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Tips and Answers to Your Questions
Human Resources
What should be done to combine Human Resources functions
when a merger happens?
The answer to this question depends upon a number of factors: the level of
sophistication found in the Human Resources (HR) functions that exists; the
charter or role of HR in the pre-merger organizations; and the capacity of
those HR functions to meet the new demands.
The minimalist HR function in some organizations is nothing more than a paper
and file cabinet resource that simply documents and records the employees’ employment
relationships. In other organizations, you have HR as a strategic partner that
is not only accountable for personnel files, paychecks, and benefits administration,
but is also responsible for employee retention and morale, organizational effectiveness,
and planning for the future. (For more information about building an HR function,
see the case study on the La Piana Associates consulting website at http://www.lapiana.org/consulting/cases/yni.html.)
Let us start with an operational definition of what HR is supposed to do in
your organization. We define HR as …
The practices and policies an organization needs in order to carry
out the people aspect of its mission, and to maintain effectiveness, cohesion,
and safety. The HR function articulates roles, relationships, boundaries,
and expectations within the organization.
Additionally, Randy Schuler from the Stern School of Business at New York
University has described the strategic contribution of HR as consisting of
the “Five P’s”: philosophy, policies, programs, practices,
and processes.
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The philosophy of an organization is expressed in statements
defining its business values and culture. It expresses how to treat and
value people. In the nonprofit world, an organization’s philosophy
has to convey the value that the organization places on human dignity.
Articulating each of the partner organization’s philosophies is the
first step in melding culture in a merger.
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The policies of an organization express its shared values. In
practical terms, merging personnel policies means rewriting those of the
merging organizations to fit the new organization. More critically, however,
it establishes guidelines for action on people-related business issues
and HR programs in the new organization.
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The HR programs in an organization are its human resources strategies.
These strategies coordinate efforts to facilitate change, and to address
major people-related business issues, both pre- and post-merger.
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The practices are the actions and activities of those in managerial,
operational, and leadership roles within the organization. These are particularly
important in a merger, and contribute heavily to its success or failure.
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The processes in human resources are the formulation and implementation
of the previous four elements. They define how HR activities are carried
out.
The biggest challenge for many nonprofits is that the HR function tends to
be underdeveloped in relation to the programmatic and finance functions in
the organization. HR has typically evolved out of the finance office, and is
given the mandate of keeping things legal, maintaining records, and meeting
the increasing external demands of state and federal agencies. Few nonprofits
have had the luxury of a highly evolved and strategic HR function.
HR, in order to have real impact, must be able to take the lead in proposing,
creating, and integrating best practices with regard to people, culture, rewards,
and performance. This means building credibility with all the varied constituencies
and stakeholders within the organization. It means that HR is the first place
that employees and managers look to solve challenges, develop solutions, and
model being an agent of change. Such an HR function plays a critical role in
implementing a successful nonprofit merger.
An effective HR function with developed expertise can provide the guidance
and the process skills necessary to maneuver the challenges of a merger. The
steps to integrate a combined HR function are:
- Perform an audit of the HR functions of both pre-merger
organizations to review existing policies, procedures, and practices. This
will enable you to examine and compare the technical and practical dimensions
of the HR functions, giving you an idea of what each organization brings
to the table. You will gain a sense of how the organizations view themselves,
and what the culture and management of both organizations expect from HR.
(You can download the HR Audit Tool from the La Piana Associates website
at http://www.lapiana.org/consulting/services/hraudit.html.)
- Chose HR leadership. The HR Director, Director of Operations,
or other individual who will be responsible for HR activities must be the
key architect and author of the HR function. This person should have the
competence, skills, and experience necessary to integrate and build the new
system, which needs to be appropriate to the staff, demands, culture, and
expectations of the new organization.
- Select the best in all areas of HR practice. The HR leadership
must assess the compatibility of the HR functions in order to create a comprehensive
merged system that adds value to the new organization. S/he will need to
make specific choices based on existing policies, procedures, practices,
programs, and processes — but should also take this opportunity to
correct flaws in the current systems and to develop a superior system that
will meet the evolving demands of a newly merged organization.
- Audit and review on a regular basis. Once your system
is in place, keep checking back to make sure your initial decisions made
sense, are being implemented effectively, and are working well. Don’t
be afraid to make revisions as necessary. This will be a period of big change
for the organization, so the HR function may need to be adapted over time.
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