Wen / Sun Bo is an associate professor at China Institute of Labor Relations and an executive vice president of Huaxia Cornerstone Group
Source: Huaxia Cornerstone Management Review
01
Grasp the key changes in human resource management in times of uncertainty
There are two sets of keywords in this era: qualitative change and uncertainty, and the digital economy. Although the beginning of 2020 is full of "black swans", the dispute between the United States and Iran has not stopped, and a new crown pneumonia has swept the world. In fact, qualitative change and uncertainty did not appear only this year, if you must find a time node, I think since the 2008 financial crisis, uncertainty has become one of the theme words of this era.
1. Efficiency management challenges under the middle-income trap
Uncertainty comes from many aspects, from the perspective of the operation and development of Chinese enterprises, uncertainty mainly comes from two aspects: one is from the national macro level, that is, the problem of development model; The other comes from the middle-income trap. The issue of development models has been discussed a lot over the years, and I will not dwell on them here.
I think what's more critical for China right now is to get into the middle-income trap. The middle-income trap itself is a statistical indicator concept, and the World Bank's 2012 re-established criteria are: low-income countries whose per capita national income is below $1,035; $1036 to $12,616 is a middle income, and the middle income is bounded by $4,086, which is divided into lower middle income and upper middle income; Above $12,616 are high-income countries. According to this standard, the mainland has entered the stage of middle- and high-income countries since 2012. Why is the concept of "middle income" so important in the international community? Because the "Latin American vortex", "East Asian crisis" and "North African crisis" in recent history have all occurred in the middle-income stage of the region.
In the 1960s, 113 countries and regions in the world reached the level of middle income at that time, but by the end of the 1980s, no more than 13 countries and regions had achieved leapfrogging, which means that most countries did not achieve leapfrogging at the middle-income stage. A series of problems often erupt at this stage, so it is called the "middle-income trap", whether this stage can cross the past also determines whether a country can achieve sustainable development.
The biggest uncertainty we face now comes from how to cross the middle-income trap. At this stage, there are two risks: one is the supply side, and the other is the demand side. This will bring about a change in the background of enterprise development.
From the supply side, it is a full range of cost increases, labor costs, resource costs, environmental costs, etc., and greater costs come from technological innovation. Regarding the rising cost, enterprises have suffered from skin pain in recent years. The Pearl River Delta and the Yangtze River Delta are places where industries are relatively concentrated, especially enterprises with labor-intensive and low gross profit margins. However, the long-term trend of rising labor costs has not reached a certain "node", which is simply that it is likely to continue to rise. And not only labor costs, but also resource costs, environmental costs, etc., of course, the cost of basic R & D investment has risen sharply.
From the demand side, investment and consumption are weak. Many companies that do investment invest in projects like gambling, why? Just because there are too few good projects. What is a good project? It is not backward production capacity, not simply capacity expansion, but a project with independent research and development and independent innovation capabilities. The lack of such "good projects" inevitably leads to weak investment.
Consumption also weakened at the same time. In the more than 40 years of reform and opening up, wealth has been accumulated on a considerable scale, so why is there weak consumption? In fact, a very important premise for the improvement of consumption power is whether income is reasonably distributed. It includes three levels: whether the allocation of middle and high, middle and low income is reasonable. And we have irrationalities at all three levels of distribution.
Weak demand brings superposition of two aspects of supply and demand, there is no way to digest costs through price rises, and there is no way to stimulate demand in a deflationary way, so this is the current more difficult problem.
In this case, many enterprises choose to deploy globally and move to Southeast Asia and Africa, where labor prices are relatively low. However, labor prices do not equal labor costs, and what is really to be compared is the unit labor cost. Its basic formula: unit labor cost = average labor remuneration÷ labor productivity.
After many enterprises moved to Vietnam, the labor remuneration was low, but the labor productivity was also reduced, so the unit labor cost did not improve, and even for a long time it declined, so its competitiveness was still problematic.
And we want to participate in international competition, the only indicator is the unit labor cost leadership. The challenge posed by this for human resources is that it is necessary to face the pressure of rising labor remuneration, while the unit labor cost must be leading, and labor output must be greater than the growth rate of labor compensation. The first challenge facing human resource management is efficiency management, using human resources efficiency to improve to resolve cost risks.
2. The changes in people brought about by the digital economy
The digital age is an era of co-evolution of people and technology, that is, the comprehensive application of Internet technology to all aspects of production and consumption, so that the real economy and the virtual economy are highly integrated. Digitalization is not only a technological revolution, but more importantly, a way of thinking, a cognitive revolution.
