HR GOVERNANCE:

From Business Partner to HR Governor

Marius Meyer

20 September 2013, ZIHRM

@SABPP1

New SABPP Model: HR Voice for

Professionals

Human resource development

Research - info

Value & visibility

Open for alliances

Innovation

CPD

Excel-lence

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ment

Knowledge

Self-governance Duty to society

Ethics

SABPP VALUE PROPOSITION:

Products/Services to advance HR professionRECOGNITION =

PROFESSIONAL STATUSRESOURCES =

PRODUCTS/SERVICESRESEARCH =

INFORMATION

• Professional registration• NLRD Upload (SAQA)• RPL• Awards• Advocacy• HR Assessors/Moderators

registration• Accreditation of providers• University accreditation

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• Research papers• Position papers• Books• Articles• Cases• Benchmarking• Magazines• Labour market

information

Professional registration levels

• M/D degree + 6 years top level experience

• LoW = executive levelMHRP

(Master)

CHRP

(Chartered)

• Degree/ND + 3 years experience

• LoW = middle managementHRP (Professional)

HRA (Associate)

• Certificate + 1 year experience

• LoW = entryHRT (Technician)

• Hons degree + 4 years sr experience

• LoW = senior management

• 2 year dip + 2 years experience

• LoW = junior level

A G E N D A

• The emerging field of HR governance:

Balancing people GRC for business

sustainability

• The transition from HR business partner to

HR Governor

• Key dimensions of HR governance

• Applying robust HR risk management

• Balancing performance and compliance

• HR’s contribution to a sustainable business

This financial crisis is forcing government and local agencies to make some tough decisions.

If things continue for much longer, there's a real risk that we may have to lay off Jose.

HR AS BUSINESS PARTNERS?

ROLE OF HR IN ORGANISATIONS

FLAWS OF BUSINESS PARTNER

MODEL

• Why partner with the business if we are part of

the business?

• Why HR, what about IT, marketing etc?

• Underlying assumption that business is right &

HR is wrong.

• Line management view that performance is

more important than compliance.

• Line taking short cuts to side-step laws, HR

policy & procedures, e.g. selection.

• Line seen as most important stakeholder, what

about other stakeholders?

HR-LINE INCONGRUENCE

LINE SHOULD BECOME HR

PARTNERS

• Turning the business partner model around – line

should become HR partners!

• Balancing the needs of multiple stakeholders (not

only line)

• HR as innovators, social activists & stakeholder

partners - sustainability

• High performance organisation culture

• HR driving business strategy

• HR’s role as governors – custodians of people

SOUTH AFRICAN HR COMPETENCY MODEL

STRATEGY

TALENT MANAGEMENT

HR GOVERNANCE, RISK, COMPLIANCE

ANALYTICS & MEASUREMENT

HR SERVICE DELIVERY

5 HR

CAPABILITIES

LEADERSHIP & PERSONAL CREDIBILITY

ORGANISATIONAL CAPABILITY

SOLUTION CREATION & IMPLEMENTATION

INTERPERSONAL & COMMUNICATION

CITIZENSHIP FOR FUTURE: INNOVATION, TECHNOLOGY, SUSTAINABILITY

CO

RE

CO

MP

ET

EN

CIE

S

HR & BUSINESS KNOWLEDGE

DUTY TO SOCIETY

ET

HIC

S

PR

OF

ES

SIO

NA

LIS

M

4

PILLARS

Comfort zone challenged

Why a national HR Standard?

• We need to improve the quality of HR

practice.

• HR will not be seen as a true profession

without standards.

• Inconsistencies – practices, sites, business

units, companies, industries.

• Too many bad examples of things going

wrong – Marikana, De Doorns, Medupi.

• Raising the bar for the HR profession and

business impact.

Operational Management Consistency in the

Management of People

One of the toughest things to be is consistent

HR Standards Facilitators

Kate Dikgale-Freeman Michael Robbins Linda Chipunza

468 HR Leaders developing

HR Standards for South Africa

BUSINESS STRATEGY – HR BUSINESS ALIGNMENT

StrategicHRM

TalentManagement

HR RiskManagement

HR ARCHITECTURE

I

HR VALUE & DELIVERY PLATFORM

Work-force

planning

Learning&

Deve-lopment

Perfor-manceMana-

gement

RewardWell-ness

ERM OD

HR Service Delivery

HR Technology(HRIS)

