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Why HR Gets No Respect

By Liz Ryan On a panel at a leadership conference recently I was the last to speak -- just after the division president of a large manufacturer. "We've done a lot to turn the division around," the exec reported. "but we have a ways to go. I'm saddled with a weak human-resources group," she added. "They've slowed our key initiatives. That's the way it goes when you're dealing with HR, I guess."

The audience laughed weakly, while I tried to decide how to react. Since fuming doesn't become me, I just sat and waited for my turn. After the exec had done more HR bashing, the moderator asked for my views.

"My fellow panelist, like all leaders, has exactly the HR team she deserves," I said. The audience perked up -- controversy! "Can you imagine a division president complaining that she's been saddled with a weak sales force or a weak product team?" I went on. "She would never say that! She'd fire the team and start over! Leaders get the staffs they deserve, and HR groups are no exception."

THREE REASONS. Then I began to ponder: Why is it that HR is so often the scapegoat when companies aren't getting the results they want? True, there are HR people out there who are abysmally ineffectual. But they keep their jobs at the pleasure of CEOs. Why is that? As a veteran of 20 years in HR, let me offer three explanations.

Business leaders don't understand HR. Meaning, CEOs often don't know what results they should expect. This is odd because, for me, the HR role is as clear as day. Look at it this way: Your CFO is responsible for dollars in and dollars out, for short-term accounting and long-term financial leadership. It's his or her job to keep the company fiscally sound. Ditto for the HR leader, only substitute the words "talent" and "organizationally" for "dollars" and "fiscally."

You can tell that a lot of corporate leaders don't understand this just by observing how low their expectations are when they hire an HR leader. Browse and you'll see openings for vice-presidents of HR that don't mention vision or excellence or talent. Instead, they stress ERISA experience, 401(k) management, and succession planning. That would be like advertising for a chief financial officer who was an expert in general ledger accounting and accounts receivable. Earth to CEOs: Do you want a visionary HR leader or a functional specialist?

Top execs often undervalue the HR leadership role. I've noticed that many of the companies that display their leaders' bios on the About Us page of their Web sites leave out the HR leader. Should it bother anyone that many companies have a vice-president of sales, a vice-president of marketing, a CFO, CIO, and a vice-president of operations, but only a lowly director of HR? Or that many top-level HR leaders report to the CFO or general counsel rather than to the CEO?

Here's the thing: You can't say that people make your organization what it is and then discount the human-resources function.

Reporting structures send a signal. If HR reports to the CEO, then the company may be serious when it brags that "people are our most important asset." Stick it under legal or finance, and the implication is: "We were only kidding when we said that our people set us apart from our competitors."

A company that is serious about developing its people will make its top HR post an executive team position. And it will find a business person with world-class qualifications to put there.

I have this advice for anyone who interviews for the top HR spot: When the conversation turns to your compensation, say: "I will require the same compensation as your CFO." Of course, as HR leader you'll be privy to this information, so there's no fooling you. Why would a company hesitate to pay its top people officer just what its top money officer is earning? Beats me -- unless the company doesn't value its people as much as it says it does.

VICIOUS CIRCLE. I'm a zealot for HR, but let's be honest, many HR leaders don't exactly burn the house down. Notwithstanding some wonderful counterexamples, the level of HR leadership in many companies falls short of what it might be, could be, and should be. Inspired and inspiring leaders aren't as often drawn to HR as one would wish -- or they're drawn to it early in their careers before being hired away for more rewarding assignments.

It's a vicious circle: HR doesn't pay what it should, so good people leave, and brilliant candidates aren't attracted to the field, so HR doesn't pay what it should, and so on.

Any CEO can snap her fingers and break that cycle, however. To do so only requires a relentless determination to find a creative, fearless, and business-savvy HR leader. Pay this person appropriately, demand that he produce results -- meaning, assemble a championship team both for now and the future -- and stand back.

SCAPEGOAT CENTRAL. With the business world changing so quickly, what competitive advantage can an organization hope to build and sustain beyond the abilities of its people? Surely not its equipment, its methods, or even a financial advantage. You have to have the team that can win -- well equipped, smartly led, and highly motivated -- if you want to get ahead of the pack and stay there. If, by contrast, it's important to you to save a few bucks on your coaching staff payroll, you had better get comfortable in the minor leagues.

As I told my fellow panelist, "If your HR team is an impediment, upgrade. When you decide that you're serious about the results you want, you'll do that. In the meantime, a weak HR group is a great excuse for things that don't go the way you want."

Could this be another reason for the mediocrity of HR leadership in U.S. organizations -- that when things go wrong, it's always nice to have someone around to blame? Do you have any great business leadership tips to share with BusinessWeek Online's readers? Send them to Liz Ryan, an at-work expert, speaker, and writer, and CEO of online networking organization WorldWIT

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