HR Value Pyramid Model

When Should We Use this Model?

The aim of this tool is two-fold:

1. to engage stakeholders in thinking about where HR adds value;
2. to engage stakeholders in identifying where the balance of effort/resource in HR is now and where it should be in the future.

The model should clearly be used at the outset of the transformation journey in considering how the function adds value now and where it needs to focus in the future. We have also found the model useful in undertaking quick, high-level reviews during transformation.

What Does the Model Look Like?

Figure 1 represents visually the HR value pyramid. The HR value pyramid has four main propositions:

1. There is a hierarchy of roles within HR.
2. The basic administration and transactional roles will be most impacted by e-HR (including employee and manager self service) and new organisational arrangements, such as shared service centres and outsourcing.
3. The HR processes impact roles within and outside of the HR function and an important task during the HR transformation process is to determine those activities which can be embedded within Web-based HR, who is accountable for data entry and where knowledge-based roles need to make their unique contributions.
4. The HR professionals will acquire widely sought after expertise when they become business partners, proactively engaging with critical organisational issues as part of the management team.
   
   

 

Figure 1: HR value pyramid.

How Do I Use the Model?

This model is helpful in stimulating initial debate with key stakeholders about what they want from HR. On a one-to-one basis, it is a simple model for stakeholders to engage quickly and can take discussions into a number of interesting areas, such as what service internal clients need from the administrative/transactional side of HR and the nature of business partnership.

In a workshop format, the model has been particularly helpful around sourcing and resourcing discussions; that is, what percentage of HR activity, resource or cost currently sits across the four areas and what percentages should exist in the new world of HR. We have found that this exercise stimulates quality discussion around themes such as cost versus headcount (e.g., you may have fewer people in the administrative/transactional space, but there are clearly costs associated with Web-based HR) and cost versus type of resource (e.g., you may have a lower overall headcount in HR, but the people you will have may cost more).

At the early stages of the transformation process there is considerable value in encouraging key stakeholders to play with these ideas and their implications. This helps people to work through for themselves what the new world of HR might look and feel like.