"Human resources are at the heart of transformation strategies and a new population of Human Resources Managers (HRM) is emerging, which will legitimately find its place in boards", Véronique de Pompignan, Associate Director of Boyden
Having become a strategic partner for managers, today's CHRO not only deploys HR policy in the field but also aims to support the company's objectives and business challenges.
With a dual role of HR and business, the new generation CHRO can define a recruitment process and advise managers and decision-makers during organizational transformation projects. Previously, HRM was limited to relatively administrative personnel management functions. Today, all its missions are carried out in light of the business challenges of the activity. His position is becoming increasingly important in executive committees and executive committees where his HR expertise is an asset for the development of the business.
Why HRMs have an important role to play in corporate strategy and more specifically in the development of an incentive compensation system? In this article, look back at the transformation of the HRM business into a real Business Partner!
"The particularity of the HR Business Partner is to interact in a privileged way with the operational management and the centers of expertise, more than with the employees, which allows him to be as close as possible to the realities of business and HR solutions developed by the company.”
CHRO have seen their role change in recent years. True co-pilots of corporate strategy, they are increasingly involved in business-related topics and less on pure HR issues, such as the administrative management of staff.
The HR Business Partner is the conductor of the implementation of the business strategy applied to the human and is in direct connection with business issues. Some HR issues, such as aspects related to the field of training, are an integral part of business strategies and are essential for the proper deployment of commercial policy. We can cite the example of Nocibe, French giant specializing in the distribution of perfumes and cosmetics, which has redesigned its commercial strategy according to a global system of employee training.
In fact, the group has completely reconsidered its variable compensation scheme in its stores in parallel with the deployment of a huge training campaign for the group's 2,000 employees. The training objectives focus on notions of quality of service and thus allow the French company to incentivize its employees on commercial aspects directly related to these training courses, while establishing a strong proximity with the managers. As a result, employees are trained and evaluated on quality aspects related to the quality of customer service in the store. Under the responsibility of HRD, the quality of the service produced was directly associated with incentive compensation. The alliance of HR and business has been one of the keys to the group's commercial performance, demonstrating the strong impact of HRD on the business.
Thanks to this strategy combining HR, business and variable incentive compensation, Nocibe group moved in 2017 from number 3 in France to number 2, surpassing Marionnaud.
According to a recent Deloitte study, HR manager sees itself as a full player in the strategy and the smooth running of the company. The contribution to strategic issues (87%) and business sense (83%) are the first two qualities cited, followed by complicity with the CEO (80%) and good leadership within the executive committee (77%).
A transfer of the missions took place: the HRM has from now a double cap, management HR and commercial strategy applied to HR. Previously, the CHRO was limited to the management of social relations and its missions were similar to those of a “Director of Personnel and Social Relations”. Today, the HR issue is clearly dissociated into a notion of "resources" that refers to an idea of performance and "human" which describes the state of human numbers in society.
In addition, if the daily work is well lived by the employees, we will observe a better level of performance than among employee’s malaise on their position. Thus, it is important to pay particular attention to the fulfillment of these. Training proposals, professional development, management of individual trajectories or regular upgrades are all elements to transform the company into a real place of human performance.
Variable pay compensation is part of the arsenal of CHRO to improve the performance of its employees while ensuring their personal and professional development. In this way, it represents an interesting lever of action as part of the overall HR strategy applied to business. Today's CHRO often centralizes the computational part linked to the incentive compensation of employees. This is a performance factor aligned with the corporate strategy, a strategy to which HRM is directly associated. As a result, the HRM is fully invested in the company's business policy, where even a few years ago only sales managers were solicited.
In another way, variable pay must be attractive to attract talent. It must reward employees enough and help retain the best elements. The goal is to limit the turnover. Nevertheless, it is important to stress that the modification of certain operating rules will necessarily require the agreement of the Works Council, the Works Council, and social partners, made up of representatives of the main employee unions and the main employers' organizations. Some decisions involving significant organizational change may be favorable to "business" but may not be perceived as such by the social partners, who will not hesitate to block their implementations. Thus, it is not always easy for the HR Business Partner to validate strategic decisions useful to the development of the activity and to obtain the agreement of all parties.
The CHRO is then caught between two fires. He must be bold and courageous if he wants to embody the change he is carrying. The trend of HRM turned to business is observed in large groups, but also in SMEs, where due to a rationalized and centralized organization, the Head of Sales is led to make decisions HR!