Tranformative HR: How Integration & Synergy Can Work Within HR

By John W. Boudreau and Ravin Jesuthasan

The first level of the principle of integration and synergy exists within the HR function, and the focus is on how the elements of HR can work together. The easiest way to recognize integration is to look for where it is missing.

For example, if an organization provides outstanding training in customer service to 100 people just before laying off 50 of them, then clearly that was not a good investment. If recruiting goes to great lengths to source and select individual high achievers while the performance-management system is rewarding teamwork, then there will be higher turnover and poor performance.

If the reward system pays well above the market average to attract top performers, that money will be wasted if recruiting minimizes cost-of-hire and time-to-fill by cutting corners on selection and onboarding in such a way that average performers are brought in.

A misstep that Starbucks quickly corrected

A famous case of negative synergy occurred when Starbucks introduced a program to reduce theft by employees. The coffee-house chain decided to remove the pockets from baristas’ aprons, which could make it all too easy for a barista to pocket a few dollars that should have gone into the till.

We can readily imagine the argument that was made for this program, and how reasonable it sounded. Unfortunately, however, this effort was completely at odds with the Starbucks employment brand, which emphasized treating baristas as valued talent. The theft-reduction program was fine, and the employment brand was fine, but together they were in conflict, and the net result was negative synergy.

Starbucks, realizing that its employment brand mattered more than any potential loss due to theft, reinstated the pockets. It is important to recognize that the same theft-reduction program might make sense in a different company with a different employment brand. The issue is not that it was a dumb idea but that it was at odds with an important part of Starbucks’ HR strategy.

Another example of lack of synergy can be seen in professional services firms. In most consulting firms, consultants’ performance appraisals are based on an annual review by their boss. This may seem completely uncontroversial; if you look at the job design, however, you will see that consulting work is based on client engagements, not on an annual cycle.

Furthermore, the design of the organization calls for the consultant to report to the project leader for the duration of a particular client engagement, and so the boss responsible for the annual appraisal does not direct or observe the consultant’s day-to-day work. In the absence of some sort of review after each engagement, the performance appraisal feels disconnected from the consultant’s work.

Here, again, there is nothing wrong with annual appraisals, and there is nothing wrong with designing work around client engagements, but if the work design and the appraisal system are not integrated, they end up creating negative synergy.

Encouraging programs that synergize with HR

HR leaders can do a number of things to promote synergy and integration.

One is to avoid encouraging the out-of-context creation of world-class training programs, sourcing projects, or diversity initiatives. The more savvy HR leader will encourage programs that synergize with everything else HR is doing. If an enthusiastic but narrowly focused program designer created an award-winning mentorship program, how would an organization that values synergy receive it?

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If the mentorship program did not sync well with the organization’s management development process, the program would get a thumbs-down. The individual excellence of a program is not as important as what it adds to or subtracts from the total equation. Clearly, careful analysis and communication are needed to keep program designers motivated but also synergistic.

A useful way for an HR leader to examine integration and synergy in the HR function is to array the functional elements of the talent lifecycle (attract, select, orient, develop, deploy, assess, reward, and so on) and ask, “Do these separate elements of our deliverables work well together?”

One can imagine mapping combinations of these elements against ratings of how well they work individually and how well they integrate (or how much they fail to integrate) with each other function. Examining how different HR functions work together and communicate is another way to approach HR integration.

More than just a nice-sounding concept

Synergy is not just a nice-sounding concept; it can be measured. For example, a study by Towers Watson showed a wide range of talent-management programs that were significantly more effective when they were linked to a globally consistent, broad-based job-leveling architecture. Leveling is worthwhile on its own, but synergistic effects show up when many elements of talent management are linked to it.

There is an even higher plane of thinking that we sometimes see when an HR leader promotes universal themes that keep everyone in HR, and even beyond HR, pointed in the same direction.

For example, in an organization that values diversity, someone designing a coaching program will not need to be directed to ensure that his or her work dovetails with the organizational focus on diversity. That focus will naturally be a  design consideration because the theme of diversity has been so deeply woven into the HR mind-set.

Reprinted from Transformative HRby John Boudreau and Ravin Jesuthasan. Published by Jossey Bass, A Division of John Wiley & Sons, Inc. by permission of the publisher. Copyright 2011. All rights reserved.

John Boudreau is professor of Management and Organization at the Marshall School of Business and research director, Center for Effective Organizations, at University of Southern California. He is author of over 60 publications and is featured in Harvard Business Review, The Wall Street Journal, Fortune, and BusinessWeek. Ravin Jesuthasan, CFA, is managing director and Global Practice Leader for Towers Watson's Talent Management Practice. He was recognized as one of the Top 25 most influential consultants in the world and has been featured extensively in CNN, CNBC, The Wall Street Journal, BusinessWeek, and Fortune.

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