The role of Organization by Universidad Da Vinci

“OD has always been the more innovation oriented function, while HR is typically expected to be stable and conservative. How people are paid and disciplined requires systems that are reasonably transparent and predictable. This asymmetry has important implications for the relationship between OD and HR.”

The Role of Organization Development in the Human Resource Function

By Edgar H. Schein

The purpose of this paper is to explore the connection between the Human Resource Function in organizations and the evolving field of Organization Development, and to do this in a historical context with an eye toward future challenges. The connection between the field of Organization Development (OD) and the Human Resource (HR) function is complex because both OD and HR are themselves evolving in response to many global forces. We are so preoccupied with the economic factor in the organizational world, both in business and in the nonprofit sector, that we may have failed to note five important trends that are influencing both HR and OD. First, all the organizational functions are becoming more complex and technologically sophisticated leading to the creation of subcultures based on different occupational technologies. In OD the technology of survey methodology, strategic analysis, leadership development, large systems change, group dynamics, culture change, and lean manufacturing have evolved complex processes leading to specialized training and the licensing of practitioners. In the HR area pay systems, labor relations, management development programs, and health/ environment/safety p rograms have become similarly specialized. Second, the rapid evolution of information technology has changed the nature of work and the nature of organizing in 1. This paper is based partly on an invited address to the Human Resource Forum, IEDC, Bled Business School, Bled, Slovenia, September 1, 2007.

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dramatic ways, stimulating innovation in OD and challenging some of the most sacred cows of the HR culture. Specifically, the basic assumption that good communication, trust, and effective supervision all hinge on face to face contact has clearly been challenged by the myriad of organizations that today consist of large numbers of employees who are not co-located, who may never have met each other, yet who are required to build trusting relationships and work as teams. Increasingly organizations are becoming complex networks held together by new communication and control mechanisms that are being invented out of necessity. Third, the world is becoming more of a global village in which the interdependenciesbetween countries and between organizations are increasing dramatically. Through subsidiaries, joint ventures, and partnerships of various sorts more and more companies are reaching across national boundaries. The basic driver is of course, economics. In the effort to be competitive, more and more organizations are discovering the need to go beyond their own boundaries for markets, cheaper labor, and scarce resources. Evolving policies that cut across nations and geographies is a challenge to both OD and HR. The fourth major force is, in a sense, derivative from the others—the complexity that arises from cultural diversity. Culture is a group’s learned response to the problem of survival in the external environment and the problem of internal integration. If there is no history of problem solving,

there is no culture. So countries or regions of countries have cultures, organizations have cultures, and occupations develop cultures. So when sales people with a sales culture are talking to engineers with an

systems that are reasonably transparent and predictable. This asymmetry has important implications for the relationship between OD and HR. Let’s examine each function first.

As we become more multicultural we are discovering that the basic functions of organizations, their ethical systems, their rules and procedures for how to deal with each other, with customers, shareholders, employees, and the community all vary across cultures. Even the definitions of work, of career, of work-family balance, of gender roles, of rules about the age of entry and retirement are all being discovered to be highly variable. The vaunted western system, most highly evolved in the US, simply does not work in or even apply to most other countries. engineering culture mentality and they come from different countries and different parent organizations, it is a wonder that they can communicate at all, much less solve problems together. Multicultural groups will become more of a fact of life (Schein, 2009a, 2010). Fifth, the fundamental function of organizations is being reexamined around the issues of social responsibility and business ethics. As we become more multicultural we are discovering that the basic functions of organizations, their ethical systems, their rules and procedures for how to deal with each other, with customers, shareholders, employees, and the community all vary across cultures. Even the definitions of work, of career, of work-family balance, of gender roles, of rules about the age of entry and retirement are all being discovered to be highly variable. The vaunted western system, most highly evolved in the US, simply does not work in or even apply to most other countries. The implications of these five factors for both OD and HR are staggering, but the impact is not the same on both functions. OD has always been the more innovation oriented function, while HR is typically expected to be stable and conservative. How people are paid and disciplined requires

