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Applied H.R.M. Research, 2010, Volume 12, Number 1, pages 40-58
Are HR Business Partner Competency Models Effective? Raymond Caldwell University of London HR competency models have been vital to attempts to improve the selection and development of ‘HR business partners’ and establish a new mechanism for linking HR strategy with business performance. But how effective are they? This article proposes a research model of the links between selection and development as antecedents of the HR-business strategy linkage, with HR business partner performance as its outcome. The research model indicates that the creation of an effective HR strategy-business strategy linkage mediates the association of selection and development on business partner performance. The findings highlight the critical importance of the HR strategy-business strategy linkage, and raise important questions about the ability of HR business partners to develop this capability in the future.
There has been an enormous growth in the use of HR competency models over the last decade as part of an overall attempt to realign the HR function and transform HR professionals into ‘business partners’ (Ulrich, Brockbank, Yeung, & Lake, 1995; Ulrich, 1997; Losey, 1999; Ramlall, 2006; Ulrich, Brockbank, & Johnson, 2008). By focusing on the behaviors, knowledge and attributes required in HR business partner roles, competency models offer the possibility of creating an integrated and consistent framework for the selection, appraisal, training and development of HR practitioners, as well as a mechanism for linking HR strategy and business performance (Boyatzis, 1982, 1993; Ulrich et al., 1995; Baill, 1999; Ulrich et al., 2008). But how effective are these models? Despite the growth in ‘business partnering’ competency models and their widespread advocacy, there have been few empirical or survey-based investigations of the effectiveness of these models in making HR professionals more strategic or business-oriented (Huselid, Jackson, & Schuler, 1997; Boselie & Paauwe, 2005; Ulrich et al., 2008). This article presents UK survey data from 118 HR business partners in a variety of roles, mainly within large UK organizations that have embraced business partnering. The findings suggest that competency models are perceived to be broadly effective in selecting business partners, but are less effective in developing business partners or linking HR strategy with business strategy. Crucially, competency models are poor at predicting effective performance in a business partner role. To explore the survey findings a research model is proposed of the relationship between four effectiveness variables: selection, development, HR
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strategy-business linkage and business partner performance. The research model indicates that business partner selection and development are the antecedents of the HR strategy-business strategy linkage and that effective business partner performance is the outcome of the HR strategy-business strategy linkage. The findings highlight the limitations of business partner competency models and they raise important questions about how business partnering will develop in the future as HR roles are further stretched in the ever-ambitious drive to link HR with business performance outcomes (Hope Hailey, Farndale, & Truss, 2005; Francis & Keegan, 2006). The article begins with a brief review of the use of competency models as a mechanism for improving the effectiveness and performance of HR professionals in new business partnering roles. The proposed research model and the major hypotheses to be tested are then presented. This is followed by a brief outline of the scope of the survey, including information on the survey respondents and some the key findings on effectiveness. The correlation and regression analyses used to test the research model are then outlined. Finally, the findings are discussed in of the challenges of linking HR strategy and business strategy. HR Competency Models Boyatzis’s pioneering study of The Competent Manager (1982) was undoubtedly a major influence on the enormous growth of management based competency models during the early 1990s. His work promised a new, more integrated and universal approach to management education, training and development (Burgoyne, 1993). Boyatzis defined competency as: ‘an underlying characteristic of an employee (i.e., a motive, trait, skill, aspect of one’s selfimage, social role, or a body of knowledge) which results in superior performance’ (Boyatzis, 1982, p. 21). This definition allowed competencies to be objectified, analytically disaggregated and grouped into skills, knowledge, selfconcepts, traits and motives. It also allowed competences to be hierarchically defined and rated by levels of proficiency, position and performance: ‘essential’, ‘core’ or ‘foundational’ competencies were contrasted with ‘differential competencies’ that distinguished superior from average performance, and there were also higher level ‘strategic competencies’ that appeared to be vital to organizational performance and competitive success. Despite this apparent analytical precision and the promise of consistency, competency models were rarely successful in defining performance linkages, and the proliferation of definitional disputes and competing models has led to growing confusion as to precisely what competencies are, how they are measured, and what precise impact they have on performance (Boyatzis 1993; Antonacopoulou & Fitzgerald, 1996;
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Huselid et al., 1997; Brockbank, 2003; Boselie & Paauwe, 2005; Delamare Le Deist & Winterton, 2005; Grazeda, 2005). When competency models were assimilated into the HR field the task of defining the links between competencies and performance was paramount (Ulrich & Yeung, 1989; Baill, 1999; Brewster et al, 2000). This was certainly true of the most influential model of HR competencies originally developed by Ulrich (1995) and his colleagues at the University of Michigan (Yeung et al., 1996). The initial model-building process began with broadly universal-generic ambitions, but over the years the model has undergone numerous updates and revisions (1987, 1992, 1997, 2002, 2008). In the earliest versions it was suggested that there were three decisive HR competencies, irrespective of job role or title, and that these could be ranked in of their impact on performance: ‘change management’, ‘functional expertise’ and ‘knowledge of the business’. An updating of the research findings suggested, however, that there were two other important competencies: ‘culture management’ focused on changing employee behaviour and ‘professional credibility’, or how practitioners embodied the business values of their organization. This model was also later revised into five overarching competency categories that sought to distinguish low from high performing organizations: strategic contribution, personal credibility, HR delivery, business knowledge and HR technology. The most recent reworking of HR competencies by Ulrich (2008) and his colleagues has suggested yet another redefinition of the competencies and roles of high performing HR professionals. They are now expected to operate in six competence domains as a credible activist, cultural steward, talent manager/organizational designer, strategic architect, business ally, and operational executor. Despite all these revisions and updates the ‘Michigan model’ of HR competencies is still characterised by definitional disputes, analytical inconsistency and the performance impact of specific competences has proved to be shifting and elusive (Becker et al., 2001). The relationship between HR competencies and HR roles has also proved to be an area of considerable controversy. Many HR competency models were explicitly designed with the programmatic intent of transforming HR professionals into a new category of people manager with business knowledge: the ‘HR business partner’. This was certainly true of Ulrich’s famous attempt to classify HR professionals into four overlapping roles: ‘strategic partners’, ‘istrative experts’, employee champions’, and ‘change agents’. These new roles sought to shift the focus from the narrowly defined domains of personnel expertise and concentrate instead on HR as a delivery function that served the strategic imperatives of business success. However, as the ‘Ulrich model of business partnering’ became widely espoused and more and more HR practitioners assumed the business partner job title at the business unit or corporate level, questions were raised as to how each role was precisely defined
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and what specific competencies they required. Are business partner roles defined by a universal set of competencies or does each role have a unique set of competencies? How do competencies map on to HR generalist and specialist roles; should they be differentiated? Why are some competencies (e.g. ‘personal credibility’) less important than others? Can behavioral competences really encom the ‘meta-qualities’ or ‘capabilities’ required in demanding and increasingly complex business-facing HR roles? Should all HR practitioners embrace business partner competencies? Partly because of the disputes over HR competencies and roles, the implementation of HR business partnering has rarely followed a single model, and there is growing concern regarding the efficacy of the more generic and contextindependent competency frameworks propounded by advocates of business partnering (Pitcher, 2008). Major issues still surround the range and definition of functional and behavioural competencies and how they are formalised and evaluated, both with respect to management and leadership (Buckley & Monks, 2004). There is also particular concern as to how much ‘business knowledge,’ both formal and tacit, HR people need to ensure they are effective in a strategic business partner role (Boselie & Paauwe, 2005). But by far the biggest issue for practitioners is the link between new business partner competencies and performance (Ulrich et al., 2008). Are HR business partner competency models really effective in selecting and developing business partners, linking HR strategy and business strategy, or predicting performance in a business partner role? The Research Model The classic rationale for competencies models is the belief that formalized and tested competencies are the most effective way of predicting performance (Delamare Le Deist & Winterton, 2005). This partly explains why competency models have been very widely used in underpinning development and promotion processes in organizations. However, the overarching question of effectiveness has rarely been critically addressed in the HR competency literature, at least directly. Instead, the primary inward-looking focus has been on reclassifying and redefining behavioral attributes and indicators to fit the prescribed agendas of selection, training, development and appraisal. The research model proposed here shifts the focus to HR practitioners’ overall perceptions and evaluations of effectiveness. While this shift in focus does not offer a direct exploration of empirical measures of effectiveness it does allow for an analysis of the perceived effectiveness HR competencies models by those in a unique position to judge them: senior HR professionals performing business partner roles (Rynes et al., 2002).
