What Makes an Effective HR Function?

Attention to people and organization issues has increased with the COVID pandemic, subsequent mental health and well-being concerns, and clear evidence of the impact of people and organization on stakeholder value.
In light of this attention, many consulting firms are exploring the “HR operating” model for how to build an effective HR function to respond to these trends. We see some commonalities in these approaches, including an overemphasis on HR structure, agility as the primary capability, and the employee as the primary customer of HR. Based on our research and experience, we propose an HR value logic that defines what makes an effective HR function so that value is created for all stakeholders. We use “HR function” as a broad term to refer to the HR department, mission, purpose, design, analytics, and people.

This RBL Institute playbook answers the question of what makes an effective HR function by reviewing:

  1. The value of “HR” for key stakeholders to build the business case.
  2. Nine recent approaches to characterize today’s HR function.
  3. RBL’s recent research and insights on HR effectiveness leading to an HR value creation logic.
  4. Action implications for diagnosis and improvements for HR value creation.


About the Authors

>> This original paper is being posted with the permission of Prof. Dave Ulrich and his colleagues at the RBL group.