Prepare

Imple-ment

Review ImproveHR MEASUREMENTHR Audit: Standards & Metrics

H R

C O

M P

E T E N C

I E SSABPP HRM SYSTEM STANDARDS MODEL

National HR Governance Strategy Alignment

HR Professional Standards:• HRMS (13)• HRMSAS (13)• HRPPS (30+)

HR Products/Services:• CPD• Mentoring• Professional registration• Research• HR Academy • Curriculum standards

HR Metrics:• National HR Scorecard• HR Service Standards

HR Auditing:• Internal Audit• External Audit

King IV:HR Governance

ISO: HR

IntegratedReporting

HR Competencies

POSITIONING GRC IN

COMPANIES

GOVER-NANCE

RISKCOM-

PLIANCE

LEADERSHIP

MANAGEMENT

CU

LTUR

E

CO

NTR

OLS

Triple bottom-line: 3 P’s

PEOPLE(Social)

PLANET(Environment)

PROFITS(Financial

performance)

S U S T A I N A B I L I T Y

THE GREEN REVOLUTION

HR governance defined:

is the act of leading, directing & controlling the HR function to promote sound corporate governance in pursuit of the overall business goal of economic, social & environmental sustainability

“Good human resource management is imperative for good governance”

Mervin King

Evolution to HR governance

HRLeader

(business partner)

HRGovernor

HRManager

HRRegulator

P

e

r

f

o

r

m

a

n

c

e

High

Low

C o m p l i a n c e HighLow

PERFORMANCE VS

COMPLIANCE

Source: Kevin Carter

“People and behaviour are often the biggest

risks”

• Critical to include people risks in a company’s risk management plan

• HR need to be the eyes & ears for people-related governance & compliance

What happens if we don’t manage risk:

A public sector case study

181 babies died in state hospitals.

Human errors, faulty equipment & cover-up by senior medical staff were key factors.

Infection-control nurse retired, and her post not filled.

Critical shortage of nurses & clinical engineers who are responsible for maintaining ventilators.

Senior doctors presented inaccurate stats to their bosses to cover up poor management practices.

Doctors failed to alert DoH to the crisis, even though a few nurses had raised the alarm to management.

What happens if we don’t manage risk:

A public sector case study

STAFF COMPLAINTS:

Shortage of nurses, leading to overworked staff being vulnerable to human error.

High baby-to-nurse ratio – babies not getting adequate care and attention.

Specialist doctors consult junior doctors on the phone without personally accessing high-risk cases.

Inadequate training for medical staff.

30 May 2010

Risk / Readiness Profile

HR risks – people risk, governance

and compliance

PEOPLE RISKS IN THE

BUSINESS• People risk includes: company culture, talent

shortages & retention, incompetence, employee

performance

• HR risks

need to be factored into

every major business

decision

H R R I S K S (8 African countries)

• Safety - accidents

• Skills shortages/gaps

• Incompetence

• Employee disengagement

• Strikes & poor employment relationships

• Fraud/corruption

• Stress

• HIV/AIDS

• Staff turnover

• Low staff satisfaction –impact on customer satisfaction

• Cyber security

• Conflict/disputes

• Diversity problems

• Sexual harassment

• Expatriate issues

• Non-compliance

Identity Fraud

Workplace behaviour

OOPs !! What if ? the pilots had not read the Instruction book

What if ? The ground staff didn't think that

house keeping was an important issue

Who insured it and will they pay ??

HR role

HR’s role is to guide and develop policies and ensure that managers have a clear understanding of their responsibilities. This applies in respect of, for example, health and safety; fair employment practices; recruitment and terminations; diversity and the avoidance of discriminatory behaviour.

HR should participate at all levels in managing risks within the company and contribute to ensuring ‘joined-up thinking’ between different business functions.

HR should be represented at executive level and on specialist company-wide committees – for example, on the implementation of the Corporate Governance (King 3) requirements.

HR RISK MANAGEMENT

STANDARD

DEFINITION

HR Risk Management is a systematic

approach of identifying and addressing people

factors (uncertainties and opportunities) that

can either have a positive or negative effect

on the realisation of the objectives of an

organisation.

SABPP (2013)

HR Risk Management

OBJECTIVES

3.2.1 To increase the probability and impact of positive events and decrease the

probability and impact of negative events caused by people factors on the

achievement of organisational objectives.

3.2.2 To align HR and people management practices within the governance, risk

and compliance framework and integrated reporting model of the organisation.

3.2.3 To ensure appropriate risk assessment practices and procedures relating to

people factors are embedded within the organisation.