Historic Evolution of HR—Four Roles To understand how these forces will impact the HR function, we must first look historically at the different roles that HR managers have played and see which of these roles is most relevant today and for the future. We can distinguish four basic roles: Role 1: Champion of the Employees One of the first and most important roles of the HR Manager was to be the spokesperson for the employee. Not all companies honored this role; but in the heyday of the human relations movement of the 1940s and 1950s, it fell to HR to show management how the employees’ working conditions, wages, and benefits needed to be upgraded. To play this role effectively required a certain set of attitudes, values, and skills. The HR Manager, usually called Personnel Manager in those days, had to have empathy for the employees, the desire to improve the lot of the worker even if this meant less profit for the company, and the skills to influence upward. Fulfilling this role effectively often put the HR manager in opposition to higher levels of management. To play this role effectively, it was useful to know something of individual psychology, and this field was rapidly

evolving under the impetus of WW2 in which the need for effective selection methods stimulated industrial psychology (Schein, 1980). The domination of psychology in HR was established early but continues to this day in the obsession with surveys, individual selection testing and interviewing, the search for competency profiles for effective leaders, and the popularity of concepts such as emotional intelligence. The basic focus of HR in this role has been and continues to be the individual, reflecting Western cultural traditions. Role 2: Expert Administrator The Personnel Departments of most organizations had and continue to have the job of managing the pay and benefits system, which requires efficiency and precision. The HR Manager, for whom this role is central, had to have a good knowledge of the relevant systems and procedures, must believe in the value of standardization, had to defend procedures that often appear to be too bureaucratic to the employees, and had to have the administrative skills to build and manage the pay and benefits organization. If Labor Relations is an issue in the organization, the HR Manager had to also know the laws and have the negotiating skills to deal with the contract negotiations process. Training and development in this role was typically conceived of as indoctrination of the employees in the organization’s values and ways of doing things. The individualistic psychological bias showed itself in this role as well in that administrative functions leaned heavily on individual incentives, on individualistic discipline systems, and on the assumption that economic incentives are the key to good administration. Role 3: Partner in Strategy As corporations became more complex and recognized the centrality of human resources to the success of their longerrange strategies, they began to demand of the HR function some participation in the strategy and planning process. How many people with what talent will be needed? How are the relevant people to be found,

The Role of Organization Development in the Human Resource Function

developed, and integrated? Can career systems be designed to insure prepared people for succession in all key jobs? It was this period, sometime in the 1960s and 1970s that led to the conversion of the Personnel Manager title into Manager of Human Resources to acknowledge the importance of people in the longer run strategy of the organization. In most organizations a problem arose since senior management wanted help from HR in strategy, but the HR Managers were not trained in that kind of thinking and, worse, often had pro-employee values that made them fight rather than help senior management. The HR manager who could play this role would have to have empathy for the strategic issues facing the CEO, would have to have the skills to think strategically and in systemic terms, would have to have a broad view of all elements of the business, and, most important, would have to share the value that the ultimate goal of the business is to increase shareholder value. The conflict with Role 1—The Champion of the Employees—is obvious. In the meantime, OD as a field of practice was evolving rapidly and creating ambiguity concerning the issue of how much OD should be part of or independent of HR. Role 4: The Professional HR Manager In a 1975 article for the Journal of the College and University Personnel Association, I outlined what at that time seemed to be the major change that the HR function was undergoing (Schein, 1975). I noted that HR Managers were, of necessity, becoming change agents and process consultants. This role shift was in part the result of the professionalization of the function. More was known about employee motivation, career development, leadership and management development, and it was often the role of the HR manager to bring the research knowledge and practice into the organization. Instead of identifying with the employee (Role 1), the administrative functions of the company (Role 2), or the senior management (Role 3), HR managers began to identify with each other and with the profession of HR. In the other three roles, the HR manager was still an organization

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person. In Role 4 the HR manager was a professional whose loyalties lie outside the organization. The correct way to fulfill the HR function now was to be based on the best practices in the profession, and the HR manager became de facto both marginal in terms of the role in the company and an outside conscience to the organization, bringing knowledge, new attitudes, and new practices into the organization. However, in order to fulfill this role, the HR manager had to have new and powerful influence and change agent skills. In particular, he or she had to be able to think

evolution of HR. I believe that OD got its biggest stimulus from the post war problems of WW2, specifically the need to help reconstruction in war-torn countries. While Kurt Lewin and others were working on trying to understand how Nazism could have occurred in the first place, Eric Trist and others at the Tavistock Institute were helping the British Coal Mining Industry to reconstruct itself (Schein, 1980). The Tavistock projects were more sociologically oriented and laid the foundation for what came to be seen as a new core concept—sociotechnical systems with which