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Figure 1 presents a conceptual model of the relation of the four single-item effectiveness variables: selection, development, HR strategy-business strategy linkage and performance. It indicates that effective HR business partner selection and development, the two primary independent variables, lead to the linkage of HR strategy and business strategy. This linkage, in turn, affects the key outcome variable of business partner performance. In other words, the model proposes that the creation of an effective HR strategy and business strategy linkage is the intervening variable defining the association of selection and development on effective business partner performance (Cohen et al., 2003). The hypotheses that underpin the model are outlined below. Figure 1 Research Model
HR Business Partner Selection
HR-Business Strategy Linkage
HR Business Partner Performance
HR Business Partner Development
The Hypotheses Many organizations that have embraced business partnering have used competency models in their assessment tools for selecting business partners, although the results have sometimes been very disconcerting. In one notable case, less than 10 percent of existing HR staff subject to assessment had the competencies to take on the new business partner role (Hesketh, 2006, p. 56). However, the question also arises whether those that have been selected as business partners using competency models can be further developed in this role and whether this in turn influences perceived performance. This suggests the first hypothesis within the research model:
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Hypothesis 1: The perceived effectiveness of business partner competency models in selecting business partners will be positively related to the effectiveness of these models in creating a linkage between HR strategy and business strategy. Most of the competency–based programmes used to develop business partners are expensive and intrinsically problematic, mainly because investments in management development and leadership are notoriously unpredictable in of outcomes. This partly explains why some organizations tend to separate out selection tools from the competencies used to develop business partners, although they are often coned in many competencies models. Within the research model it is assumed that there may be a positive correlation between selection and development as mutually reinforcing processes, and that together they may have a positive performance impact on the HR strategy-business strategy linkage – the mediation variable (Schmidt & Hunter, 1998; Robertson & Smith, 2001). This leads to the second hypothesis. Hypothesis 2: The perceived effectiveness of business partner competency models in developing business partners will be positively related to the effectiveness of these models in creating a linkage between HR strategy and business strategy. Linking HR strategy with business strategy is absolutely fundamental to the rationale of business partner competency models. However, this is one of the most difficult challenges facing business partners as they seek to embrace crossfunctional managerial competencies that go beyond the comfort zone of traditional HR expertise (Ulrich, 1997; Ulrich & Brockbank, 2006). But if the HR strategy-business strategy linkage is achieved does it then have a positive impact on predictions of business partner performance? This leads to the third hypothesis: Hypothesis 3: The perceived effectiveness of the HR strategy-business strategy linkage will be positively related to the perceived effectiveness of competency models in predicting business partner performance. Before exploring the hypotheses the scope of the survey and the main characteristics of the organizations and respondents surveyed are outlined. The Survey The survey was conducted using a combined online and postal questionnaire. Respondents were encouraged to complete the online version,
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mainly because it offered advantages in of data input and analysis; but the choice of a postal questionnaire was also offered to help improve the response rate. The survey questionnaire was sent to 600 organizations and 118 completed questionnaires were received from respondents in 114 organizations, representing a response rate of 19 percent. Four organizations had two respondents each, but this was considered acceptable as these organizations were very large, diversified or recently merged businesses with distinct operating units. There were no important differences in the data across the two survey modes. The survey questionnaire was divided into eight sections, covering over 50 major items of information (Caldwell, 2008). Standard information was collected on respondent characteristics, measures of organizational size and industry sector. There was also a wide range of questions on the characteristic features of business partnering, common pitfalls and the major obstacles to implementation. The organizations included in the survey were identified from a variety of published sources and proprietary databases that contained information on large organizations pursuing business partnering or those in which the ‘HR business partner’ job title was used. Most of the organizations in the survey (53) had well over 5,000 employees, and they included some major UK global companies, as well as a range of central government departments and large public service organizations. A few relatively small organizations are also included, but none of them had less than 500 employees (Table 1). Most industry sectors are covered in the survey, but global financial services institutions and a wide range of diversified international businesses in consumer products, manufacturing, retailing and pharmaceuticals are prominent. This is not surprising as business partnering has often been associated with global businesses with geographical dispersed or diversified business units. Overall the survey sample is largely representative of large organizations and global businesses in the UK that have embraced the HR business partnering approach (Table 1). Table 2 offers a profile of the survey respondents. They are almost equally split between male and female HR practitioners. In of age 42 percent are in the age range 35 to 44, while a small number (11) are in the age range 55-65. The vast majority of respondents (88 percent) have followed a mainly generalist HR career path and approximately 50 percent have been in their current role for just 1 or 2 years. Overall, the respondents represent HR business partners at all levels, with almost half using some version of the ‘business partner’ job title – based on the job title information provided in the survey.
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Table 1 Organization Profiles Category
Profile of Organizations Frequency Count 500-1000 (7) 1001-2500 (19) 2501-5000 (14) over 5000 (53) Missing (25)
Valid Percent 7.5 20.4 15.1 57.0
Number of HR Staff
0-50 (44) 51-100 (18) Over 100 (38) Missing (18)
44.0 18.0 38.2
Number of HR Business Partners
0-10 (66) 11-25 (22) 26-50 (10) >50 (14) Missing (6)
58.9 19.6 8.9 12.5
Private v Public Sector
Private sector (86) Public sector (27) Other (1)
76.0 24.0
Size - Number of Employees
In the survey respondents were asked to indicate on a five-point scale of very effective (5) to very ineffective (1), how they rated HR business partner competency models in selecting business partners, developing business partners, linking HR strategy and business strategy, and predicting performance in a business partner role. As most respondents, given their HR role and/or business partner job title, were assumed to be broadly familiar with ‘competency models’, no standardized definition was given of competencies. It should also be noted that over two thirds of the respondents indicated that they were familiar with the ‘Ulrich model of business partnering’. The responses to the four questions on competencies were as follows: 63 percent of respondents believed that business partner competency models are generally effective in ‘selecting business partners’, 46 percent thought they were effective in ‘developing business partners’ and 47 percent thought they were effective in ‘linking HR strategy and business strategy’ (Table 3). However, competency models appeared to be much less effective in predicting performance
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Table 2 Respondent Profiles Category
Gender Age
HR Career Paths
Years in Current HR Role
Position
Profile of Respondents Frequency Count
Valid Percent
Male (52) Female (57) 25-34 (20) 35-44 (47) 45-54 (33) 55-65 (11) Specialist HR roles (12) Generalist HR roles (90) Other (14) 1-2 years (49) 3-5 years (39) 6-9 years (1) Over 10 years (6) Other (20) Board Member (7) HR Director/Head of HR (56) Senior HR Specialist (12) Senior Business Partner (15) HR Business Partner (25) Other (3)
47.3 51.8 18.0 42.4 29.7 9.9 11.8 88.2 50.0 39.8 1.0 5.1 6.1 48.7 10.2 13.0 21.7
Table 3 Responses Saying Very Effective/Effective HR Business Partner Competency Models (% Saying Very Effective/Effective) Summary of Response Data
Overall percentage saying effective Number valid Mean Standard deviation
Selecting business partners
Developing business partners 46.5% (55)
Linking HRbusiness strategy 47.5%(56)
Predicting business partner performance 24.5%(29)
63.1% (70) 111 2.21 .955
111 2.39 1.011
111 2.82 1.089
110 2.44 1.088
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in a business partner role; only 24 percent of respondents thought they were effective in this area. Results Before we examine the proposed research model it is worth noting some of the preliminary factors that were reviewed in evaluating the perceived effectiveness of HR competency models. There appeared to be no significant differences in ratings of perceived effectiveness by gender or seniority of position. Nor did specialist or generalist HR career paths appear to influence ratings of effectiveness. However, respondents in the age range 25-34 appeared to give higher ratings of effectiveness than respondents in the age range 45 to 54 or 55 to 65. In other words, perceptions of effectiveness decrease with age. More broadly, overall ratings of the perceived effectiveness of competency models do not appear to be strongly associated with industry sector, although there are some variations between the private and public sector. Nor do size factors, such as the number of employees, appear to be significant. The next section examines the proposed research model using correlation and regression analysis. Correlation Analysis Table 4 presents mean and standard deviations for the four single-item effectiveness variables. The mean score for three of the four variables are greater than 3, on a Likert scale of 1 to 5, indicating broad agreement among the respondents. In addition, the standard deviations for the four variable ranges from .79 to .91, indicating the data were broadly homogenous. Table 4 also presents the Pearson correlation results for the four variables as well as the Cronbach Alpha reliability coefficients (bold) of internal consistency, which range from .81 to .86, indicating the reliability of the five-point effectiveness scale. As hypothesized in the overall research model, the values correlated positively, with selection and development being most strongly correlated (.63). However, selection is not positively correlated with performance, suggesting other factors may influence perceptions of performance (Robertson & Smith, 2001). Moreover, the two antecedent variables of the HR strategy-business strategy linkage, namely selecting business partners and developing business partners are only modestly correlated with perceptions of the HR strategybusiness strategy linkage. Nevertheless, the hypothesized dependent variable of the HR strategy-business strategy linkage, namely business partner performance, had a substantial positive correlation (.56)
