My HR Department’s Turnover is too High; CEO Complains

HR, in many countries, is still struggling to form a strong position in an organization and there are many HR professionals with enormous zeal in delivering the best results. But, in most of the situations, it is the CEO’s mindset that ruins the HR department. Ultimately, it ruins the company culture, which leads to heavy costs on HR consultancy when the ball has gone out of the court.

CEO(s), with a mindset of using HR to handle company’s bad employment practices, are in a big loss, unfortunately. Many quality HR professionals do not join a local organization just because they know that they will be misused by the CEO(s) during many employee related matters, especially Remuneration. And, if a quality HR pro does join such an organization, then they have just put their career in danger unless the higher management understands the true essence of HR department.

It is, definitely, due to the lack of proper policy which has, first, to be followed by the CEO strictly; as many organizations have good policies, but there is no following which is due to the lack of commitment from CEO. HR’s role is to work on policies by forming a Business Partnering role with Line Managers by providing the best industry practices. Now, it is the Line Managers who ought to be held responsible for the implementation of policies.

One of the biggest problems which HR faces is dealing with remuneration matters such as Overtime, Other Benefits, Attendance Management & related deductions, Policy Making etc.

Let’s look into some issues one by one:

Near & Dear Policy: Are you earning for the company? - If yes, then you are part of this Near & Dear Policy before which no HR Policy exists. This is where CEO(s) have to think about future and what culture this practice is bringing fourth. In short, there is no Attendance Policy, no Recruitment Policy or no any policy for these people.

Time Management: CEO complains that HR is not delivering in improving the attendance of people in the organization. HR complains that he/she worked vigorously in developing a quality attendance policy, but, still, people do not follow, especially managers. Now, where is the problem? – It is, indeed, in the commitment of CEO who never took the policy seriously or never owned and put it on the Line Managers seriously, which should just be similar to the responsibility of the product quality that is imposed on Line Managers strictly.

One organization’s CEO complained that people are not coming on time despite the policies are there and he blames HR for this. HR, in this situation, has a following role to play:

Sit with the CEO to include some of high influencing Line Managers for policy implementation.
Encourage CEO to form an understanding that all such policies are as important as the CEO does not compromise on company profits, for which he/she holds Line Managers responsible in an event of low sales, caused by poor quality, marketing, customer service etc.
HR should sit with Line Managers by first convincing himself/herself of what he/she has to offer for the policy.

Consider employees as Humans and stop being personal by following bad practices, merely, to get praised by the CEO.

Get involved in providing regular feedback to Line Managers and CEO about the absenteeism rate (HR metrics/analytics play a vital role in it).

Overtime: It has been observed in many organizations that CEO(s) form a strong focus on saving on the overtime costs. Indeed, it’s a good approach as overtime remuneration itself is a kind of penalty on the organization for making an employee work extra hours. A good organization is the one that emphasizes on making the employees work during the defined working hours only; by forming quality procedures and standards. A common example, which has been frequently observed, is that CEO(s) want their production workers work for extra hours and also come on time. The biggest pressure that arises on HR, in this situation, is to be strict to Late Comers and act as a sandwich when the CEO only pays overtime when he/she wishes. There needs to be a stubborn approach by HR professionals to have a policy and commitment of CEO to follow it.

Benefits Related Issues: This is the situation when everyone, in the organization, keeps an eye on HR department that pay rise (for example) is dependent on what HR proposes to the CEO. On the other hand, HR complains that the CEO makes the decision on his own and puts the responsibility on HR; there is no basis for all decisions by him/her.

One case is of an organization where the CEO held a meeting with his HR Pro to discuss the prevailing bonuses in the market. The organization offers 3 full salary annual bonuses while the market practice is 1-2 full salary bonuses. Upon knowing this from HR, the CEO decides to follow market practice and instructs HR to shoot the email of this new policy. On this, HR tells the CEO that the company holds a good reputation in market for offering this benefit; and reversing it, merely, to follow the market practice although the company is making good profits, could bring a negative impact on employees’ moral. HR further adds that if the decision has to be taken (anyhow), it would be nicer if it is taken by taking key Line Managers in confidence. The response comes from the CEO, ”It is my decision and I have decided. You just need to go and shoot a memo”.

Now, where does the problem lie?

After HR shoots the memo, everybody rushes to HR to know why this decision has been made even though the company is doing well. Line Managers approach HR too and ask as to who made such a big decision of cutting our pockets. They approach the CEO to inquire about this issue. The CEO, in response, says that it is HR’s decision and all such matters should be discussed with HR. I do not have time to discuss such issues as we have to talk a lot on business.

Here, the whole blame comes on HR as Line Managers say, ”when the company was in loss, years earlier, it is we who advised the CEO not to issue bonus that year. Still we were given the bonus. We simply cannot believe that this decision is CEO’s when the company is doing great. Hence, it is you who are attempting to get praised by giving such frivolous ideas”. HR becomes blank and tries to convince that I never approached the CEO.

But, everyone, in the organization, now blames HR. This is the situation when HR becomes the victim of being misused by the CEO and such organizations really face huge problems when they do not understand the true essence of HR. Thus, a huge sum is spent, later, on OD consultancy when time goes out of the hand and the company gets into the dire need of Policies and Procedures.

HR pros, in such a situation, are advised to be committed to their profession and stop the boot-licking practice. The only advise to them is to play an active HR advisory role and think about what is ethically right and what is wrong rule; and hold a firm stand to hold a formal discussion/debate with the CEO on such matters and try to include Line Managers as much as possible.

If such an attempt does not work at all, then the organization’s disease is incurable (unless a strong OD intervention takes place when the CEO becomes mature) and it’s time to look for a good organization.