How to retreat to progress on people management and performance

5 Jun 2019

Duncan Brown

Duncan Brown, Head of HR Consultancy

Leaders of people management in organisations have always faced contradictions and challenges. As we heard at the IES HR Directors’ Retreat in Brighton last month, the current political and economic uncertainty is presenting plenty of both at the moment.

The Retreat is IES’ annual event where we take HR leaders from our research network - from organisations this year ranging from Fairtrade to the Foreign Office, Clarion Housing Group and Hymans Robertson to the National Church Institutions and Sussex Police. We prise them away from their offices and mobile phones for 24 hours, share challenges and insights and facilitate some much-needed confidential and collective reflection and planning. By bringing together thought leaders and prominent practitioners, the Retreat is an important forum for IES to practice our own mission of putting research into practice.

We discussed severe skill shortages in the context of continuing cash constraints; the much greater need for strategic and workforce planning, just when this Brexit-frazzled context makes accurate forecasting well-nigh impossible; and an increased emphasis in all of their HRM strategies on employee wellbeing and engagement, at a time of escalating levels of reported stress and mental ill health, at the end of the worst decade on take-home pay for more than two centuries.

Our study in partnership with CIPD on the past, present and future of Strategic Human Resource Management acted as the main research input for this year’s meeting, including a comprehensive literature review and case study research in four employers. The research highlights a number of these key HR tensions and balances that were illustrated in the meeting, for example between HR’s longer-term thinking and short-term actions; between our policy intentions and their practical implementation; and in balancing the various different stakeholder interests.

As our literature review notes, ten years ago IES visiting fellow Professor Mick Marchington questioned the future for the ‘heart and the soul of people management’ at the start of a decade of austerity and growing inequality. Over that period, Tony Dundon and Anthony Rafferty claimed in the HRM Journal last year, the ‘function of HR often became little more than an administrative minder for investors who demand added value… relegating the interests of other important stakeholders’. They particularly highlighted employees, who they believe have suffered real pay and pension cuts, zero hours contracts and other cost-reducing measures as a result.

People before strategy (and shareholders)

Well, there was certainly plenty of ‘heart and soul’ evident in Brighton. Perhaps most importantly we discussed the need for achieving the balance, highlighted in our research, between what professor David Guest referred to 30 years ago as the ‘soft’ and the ‘hard’ dimensions of HRM. This tension was perhaps first evident when the largely female Welfare Workers’ Association (WWA) (the original forerunner of the CIPD as we know it today) founded in 1913, was effectively taken over by the largely male exponents of scientific management and labour relations and discipline, to become the Institute of Labour Management in 1931.

The popular reassertion of the humanistic side of the equation by CIPD in its recently revisited purpose and mission, which is ‘to champion better work and working lives by improving practices in people and organisation development for the benefit of individuals, the economy and society’; alongside a continuing drive on evidence-based practice and HR analytics by all of those employers present, was very much supported and illustrated at the Retreat.

This was highlighted by the common switch in terminology evident in these employers from HR to people management plans, and the strong focus in these strategies on employee wellbeing and engagement. This, for example, is one of the six core pillars of the people strategy at research case study The London School of Economics, as speaker Director of Human Resources Indi Seehra described to the meeting in his excellent presentation.

There is a particular focus at LSE on mental health and IES fellow Dame Carol Black followed Indi with a raft of evidence making the business case for investing in employee health and wellbeing. She also highlighted the ‘critical and integral’ role that the HR function is playing in driving this in major employers such as the NHS, where Dame Carol is acting as an expert adviser to CEO Simon Stevens. As he describes it, ‘NHS England employees need to be healthy and fully engaged in their work towards improved patient outcomes’. And as she satirised it, this cannot be achieved through the superficial approach of ‘Pilates classes and free fruit’ which characterises too many organisations.

Improving performance was also, not surprisingly, much discussed. Kings College professor and IES board member David Guest had opened the meeting with a masterly overview of HR’s evolution and he summarised the compelling research evidence on the positive impact of strategic Human Resource Management. David was one of the first UK academics to define and research SHRM when the concept first arrived here from the US in the 1980s. And while he highlighted the wealth of evidence on associations between HRM and organisational performance, he emphasised that those associations can only be realised in an organisation through a positive employment relationship founded on high employee motivation and employee engagement. David also described the importance of HR avoiding fads and fashions and adopting a more evidence-based approach based on high consensus, high distinctiveness and high consistency. Again, that ‘soft’ / ‘hard’ balance.

It was a theme at the centre of much of our discussion and developed further by our final speaker, the always-effervescent Nita Clarke, Director of the IPA. Ten years after her co-authored and highly influential Engaging for Success report for the government (which included a review of the evidence on the links between engagement and performance that she commissioned IES to undertake), she highlighted that reviving employee engagement will be critical to addressing our national productivity problems.

In the current pressurised climate, Nita described that many employers face a stark choice between a future based on an organisational and management model of pressure, control and supervision; or a more sustainable one based on people, which inspires, respects and trusts them to high performance. Nita regards this pressure as a tremendous opportunity for HR professionals to ‘step up to the plate’ to lead on the latter approach; and to provide leaders with the evidence and the tools to deliver the enablers of employee engagement and thereby high performance.

As she memorably put it, ‘you can’t ‘lipstick on’ an employee engagement approach’, it has to be authentic and genuinely rooted in these enabling HR and OD policies and effective line management practices that employees experience every day at work.

Progressing on HR, people and performance

In a function rarely characterised by optimistic self-confidence, ever since Peter Drucker famously questioned 60 years ago the then personnel departments ‘constant, fruitless search for place and purpose’, the overwhelming sensation we all came away with from this year’s HR Directors’ Retreat was one of positive progress, impact and optimism for the function’s future, rather than Brexit-style stalemate, bureaucracy and nostalgic navel-gazing.

Professor Guest ended his presentation with a plea for HR leaders to ‘be braver in proposing (and pursuing) a new employment relationship, prioritising well-being as the route to performance’. Many HR leaders are already convinced and progressing in that direction, if our Retreat participants are anything to go by, and we all came always with lots more ideas and examples to help us progress further on that path.

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Any views expressed are those of the author and not necessarily those of the Institute as a whole.