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Table 4 Descriptive Statistics and Correlations Descriptive Statistics and Correlations (N=110) Variables Mean SD 1 2 3 4 1. Selecting business partners 3.64 0.79 .86 2. Developing business 3.45 0.82 .63** .81 partners 3. Linking HR-business 3.39 0.91 .28** .36** .84 strategy 4. Predicting performance 2.99 0.83 .128 .43** .56** .83 **p<0.01 Note. Values in parenthesis are coefficient alphas Regression Analysis Regression analyses were used to test the postulated research model (Figure 1). Each hypothesis was tested independently using a two–step process which involved regressing the intervening or mediation variable on the independent variables and then regressing the dependent variable on the independent variable. H1 is that the perceived effectiveness of business partner competency models in selecting business partners will be positively related to the effectiveness of these models in creating a linkage between HR strategy and business strategy. Table 5 presents the results of selecting business partners as an antecedent of HR-business strategy linkage. The results indicate that 28.6 percent of the variance in the assessed linkage was explained by the independent variable, providing a modest degree of confidence in interpreting the result. The significance result at p < 0.001 provides for the relationship. Regression analysis was then used to test hypothesis H2, whether developing business partners has a positive influence on the HR strategy-business strategy linkage. Table 5 indicates that almost 35 percent of the variance in the independent variable, developing business partners, was explained. The significance relationship at p < 0.001 level provides for the H2 that developing business partners is an antecedent of the perceived effectiveness of the HR strategy-business strategy linkage. In Table 6 the results of the regression analysis for hypothesis H3 indicate that business partner performance positively relates to the HR strategy-business strategy linkage and that this is an outcome of that linkage. The amount of variance explained for the linkage was almost 53 per cent, providing a
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considerable degree of confidence in interpreting the results. The relations were significant at p < 0.01 providing for H3. Table 5 Regression Analysis for Hypothesis 2 Regression Analyses of Effect of Business Partner Selection and Development on HR-Business Strategy Linkage (N=110) Dependent Variable Independent Adjusted F t p< Variables R2 Selecting business HR-Business Strategy partners .286 43.27 6.58 0.001 Linkage Developing business partners .341 57.42 7.58 0.001 Table 6 Regression Analysis for Hypothesis 3 Regression Analysis of Effect of HR -Business Strategy Linkage on Performance (N=110) Dependent Variable
Independent Variable
Business Partner Performance
HR-Business Strategy Linkage
Adjusted R2
F
t
p<
.529
123.44
11.00
0.01
Discussion HR business partner competency models emerged well over a decade ago on the back of the management-based competency movement (Burgoyne, 1993; Yeung, 1996). Competencies promised a mechanism for reinventing HR roles, as well as an alternative approach to establishing the performance impact of the HR function (Ulrich & Brockbank, 2005; Ulrich et al., 2008). But there is growing concern that generic and role-specific competency models are not working as effectively as proposed by their most forceful advocates, and practitioners are increasingly aware of the growing performance gaps (Pitcher, 2008). It is therefore increasingly important to develop a critical awareness of the limitations of competencies models and their potential effectiveness as a mechanism for improving performance. Most attempts to explore variations in the effectiveness of HR business partner competency models have focused on issues of the range, mix and
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weighting of competencies (Ulrich & Brockbank, 2005; Ramlall, 2006). This usually leads to attempts to increasingly formalise, reformulate or introduce new add-on competencies, with the assumption that new hybrid models will have more general applicability or a greater performance impact (Ulrich et al., 2008). But these approaches have often been unsuccessful at unlocking consistent performance linkages over time in business partner competency models. Rather than examine individual competencies or a specific competency framework, this study explored overall evaluations of the perceived effectiveness of competency models by practitioners. It sought to discover how evaluations of effectiveness are interrelated and to what extent competency models are perceived to be predictive of business partner performance. The rationale for this approach was that HR practitioner evaluations of effectiveness matter because they are in a unique position to judge how competency models work in practice (Rynes et al., 2002). The overall survey findings indicate that competency models for business partners are not as effective as generally assumed, and they are particularly weak in predicting performance in business partnering roles. There also appears to be a weak link between business partner selection and business partner performance, although the selection and development of business partners are strongly correlated (Table 4). One practical implication of this particular finding is that more emphasis should perhaps be placed on business partner development. But perhaps the most important research finding is that selection and development have a positive impact on the HR strategy-business strategy linkage, and this in turn is predictive of the perceived effectiveness HR business partner performance. The identification of the HR strategy-business strategy linkage as a key variable within the overall research model is important. It highlights the critical importance for business partners of making their primary ‘strategic contribution’ in linking HR with the business. But this is by far the most difficult practical challenge business partners face, mainly because they invariably lack competencies in this key area (Ulrich & Brockbank, 2005; Ramlall, 2006; Ulrich et al., 2008). In general, HR professionals are often successful at building their ‘personal credibility’, although this has a very modest impact on business performance. In contrast, they are weak at creating the strategic competencies that have a very major impact on business performance (Ulrich & Brockbank, 2005; Ulrich et al., 2008). Not surprisingly these tensions between different competencies appear to send mixed messages. Paradoxically, HR professionals might increase their ‘personal credibility’ through an internal focus on providing expert advice and istrative efficiency, but this seems to be interpreted differently by different stakeholders who may value transactional efficiency and an ethos of independent professionalism over business performance outcomes (Graham & Tarbell, 2006). The recent reworking of ‘personal credibility’ as
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‘credible activist’ by Ulrich and his colleagues does not really adequately these issues. Another area of potential difficulty is the business side of the HR strategy linkage. Moving closer to the business by developing ‘business knowledge’ or ‘commercial acumen’ as a ‘business ally’ may seem a natural way of overcoming the ‘performance gaps’ in competency models (Ulrich et al., 2008). However, while ‘business knowledge’ in itself may be perceived by HR professionals as enhancing their desired role this view may not be shared by line managers and employees (Boselie & Paauwe, 2005; Hope Hailey et al., 2005). Line managers are often deeply skeptical about the business knowledge claims of HR professionals while employees are often mistrustful of HR professionals that are primarily business-oriented (Graham & Tarbell, 2006; Han et al., 2006). Finding a middle way as a HR business partner can therefore be very daunting. More broadly, there is also a fundamental difficulty in focusing HR business partner competencies on the linkage between HR strategy and business strategy, because this may lead HR business partners into very demanding strategic roles that are difficult to sustain. In practice, developing the linkage of HR strategy to business strategy requires cross-functional managerial competencies that may side-line or undermine conventional HR professional expertise, so much so that it is seen as secondary or substitutable by others including outside consultants (Wright, 2008). HR expertise has always been vulnerable to replacement, but HR business partner capability is by its very nature more vulnerable to substitution by non-HR professionals and consultants. There is already a growing ‘talent gap’ for HR business partners, especially for those who can cross the HR-business divide (Reilly et al., 2007; Ulrich et al., 2008). Besides the various practical challenges of implementing business partnering, the survey findings raise another crucial question: If HR professionals are broadly skeptical about the effectiveness of HR competency models in of their predictiveness what implication does this have for practice? In many respects valid prediction is the fundamental rationale for competency models, so any undermining of perceived effectiveness must be a source of concern (Rynes et al., 2002). Certainly such a perception might become a self-fulfilling reality in that any valid measures of effectiveness might be underplayed or ruled out, thus undermining the overall case for business partner competencies. One suspects, however, that HR practitioners are simply highlighting how difficult it is to get from competencies to capability. In practice what bridges the gap between competency and performance is capability – what someone actually does (Boyatis, 2008). Perhaps then HR practitioners are being more realistic about this intrinsic gap and the limitations of their role than those who extol the high performance virtues of business partnering competency models.
