The HR Value Proposition

by Dave Ulrich and Wayne Brockbank

BOOK REVIEW
The HR Value Proposition by Dave Ulrich and Wayne Brockbank. The essential message of this

book is very simple: Human Resources (HR) must deliver value. HR practices must create value in the

eyes of investors, customers, line managers, and employees. HR departments must be organized –

implement strategies that create value by delivering business results in efficient and effective ways. The

HR Value Proposition offers an integrated approach to what HR professionals and departments can and

should do to create sustained value. The target audience for this book is HR professionals everywhere in

the world.

Since value is defined by the receiver, not the giver, any value proposition begins with a focus on

receivers, not givers. It requires that HR professionals focus less on what they do and more on what they

deliver. Often, HR professionals go straight to their desired results, without paying enough attention to the

perspectives of others. When HR professionals begin with the receiver in mind, they can more quickly

emerge as full strategic contributors; add greater value for stakeholders; enhance business productivity;

achieve measurable and valuable results; create sustainable competitive advantage. The HR value

proposition grounds HR and has five elements that form an integrated HR blueprint: external realities,

stakeholders, HR practices, HR resources, and HR professionals.

HR actions inside a firm must reflect and influence such business realities outside that firm.

Knowing external business realities makes it possible to put HR practices in context, tie them to

competitive challenges, and relate them to concerns facing line managers. The realities that influence

business today may be grouped in three categories: technology, economic and regulatory issues, and

workforce development. Technology drives almost every aspect of the changing business environment.

The major trends in technology fall into four dimensions: speed, efficiency, connectivity, and

customization. To contribute to management team discussion about technology, HR professionals need a

knowledge base about the current technological possibilities and a general vision about the future role

that technology might play in their firms. HR professionals need to be aware of the basic trends relative to

economic and regulatory issues and know where to find them. For example, such important factor as

workforce productivity shows that in recent years productivity per worker has increased at twice rate.

Also, HR professionals need to bear in mind that since the mid- to late 1980s, trillions of dollars of
economic activity has been deregulated and this trend toward deregulation is expected to continue.

Workforce demographics that influence the pool of labor available to conceive, develop, produce,

distribute, and sell products and services are changing in turbulent ways. Five categories of

demographics trends that are most relevant for business decisions: declining workforce growth,

increasing age of the workforce, changing gender balance, increasing ethnic diversity, and deteriorating

family economic health. Demographics directly influence the demand for types and volumes of products

and services. With this knowledge of , HR professionals may then add value to strategic discussions

about any of three major trends; understand how each of trends influence their firms directly and

indirectly; align their HR strategies and practices to HR’s key constituents in a timely and accurate

manner.

HR is successful if and when its stakeholders perceive that it produces value. Delivering what

matters most to stakeholders focuses on the outcomes of HR rather than on the activities of HR. The

authors distinguish external (investors and customers) and internal (line managers and employees)

stakeholders and present specific ways HR professionals can deliver value to them. To be more efficient

HR professionals should blur boundaries by integrating what happens in the organization with what

customers and investors experience outside it. HR professionals should be linked to organization

capabilities that build intangibles important to investors and also supported a customer value. For internal

stakeholders the book provides approaches how HR professionals can identify and create organizational

capabilities required for line managers to implement strategy; and also how HR can add value for

employees by encouraging individual knowledge, skills, and abilities that promote productivity and help

ensure long-term employability. To assess the alignment between HR activities and the requirements of

stakeholders, the authors provide an organizational audit. HR professionals must be fully literate in

knowing how HR can add value for investors, customers, managers, and employees. With an

understanding of these issues, HR professionals can become active players and partners with business

leaders, and they can begin to develop human abilities and organizational capabilities that enable a

company to compete now and in future.

HR practices must be defined and must evolve to deliver what stakeholders expect. Four domains

of HR practices that follow the flows or processes central to organization success are offered: flow of

people, flow of performance management, flow of information, and flow of work. Flow of people and flow

of performance management are more related to traditional HR practices such as staffing, training,

development, appraisal, rewards, and feedback. The book presents how these practices can be designed

and delivered to add value for each of the key HR stakeholders; and how HR professionals can adapt
best practices to their individual situations. But HR professionals need to devote their attention to two

additional areas as well: the flow of information and the flow of work. These emerging HR activity areas

have great impact on the human side of the business and value to stakeholders. These practices areas

include the management of internal and external communication and design. The authors discuss action

planning, offering templates to help HR professionals implement the choices for new practices and track

the progress in implementing the choices practices.