In most organizations a problem arose since senior manage ment wanted help from HR in strategy, but the HR Managers were not trained in that kind of thinking and, worse, often had pro-employee values that made them fight rather than help senior management. The HR manager who could play this role would have to have empathy for the strategic issues facing the CEO, would have to have the skills to think strategically and in systemic terms, would have to have a broad view of all elements of the business, and, most important, would have to share the value that the ultimate goal of the business is to increase shareholder value. of the organization in broader systemic terms and be able to get that perspective across to the executive suite. So paradoxically, as HR managers got pulled up into the strategy discussion, they also found themselves in the difficult role of influencing that discussion in value directions that the executives might not want to hear. Being both a conscience with outsider responsibilities and an effective administrator with inside responsibilities could create role conflict. The relationship to OD with its more systemic emphasis became more visible. Some History of Organizational Development To understand the evolution of this fourth role of the HR manager, we need first to look at some aspects of the history of OD, which was quite different from the

one worked in an action research model. Large-scale social projects were launched by Rice in the textile mills, Jaques in factories, and by Menzies in hospitals (Rice, 1963; Trist & Bamforth, 1951). European psychiatrists were beginning to experiment with therapeutic communities in which the helpers were not professional psychiatrists and social workers, but healthy young adults who could serve as role models for the patients and establish normal relationships with them. In the late 1940s and early 1950s Lee Bradford and others formed the National Training Labs (now NTL Institute) that began to run group dynamics and leadership workshops in Bethel, Maine and Ojai, California (Bradford, et al., 1964; Schein & Bennis, 1965). The need to understand group dynamics and leadership led naturally to the emphasis on organizations. My book Organizational

Psychology was first published in 1965 and pulled together in its last chapter what had evolved through McGregor, Likert, the Lippitts, Tannenbaum, Bennis and Shepard, Blake and Mouton, Dyer, and especially Richard Beckhard into the field now labeled Organization Development (Schein, 1980). One wing of Sensitivity Training became more oriented toward “therapy for normals,” continuing the strong individualistic psychological focus. However, as organizations became more interested in the p owerful impacts of experiential learning, they stimulated more labs, research projects, and in-house experiments that de facto created the OD field that was more oriented toward systems and group dynamics. At the same time, applied anthropology was entering the organizational domain and creative new research approaches were spawned in places like the Western Electric Hawthorne Works. Instead of just doing psychological experiments, parts of the research program consisted of having observers just sit and observe how work groups actually functioned. Experiential learning, observation and analysis of group and interpersonal processes, and community role playing evolved in the NTL and Tavistock A.K.Rice workshops, which gave real meaning to the concept of systems. OD as a concept and a set of practices was premised on the idea that the consultant/helper was not working with an individual or even a small group, except as a means for helping the organization or some larger segment of that organization. The concept of client shifted to the organizational unit (Schein, 1999). The skills required to do this could not be learned from traditional psychology. One had to attend workshops and develop one’s own capacity to observe systemic processes and develop personal skills to intervene in such processes. All through the 1950s and 1960s innovations of all sorts were developed as a result of stimulus and support from large organizations such as Exxon, Union Carbide, Hotel Corporation of America, TRW Systems, and various European companies. Some of the individual innovators in the US were Blake and

Mouton, Beckhard, Shepard and Bennis, Benne, Gibb, Tannenbaum and Schmidt, and Miles at the Columbia University Teachers College. The rapid expansion of the OD field was symbolized by the Addison-Wesley series of OD books edited originally by Beckhard, Bennis, and Schein. Though integrative books were available, the feel of the OD arena was one of diversification and innovation highlighted by the fact that the OD series had more than 30 titles by the 1980s.

either missing altogether or is set up as a separate function reporting to HR. This solution usually leaves the OD consultants in a compromised and sometimes frustrating position because they have to influence upward through the bureaucracy in order to get projects approved and implemented.

Pattern 4—Separate and Independent Functions. The solution that seems to me to work best is where HR and OD are treated as separate functions that report independently to senior line management. For example, when Digital Equipment Corp. (DEC) first hired Dennis Burke, they Connection Between the appointed him as head of management HR’s Fourth Role and OD development reporting directly to founder and CEO Ken Olsen. The head of HR, The role of HR as a profession required who had all the administrative functions some form of integration or at least alignand Labor Relations, reported to Olsen ment between HR and the growing OD separately. Burke had the independence to field. As I have observed this over the create a variety of developmental activilast 50 years, there are three different ties that worked very well as DEC grew patterns visible. (Schein, 2003). When they later hired Sheldon Davis Pattern 1—Integration. The OD role is from TRW systems as the senior VP of HR, integrated into the job of the HR execuOD was supposed to be integrated with tive, which implies that the senior HR HR, but this solution did not work because manager fulfills all four roles. Needless Davis was skewed toward OD. The adminto say, very few HR executives have the istrative side of HR suffered, and Davis breadth of insight, values, and skills to often attempted to change Ken Olsen’s actually perform all four roles. It is also not clear whether the deep assumptions of behavior without success and to his own ultimate detriment. the HR culture and the OD culture can be In Procter and Gamble it was notable integrated because some of the HR functhat the new designs of production units tions are entirely driven by organizational always had both an HR manager and needs while many OD functions require consideration of broader concepts of client, an OD manager reporting to the plant which may run counter to some immediate manager. The OD managers were often recruited from the employment pool, organization needs. often the union, because of their interest and skill in working on group and orgaPattern 2—OD Bias. The HR function is skewed toward OD by hiring an OD trained nizational process. They were then sent to workshops at NTL to learn the specific and skilled HR executive who may or may OD skills they would need, and then they not have the administrative or strategic skills to play the other roles. I have encoun- joined the plant manager’s staff as full time tered many organizations that had creative employees on the same level as the HR manager for the plant. OD functions but their administrative In Ciba-Geigy in the 1970s and early systems were in disarray and senior man1980s the CEO had reporting to him a agement felt that the OD function was not Senior VP of Development whose job it always aligned with corporate strategy. was to oversee the care and feeding of the top several hundred executives (Schein, Pattern 3—HR Bias. The HR function 2010). He had only a small staff but, more is skewed toward administration and/or importantly, he reported directly to the corporate strategy with the OD function