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Finally, there is growing evidence that the achievement of a strong HR strategy-business strategy linkage may only be practicable in contexts in which the HR function as a whole is being dramatically transformed by the introduction of shared services, centres of expertise, and significant outsourcing (Caldwell, 2008). These structural changes can lead to major reductions in transactional HR; all of which potentially allows HR business partners to act more strategically. Unfortunately, in many organizations business partnering may be implemented without a fundamental shift in the organizational infrastructure of the HR function, and this fundamentally limits the potential strategic contribution of HR business partners. More research needs to be undertaken to explore how business partners can overcome the obstacles to the HR strategy-business strategy linkage. This must include a greater focus on the competency-capability gaps in enacting business partnering. For example, we need to know more about how competencies vary at the corporate and business unit levels, and how HR specialists and generalists cope with the challenges of performing business partner roles. Related to this there is a need for more research which focuses less on a constantly evolving portfolio of predefined or prescribed competencies and more on how HR practitioners actually construct, reconstruct and make sense of their changing roles in practice (Maitlis & Lawrence, 2007). More broadly, within the current economic climate, there is also an urgent need to research that questions why HR competency models have focused increasingly on the instrumental logic of business performance (‘adding value’) rather than a professional ethos or set of values which may allow individual practitioners to critically question business outcomes (Kochan, 2004; Wright & Snell, 2005). While these are challenging research agendas with their own limitations, the initial research evidence presented here should be a reder not only to those who overstate the effectiveness of current competency models as a high road to more strategic HR roles, but also to those who understate the potential pitfalls business partners confront in facing-up to the strategic ambitions of HR business partnering. Conclusion Are HR business partner competency models effective? The research model investigated here identified the effects of two antecedent and one outcome variable on the perceived effectiveness of business partner performance. Specifically the research model tested the hypothesis that HR business partner competency models of selection and development were the antecedents of the HR strategy-business strategy linkage, and assessed the variable of business partner performance as the outcome of the HR strategy–business strategy linkage. The
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correlation and regression analyses indicated that both antecedent variables have an influence on the perceived HR strategy-business strategy linkage, with development having more impact than selection. While the findings reveal the critical importance of the HR strategy-business strategy linkage, they also highlight the considerable challenges facing business partner competency models. The findings require further in-depth exploration and systematic retesting using a larger sample. One must therefore be cautious in generalising from a modest sample based on the HR business partnering in mainly large international organizations operating within the UK. It is also important to note that the effectiveness measures used in the correlation and regression analyses must be treated with considerable caution, as they are single items rather than multidimensional composites subject to data reduction using factor analysis (Cohen et al., 2003). A larger sample would make factor analysis more feasible. In addition, it is important to emphasize that while the regressions may be indicative of the linear prediction of a partial ‘mediation effect’ they do not meet the robustness claims of full mediation as proposed in Baron and Kenny’s (1986) mediated regression analysis. This would require a three-step process: the mediator is regressed on the independent variable; the dependent variable is regressed on the independent variable; and the independent variable is simultaneously regressed on both the independent variable and the mediator – all of which must meet the necessary and sufficient conditions to establish mediation (Shout & Bolger, 2002). Finally, it is important to state once again that the findings are based on HR practitioner self-perceptions of the effectiveness of competency models, rather than factual or empirical measures of effectiveness (Wright et al., 2001; Rynes et al., 2002; Han et al., 2006). Perceptions can of course be affected by ‘functional’ or ‘self-interest bias’, mainly because HR professionals may exaggerate the effectiveness of competency models or their strategic role as business partners (Wright et al., 2001; Boselie & Paauwe, 2005). Equally, however, it must be recognized that HR professionals are by virtue of their position and experience often in a special position to offer wellinformed and realistic judgments on the effectiveness of competency models. Paradoxically, these judgments matter even when they may be unfounded or misguided. In principle, actual measures of effectiveness should have analytical priority over perceptions of effectiveness, but sometimes we have to accept that perceptions can become a self-fulfilling reality. Despite the intrinsic limitations of the research, the findings broadly suggest that current HR business partner competency models may face mounting challenges in creating a new strategic role for HR professionals. The models may be good at initially selecting business partners but they are widely perceived to be very poor at predicting performance in a business partner role. More importantly,
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competency models may ultimately be unable to deliver the HR strategy-business linkage that is central to the strategic ambitions and performance goals of HR business partnering. Perhaps it is now time for a realistic rethink of the effectiveness of HR business partner competency models as well as a broader examination of the intrinsic limits and potential pitfalls of HR business partnering roles. References Antonacopoulou, E. P. & Fitzgerald, L. (1996). Reframing competence in management development. Human Resource Management Journal, 6(1), 27-48. Baill, B. (1999). The changing requirements of the HR professional: Implications for the development of HR professionals. Human Resource Management, 38(2), 171-175. Becker, B., Huselid, M. & Ulrich, D. (2001). The HR Scorecard: Linking, People Strategy and Performance. Boston: Harvard University Press. Boselie, P. & Paauwe, J. (2005). Human resource function competencies in European companies. Personnel Review, 34(5), 550-566. Boyatzis, R. (1982). The Competent Manager. New York: John Wiley. Boyatzis, R. (1993). Beyond competence: The choice to be a leader. Human Resource Management Review, 3(1), 1-14. Boyatzis, R. (2008). Competencies in the 21st century. Journal of Management Development, 27(1), 5-12. Baron, R. M. & Kenny, D. A. (1986). The -mediator variable distinction in social psychological research: Conceptual, strategic and statistical considerations. Journal of Personality and Social Psychology, 51(6), 1173-1182. Brewster, C., Farndale, E. & van Ommeren, J. (2000). HR Competencies and Professional Standards: WFPMA Report. Cranfield: Cranfield University, Centre for European HRM. Brockbank, W. & Ulrich, D (2003). Competencies for the New HR. Ann Arbor, MI: University of Michigan. Buckley, F. & Monks, K. (2004). The implications of meta-qualities for HR roles. Human Resource Management Journal, 14(4), 41-56. Caldwell, R. (2008). HR business partner competencies models: Recontextualising effectiveness. Human Resource Management Journal. 18(3), 275-294. Cohen, J., Cohen, P., West. S. G., & Aiken, L. (2003). Applied Multiple Regression/Correlation Analysis for the Behavioral Sciences. Mahwah, NJ: Lawrence Erlbaum Associates.
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Delamare Le Deist, F. & Winterton, J. (2005). What is competence? Human Resource Development International, 8(1), 27-46. Francis, H. & Keegan, A. (2006). The changing face of HRM: In search of balance. Human Resource Management Journal, 16(3), 231-249. Graham, M. E. & Tarbell, L. M. (2006). The importance of the employee perspective in the competency development of human resource professionals. Human Resource Management, 45(3), 337-355. Griffin, E., Finney, L., Hennessay, J., & Boury, D. (2009). Maximizing the Value of HR Business Partnering. Horsham: Roffey Park Institute. Grzada, M. M. (2005). In competence we trust: Addressing conceptual ambiguity, Journal of Management Development, 24(6), 530-545. Han, J., Chou, P., Chao, M. & Wright, P.M. (2006). The HR competencies-HR effectiveness link: A study in Taiwanese high-tech companies, Human Resource Management, 45(3), 391-406. Haskett, A. (2006). Outsourcing the HR Function: Possibilities and Pitfalls. London: Corporate Research Forum. Hope Hailey, V., Farndale, E., & Truss, C. (2005). The HR department’s role in organizational performance. Human Resource Management Journal, 15(3), 49-66. Huselid, M., Jackson, S. E., & Schuler, R.S. (1997). Technical and strategic human resource management effectiveness as determinants of a firm’s performance. Academy of Management Journal, 40(1), 171-189. Kochan, T. (2004). Restoring trust in the human resource management profession. Asia Pacific Journal of Human Resources, 42(2), 132-146. Losey, M. (1999). Mastering the competencies of HR management. Human Resource Management, 38(2), 99-103. Maitlis, S. & Lawrence, T. B. (2007). Triggers and enablers of sensemaking in organizations. Academy of Management Journal, 50, 57-84 Pitcher, G. (2008). Backlash against human resource business partner model. Personnel Today, January 28. Ramlall, S. J. (2006). Identifying and understanding HR competencies and their relationship to organizational practices. Applied HRM Research, 11(1), 27-38. Reilly, P., Tamkin, P., & Broughton, A. (2007). The Changing HR Function: Transforming HR? London: CIPD. Robertson, I. T. & Smith, M. (2001). Personnel selection. Journal of Occupational and Organizational Psychology, 74, 441-472. Rynes, S., Colbert, A. E., & Brown, K. G. (2002). HR professionals’ beliefs about effective human resource practices: Correspondence between research and practice. Human Resource Management, 41(2), 149-174. Schmidt, F. L. & Hunter, J. E. (1998). The validity and utility of selection
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methods in personnel psychology: Practical and theoretical implications of 85 years of research findings. Psychology Bulletin, 12(2), 262-274. Schrout, P. E. & Bolger, N. (2002). Mediation in experimental and nonexperimental studies: New procedures and recommendations. Psychological Methods, 7, 422-445. Ulrich, D. (1997). Human Resource Champions. Boston, MA: Harvard University Press. Ulrich, D. & Yeung, A. (1989). Human resources in the 1990s: Trends and required competencies. Personnel istration, March, 38-45. Ulrich, D., Brockbank, W., Yeung, A., & Lake, D. (1995). Human resource competencies: An empirical assessment. Human Resource Management, 34(4), 473-496. Ulrich, D. & Brockbank, W. (2005). The HR Value Proposition, Boston, MA: Harvard University Press. Ulrich, D., Brockbank, W., & Johnson, D. (2008). HR Competencies: Mastery at the Intersection of People and Business, Alexandria, VA: Society of Human Resource Management. Wright, C. (2008). Reinventing human resource management: business partners, internal consultants and the limits to professionalisation. Human Relations, 61(8), 1063-86. Wright, P., McMahan, G., Snell, S., & Gerhart, B. (2001). Comparing line and HR executive’s perceptions of HR effectiveness: Services, roles and contribution. Human Resource Management, 40(2), 111-123. Wright, P. & Snell, S. (2005). Partner or guardian? HR’s challenge in balancing value and values. Human Resource Management, 44(2), 177-182. Yeung, A., Woolcock, P., & Sullivan, J. (1996). Identifying and developing HR competencies for the future: Keys to sustaining the transformation of HR functions. Human Resource Planning, 19(4), 48-58. Yeung, A. K. (1996). Competencies for HR professionals: An interview with Richard E. Boyatzis. Human Resource Management, 35(1), 119-132. Author Information: Raymond Caldwell Professor of HRM and Organizational Change Birkbeck College University of London [email protected] 0207 631 6620 This article forms part of a series that examine original survey data collected by the author. The first article in the series addressed the contextual constraints on HR competency models (Caldwell, 2008). This article presents further in-depth analysis of the survey data using a regression model.
