3 Reasons HR Should Always Report to the CEO

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“There are only three measurements that tell you nearly everything you need to know about your organization’s overall performance:  employee engagement, client satisfaction and cash flow.”

–     Jack Welch (b. 1935), longtime, wildly successful CEO of General Electric

“It doesn’t make sense to hire smart people and tell them what to do.  We hire smart people so they can tell us what to do.”

–     attributed to Steve Jobs (1955 – 2011), co-founder and twice CEO of Apple

While Jobs carries cult-hero status even years after his death, bashing Welch has become popular these days, which baffles me.  It’s been 17 years since he had the wheel, and during his time, GE not only spun off cash and stock growth that was the envy of most companies, and he also produced a culture that spawned dozens of world-class CEO’s and senior executives.

Why?

Because he knew people came first.  If your company is ginormous (technical term), Human Resources should still report to the CEO.  If your company is tiny, the owner / CEO should still have direct responsibility for the people part of the puzzle.  Because…

1) If there’s a problem, the right people will fix it.  It may stem from a flawed process.  Bad marketing.  Inadequate cash management or some other accounting issue.  Behind each of those issues lie real human beings, and the CEO needs a direct line to the firing, hiring, developing and promoting decisions in the company.

2) If there’s not a problem, the right people will maximize the opportunity.  In good times, some departments, or individual’s might tend to coast a bit.  The CEO needs a direct line to the people decisions that permit a company to maximize opportunity when it presents itself.

3) Employee engagement is a hot topic, and it ain’t gonna cool off anytime soon.  I’m not particularly impressed by Glassdoor® or any other public forum where people can go air their dirty laundry anonymously.  I think we should air our dirty laundry with conviction, at the “family table,” so-to-speak.  Still, the best, and lowest cost recruiting there is comes from Albert in Accounting, who recommends Sandy for Sales.  The best employee retention comes when Sandy reminds Albert of all the great things he told her about the company when she hired on.  Don Clifton and Marcus Buckingham had in right in “First, Break All The Rules;” when we’re connected, engaged and devoted to our teams at work, great things happen, individually and in the broader picture as well.

Technically, I guess I could have titled the post “The Reason…” instead of three.  The reason?  People first.  And if the people are going to really be first, the CEO has to have direct access to and accountability for the people people.

 


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