Human Challenges : Weblog

Thursday Oct 19, 2006

Our HR Organization

In the current environment while we are having some trouble and issues around our HR processes and tools at Sun I think it makes sense to give some background on our HR organization. As an HR employee at this time you really do not want to show yourself outside cause you're getting beaten up talking to managers or let's put it this way: you're getting a lot of feed-back on HR. Talking to managers and employees at many of our remote sites also shows that there is little knowledge or even insight in our model and why we are structured like this. Some of them simply missed the history that we were going through.

We are really in the hot phase of our HR Business Process Outsourcing (HR BPO) right now. New processes and tools were established and now need to prove themselves. This is exactly the kind of moment Bill McGowan our Executive VP (Vice President) for People & Places at Sun was describing years back in an HR meeting in Munich. We had just signed the contract with our new vendor and he said: as with all new outsourcing projects there will be a point when things will not go as well as we thought.

I personally believe these are the moments to remind ourselves why we were doing this and what our long-term benefit is moving ahead. Clearly we have gone this way much earlier than most other global companies. And the emphasis really is on “global” as this was and still is one of the major challenges. In general most companies are still in the early stages of fully outsourcing HR processes. I would say that today the setup of our HR organization is probably state of the art compared to the industry.

So how did it all start? How and why did we reinvent our HR Organization?

When I came to Sun nearly 7 years ago here in Germany we where working in a real traditional HR environment. Every HR Manager was working for one LOB (Line of Business) and teamed up with an HR Specialist doing all the transactions and paperwork (still plenty at that time). Whenever anyone called anyone in the HR department he got the person's voice mail. We were all so busy no one could ever answer the phone. It was really pretty chaotic and we needed to improve it.

What we came up with was the first form of a call center structure. We gave one call-in number out to all customers, employees and managers and one mail address. Behind that was a pool of HR Specialists processing all the queries. In parallel we started to enhance the HR webpage. It was a big success, customer feed-back stated high satisfaction rates as finally someone was answering the phone and a response could be given promptly. Additionally we streamlined processes behind the scenes and did small scale outsourcing, e.g. applicant tracking, writing of references (that we are legally obliged to issue in Germany when an employee leaves the company). It was the first step towards a three level support system: 1 ^st level being the webpage, 2 ^nd level being the call center and 3 ^rd level being the HR Manager. This is basically what we have today in a more sophisticated way.

Then Dave Ulrich came into play, a professor who's main purpose is to constantly bring the HR function to the next level of excellence. Our main question now was: how can we add more value to the business? Ulrich in “HR Champions" (with champions he adresses both line managers and HR professionals!) divides the HR function in 4 main responsibilities: the Administrative Expert who makes sure that day to day operational processes function well, the Business Partner who knows where the business is moving to and what HR practices would facilitate the business to excel, the Change Agent who accompanies the shifts in business strategies and takes care about the people impact of those moves and finally the Employee Champion who listens to the employee and can assess their state of motivation (click here for an abstract of Ulrich's HR Champions).

The key was to invert the pyramid, really key words at that time, meaning getting the administrative part of the work so streamlined and effective that the HR Manager could spend more time on consulting clients in organization development, get more to the strategic aspects of HR work.

As a result we needed to create an organization that allowed HR people to spend time on strategic issues with the conditions mentioned above: effective, easy to use processes. We knew that in the area of facilitating processes with an appropriate tooling we were not the best. Pretty much of an investment was needed to bring us where we wanted to be. And we also knew that this money was not to be found within our company. As a consequence of the bubble burst in late 2000 we were in the middle of reinventing the way we were doing business, we were not profitable, our SG&A costs (General Sales and administration costs) were high compared to industry standards. Also the HR function was under a lot of pressure to save costs.

The first step to invert the pyramid was a completely new HR Organization consisting of 4 quadrants based on Ulrich: a small corporate HR strategy function, an HR Country Management organization, an HR Business Partner organization and the Centers of Expertise like compensation & benefits, staffing, training, global inclusion etc. (COEs). The HR country people are responsible for making sure that the administrative part is done well. They now manage our outsourcing partner in this regard. Within each country they are responsible for SMI (Sun Microsystems Inc.) alignment, keeping a consistent standard throughout all our businesses and processes in each country and dealing with all the complex issues of local work law. In Ulrich terms they would also be the Employee Champions. On the other hand there is the HR Business Partner each of them working together with one of our bigger organization leaders. They are responsible for implementing the appropriate HR practices that support business strategy. Their charter is to drive and accompany organizational change which makes them the Change Agents. Putting it in general terms the HR Business Partner would do all aspects of organizational development (organization assessment and design, leadership development, etc.).

The next step was then to do the HR BPO, outsource all administrative processes and let them manage by an outside vendor to guarantee a constant quality of service and process excellence. In order to achieve that the vendor delivers and hosts the required tooling to enable ease of use for all HR processes by Managers and Employees and in fact today we have an incredibly rich portfolio of tools that support basically all relevant HR processes including diverse features for Talent Development which I believe will bring our organizations forward in terms of succession planning and talent management.

To summarize: our main purpose with this model is to drive value add to the business by easy to use processes and sophisticated tools, by having dedicated resources that drive and support organization development and change (I forgot to mention that meanwhile we also have a very small HR Consulting organization working bigger organization development projects with different organizations contributing to this goal!)

Concerning the current situation: we all know how it is to start using a new software, at the beginning you always suffer, first you do not know exactly what all the features are, how they are functioning and second the tool may be an early version, there are bugs, or maybe it does not work properly on your platform. Also the people behind need to get up to speed, acquire a knowledge base to answer questions promptly, they also need to get used to new processes which have been set up but are not proven yet.

I am still as much convinced as before about our model and strongly believe that we can add a lot of value through it to the business over time. We need to overcome the current obstacles and will bring our work and the performance of our company to the next level!