The impact of digitalization and intelligence on enterprise operation and management is reflected in the three basic propositions of operation and management: strategy, organization, and talent, the biggest feature of which is to reconstruct the relationship between people and organizations based on digitalization and reconstruct organizational capabilities.
Reconstructing the relationship between people and organizations based on digitalization, the most critical thing is to grasp the changes in people. Compared with the employees of the previous generations, the new generation of employees with the "post-90s" as the main body does show many different characteristics. In the past, people in the enterprise through the promotion of career development, enterprises require employees to be loyal to the organization, enterprises also provide growth opportunities for loyal employees. Loyalty has long been encouraged, and many companies will have a seniority bonus in their pay. But today's professional is not keen on being loyal to a business, but loyal to his profession. His career development plan is to continuously enhance his value and accumulate professional resources through professional growth and refinement. In this case, the relationship between people and organizations changes, and the viscosity between people and organizations decreases.
Comparison of the characteristics of traditional employees and the characteristics of the new generation of employees
These characteristics of the new generation of employees even pose challenges to the traditional theory of human resource management. This challenge is manifested in all aspects, such as positive and negative incentives based on material incentives, which obviously cannot be applied to the new generation of employees, and the new generation of employees still needs to be seen and paid attention to. If you can't meet this need and manage it the way it used to be, management will fail. So today we are facing the change of people to bring about the reconstruction of the relationship between people and organizations, management reconstruction.
3. People are the purpose, a new stage in the development of human resource management
The key change behind this era is the change of people, and the change of people brings about changes in the relationship between people and organizations, which comes from the changes in the concept of human resource management in different eras.
From the perspective of the development of the relationship between people and organizations, I have roughly divided human resource management into the following four stages.
The first stage can be called "man is a tool", and man is simply regarded as the exporter of "force". Especially in the period of agricultural society and the early stage of industrialization, the first factor of production is not human resources, but land and capital, so human resources are only regarded as ordinary factors of production with the same status as tools.
The second stage is "matching people and posts". Simple understanding is to get the right person to do the right thing. The characteristic of this stage is the initial recognition of the uniqueness and difference of human resources, but it is still premised on "things", that is, the uniqueness and difference of people are attached to "things", and "things" determine their value. This is what we call "people-to-job matching", which is the second stage of the relationship between people and organizations.
The third stage is "personnel interaction", not only people to meet a thing, but to fully recognize the unique value of knowledge, skills and so on contained in "people", through the effective configuration between people and things to achieve the development of things, but also to promote the development of people themselves. At this time, the evaluation of people and things is separated, looking at both people and things, looking at both the value of things and the value of people.
The fourth stage is the proposal that "man is the end". This concept was put forward by the philosopher Kant a hundred years ago, saying that people are the most fundamental purpose of everything, but in terms of the application of enterprises, it was after the Internet was popularized that it was Mr. Zhang Ruimin of Haier.
Zhang Ruimin once clearly explained Haier's "people are the purpose" concept, "to meet people's needs, to give people the best treatment, in fact, this is not the meaning of people is the purpose." Because this is contrary to the purpose of the enterprise, the purpose of the enterprise is to create the maximization of user value. Haier people are the purpose of management innovation is to make everyone have self-creativity, you by meeting the needs of customers to achieve your value. The organization acts as a platform to support you in realizing this value and sharing it with you. This is the foundation of business operation, so the operation of the enterprise is fundamentally people-centered. ”
The contrast between "man is the end" and "man is the tool"
Man is the end, the goal of taking man himself as the goal of the organization; Man is a tool, then man is attached to the organization. This is a fundamental change in the relationship between people and organizations. As a result, the relationship between people and organizations has a new look and new characteristics, and the development stage of human resources has also entered the fourth stage, that is, the stage of "people are the purpose".
According to Haier's "people are the purpose" concept, the organization no longer has the traditional concept of employees, only the "people" who create value on the organizational platform; There is no longer a concept of enterprise and sector, only a network of mutual collaboration that supports value creators to create value; There is no longer a hierarchy, only to create different roles and functions for user value; There is no longer a distinction between inside and outside, some are socialized human resource ecology and value creation collaborative ecosystem, and the organization becomes the carrier of value creators; There is no longer invalid labor, because valuelessness does not exist, no way to find value creation does not exist, and continuous appreciation without value creation does not exist.
Summary: Entering the ranks of middle-income countries, in the era of digital economy, the biggest challenges facing human resource management are efficiency management and human change. Human change is a fundamental change, it brings about the reconstruction of the relationship between people and organizations, brings about the reconstruction of human resource management, and its core content is the redefinition and matching of values. Including organizational value, user value, social value and individual value.
