Transition from Transactional to Transformational Human Resources

10 mins read

This Article Discusses how the job of HR has developed over the years, from its start as transactional HR to its evolving role as transformational HR.

Historically, Human Resources (HR) was merely focused on “transactional” activities like recruitment, payroll, acting as the company’s conduit for enforcing policies, and protecting the company’s best interest. Due to the picture that has been painted throughout modern history, HR professionals became an entity in the workplace that people do not want to involve in business matters.

The idea of dealing with the HR professionals appears daunting to numerous leaders and employees, often leading companies to under-develop, neglect, or absolve the department.

When I asked leaders about their hesitancy to involve HR, the recurring belief was that it would cause unnecessary red tape or bureaucracy. One leader mentioned, “If the goal isn’t to document and build a case against an employee, then why would you involve HR?”

Perspectives like this commonly develop from past experiences and could be inherited by future generations. To pinpoint a time in history and say “this is the exact moment” would be unreasonable. However, a common theory is that it dates to a time where social issues were scarcely mentioned, and complaints were “swept under the rug”. This type of environment has been coined as “old school mentality” where it is better to keep your head down and keep your job.

The start of the ’60s was the beginning of anti-discriminatory laws, when controversial social issues were starting to be publicly discussed, which accelerated changes in the world. As business compliance and legal issues continued to rise, HR professionals remained unable to handle human-related matters due to lack of understanding and training. Their primary focus was to protect the company from lawsuits and only become involved when directed which set a precedence on how employees perceive HR professionals and the department today.

After consulting with leaders, managers revealed that due to past experiences they may have inadvertently cultivated HR in a negative light to their employees. Perceptions like “HR is the department that everyone needs to work around” or “they are not objective and fair” is a stigma that has been inherited and built on.

In 2018, Team Blind conducted a study that revealed that more than 70% of employees surveyed believed that HR is not their friend.

After interviewing employees, one explained, “HR feels like it was put in place to address employee concerns, but it mostly acts as a shield for the company.”

Another stated that, “HR is there to document complaints, writeups, disciplinary actions, etc.… sitting in meetings and terminations as an ‘objective third party’ so that the company can check boxes and avoid having these types of issues turned around on them.”

We are at a pivotal moment in history where change is needed. We live in a society that speaks out about unjust behaviour and as leaders in the workplace, we set the tone for how employees behave. A behavioural psychologist once told me, “You have a choice with how you view and treat other people. If you do not understand, seek understanding.”

This is an opportunity for leaders to make a positive change and work with HR to end this stigma, as this department (contrary to belief) is not a static discipline. As the world has evolved, so has human resources.

Please take a moment; step back and reflect on when you entered the workforce. Are you the same person you were then, or have you matured? Is your profession the same as it was when you started, or has it changed? Chances are, there has been some personal and professional maturity and development. Take this exercise now and apply it to how you perceive human resources. How do you think human resources changed throughout the years?

Due to advancements in people analytics, research, respect, skills, and federal intervention, the focus of HR activities has changed substantially. Professionals in this field now need to be adept to human behaviour, data interpretation, and solving problems as strategic business partners.

One leader mentioned, “I am not averse to having HR involved, just curious as to what the benefit would be?”

In the past, HR was seldomly involved in strategic business planning and yet it has become an established fact that employees are a critical asset to the company. Having HR involved in strategic business planning helps keep the employees interests in mind with future thinking.

A company’s ideas are brought to life when its leaders recognize that their success revolves around the employees.

    1. Without employees, there would be no products or services to sell;
    2. Without products or services, there would be no revenue generated;
    3. Without revenue, the company is just an idea and no management team is needed.

Companies must now give top priority to correct planning and execution. Gone are the days that employees stick around at a company with an “old school” mentality.

Ruth Mayhew wrote an article on The Impact of Dissatisfied Employees and uncovered that unsatisfied employees are less likely to be productive, which can affect revenue.

The phrase “happy wife, happy life” can be applied when evaluating employee productivity and company success. Since today’s business world is multigenerational, leaders are now going to face different opinions and should understand that the status quo is going to be challenged.

As leaders, you have an asset in HR and an opportunity to listen to advice from your professionals who have their ear to the ground. HR is a vital tool in the workplace as these professionals balance their focus to advocate for the employees and advise leaders, while supporting the company to achieve organizational goals through “transformational” human resource activities.

Transformational Human Resources is an upcoming leading practice that steps back from transactional human resource activities and focuses on strategies to align HR Management (HRM) with company goals. It requires commitment to do things differently and not fall back into old habits.

Your HR team can help build a strong work culture by implementing guidelines and procedures, and by promoting understanding, respect, and transparency across the organization. However, it does require support from the leadership team and it all starts with how leaders perceive HR functions.

Remember that you have a choice with how you view and treat others, and that an employee is directly affected by your behaviour. The HR department supports the company to achieve organizational goals and should not be the department that “you need to work around”.

When I asked leaders what qualities a HR professional should have, they all agreed that these professionals should be able to identify problem spots, find patterns and help revolve the issues.

Involving HR can help make educated decisions and find strategic ways to address workforce concerns before they escalate. This can be accomplished by job design, workforce management, training & development, performance management, compensation & benefits, and legal issues. Move beyond the limited use of transactional HR, get the most from your HR team leaders and start implementing transformational HR practices today!

Transformational human resource activities that support this, as well as promoting collaboration are:

    1. Focusing on values, mission, and branding initiatives
    2. Promoting transparency at all organizational levels
    3. Developing clear company guidelines and procedures
    4. Providing incentives for your workers
    5. Focusing on mental health, wellness, and benefits
    6. Involving HR in operational and employee matters
    7. Involving leaders in employee-related activities
    8. Assign more engaging tasks and job reskilling
    9. Developing leaderships and individual contributors
    10. Creating a fun workplace to engage employees
    11. Improving the office décor
    12. Giving positive or constructive feedback

Together, management and HR can work towards a more positive work environment and change the stigma that has been inherited throughout the years. You will begin to see HR now as a strategic business partner who is part of your team, working with your team, and working with you to achieve a common goal together!

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