The end of Human Resource (HR) Management

If your business is not situated in a sort of totally standardized process, highly predictable, very stable environment, then the traditional human resource function is definitely out of date. Still running this type of function and your business will very likely not survive the next decade.

It is definitely the end of traditional HR managament as we know it. And it is also the end of traditional HR managers, as we knew them. If as a student you aspire to specialize in HR for your future professional life, better look carefully, what your university of choice offers. Most of what they teach has very likely little to nothing in common, what makes modern organizations successful in today’s economy. If you want to continue your career as HR professional, its time for a huge mindshift or better getting out of your organization’s way.

For most professionals this is probably not any news. Each year follows the previous with statistics from around the globe, about how disengaged people are at work (usual numbers are around 70-75% disengagement). Most companies struggle with improving anything at all. And they might question themselves, what has happened during the period, from when they hired great people as new employees (and I just assume so …) up until now. They might wonder, how did the organizational system contribute to this?

“There is a lot of conversations, where managers say, ‘we understand self-organization is essential to being agile, but our people are not ready to self-organize’. And it seems like the underlying sentiment here is loss (loss of control, loss of the familiar, etc.)”. A statement by Harrison Owen, author of Open Space, pretty well highlighting a major issue in today’s organizations: while self-organization is the new norm in complex business domains, it is a foreign element in most companies.

In the case of “people” (the humane factor) we do not at all anymore talk about resources. And most of the management related to the humane factor takes places in a decentralized fashion, driven by these people themselves. Because they better understand, what they need. They are capable of taking over responsibility, instead of being squeezed into something centrally defined. People in general, and especially well educated people (“creative knowledge workers” as we call them), are able to self-organize. And all together we are able to create systems, which self-manage. At its best, this is the biggest asset a company can develop.

As a consequence a modern business does not focus on HR as human resource management, but on human relations management. We want to look at the system as a whole. We are not interested in optimizing the single parts (with all its bad side-effects), but rather the relations inbetween parts of the system. And we are not doing this by reducing the capabilities of a complex adaptive system through external control.

What has changed? What does that mean for the future?

• Planning, deciding and pursuing education is happening at the local level (not via a central authority), where ongoing learning is daily business and people themselves know best, what they need and where they need to improve.
• Hiring is largely driven locally, where people know best, what is needed and who fits into a specific team context.
• Bonus payments (especially for individuals) are an outdated concept (Robert Bosch GmbH is just one out of many companies across the globe demonstrating clear alternatives). And appreciation (the actual bonus for great work) is also driven locally, where people collaborate.
• Performance management is not happening via a central system, though derived through strategic boundaries for alignment. But is implementation is directly part of the work system, constantly being reviewed and adapted at peer and local levels.
• Career is not any more determined via a static role and job concepts, while the world is changing as fast as never before.

These are just a few examples, where we engage more modern approaches, fitter for human beings. There are many more aspects, where the traditional HR function has come to an end. It is where Human Relations Management has started to take over. We will explore every single of these aspects over the next couple of days and weeks, providing insights how Human Relations Management works in modern companies, aligned with concrete practices and case studies.

For modern HR practitioners we run the Agile HR Circle in Vienna, a regular meetup for modern human relations management. And we also run public as well as inhouse Management 3.0 Workshops, diving deep on Agile Leadership and modern business practices, where we always have some progressive HR specialists on board. Pretty soon you can also grab the German version of the book “Managing for Happiness“, already pre-ordered by many hundred people. 

And just check it out – we probably have a Management 3.0 Workshop available for you at the right time and place (in German and English language)!