02
Mechanism innovation with talent efficiency as the core
Back to the opening paragraph, how corporate human resources cope with the management problems brought about by this era: efficiency management and rising cost pressure. For enterprises, the most feasible way to resolve contradictions is to improve efficiency, take efficiency improvement as the core, and resolve pressure for the grasp.
The effectiveness proposition has been the focus of our team's research in recent years, and combined with the consulting practice in dozens of companies, we have built a basic model.
Talent Efficiency Improvement Mechanism (Huaxia Cornerstone Model)
1. The premise of talent efficiency improvement is career theory and strategic thinking
If there is no breakthrough in the business theory and strategic thinking of the enterprise itself, how to improve the efficiency of the individual will not be amplified.
The core proposition of an organization is first and foremost strategy. I remember that when I was working at Huawei, I heard Mr. Ren Zhengfei's expression of Huawei's strategy many times, "That is, to live." What about after you live? It's about living for a long time. If there is an ultimate strategy, it is to live longer than the competitors. ”
It doesn't sound very "tall", but Mr. Ren Zhengfei actually answered a fundamental question of organizational management, that is, the problem of sustainable development. The answer to the question of sustainability is essentially the process of constructing the career theory of the organization, that is, Drucker's classic three questions about the organization: How can our career have a future? How can our work be more efficient? How can employees achieve something? Answering this basic set of assumptions clearly means that the top-level design of the organization is completed.
What exactly is our business? Expressed in the form of mission, vision, and strategy, it answers the question of whether our business has a future; If the organization wants to undertake the business goals, it must improve efficiency through the organizational structure, governance structure, control process, and system process; For an organization to support the achievement of business goals, it needs to have a catalyst, it needs a drive system, and the drive system is people. How can people feel accomplished, willing to engage in this thing, and drive this organization to complete the business vision. This series of reflections is called the business hypothesis, and the answers to this series of questions constitute the business theory of the enterprise.
Career theory is both a top-level design and the underlying logic of a company's way of behaving. The greatest value of the Huawei Basic Law is that it completes the top-level design of the enterprise, points out the direction in the process of Huawei's transformation and development, and unifies everyone's thinking.
2. The basis for improving talent efficiency is organizational evolution and change
In line with the future ecological strategy, the organization will certainly move toward a flat, networked, and customized organic structure, rather than today's pyramid structure.
Whether it is Haier's management model or Huawei's management model, the intuitive feeling may think that the organizational form is hugely different, but its essence is gradually evolving to a "platform + distributed organization". Platform + distributed organization is a mainstream organizational model after the traditional organization "de-intermediary, de-authoritarianism, and decentralization", but different enterprises have different forms of presentation. The evolution of the organization is an important foundation for the improvement of talent efficiency.
Huawei's organization and talent management mechanism has two outstanding features (success): The first feature is that it continuously activates people's value creation and fighting spirit around people's value. In an early years, Ren Zhengfei asked everyone in an internal speech: "If Huawei wants to sell, what do you think we are most valuable?" "Everyone said Huawei's brand, Huawei's technology, Huawei's talents, etc. Ren Zhengfei is not right, we have two valuables, the first is the mechanism of continuous activation of human value creation around the realization of human value (Huawei human resources value management system), and the second is the organizational change and organizational capacity building mechanism around customer value realization.
The second feature is Huawei's "empowerment platform + iron triangle" organizational approach. The "Iron Triangle" does not represent only three people, but represents a flexible combat unit that focuses on customer value realization and rapid response to customer needs. The appeal is made by the front end, the so-called "let the people who can hear the cannon fire call for the cannon fire", and the backstage to provide support. The fundamental purpose of this organizational change evolution model is to amplify and improve the effectiveness of talents.
3. Human resources efficiency supply: organizational capacity planning and employee empowerment management
In the past, when talking about human resource management, the concept of position and department was first discussed, and the first thing to do to build a competency system was to break the concept of department and position (see Figure 9). How is it implemented in practice? We summarize the positions with similar capabilities and responsibilities to form a category, called "job type" or "class", and these different categories constitute different ability growth channels.
Each category has a career development channel, each level has a corresponding evaluation standard, through the standard to continuously lead the staff to improve, it builds a competency-based human resource management foundation.
4. Human resources efficiency drive: system integration of self-management and performance management
The continuous breakthrough of technology and the continuous improvement of social demand benchmarks promote the evolution of organizational forms, which will eventually lead to the reconstruction of people and organizational relationships, and the reconstruction of human and organizational relationships will make human resource management shift from the past position-based functional management to value management, performance management is a typical example.
For example, in the past, performance management had a position that was evaluated based on the performance status of employees in the position. But now, the position is more and more dynamic, and even the post has been replaced by a role, based on the performance status and performance evaluation of the post, what is the significance? This is a huge problem with performance management today.