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Are HR Business Partner Competency Models Effective? Raymond Caldwell University of London HR competency models have been vital to attempts to improve the selection and development of ‘HR business partners’ and establish a new mechanism for linking HR strategy with business performance. But how effective are they? This article proposes a research model of the links between selection and development as antecedents of the HR-business strategy linkage, with HR business partner performance as its outcome. The research model indicates that the creation of an effective HR strategy-business strategy linkage mediates the association of selection and development on business partner performance. The findings highlight the critical importance of the HR strategy-business strategy linkage, and raise important questions about the ability of HR business partners to develop this capability in the future.
There has been an enormous growth in the use of HR competency models over the last decade as part of an overall attempt to realign the HR function and transform HR professionals into ‘business partners’ (Ulrich, Brockbank, Yeung, & Lake, 1995; Ulrich, 1997; Losey, 1999; Ramlall, 2006; Ulrich, Brockbank, & Johnson, 2008). By focusing on the behaviors, knowledge and attributes required in HR business partner roles, competency models offer the possibility of creating an integrated and consistent framework for the selection, appraisal, training and development of HR practitioners, as well as a mechanism for linking HR strategy and business performance (Boyatzis, 1982, 1993; Ulrich et al., 1995; Baill, 1999; Ulrich et al., 2008). But how effective are these models? Despite the growth in ‘business partnering’ competency models and their widespread advocacy, there have been few empirical or survey-based investigations of the effectiveness of these models in making HR professionals more strategic or business-oriented (Huselid, Jackson, & Schuler, 1997; Boselie & Paauwe, 2005; Ulrich et al., 2008). This article presents UK survey data from 118 HR business partners in a variety of roles, mainly within large UK organizations that have embraced business partnering. The findings suggest that competency models are perceived to be broadly effective in selecting business partners, but are less effective in developing business partners or linking HR strategy with business strategy. Crucially, competency models are poor at predicting effective performance in a business partner role. To explore the survey findings a research model is proposed of the relationship between four effectiveness variables: selection, development, HR
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strategy-business linkage and business partner performance. The research model indicates that business partner selection and development are the antecedents of the HR strategy-business strategy linkage and that effective business partner performance is the outcome of the HR strategy-business strategy linkage. The findings highlight the limitations of business partner competency models and they raise important questions about how business partnering will develop in the future as HR roles are further stretched in the ever-ambitious drive to link HR with business performance outcomes (Hope Hailey, Farndale, & Truss, 2005; Francis & Keegan, 2006). The article begins with a brief review of the use of competency models as a mechanism for improving the effectiveness and performance of HR professionals in new business partnering roles. The proposed research model and the major hypotheses to be tested are then presented. This is followed by a brief outline of the scope of the survey, including information on the survey respondents and some the key findings on effectiveness. The correlation and regression analyses used to test the research model are then outlined. Finally, the findings are discussed in of the challenges of linking HR strategy and business strategy. HR Competency Models Boyatzis’s pioneering study of The Competent Manager (1982) was undoubtedly a major influence on the enormous growth of management based competency models during the early 1990s. His work promised a new, more integrated and universal approach to management education, training and development (Burgoyne, 1993). Boyatzis defined competency as: ‘an underlying characteristic of an employee (i.e., a motive, trait, skill, aspect of one’s selfimage, social role, or a body of knowledge) which results in superior performance’ (Boyatzis, 1982, p. 21). This definition allowed competencies to be objectified, analytically disaggregated and grouped into skills, knowledge, selfconcepts, traits and motives. It also allowed competences to be hierarchically defined and rated by levels of proficiency, position and performance: ‘essential’, ‘core’ or ‘foundational’ competencies were contrasted with ‘differential competencies’ that distinguished superior from average performance, and there were also higher level ‘strategic competencies’ that appeared to be vital to organizational performance and competitive success. Despite this apparent analytical precision and the promise of consistency, competency models were rarely successful in defining performance linkages, and the proliferation of definitional disputes and competing models has led to growing confusion as to precisely what competencies are, how they are measured, and what precise impact they have on performance (Boyatzis 1993; Antonacopoulou & Fitzgerald, 1996;
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Huselid et al., 1997; Brockbank, 2003; Boselie & Paauwe, 2005; Delamare Le Deist & Winterton, 2005; Grazeda, 2005). When competency models were assimilated into the HR field the task of defining the links between competencies and performance was paramount (Ulrich & Yeung, 1989; Baill, 1999; Brewster et al, 2000). This was certainly true of the most influential model of HR competencies originally developed by Ulrich (1995) and his colleagues at the University of Michigan (Yeung et al., 1996). The initial model-building process began with broadly universal-generic ambitions, but over the years the model has undergone numerous updates and revisions (1987, 1992, 1997, 2002, 2008). In the earliest versions it was suggested that there were three decisive HR competencies, irrespective of job role or title, and that these could be ranked in of their impact on performance: ‘change management’, ‘functional expertise’ and ‘knowledge of the business’. An updating of the research findings suggested, however, that there were two other important competencies: ‘culture management’ focused on changing employee behaviour and ‘professional credibility’, or how practitioners embodied the business values of their organization. This model was also later revised into five overarching competency categories that sought to distinguish low from high performing organizations: strategic contribution, personal credibility, HR delivery, business knowledge and HR technology. The most recent reworking of HR competencies by Ulrich (2008) and his colleagues has suggested yet another redefinition of the competencies and roles of high performing HR professionals. They are now expected to operate in six competence domains as a credible activist, cultural steward, talent manager/organizational designer, strategic architect, business ally, and operational executor. Despite all these revisions and updates the ‘Michigan model’ of HR competencies is still characterised by definitional disputes, analytical inconsistency and the performance impact of specific competences has proved to be shifting and elusive (Becker et al., 2001). The relationship between HR competencies and HR roles has also proved to be an area of considerable controversy. Many HR competency models were explicitly designed with the programmatic intent of transforming HR professionals into a new category of people manager with business knowledge: the ‘HR business partner’. This was certainly true of Ulrich’s famous attempt to classify HR professionals into four overlapping roles: ‘strategic partners’, ‘istrative experts’, employee champions’, and ‘change agents’. These new roles sought to shift the focus from the narrowly defined domains of personnel expertise and concentrate instead on HR as a delivery function that served the strategic imperatives of business success. However, as the ‘Ulrich model of business partnering’ became widely espoused and more and more HR practitioners assumed the business partner job title at the business unit or corporate level, questions were raised as to how each role was precisely defined
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and what specific competencies they required. Are business partner roles defined by a universal set of competencies or does each role have a unique set of competencies? How do competencies map on to HR generalist and specialist roles; should they be differentiated? Why are some competencies (e.g. ‘personal credibility’) less important than others? Can behavioral competences really encom the ‘meta-qualities’ or ‘capabilities’ required in demanding and increasingly complex business-facing HR roles? Should all HR practitioners embrace business partner competencies? Partly because of the disputes over HR competencies and roles, the implementation of HR business partnering has rarely followed a single model, and there is growing concern regarding the efficacy of the more generic and contextindependent competency frameworks propounded by advocates of business partnering (Pitcher, 2008). Major issues still surround the range and definition of functional and behavioural competencies and how they are formalised and evaluated, both with respect to management and leadership (Buckley & Monks, 2004). There is also particular concern as to how much ‘business knowledge,’ both formal and tacit, HR people need to ensure they are effective in a strategic business partner role (Boselie & Paauwe, 2005). But by far the biggest issue for practitioners is the link between new business partner competencies and performance (Ulrich et al., 2008). Are HR business partner competency models really effective in selecting and developing business partners, linking HR strategy and business strategy, or predicting performance in a business partner role? The Research Model The classic rationale for competencies models is the belief that formalized and tested competencies are the most effective way of predicting performance (Delamare Le Deist & Winterton, 2005). This partly explains why competency models have been very widely used in underpinning development and promotion processes in organizations. However, the overarching question of effectiveness has rarely been critically addressed in the HR competency literature, at least directly. Instead, the primary inward-looking focus has been on reclassifying and redefining behavioral attributes and indicators to fit the prescribed agendas of selection, training, development and appraisal. The research model proposed here shifts the focus to HR practitioners’ overall perceptions and evaluations of effectiveness. While this shift in focus does not offer a direct exploration of empirical measures of effectiveness it does allow for an analysis of the perceived effectiveness HR competencies models by those in a unique position to judge them: senior HR professionals performing business partner roles (Rynes et al., 2002).
