Nancy, the CHRO at a global pharmaceutical company, realizes that key HR processes, such as recruiting or compensation and benefits, lack clear management across different business units and regions, resulting in major process inefficiencies and poor service quality. Together with her HR leadership team, Nancy needs to find a way to manage and harmonize core processes across the enterprise, while still allowing for local variations.
A multitude of global and local processes can cause ineffective HR service delivery
“As organizational complexity increases, HR leaders increasingly lack insight into key process activities and timelines, roles and responsibilities, frameworks and tools, or external vendors,” says Gartner director analyst Matthias Graf. “A multitude of global and local processes can cause ineffective HR service delivery with duplication of efforts, higher costs and low-quality results.”
Two essential components will help CHROs and HR leaders to govern HR processes across the enterprise, helping to optimize cost over the long term.
Degrees of standardization
Organizations can achieve a clear overview of all HR processes across their business units and regions by clearly defining the degrees of standardization for key activities.
Degrees of standardization are defined as the range between central standardization (central design and development, as well as standardized implementation and communication of a process) and local customization (local design, development, implementation and communication) in which a process can exist. A comprehensive catalog of defined degrees of standardization drives efficient HR service delivery, because it aligns efforts and costs across the organization, while allowing for local customization needs.
First define the degrees of standardization for selected activities and then determine the range of central standardization versus local customization for existing activities.
Once organizations define degrees of standardization for their key HR processes, they must put them into effect. Organizations especially lack well-defined routines to review and verify recurring events, such as those triggered by process failure reports or enhancement requests, or changes in underlying organizational structures or strategic directions.
Decision-making routines apply a structured approach to reviewing change requests from the recurring application of HR processes under changing circumstances. They automatically initiate a review based on predefined triggers and lead to agreed-upon changes to the processes in scope.
Predefined triggers can be process failure reports by users, process enhancement requests by users, certain events in the development of systems or other processes, changes in underlying organizational structures or changes in overall strategic direction.
The routines also include decision-making bodies that comprise key stakeholders in HR processes and decision-making processes, which are the key steps needed to be taken in the approach itself.
Decision-making routines are vital for degrees of standardization, because they ensure ongoing process efficiency and effectiveness, particularly when unusual events or issues trigger changes.