Human Resources Management— Who Needs It?
Although I’ve been trying to preach the gospel for years now, most principals of A/E/P and environmental consulting firms still do not understand what human resources management is all about.
First, there’s the way so many principals use the terms “human relations” and “human resources” interchangeably. Rightly or wrongly, this has always irritated me.
Advocates of the Human Relations School of Management believe that the better you treat people, the more productive they’ll be. On the surface, common sense dictates that contented employees with high morale will work harder, and terribly unhappy staff members won’t perform at their peak productivity. However, behavioral experiments going back as far as the Hawthorne Studies in 1927 have never been able to conclusively show a direct relationship between contentment and job performance. In fact, the more you study the whole topic of job performance and motivation, the easier it is to conclude that it is only dissatisfaction— and the resulting desire to change things— which motivates people.
On the other hand, advocates of the Human Resources School of Management see it as their obligation to maximize the productivity of their firm’s human resources. They do this through paying lots of attention to recruitment and reward strategies, streamlining decision making and eliminating bureaucracy wherever possible, and dealing with non-performers mercilessly. Human Resources Managers do not subordinate the organization’s goals to those of the individuals working in the organization. They still see the organization as a family, but they see the needs of the overall family as more important than those of any one family member.
The problem is that Human Relations Managers are constantly developing more giveaway programs that increase overhead and do nothing for productivity. They design compensation systems (such as across-the-board salary adjustments) that reward low performers at the expense of high performers.
That brings us to the second reason that Human Resources Management is not embraced by the professions. Too many A/E/P and environmental consulting firms have human resource directors or managers who think Human Relations. The core beliefs of the Human Resources Management School, particularly that of culling non-performers, make these people entirely uncomfortable. Most went into the “personnel” field (what it used to be called) because they were interested in people, not business. As a result, they have no credibility and neither does their discipline.
Third, very few A/E or environmental firms keep the performance statistics that show how effective (or ineffective) their human resources management efforts are. Most track turnover, but very little else.
They don’t know what their average cost per hire is. They don’t know exactly how much money they, as a company, are spending on outside employment agency fees and employment advertising (all advertising expenditures are frequently lumped together). They don’t know how much they spend on relocation. They don’t know how much they spend on interviewing costs, particularly in the form of non-billable time. They don’t know the total dollar cost of all overtime expenditures, and what percentage of that time is truly recovered from clients (i.e., not worked on fixed fee jobs where the budget is already busted).
Because there are no historical and current data comparisons, the human resources manager or director has nothing that shows a clear track record of accomplishment. Once again, this leads firm principals to ask the question (even if not out loud): “Who needs human resources management?” They tend to see it as “icing on the cake,” something that in times of cost cutting can be trimmed from the firm’s operating budget, just like a project’s landscaping budget might be cut.
The bottom line is that Human Resources management is a very critical area in a design or environmental firm— every bit as important as any other functional area of the business. But if it is to have the credibility it deserves, human resources managers and directors must first shed their ties to the Human Relations school of management. They must realize that they’re part of a business— one that needs to make a profit— and that the ownership is scrutinizing them every minute of the day. To be able to stand up to this kind of scrutiny, they’ll need facts and figures to justify their existence. Then— and only then— will human resources management become a widely respected, integral part of the business.
Originally published 8/01/1992