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Figure 1 presents a conceptual model of the relation of the four single-item effectiveness variables: selection, development, HR strategy-business strategy linkage and performance. It indicates that effective HR business partner selection and development, the two primary independent variables, lead to the linkage of HR strategy and business strategy. This linkage, in turn, affects the key outcome variable of business partner performance. In other words, the model proposes that the creation of an effective HR strategy and business strategy linkage is the intervening variable defining the association of selection and development on effective business partner performance (Cohen et al., 2003). The hypotheses that underpin the model are outlined below. Figure 1 Research Model
HR Business Partner Selection
HR-Business Strategy Linkage
HR Business Partner Performance
HR Business Partner Development
The Hypotheses Many organizations that have embraced business partnering have used competency models in their assessment tools for selecting business partners, although the results have sometimes been very disconcerting. In one notable case, less than 10 percent of existing HR staff subject to assessment had the competencies to take on the new business partner role (Hesketh, 2006, p. 56). However, the question also arises whether those that have been selected as business partners using competency models can be further developed in this role and whether this in turn influences perceived performance. This suggests the first hypothesis within the research model:
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Hypothesis 1: The perceived effectiveness of business partner competency models in selecting business partners will be positively related to the effectiveness of these models in creating a linkage between HR strategy and business strategy. Most of the competency–based programmes used to develop business partners are expensive and intrinsically problematic, mainly because investments in management development and leadership are notoriously unpredictable in of outcomes. This partly explains why some organizations tend to separate out selection tools from the competencies used to develop business partners, although they are often coned in many competencies models. Within the research model it is assumed that there may be a positive correlation between selection and development as mutually reinforcing processes, and that together they may have a positive performance impact on the HR strategy-business strategy linkage – the mediation variable (Schmidt & Hunter, 1998; Robertson & Smith, 2001). This leads to the second hypothesis. Hypothesis 2: The perceived effectiveness of business partner competency models in developing business partners will be positively related to the effectiveness of these models in creating a linkage between HR strategy and business strategy. Linking HR strategy with business strategy is absolutely fundamental to the rationale of business partner competency models. However, this is one of the most difficult challenges facing business partners as they seek to embrace crossfunctional managerial competencies that go beyond the comfort zone of traditional HR expertise (Ulrich, 1997; Ulrich & Brockbank, 2006). But if the HR strategy-business strategy linkage is achieved does it then have a positive impact on predictions of business partner performance? This leads to the third hypothesis: Hypothesis 3: The perceived effectiveness of the HR strategy-business strategy linkage will be positively related to the perceived effectiveness of competency models in predicting business partner performance. Before exploring the hypotheses the scope of the survey and the main characteristics of the organizations and respondents surveyed are outlined. The Survey The survey was conducted using a combined online and postal questionnaire. Respondents were encouraged to complete the online version,
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mainly because it offered advantages in of data input and analysis; but the choice of a postal questionnaire was also offered to help improve the response rate. The survey questionnaire was sent to 600 organizations and 118 completed questionnaires were received from respondents in 114 organizations, representing a response rate of 19 percent. Four organizations had two respondents each, but this was considered acceptable as these organizations were very large, diversified or recently merged businesses with distinct operating units. There were no important differences in the data across the two survey modes. The survey questionnaire was divided into eight sections, covering over 50 major items of information (Caldwell, 2008). Standard information was collected on respondent characteristics, measures of organizational size and industry sector. There was also a wide range of questions on the characteristic features of business partnering, common pitfalls and the major obstacles to implementation. The organizations included in the survey were identified from a variety of published sources and proprietary databases that contained information on large organizations pursuing business partnering or those in which the ‘HR business partner’ job title was used. Most of the organizations in the survey (53) had well over 5,000 employees, and they included some major UK global companies, as well as a range of central government departments and large public service organizations. A few relatively small organizations are also included, but none of them had less than 500 employees (Table 1). Most industry sectors are covered in the survey, but global financial services institutions and a wide range of diversified international businesses in consumer products, manufacturing, retailing and pharmaceuticals are prominent. This is not surprising as business partnering has often been associated with global businesses with geographical dispersed or diversified business units. Overall the survey sample is largely representative of large organizations and global businesses in the UK that have embraced the HR business partnering approach (Table 1). Table 2 offers a profile of the survey respondents. They are almost equally split between male and female HR practitioners. In of age 42 percent are in the age range 35 to 44, while a small number (11) are in the age range 55-65. The vast majority of respondents (88 percent) have followed a mainly generalist HR career path and approximately 50 percent have been in their current role for just 1 or 2 years. Overall, the respondents represent HR business partners at all levels, with almost half using some version of the ‘business partner’ job title – based on the job title information provided in the survey.
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Table 1 Organization Profiles Category
Profile of Organizations Frequency Count 500-1000 (7) 1001-2500 (19) 2501-5000 (14) over 5000 (53) Missing (25)
Valid Percent 7.5 20.4 15.1 57.0
Number of HR Staff
0-50 (44) 51-100 (18) Over 100 (38) Missing (18)
44.0 18.0 38.2
Number of HR Business Partners
0-10 (66) 11-25 (22) 26-50 (10) >50 (14) Missing (6)
58.9 19.6 8.9 12.5
Private v Public Sector
Private sector (86) Public sector (27) Other (1)
76.0 24.0
Size - Number of Employees
In the survey respondents were asked to indicate on a five-point scale of very effective (5) to very ineffective (1), how they rated HR business partner competency models in selecting business partners, developing business partners, linking HR strategy and business strategy, and predicting performance in a business partner role. As most respondents, given their HR role and/or business partner job title, were assumed to be broadly familiar with ‘competency models’, no standardized definition was given of competencies. It should also be noted that over two thirds of the respondents indicated that they were familiar with the ‘Ulrich model of business partnering’. The responses to the four questions on competencies were as follows: 63 percent of respondents believed that business partner competency models are generally effective in ‘selecting business partners’, 46 percent thought they were effective in ‘developing business partners’ and 47 percent thought they were effective in ‘linking HR strategy and business strategy’ (Table 3). However, competency models appeared to be much less effective in predicting performance
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Table 2 Respondent Profiles Category
Gender Age
HR Career Paths
Years in Current HR Role
Position
Profile of Respondents Frequency Count
Valid Percent
Male (52) Female (57) 25-34 (20) 35-44 (47) 45-54 (33) 55-65 (11) Specialist HR roles (12) Generalist HR roles (90) Other (14) 1-2 years (49) 3-5 years (39) 6-9 years (1) Over 10 years (6) Other (20) Board Member (7) HR Director/Head of HR (56) Senior HR Specialist (12) Senior Business Partner (15) HR Business Partner (25) Other (3)
47.3 51.8 18.0 42.4 29.7 9.9 11.8 88.2 50.0 39.8 1.0 5.1 6.1 48.7 10.2 13.0 21.7
Table 3 Responses Saying Very Effective/Effective HR Business Partner Competency Models (% Saying Very Effective/Effective) Summary of Response Data
Overall percentage saying effective Number valid Mean Standard deviation
Selecting business partners
Developing business partners 46.5% (55)
Linking HRbusiness strategy 47.5%(56)
Predicting business partner performance 24.5%(29)
63.1% (70) 111 2.21 .955
111 2.39 1.011
111 2.82 1.089
110 2.44 1.088
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in a business partner role; only 24 percent of respondents thought they were effective in this area. Results Before we examine the proposed research model it is worth noting some of the preliminary factors that were reviewed in evaluating the perceived effectiveness of HR competency models. There appeared to be no significant differences in ratings of perceived effectiveness by gender or seniority of position. Nor did specialist or generalist HR career paths appear to influence ratings of effectiveness. However, respondents in the age range 25-34 appeared to give higher ratings of effectiveness than respondents in the age range 45 to 54 or 55 to 65. In other words, perceptions of effectiveness decrease with age. More broadly, overall ratings of the perceived effectiveness of competency models do not appear to be strongly associated with industry sector, although there are some variations between the private and public sector. Nor do size factors, such as the number of employees, appear to be significant. The next section examines the proposed research model using correlation and regression analysis. Correlation Analysis Table 4 presents mean and standard deviations for the four single-item effectiveness variables. The mean score for three of the four variables are greater than 3, on a Likert scale of 1 to 5, indicating broad agreement among the respondents. In addition, the standard deviations for the four variable ranges from .79 to .91, indicating the data were broadly homogenous. Table 4 also presents the Pearson correlation results for the four variables as well as the Cronbach Alpha reliability coefficients (bold) of internal consistency, which range from .81 to .86, indicating the reliability of the five-point effectiveness scale. As hypothesized in the overall research model, the values correlated positively, with selection and development being most strongly correlated (.63). However, selection is not positively correlated with performance, suggesting other factors may influence perceptions of performance (Robertson & Smith, 2001). Moreover, the two antecedent variables of the HR strategy-business strategy linkage, namely selecting business partners and developing business partners are only modestly correlated with perceptions of the HR strategybusiness strategy linkage. Nevertheless, the hypothesized dependent variable of the HR strategy-business strategy linkage, namely business partner performance, had a substantial positive correlation (.56)
