A Balanced Approach To Human Resources!
April 13, 2020 | By Beth N. Carvin
Employee Harry comes to you the HR Manager in need of a reference. Harry is not leaving the company. He is interested in joining the Board of Director's of his autistic son's school. The Chairwoman of the board has asked Harry for a letter of reference to verify his employment and his work performance.
Harry's performance has been excellent but he has only been with the company for 6 months. Harry says that his boss told him he would be happy to write the letter but company policy forbids him from doing anything other than verifying dates of employment. Harry has come to you in hopes that the company will be flexible enough to help him with this letter.
As the HR Manger, what thoughts go through your head?
- Company Policy
- Setting a precedent
- Having to write references for everyone
- The possibility that Harry's performance might deteriorate
- The ramifications if Harry performs poorly on the school's board after a positive reference from the company
If the HR Manger denies Harry's request some of the consequences might include:
- Creating a sense that the company does not care about employees
- Negative gossip around the water cooler about how the company wouldn't help with a simple request
- Enforcing/defining a company culture where employees feel they are not part of a family atmosphere
- Reinforcing the perception of HR as the police cop
- Allowing HR to be the scapegoat for why managers can't do helpful things for employees
- Projecting to the employees that the company is more interested in protecting themselves than helping employees
- Feeling that the company is mean, insensitive or overly cautious.
So how does an HR professional balance her risk management responsibilities with her goals of creating a positive company culture? First HR must recognize that policies are guidelines not hard and fast laws. HR must understand the kind of culture that the Executive Management team is looking to foster. HR should weigh risks and rewards of acting and not acting. Finally HR should seek out ways they can say "YES!" to actions and requests rather than jump into the protective "No".
Policies are GuidelinesBecause Human Resources is so involved with the creation of company policies, they are more apt to strictly enforce absolute compliance. The policies are designed to be fair to all employees and to keep the company out of legal hot water. Both are worthwhile goals. The problem with strict compliance though is that employees are humans and humans encounter situations that aren't so black and white as to fit neatly into a policy statement. It is these gray areas that require thought, good judgement, common sense and reasonable risk management assessment.
CEO & The Company CulturePick up any business periodical and you will read about successful CEOs creating employee friendly work environments. Contrast that with the Human Resource department's actions. The greatest mistaken assumption in Human Resources is that when HR strictly enforces policy they are acting in accordance with the CEO's wishes. If it is pointed out that the CEO is generous, kind hearted and flexible with employees, the mistaken HR Manager proclaims that it is his job to protect the CEO from himself.
Many CEOs would be appalled if they knew how their HR departments were protecting them. If you don't believe this, sit down with your company's CEO and ask him. It is a good idea to get a clear understanding of the kind of company culture your leader would like for the organization. It is HR's job to make decisions that perpetuate this vision.
Taylor Burke, the head of Burke and Herbert bank from 1963-1992, told his employees, "We want you to be always polite, but there is no law which says that you have to open accounts for obvious dingbats or paperhangers... You have my permission to make up rules on the spot. Just tell me what you've done so I can field the irate phone call." Obviously this is the extreme but HR practitioners might be surprised to find out that their Chief is closer in thought to Mr. Burke than they expect. CEOs tend to be more flexible and risk tolerant than HR gives them credit for.
Risk AssessmentIf Human Resource practitioners work with these gray areas, they must become skilled at weighing risks and rewards. When an HR associate thinks about risk, it's not uncommon to focus solely on tangible litigation risks. Litigation risks are extremely important and the HR Manager must take his risk management role seriously. But it is important not to become blinded by risks. One must remember that because there is a risk of something bad happening, it doesn't mean that it is going to happen. The chance that the negative outcome will occur must be considered along with the pros and cons associated with each possible course of action.
CEOs are good at determining when to take a risk and when to play it safe because they have to deal with gray-area issues every day. For example, the CEO might have to make the decision about partnering with a potential competitor. If the CEO agrees to the partnership, she risks opening up confidential information to a competitor. If she doesn't agree to the partnership she risks losing potential growth for the business. In this example, the CEO must look at not only the pros and cons of each possible action but also the chances of success or failure.
The HR practitioner needs to develop these very same skills. He must learn to not only assess risks but also to weigh the probability of these risks. Should you allow Harry's boss to write a letter of reference for Harry and risk potential litigation or should you stick firm with company policy and risk letting the news of the company's lack of charity toward Harry infect company culture and morale?
They key to assessing risk is to consider:
- What are the options?
- What are the risks associated with each option?
- What are the rewards associated with each option?
- What are the chances that the risk will be realized?
- What are the chances that the rewards will be realized?
- How severe is the risk if realized?
- How great are the rewards if realized?