3.2.4 To ensure appropriate risk controls are designed and applied to HR activities

and interventions.

3.2.5 To contribute in creating and sustaining a risk culture in an organisation

which also encourages innovation and creativity.

SABPP (2013)

HR Risk Management

IMPLEMENTATION

3.3.1 Position the role of HR in influencing and communicating the organisational risk

culture.

3.3.2 Asses potential positive and negative people factor risk to achieving organisational

objectives.

3.3.3 Identify and evaluate the potential risk impacts with regards to strategic and

operational HR activities.

3.3.4 Decide on appropriate risk tolerances for the different components of the HR function.

3.3.5 Design and implement appropriate people-based risk management systems, metrics,

risk controls, and HR practices which will contribute to mitigate the potential risk.

3.3.6 Ensure all HR risk practices conform to the organisational governance, risk and

compliance strategies and policies including integrated reporting.

SABPP (2013)

RISK Reporting

RATING SCALE TO ASSESS HR

PROBLEMATIC MEDIOCRE EXCELLENT

High Risk Medium Risk Low/no Risk

HR practice is non-existent, has a low uptake or is applied poorly. Little, no or poor results are evident. Requires urgent attention to move to medium risk over short or medium term.

Some pockets of excellence, but they are isolated, and applied inconsistently in certain parts of company. Some occasional positive results comparable to typical average HR standards. Should be addressed before it becomes problematic.

HR leading practice is well infused, aligned and integra-ted across the company and applied consistently with clear results. Comparable to world-class standards. Should be maintained, reinforced or used as a model for other companies.

Business sustainability

Key phases for HR Governance

• Transform HR management to HR governance

by taking full responsibility for GRC in the HR

space, but with a clear link to overall GRC and

business strategy

• Identify all stakeholders and engage with them

• Form new relationships – CRO & CAE

• Design and implement a robust HR risk

management plan

• Ensure HR features in integrated reporting

• HR Professionalism – competencies &

standards

HOW TO MAKE IT WORK

• Understand the business & strategy

• Align HR strategy with business strategy

• Work on business & financial acumen

• Building sound relationships

• Regular open communication

• Use the language of business, not HR jargon

• Invite line people to HR meetings

• Start HR meetings with business strategy

• Invite yourself to line meetings!

• Proper HR analytics & metrics for business

Gap between strategy and

execution

ELIMINATING THE OBSTACLES

• Develop a clear business partner philosophy &

model for your organisation

• Break down the silos within HR, before you try

to break down the gap between HR and line

• Create a people-driven culture

• Build high level HR competence

• Develop line managers as people managers –

leaders

• Get line to understand risk & governance

6 CRITICAL QUESTIONS

No Key Questions

1 Have you identified all your stakeholders?

2 Do you have a plan for implementing HR GRC?

3 What is the role of HR enabling GRC in your organisation?

4 Have you identified all the HR risks in the business?

5 Do you have an HR governance framework?

6 If you are assessed today, will you meet the requirements of a GRC compliance audit?

SUSTAINABLE PERFORMANCE

“Whether a company sustains exceptional performance depends first and foremost on whether it continues to

have the right people in power.”

GRC ROLE OF CHRO

“Governance, risk & compliance provides a

perfect opportunity for Chief HR Officers &

HR organisations to move beyond their

traditional administrative role & earn a seat

at the strategy table - providing HR with a

level of credibility & respect that’s long

overdue.”

CONCLUSION

Yes, HR should be strategic business partners, but

that means that we really address the needs of the

business without compromising our professional

duty of sound HR governance. If we can improve on

our HR performance and gain true credibility as

strategic HR champions, the challenge will be to

ensure that line managers become HR partners.

We should also become HR governors overseeing

HR as a key resource.

Best wishes with your HR work in Zambia!

Let us build world-class HR functions

professional@sabpp.co.za (Professional Registration)

sithembele@sabpp.co.za (Professional Services)

kenneth@sabpp.co.za (Stakeholder Relations)

penny@sabpp.co.za (Research)

naren@sabpp.co.za (Learning & Quality)

marius@sabpp.co.za (Strategy inputs)

voice@sabpp.co.za (Social media)

Website : www.sabpp.co.za Blog: hrtoday.me

New office: 8 Sherborne Str, Parktown, South Africa

Tel: +27 11 482-8595 Fax: +27 11 482-4830

Cel: 082 859 3593 (Marius Meyer)