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Table 4 Descriptive Statistics and Correlations Descriptive Statistics and Correlations (N=110) Variables Mean SD 1 2 3 4 1. Selecting business partners 3.64 0.79 .86 2. Developing business 3.45 0.82 .63** .81 partners 3. Linking HR-business 3.39 0.91 .28** .36** .84 strategy 4. Predicting performance 2.99 0.83 .128 .43** .56** .83 **p<0.01 Note. Values in parenthesis are coefficient alphas Regression Analysis Regression analyses were used to test the postulated research model (Figure 1). Each hypothesis was tested independently using a two–step process which involved regressing the intervening or mediation variable on the independent variables and then regressing the dependent variable on the independent variable. H1 is that the perceived effectiveness of business partner competency models in selecting business partners will be positively related to the effectiveness of these models in creating a linkage between HR strategy and business strategy. Table 5 presents the results of selecting business partners as an antecedent of HR-business strategy linkage. The results indicate that 28.6 percent of the variance in the assessed linkage was explained by the independent variable, providing a modest degree of confidence in interpreting the result. The significance result at p < 0.001 provides for the relationship. Regression analysis was then used to test hypothesis H2, whether developing business partners has a positive influence on the HR strategy-business strategy linkage. Table 5 indicates that almost 35 percent of the variance in the independent variable, developing business partners, was explained. The significance relationship at p < 0.001 level provides for the H2 that developing business partners is an antecedent of the perceived effectiveness of the HR strategy-business strategy linkage. In Table 6 the results of the regression analysis for hypothesis H3 indicate that business partner performance positively relates to the HR strategy-business strategy linkage and that this is an outcome of that linkage. The amount of variance explained for the linkage was almost 53 per cent, providing a
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considerable degree of confidence in interpreting the results. The relations were significant at p < 0.01 providing for H3. Table 5 Regression Analysis for Hypothesis 2 Regression Analyses of Effect of Business Partner Selection and Development on HR-Business Strategy Linkage (N=110) Dependent Variable Independent Adjusted F t p< Variables R2 Selecting business HR-Business Strategy partners .286 43.27 6.58 0.001 Linkage Developing business partners .341 57.42 7.58 0.001 Table 6 Regression Analysis for Hypothesis 3 Regression Analysis of Effect of HR -Business Strategy Linkage on Performance (N=110) Dependent Variable
Independent Variable
Business Partner Performance
HR-Business Strategy Linkage
Adjusted R2
F
t
p<
.529
123.44
11.00
0.01
Discussion HR business partner competency models emerged well over a decade ago on the back of the management-based competency movement (Burgoyne, 1993; Yeung, 1996). Competencies promised a mechanism for reinventing HR roles, as well as an alternative approach to establishing the performance impact of the HR function (Ulrich & Brockbank, 2005; Ulrich et al., 2008). But there is growing concern that generic and role-specific competency models are not working as effectively as proposed by their most forceful advocates, and practitioners are increasingly aware of the growing performance gaps (Pitcher, 2008). It is therefore increasingly important to develop a critical awareness of the limitations of competencies models and their potential effectiveness as a mechanism for improving performance. Most attempts to explore variations in the effectiveness of HR business partner competency models have focused on issues of the range, mix and
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weighting of competencies (Ulrich & Brockbank, 2005; Ramlall, 2006). This usually leads to attempts to increasingly formalise, reformulate or introduce new add-on competencies, with the assumption that new hybrid models will have more general applicability or a greater performance impact (Ulrich et al., 2008). But these approaches have often been unsuccessful at unlocking consistent performance linkages over time in business partner competency models. Rather than examine individual competencies or a specific competency framework, this study explored overall evaluations of the perceived effectiveness of competency models by practitioners. It sought to discover how evaluations of effectiveness are interrelated and to what extent competency models are perceived to be predictive of business partner performance. The rationale for this approach was that HR practitioner evaluations of effectiveness matter because they are in a unique position to judge how competency models work in practice (Rynes et al., 2002). The overall survey findings indicate that competency models for business partners are not as effective as generally assumed, and they are particularly weak in predicting performance in business partnering roles. There also appears to be a weak link between business partner selection and business partner performance, although the selection and development of business partners are strongly correlated (Table 4). One practical implication of this particular finding is that more emphasis should perhaps be placed on business partner development. But perhaps the most important research finding is that selection and development have a positive impact on the HR strategy-business strategy linkage, and this in turn is predictive of the perceived effectiveness HR business partner performance. The identification of the HR strategy-business strategy linkage as a key variable within the overall research model is important. It highlights the critical importance for business partners of making their primary ‘strategic contribution’ in linking HR with the business. But this is by far the most difficult practical challenge business partners face, mainly because they invariably lack competencies in this key area (Ulrich & Brockbank, 2005; Ramlall, 2006; Ulrich et al., 2008). In general, HR professionals are often successful at building their ‘personal credibility’, although this has a very modest impact on business performance. In contrast, they are weak at creating the strategic competencies that have a very major impact on business performance (Ulrich & Brockbank, 2005; Ulrich et al., 2008). Not surprisingly these tensions between different competencies appear to send mixed messages. Paradoxically, HR professionals might increase their ‘personal credibility’ through an internal focus on providing expert advice and istrative efficiency, but this seems to be interpreted differently by different stakeholders who may value transactional efficiency and an ethos of independent professionalism over business performance outcomes (Graham & Tarbell, 2006). The recent reworking of ‘personal credibility’ as
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‘credible activist’ by Ulrich and his colleagues does not really adequately these issues. Another area of potential difficulty is the business side of the HR strategy linkage. Moving closer to the business by developing ‘business knowledge’ or ‘commercial acumen’ as a ‘business ally’ may seem a natural way of overcoming the ‘performance gaps’ in competency models (Ulrich et al., 2008). However, while ‘business knowledge’ in itself may be perceived by HR professionals as enhancing their desired role this view may not be shared by line managers and employees (Boselie & Paauwe, 2005; Hope Hailey et al., 2005). Line managers are often deeply skeptical about the business knowledge claims of HR professionals while employees are often mistrustful of HR professionals that are primarily business-oriented (Graham & Tarbell, 2006; Han et al., 2006). Finding a middle way as a HR business partner can therefore be very daunting. More broadly, there is also a fundamental difficulty in focusing HR business partner competencies on the linkage between HR strategy and business strategy, because this may lead HR business partners into very demanding strategic roles that are difficult to sustain. In practice, developing the linkage of HR strategy to business strategy requires cross-functional managerial competencies that may side-line or undermine conventional HR professional expertise, so much so that it is seen as secondary or substitutable by others including outside consultants (Wright, 2008). HR expertise has always been vulnerable to replacement, but HR business partner capability is by its very nature more vulnerable to substitution by non-HR professionals and consultants. There is already a growing ‘talent gap’ for HR business partners, especially for those who can cross the HR-business divide (Reilly et al., 2007; Ulrich et al., 2008). Besides the various practical challenges of implementing business partnering, the survey findings raise another crucial question: If HR professionals are broadly skeptical about the effectiveness of HR competency models in of their predictiveness what implication does this have for practice? In many respects valid prediction is the fundamental rationale for competency models, so any undermining of perceived effectiveness must be a source of concern (Rynes et al., 2002). Certainly such a perception might become a self-fulfilling reality in that any valid measures of effectiveness might be underplayed or ruled out, thus undermining the overall case for business partner competencies. One suspects, however, that HR practitioners are simply highlighting how difficult it is to get from competencies to capability. In practice what bridges the gap between competency and performance is capability – what someone actually does (Boyatis, 2008). Perhaps then HR practitioners are being more realistic about this intrinsic gap and the limitations of their role than those who extol the high performance virtues of business partnering competency models.