The HR function must create strategies and organize resources so that individual efforts of HR

professionals combine to create value. In this part of the book authors identifies specific steps and actions

for designing HR strategy so as to link and integrate the various stakeholder requirements, business

strategies, organization capabilities, and HR practices. As an example, book shows how Motorola’s HR

professionals created a more powerful strategy using these steps and achieved success in implementing

this approach. Based on the scale and scope of their products and services, firms set themselves up as

single business, related and unrelated diversifications, or holding companies. To fit into these structures,

HR generally assumes on of three patterns: HR functional organization, HR shared services, and

embedded HR. Then the book offers alignment of different business organizations and HR organizations

and reviews tips for creating each of the three HR organizations, with greater focus on shared service.

Shared services divide into two parts: transaction work and transformation work. Transactional work of

HR can be organized through service centers, technology, and outsourcing, while transformational work

can be organized through centers of expertise, dedicated HR, and corporate HR. The authors also

provide the reader with accurate responsibilities of HR professionals and line managers in the context of

a shared service organization.

HR professionals deliver value through the roles they play and the competencies they

demonstrate. They need to master new roles to add value and competitive advantage. There are different

roles that HR professionals can play but the book allocates five most important: employee advocate

(employer-employee relationship is reciprocal), human capital developer (build the future workforce),

functional experts (designing and delivering HR practices), strategic partners (help line managers reach

their goals). No one plays all five roles to the same degree. Depending on where to work in company,

different roles have primary and secondary importance. It is not enough just to play particular roles, HR

has its own set of competencies that professionals need if they are to maximize the value they add for

key stakeholders. The authors provide the results of global survey, which allocates five main

competencies: strategic contribution, personal credibility, HR delivery, business knowledge, and HR

technology. Also, this survey shows how HR effectiveness of these competencies influences on business
performance. Thanks to this survey now it can be defined what competencies matters most to HR

professionals.

In concluding part of the book authors review how training and experience can sustain or build

better HR professionals. It suggests principles of adult learning and applies those principles to HR

professional development. It also outlines specific ways to build both training and development

experience for HR professionals. When HR professionals engage in learning, either formal training or

through development experiences, they become learning-agile. As business conditions change, as

expectations on HR increase, the ability to learn becomes critical. HR professionals constantly need to

develop their knowledge by reading, listening, observing, and doing.

In the last chapter, authors conclude by integrating the themes of this book into the HR function

as a whole (practices, department, and people). It offers a four-phase process – theory, assessment,

investment, and follow-up – that will enable to transform HR function by adding greater value. Theory

gives a blueprint for overall HR system in organization and criteria for effectiveness. Assessment enables

to determine how HR professionals performing against effectiveness criteria. Investment suggests what

can be done to improve HR function. Follow-up ensures that things get done. After all, last chapter offers

HR leaders a comprehensive organizational audit that will enable them to define, assess, and improve

their HR organization.

In my opinion, this book provides clear and accurate advices that can help HR professionals to

redevelop or transform an HR department into a forward-thinking, strategic part of the company. The

book no doubt gives important insights into the changing roles of HR in the 21st century, and

differentiates them from those performed by HR managers a decade ago. It should be read not just by HR

managers but by all line managers, who are key HR managers in today's context, so that they can help in

organizational capacity-building and performance excellence. The book has outlined a strategic HR

agenda in a comprehensive way. The roadmap outlined is clear and helpful for different types of readers.

This book outlines which practices and competencies make a difference to the business, and which don’t.

It is a great contribution to HR and leaders everywhere who are looking to increase the capability of their

organization.

In comparison with “Human Resource Management (HRM) in the Knowledge Economy”, I can

say that this book was easier to read, because it provides more examples and gives accurate steps to

achieve certain result. “The HR Value Proposition” covers more information than “HRM in the Knowledge

Economy”, it describes not only future aspects of HR, but also provides useful advices how to redevelop
or transform its current structure. Also, the links between chapters are very strong so it is easy to follow

the plot and don’t lose the idea.