In addition, human resource management shifted from functional management to value management, and the requirements for employees have changed a lot, emphasizing that employees take the initiative to break through the boundaries of the organization, actively capture customer needs and achieve value creation by increasing interaction with the outside world and by meeting customer needs.
Under this requirement, many companies that have done very strict traditional performance management have also encountered new challenges. For example, many employees show such behavior - the performance is stipulated, he will do the performance, and he will not do the performance. Today, we require employees to be more active contact with customers, more to seize opportunities, more subjective initiative behavior, but this kind of active work is difficult to pre-design and calculate into performance appraisal, how to do? This is also a problem encountered in performance management.
Therefore, one of the development trends of management is that the relationship between employee effectiveness and employee self-management and self-drive is getting closer and closer, and we can observe that many attempts in the industry are responding to this demand and change. The following two practices stand out.
First, the combination of self-management and performance management, that is, the concept of OKR, emphasizes self-worth-driven and self-positioning (see Figure 11). The basic idea of OKR is that the organization determines a general goal based on the general direction, and each team and each individual puts forward their own goal contribution based on the understanding of the overall goal. Of course, there is a set of evaluation criteria, such as the score is 0 ~ 1 point, then the score in 0.6 ~ 0.7 is relatively appropriate. In other words, OKR's measurement standard is not necessarily to require employees to complete 100% of performance indicators, but to focus on how employees can contribute more to the achievement of goals. Essentially, it is to evaluate the impact of employees on the achievement of goals, not the value of indicators that must be completed.
The fundamental difference between OKR and KPI is to change other disciplines into self-discipline, and to involve employees in the process of self-management by mobilizing their autonomy.
Second, performance management extends forward. Representative cases are Alibaba's value management and Huawei's labor attitude assessment. By extending performance management forward, selecting, guiding and mobilizing employees to achieve the desired performance of the organization through appraisal values.
Performance Management Extension (Value Appraisal)
5. The basis for the improvement of talent efficiency: leadership construction
Talent effectiveness also comes from the leadership of managers to a large extent, and the improvement and release of organizational talent efficiency can also be effectively realized through leadership construction.
Leadership building needs to solve three problems. First, the issue of mission, the mission pursuit and career passion of entrepreneurs and executives is a source of motivation for enterprises to move from excellence to excellence. The second is responsibility, responsibility is greater than ability, responsibility achieves excellence, entrepreneurs and executives are the role models of responsibility, and the real threat of enterprises comes from the lack of responsibility. The third is ability, and ability is the cornerstone of mission and responsibility.
Huawei has been committed to the construction of cadre management system, forming the Huawei experience of cadre management, the entire cadre management system is relatively perfect, and the management of cadres has been refined from mission and responsibility to selection and allocation, suitable for management, and team construction.
6. The engine of talent efficiency improvement: incentive and talent business partnership mechanism
1. Full recognition incentives. Based on the transformation of organizational and human relations and the characteristics of the new generation of employees, we found that the role of simple salary incentives is getting lower and lower, and enterprises must enter the era of full recognition incentives. The scope of the full recognition incentive includes at least six aspects: incentive performance improvement, incentive benchmarking behavior, incentive organization member behavior, incentive employee loyalty, incentive employee growth, and customer loyalty. There are many ways and methods, and the more popular ones are the point system, self-service benefits and so on.
2. Sharing and participation mechanism. The demand of knowledge workers for enterprises is no longer just to seek a salary, but also to obtain the right to claim surplus value as human capital and the right to participate in operation and management. This is a background for the current equity incentive and talent business partnership system to attract the attention of enterprises. The business partnership mechanism is a strategic power mechanism, a mechanism for enterprise growth and talent development, involving enterprise strategic innovation (platform + ecological strategy), corporate governance structure optimization (maximization of shareholder value and value of relevant stakeholders, co-governance and co-determination), and restructuring of the relationship between organizations and people (employment relationship and partnership), which is a new talent ecology. Huaxia Cornerstone put forward the 32-character value proposition of the talent business partnership mechanism: like-minded, altruistic; Co-creation, incremental sharing; Mutual empowerment, automatic collaboration; Value accounting, dynamic advances and retreats.
Summary: From the perspective of human resource management, the era we are in today has indeed undergone tremendous changes, and the core of the change lies in the change in the relationship between people and organizations, so we must reconstruct the management paradigm. From position-based human resource management, competency-based human resource management, to evolve to human capital management based on value creation and evaluation, we must evaluate value and distribute value, and human resource effectiveness has become the core issue. Efficiency improvement is not only to motivate individuals, but also to achieve the overall improvement of enterprise efficiency through mechanism innovation such as the reconstruction of business theory and the evolution of organizational forms.