Memo from HR: We Do Too Create Value

A professor's criticism of the profession stirs up a frenzied debate.

Rutgers University professor Richard Beatty sparked a verbal conflagration at last month’s CFORising conference, where he criticized the human resources profession for being mostly unable to talk the language of business and help companies build economic value. After his remarks were reported on CFO.com, they spread through the blogosphere and generated an extraordinarily high number of comments to a CFO.com article.

While some commenters agreed, in whole or in part, with Beatty’s take on HR, many were wounded human resources professionals. Typical comments were “Thank you for enforcing those stereotypes,” “Beatty needs a reality check,” and “My reaction? Outrage.” A fair number of responses to the article or blog posts claimed that the professor’s attitudes were outdated and disapprovingly noted that he is a career academician with no direct corporate employment experience.

For his part, Beatty, a well-known scholar who has written or co-written hundreds of articles and more than 20 books, felt a bit wounded too. “I don’t want to be the bad boy of HR,” he told CFO.com. “I love HR — I’ve dedicated my whole career to it. I want the profession to be great. And it clearly is improving, but I think it can get a lot better.”

While Beatty is hardly the first person to knock the profession’s business acumen, human resources does have some solid supporters in the C-suite. Ed Goldfinger, the CFO of ZipCar, told CFO.com that the HR people he has worked with “are just as much business professionals as anyone else. They often come with their own angle, just as finance, marketing, and engineering do.”

Goldfinger acknowledged that at some companies, human resources departments are ineffective at providing data analysis that helps to create economic value. But he blamed the companies themselves. The mistake they make is not valuing HR to begin with, he said, so they underhire and underpay the heads of that department and deny them a seat at the leadership table. “To expect the same level of business savvy from a layer down is not the right thinking,” Goldfinger told CFO.com.

Beatty insisted that his address at CFORising was not an indictment of the entire human resources profession, but merely of those practitioners who are more focused on the “HR scorecard” than the “business scorecard.” The new book he co-wrote, The Differentiated Workforce, cites many companies where the HR function is doing a great job, he notes.

The Value of Happiness

Among the professor’s incendiary opinions is that HR people often are disproportionately focused on employee job satisfaction. There is no evidence that greater job satisfaction produces better performance, he claimed, and in fact, it is the other way around: People who are high performers tend to be more satisfied and engaged.

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