Experience: Establishing HR Department

Dipesh Man Shrestha

Are our HR departments effective enough to enable businesses to achieve their objectives? Are different HR systems and processes aligned to organization goals? How are we ensuring that HR departments are well-established to ensure meaningful contributions to organizations? I would like to share some of my experiences in developing HR departments in various organizations.

Before I talk about my experience of establishing HR departments, I would like to share how the modern HR departments have evolved over the years and the focus areas these HR departments have had concerning the business environment. I understand this evolution of HR departments in mainly four different eras (for ease of understanding, I have used very basic terminologies):

  1. Best Practices Era: Initially, the HR systems and practices were introduced exploring best practices in different organizations. This period was successful to some extent while there was a need to customize the systems and practices as per organizational requirements.
  2. Vertical Linkage Era: With time, HR professionals felt the need to contribute to organizational objectives and the HR departments started linking their HR systems and practices with the objectives of the organization. This period had strategic linkages and was no doubt better in terms of enabling organizational objectives.
  3. Vertical and Horizontal Linkage Era: With the vertical linkage era giving results, organizations slowly started exploring value-added roles of HR. To ensure consistency of the service delivery, there was a need for aligning all HR systems and practices horizontally as well.
  4. Holistic Era: The HR departments till then were effective enough and were quite visible within organizations for their effective delivery of HR services. However, the HR departments had to then consider the internal and external environment in which the organizations were operating. This need demanded a holistic approach in terms of considering various stakeholders (internal as well external) while establishing HR departments in organizations.
    Now, I would like to explain the process we adopted in establishing the HR departments in a nutshell:

STEP 1: Understanding Organizational Vision and Purpose
It is imperative to understand the broad objectives behind the establishment of organizations along with any of their short-term and long-term goals. The HR department must understand organizational objectives and then explore all possibilities to align HR systems and practices for better service delivery to the organization. It is also important to understand the organizational brand identity that the organization has which is paramount in developing the desired culture of the organization.

The objective behind this was that until we as HR professionals have full and clear visibility of organizational objectives and organizational brand identity, the HR department would be working in silos rather than from a holistic approach.

STEP 2: Environmental Assessment
We used simple environmental assessment tools like PESTL and SWOT Analysis. The objective behind this assessment was to understand the environment much better and the kind of environmental impacts that we might face while implementing HR systems and practices. So, these considerations had to be managed at the time of the development of HR systems and practices itself. For all negative results of the environmental assessment report, we had to develop strategies to mitigate or manage them while developing HR systems and practices.

STEP 3: Co-creating Desired Culture
We had to align the organizational culture with the direction of the company and the brand identity; so, there were various interventions done well before the organization was established in terms of the following:

Aligning broad-level organizational desired behaviors in line with the vision and purpose of the company.

This was cascaded to mid-level managers for them to understand the desired behaviors and rationale behind the same.

The broad level expectations were then co-created involving and engaging with all employees to arrive at the desired values of the organizations, and also ‘Terms of Engagement’ within the organization.

This was further drilled down to finalize (co-create) Dos and Don’ts of all the values for all employees to live and inculcate the same. These values then became the guiding principles while doing anything within the organization.

Step 4: HR Systems and Practices 
In line with the outcome of step 1 to step 3 above, the HR systems and practices were finalized for the organization. All the HR systems and practices had broadly the following components:

Framework: It was developed incorporating long-term (5 years), short-term (3 years), and annual HR objectives along with key strategies aligned to organizational goals. This was in a pictorial format giving a snapshot of the HR roadmap for the next 5 years.

Key Focus Areas: In line with the broad framework, 4 to 5 objectives of each HR system and practice were finalized in terms of what are the focus areas and what are the desired outcomes of the same.

Strategies: In line with the objectives / key focus areas of each HR system and practice, strategies were developed. Strategies were basically the choice that had to be adopted among various other options that were available with us then.

Action Plans: Aligning with the strategies where the action plans (initiatives) in each HR system and practice with clear timelines, responsibility, and deliverables.
In line with this, the following were the major HR systems and practices that were developed to manage the overall employee lifecycle within the organization:

Organization Design:
This covered the detailed time and motion study to arrive at headcount planning for the organization along with organizational structure, classification of levels, and all HR-related policies and procedures including compliance checklists.

This covered the detailed plan of execution mainly in terms of rewards components, rewards structure, and all other processes that were needed at various levels and stages of organizational operations.

Recruitment and Selection:
This covered the detailed plan of execution mainly in terms of manpower sourcing, tools, and IT platform to ensure desired culture and competencies, and all other processes including time of onboarding.

Onboarding, and Learning & Development:
This covered the detailed plans of execution mainly in terms of onboarding plans, and regular learning and development to ensure competencies of employees are of desired levels for them to contribute to their respective functions and verticals.

Employee Engagement:
This covered the array of areas including the understanding pulse of the organization; plans to ensure the desired level of behaviors; plans to ensure the desired level of productivity within the organization etc.

Performance Management System:
This covered the plans to ensure regular monitoring along with timely guidance to employees for them to be productive which in turn would have an impact on overall organizational productivity.

Exit Management:
This covered the plans to ensure the smooth exit of employees giving them an overall good experience even at the time of exit and also ensure a robust mechanism to take views and comments of exiting employees for the betterment of the Organization.

Along with the major HR systems and practices mentioned above, we also focused on the following other areas related to HR departments like HR operations, digitization, talent management, and succession planning.

To sum up, we as HR professionals must understand the business of the organization for us not only to contribute towards the productivity of the department but also contribute towards business decisions from a people perspective. Further, it is important for HR professionals to ensure that all HR systems and practices are developed aligning with the organizational long-term and short-term objectives. These HR systems and practices must also be aligned with each other considering the internal and external environment that we are operating in and these must also be aligned with the values of the organization ensuring the desired behavior and ways of doing things within the organization.

Shrestha is a HR Professional.

Leave a Comment

Scroll to Top