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Finally, there is growing evidence that the achievement of a strong HR strategy-business strategy linkage may only be practicable in contexts in which the HR function as a whole is being dramatically transformed by the introduction of shared services, centres of expertise, and significant outsourcing (Caldwell, 2008). These structural changes can lead to major reductions in transactional HR; all of which potentially allows HR business partners to act more strategically. Unfortunately, in many organizations business partnering may be implemented without a fundamental shift in the organizational infrastructure of the HR function, and this fundamentally limits the potential strategic contribution of HR business partners. More research needs to be undertaken to explore how business partners can overcome the obstacles to the HR strategy-business strategy linkage. This must include a greater focus on the competency-capability gaps in enacting business partnering. For example, we need to know more about how competencies vary at the corporate and business unit levels, and how HR specialists and generalists cope with the challenges of performing business partner roles. Related to this there is a need for more research which focuses less on a constantly evolving portfolio of predefined or prescribed competencies and more on how HR practitioners actually construct, reconstruct and make sense of their changing roles in practice (Maitlis & Lawrence, 2007). More broadly, within the current economic climate, there is also an urgent need to research that questions why HR competency models have focused increasingly on the instrumental logic of business performance (‘adding value’) rather than a professional ethos or set of values which may allow individual practitioners to critically question business outcomes (Kochan, 2004; Wright & Snell, 2005). While these are challenging research agendas with their own limitations, the initial research evidence presented here should be a reder not only to those who overstate the effectiveness of current competency models as a high road to more strategic HR roles, but also to those who understate the potential pitfalls business partners confront in facing-up to the strategic ambitions of HR business partnering. Conclusion Are HR business partner competency models effective? The research model investigated here identified the effects of two antecedent and one outcome variable on the perceived effectiveness of business partner performance. Specifically the research model tested the hypothesis that HR business partner competency models of selection and development were the antecedents of the HR strategy-business strategy linkage, and assessed the variable of business partner performance as the outcome of the HR strategy–business strategy linkage. The
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correlation and regression analyses indicated that both antecedent variables have an influence on the perceived HR strategy-business strategy linkage, with development having more impact than selection. While the findings reveal the critical importance of the HR strategy-business strategy linkage, they also highlight the considerable challenges facing business partner competency models. The findings require further in-depth exploration and systematic retesting using a larger sample. One must therefore be cautious in generalising from a modest sample based on the HR business partnering in mainly large international organizations operating within the UK. It is also important to note that the effectiveness measures used in the correlation and regression analyses must be treated with considerable caution, as they are single items rather than multidimensional composites subject to data reduction using factor analysis (Cohen et al., 2003). A larger sample would make factor analysis more feasible. In addition, it is important to emphasize that while the regressions may be indicative of the linear prediction of a partial ‘mediation effect’ they do not meet the robustness claims of full mediation as proposed in Baron and Kenny’s (1986) mediated regression analysis. This would require a three-step process: the mediator is regressed on the independent variable; the dependent variable is regressed on the independent variable; and the independent variable is simultaneously regressed on both the independent variable and the mediator – all of which must meet the necessary and sufficient conditions to establish mediation (Shout & Bolger, 2002). Finally, it is important to state once again that the findings are based on HR practitioner self-perceptions of the effectiveness of competency models, rather than factual or empirical measures of effectiveness (Wright et al., 2001; Rynes et al., 2002; Han et al., 2006). Perceptions can of course be affected by ‘functional’ or ‘self-interest bias’, mainly because HR professionals may exaggerate the effectiveness of competency models or their strategic role as business partners (Wright et al., 2001; Boselie & Paauwe, 2005). Equally, however, it must be recognized that HR professionals are by virtue of their position and experience often in a special position to offer wellinformed and realistic judgments on the effectiveness of competency models. Paradoxically, these judgments matter even when they may be unfounded or misguided. In principle, actual measures of effectiveness should have analytical priority over perceptions of effectiveness, but sometimes we have to accept that perceptions can become a self-fulfilling reality. Despite the intrinsic limitations of the research, the findings broadly suggest that current HR business partner competency models may face mounting challenges in creating a new strategic role for HR professionals. The models may be good at initially selecting business partners but they are widely perceived to be very poor at predicting performance in a business partner role. More importantly,
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competency models may ultimately be unable to deliver the HR strategy-business linkage that is central to the strategic ambitions and performance goals of HR business partnering. Perhaps it is now time for a realistic rethink of the effectiveness of HR business partner competency models as well as a broader examination of the intrinsic limits and potential pitfalls of HR business partnering roles. References Antonacopoulou, E. P. & Fitzgerald, L. (1996). Reframing competence in management development. Human Resource Management Journal, 6(1), 27-48. Baill, B. (1999). The changing requirements of the HR professional: Implications for the development of HR professionals. Human Resource Management, 38(2), 171-175. Becker, B., Huselid, M. & Ulrich, D. (2001). The HR Scorecard: Linking, People Strategy and Performance. Boston: Harvard University Press. Boselie, P. & Paauwe, J. (2005). Human resource function competencies in European companies. Personnel Review, 34(5), 550-566. Boyatzis, R. (1982). The Competent Manager. New York: John Wiley. Boyatzis, R. (1993). Beyond competence: The choice to be a leader. Human Resource Management Review, 3(1), 1-14. Boyatzis, R. (2008). Competencies in the 21st century. Journal of Management Development, 27(1), 5-12. Baron, R. M. & Kenny, D. A. (1986). The -mediator variable distinction in social psychological research: Conceptual, strategic and statistical considerations. Journal of Personality and Social Psychology, 51(6), 1173-1182. Brewster, C., Farndale, E. & van Ommeren, J. (2000). HR Competencies and Professional Standards: WFPMA Report. Cranfield: Cranfield University, Centre for European HRM. Brockbank, W. & Ulrich, D (2003). Competencies for the New HR. Ann Arbor, MI: University of Michigan. Buckley, F. & Monks, K. (2004). The implications of meta-qualities for HR roles. Human Resource Management Journal, 14(4), 41-56. Caldwell, R. (2008). HR business partner competencies models: Recontextualising effectiveness. Human Resource Management Journal. 18(3), 275-294. Cohen, J., Cohen, P., West. S. G., & Aiken, L. (2003). Applied Multiple Regression/Correlation Analysis for the Behavioral Sciences. Mahwah, NJ: Lawrence Erlbaum Associates.
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Delamare Le Deist, F. & Winterton, J. (2005). What is competence? Human Resource Development International, 8(1), 27-46. Francis, H. & Keegan, A. (2006). The changing face of HRM: In search of balance. Human Resource Management Journal, 16(3), 231-249. Graham, M. E. & Tarbell, L. M. (2006). The importance of the employee perspective in the competency development of human resource professionals. Human Resource Management, 45(3), 337-355. Griffin, E., Finney, L., Hennessay, J., & Boury, D. (2009). Maximizing the Value of HR Business Partnering. Horsham: Roffey Park Institute. Grzada, M. M. (2005). In competence we trust: Addressing conceptual ambiguity, Journal of Management Development, 24(6), 530-545. Han, J., Chou, P., Chao, M. & Wright, P.M. (2006). The HR competencies-HR effectiveness link: A study in Taiwanese high-tech companies, Human Resource Management, 45(3), 391-406. Haskett, A. (2006). Outsourcing the HR Function: Possibilities and Pitfalls. London: Corporate Research Forum. Hope Hailey, V., Farndale, E., & Truss, C. (2005). The HR department’s role in organizational performance. Human Resource Management Journal, 15(3), 49-66. Huselid, M., Jackson, S. E., & Schuler, R.S. (1997). Technical and strategic human resource management effectiveness as determinants of a firm’s performance. Academy of Management Journal, 40(1), 171-189. Kochan, T. (2004). Restoring trust in the human resource management profession. Asia Pacific Journal of Human Resources, 42(2), 132-146. Losey, M. (1999). Mastering the competencies of HR management. Human Resource Management, 38(2), 99-103. Maitlis, S. & Lawrence, T. B. (2007). Triggers and enablers of sensemaking in organizations. Academy of Management Journal, 50, 57-84 Pitcher, G. (2008). Backlash against human resource business partner model. Personnel Today, January 28. Ramlall, S. J. (2006). Identifying and understanding HR competencies and their relationship to organizational practices. Applied HRM Research, 11(1), 27-38. Reilly, P., Tamkin, P., & Broughton, A. (2007). The Changing HR Function: Transforming HR? London: CIPD. Robertson, I. T. & Smith, M. (2001). Personnel selection. Journal of Occupational and Organizational Psychology, 74, 441-472. Rynes, S., Colbert, A. E., & Brown, K. G. (2002). HR professionals’ beliefs about effective human resource practices: Correspondence between research and practice. Human Resource Management, 41(2), 149-174. Schmidt, F. L. & Hunter, J. E. (1998). The validity and utility of selection
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methods in personnel psychology: Practical and theoretical implications of 85 years of research findings. Psychology Bulletin, 12(2), 262-274. Schrout, P. E. & Bolger, N. (2002). Mediation in experimental and nonexperimental studies: New procedures and recommendations. Psychological Methods, 7, 422-445. Ulrich, D. (1997). Human Resource Champions. Boston, MA: Harvard University Press. Ulrich, D. & Yeung, A. (1989). Human resources in the 1990s: Trends and required competencies. Personnel istration, March, 38-45. Ulrich, D., Brockbank, W., Yeung, A., & Lake, D. (1995). Human resource competencies: An empirical assessment. Human Resource Management, 34(4), 473-496. Ulrich, D. & Brockbank, W. (2005). The HR Value Proposition, Boston, MA: Harvard University Press. Ulrich, D., Brockbank, W., & Johnson, D. (2008). HR Competencies: Mastery at the Intersection of People and Business, Alexandria, VA: Society of Human Resource Management. Wright, C. (2008). Reinventing human resource management: business partners, internal consultants and the limits to professionalisation. Human Relations, 61(8), 1063-86. Wright, P., McMahan, G., Snell, S., & Gerhart, B. (2001). Comparing line and HR executive’s perceptions of HR effectiveness: Services, roles and contribution. Human Resource Management, 40(2), 111-123. Wright, P. & Snell, S. (2005). Partner or guardian? HR’s challenge in balancing value and values. Human Resource Management, 44(2), 177-182. Yeung, A., Woolcock, P., & Sullivan, J. (1996). Identifying and developing HR competencies for the future: Keys to sustaining the transformation of HR functions. Human Resource Planning, 19(4), 48-58. Yeung, A. K. (1996). Competencies for HR professionals: An interview with Richard E. Boyatzis. Human Resource Management, 35(1), 119-132. Author Information: Raymond Caldwell Professor of HRM and Organizational Change Birkbeck College University of London [email protected] 0207 631 6620 This article forms part of a series that examine original survey data collected by the author. The first article in the series addressed the contextual constraints on HR competency models (Caldwell, 2008). This article presents further in-depth analysis of the survey data using a regression model.
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