The Role of Organization Development in the Human Resource Function

CEO, which made him superior in rank to the VP of HR. All the work on culture that I was able to do in that organization was stimulated and supported by this executive. In fact, I never met the manager of HR, whose job was entirely to administer the bureaucratic side of the HR function such as pay and benefits. Preliminary Conclusion and Emerging Issues One important conclusion is that the skills and attitudes required in each HR role and the OD role are quite different, and, to some degree in conflict with each other, setting up potential role conflicts within the person occupying the HR job. Which role to treat as paramount and which sets of attitudes, skills, and values to cultivate can become a difficult psychological balancing act. As tempting as it may be to resolve these issues by looking at what has happened historically, i.e., just separate the functions because that has worked well in the past, I believe that the trends I outlined at the beginning of this paper may require new patterns and new role definitions for both HR and OD. I previously mentioned the broad trends toward globalization, technological complexity in all areas of business, and growing cultural diversity. In addition one should note that the level of education worldwide is slowly increasing, which means that organizations will be dealing with smarter and more educated and sophisticated employees. There is also a change in the expectations of top management as to the role that HR should play. There are growing pressures toward being able to play Role 3 (Partner in Strategy) and Role 4 (Professional HR Manager). There is clearly a change in social values around the importance of work/life balance and the psychological contract between company and employee (Bailyn, 2006). Employment security is rapidly migrating into employability security. Companies like Apple have argued that even if they fire you, you will have learned important new skills that will make you more employable elsewhere. This may not be objectively true, but many companies argue that they

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are, therefore, justified in hiring and firing at will. The concept of career is itself slowly metamorphosing into a variety of concepts, especially as globalization reveals that in different cultures work and career have different meanings and are differently integrated with family and self. In the western world this shows up most clearly in the increasing mobility that employees display (as well as sometimes, the refusal to move), in the decline of company loyalty, and the growing concern for self and family. Much of this is due to the growing number of dual career families in which the family is

potential conflict between HR’s need to develop standard systems and OD’s view of diagnosing and working with subsystems and microcultures. What OD brings to the party is more of a process concern of how to align different individual needs and different subcultures into a functioning whole. For HR, jobs are individual sets of responsibilities and accountabilities often captured in the job description. From an OD perspective I have argued that jobs should be seen as roles that are embedded in an ever changing role set that needs to be perpetually examined and updated (Schein, 2006).

The dispersion of employees into networks and the loosening of organizational boundaries will be a special challenge to OD and a source of difficulty for HR. The OD function will have to evolve concepts of teamwork and collaboration in a network in which face to face contact may never take place. HR will have to develop policies that are consistent across various kinds of spatial and cultural boundaries, which will be especially difficult around pay systems since we know that money and rewards are perceived very differently in different cultures. managing two full careers. In this arena HR and OD will have to work together to shape appropriate development policies. Research on employees has shown increasing variability in what they are good at, seek, and value. My own research on Career Anchors shows that organizations must be prepared to respond to a wide variety of employee needs and avoid the stereotype of “everyone wants to climb the corporate ladder” (Schein, 2006). This impacts HR directly because incentive, reward, and discipline systems have to become much more differentiated in order to seem fair to people with different skills, needs, and aspirations. With increasing technological complexity, work itself becomes more complex. The HR manager will have to help line and other staff managers to develop better tools for figuring out what needs to be done and how to communicate that to employees. Around these last points I see a

