C.E. Grantham, L.D. Nicholsand M. Schonberner, Journal of HealthCare Finance, Vol. 23 no. 3, Summer 1997, page 1-20.

12 “Corporations of the Future,” McKinsey &Company Month by Month, August 1997.

13 H. Wayne Hodgins, “Into the Future:A Vision Paper, Commission onTechnology & Adult Learning”,February 2000, p. 13.

Submitted to IHRIM Journal, summer 2002

Footnotes

The content herein was originally published as a part of the Go-to-Guides Series of the International Association for Human Res ourceInformation Management (IHRIM) and is re-purposed by PeopleSoft with permission from the association.

5037-0503

an ihrim go-to guide - suny oswegofriedman/21century.pdf · hr in the 21st century: challenges and...

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