The Thames Building Society has a head office in Oxford that contAIns the operations, marketing, prODuct development, corporate planning, finance, IT, HR and legal functions. The Head of hr is responsible for providing HR services in head office and the regions. These services include recruitment at headquarters, training (centralized courses, mainly for branch staff), pay and benefits administration for the whole Society, and dealing generally with employment issues at head office. There is no recognized trade union – a staff association exists but it does not have negotiating rights and does not exert much influence. Little responsibility for people management is devoLVed to line managers, who are expected to use the services of the HR function on any matter affecting the employment of people, even first-level disciplinary problems. The Head of HR reports to the Operations Director.
There are 180 branches split into four regions. Each region is controlled by a regional director who reports to the Operations Director. Regional offices are small but they include a regional HR manager who reports to the Head of HR in the centre. Regional HR managers are mainly concerned with recruitment and dealing with employment issues that have to be referred to them by branch managers. Training and pay administration is handled by head office.
The number of staff in head office is just over 500. There are about 1,800 staff in the branch network.
The organization structure of HR is as follows:
The Society has been doing reasonably well in terms of sales and profits over the last few years but there are signs of the beginning of a downward trend. The marketing and product development functions at head office are effective (a number of successful new products have been launched recently) but sales at branch level have been diSAPpointing. Serious doubts have been expressed in the board about the quality of staff in the branches. It is felt that inadequate people have been recruited and that they are badly trained and underpaid. Retention rates are getting worse. There is concern about the leadership capabilities of branch managers and a belief that they are not getting the HR help they need.
To address these issues, it was agreed by the Board that the branch network should be reorganized – the regions were far too large and were difficult to manage. It was therefore proposed to replace them with six regions, with an average number of 40 branches per region (some branches were closed) and an average of 250 staff in each region.
A complete re-think was also needed of the role and organization of the HR function. Providentially, the Head of HR was about to retire, so a new HR Director could be appointed who would report to the Chief Executive and would be given a brief to develop proposals on what should be done about HR.
You are the newly appointed HR Director. What would you recommend and why? If you want to create new posts or functions, summarize what they will be there to do and how they relate to one another. Bear in mind that if your proposals include the appointment of more and better-qualified HR specialists, you will have to justify this in terms of the added value they will provide, taking into account the business needs of the Society.
There are no inevitable or obvious answers to this case. There is always organizational CHOice. What is important is that, whatever choice is made, it has to be demonstrated that it will further the achievement of the organization’s business goals. If the solution is going to cost more, the added value it provides must be spelt out. The proposals also have to be realistic. The question has to be answered: ‘Will the organization be able to cope with a massive change?’ If, for example, it is believed that more responsibility for people management should be devolved to line managers, what exactly does that mean? And will managers be able to cope? Such changes can take time. There is probably no immediate solution and the recommendation will have to include an extended implementation and change management programme.
One possible proposal is to develop a three-legged ‘Dave Ulrich’ organization. This could comprise a ‘centre of expertise’ dealing with strategic issues concerning talent management, management development, organizational learning, human capital measurement, performance management and reward management. The regions could be serviced by ‘HR business partners’ who are responsible to the regional manager and are there to give help and advice to line managers, progressively equipping them to take on more responsibility for people management. It may be tempting to call them ‘strategic’ business partners but the emphasis should be on service delivery at branch level rather than focusing on HR strategy. The third leg could be a shared service centre dealing with such matters as recruitment, benefits and pensions administration, training support, absence monitoring and management information. Such a centre can both improve administrative efficiency and reduce costs.