Cultural diversity is increasing and so is management’s discovery of culture. Culture and sub-cultures have always been with us, but the discovery of the importance of culture in the performance of the firm is fairly recent (Denison, 1990; Denison et al., 2003; Sackman, 2006). Managers don’t quite know how to deal with an abstraction like culture, so it will fall to the HR and OD functions to educate management on what culture is and does, and beyond that both functions will be involved in the implementation of culture evolution, culture change, and, in the case of sub-culture conflicts, culture alignment (Schein, 1996). The dispersion of employees into networks and the loosening of organizational boundaries will be a special challenge to OD and a source of difficulty for HR. The OD function will have to evolve concepts of teamwork and collaboration in a network in which face to face contact may never

take place. HR will have to develop policies that are consistent across various kinds of spatial and cultural boundaries, which will be especially difficult around pay systems since we know that money and rewards are perceived very differently in different cultures. Organizations are increasingly catching on that people (human resources) are not an expendable resource and a cost factor in the economics of the firm but rather a capital investment to be valued and nurtured. No matter how much we automate, downsize, or break up organizations geographically, people will always, in the end, be the key to performance. The reason for this is simple—no amount of engineering and planning can predict all of the contingencies that will arise in a dynamic world. It will always fall to some people somewhere to make sense of the new data and new problems that will show up. So whether we like it or not, people will continue to be central to the organization and the HR function will continue to be central to the management of those people. With that insight will also come the recognition that collaboration, mutual helping, leaders as providers and consumers of help will become more and more important (Schein, 2009b). OD will play a critical role in developing concepts and processes that will facilitate more mutual help and HR will have to develop administrative policies that value help and collaboration. Both functions will be needed and we can all watch with interest how they will evolve and eventually align and/or integrate. A Final Thought—Whither Management? Though it is beyond the score of this paper, we should consider that the biggest impact on both HR and OD might be the slowly evolving but significant growing competence of line executives in human process skills. As general managers become more aware of the value of humans and as they develop skills in handling interpersonal relationships, group dynamics, and interorganizational dynamics, and as they become more culturally sophisticated they will take on many of the roles that HR and OD play today. As managers are defined

increasingly as HR and OD practitioners, it remains to be seen how the HR and OD specialists will adapt. References Bailyn, L. (2006). Breaking the mold (2nd ed.). Ithaca, NY: Cornell University Press. Bradford, L. P., Gibb, J. R., & Benne, K. D. (Eds.). (1964). T-Group theory and laboratory method. Hoboken, NJ: Wiley. Denison, D. R. (1990). Corporate culture and organizational effectiveness. Hoboken, NJ: Wiley. Denison, D. R., Haaland. S., & Goelzer, P. (2003). Corporate culture and organizational effectiveness: Is there a similar pattern around the world? Greenwich: Jai Press. Rice, A. K. (1963). The enterprise and its environment. London: Tavistock Publications. Sackman, S. A. (2006). Success factor: Corporate culture. Guetersloh, Germany: Bertelsman Stiftung. Schein, E. H. (1975). Changing role of the personnel manager. Journal of the College and University Personnel Association, 26, 14-19. Schein, E. H. (1980). Organizational psychology (3rd ed.). Upper Saddle River, NJ: Prentice-Hall. Schein, E.H. (1996). Three cultures of management: The key to organizational learning. Sloan Management Review, 38(1), 9-20. Schein, E. H. (1999). Process consultation revisited. Upper Saddle River, NJ: Prentice-Hall. Schein, E. H. (2003). DEC is dead; Long live DEC: The lasting legacy of Digital Equipment Corporation. San Francisco: Berrett/Kohler. Schein, E. H. (2006). Career Anchors (3rd ed.). San Francisco: Jossey-Bass, Pfeiffer. Schein, E. H. (2009a). The corporate culture survival guide (2nd ed.). San Francisco: Jossey-Bass. Schein, E. H. (2009b). Helping: How to offer, give, and receive help. San Francisco: Berrett/Koehler. Schein, E .H. (2010). Organizational culture

Edgar H. Schein is the Sloan Fel lows Professor of Management Emeritus from the MIT Sloan School of Management where he taught from 1956 to 2004. He received his PhD in Social Psychol ogy from Harvard in 1952 and has applied this field to the under standing of career development, organizational culture, process consultation, and the dynamics of interpersonal relations in orga nizations. He can be reached at scheine@comcast.net.

and leadership (4th ed.). San Francisco: Jossey-Bass. Schein, E. H., & Bennis, W. G. (1965). Personal and organizational change through group methods. Hoboken, NJ: Wiley. Trist, E. L., & Bamforth, K. W. (1951). Some social and psychological consequences of the long-wall method of coal getting. Human Relations, 4, 1-38.

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