What CEOs Really Want from HR Leaders

businessman-thinking-michelle-smithYour CEO doesn’t want you to be a human resources leader—they want you to be a business leader with human resources expertise. While that may just seem like a clever turn of phrase, there’s a growing body of research that supports this concept and HR leaders would be well-served to heed the advice.

Consulting firm Schuster-Zingheim provides research and guidance for HR through direct interviews with CEOs, COOs, and CFOs on how the C-Suite expect HR professionals to align employees with their organization’s future.

The executives Schuster-Zingheim spoke with believe rewards and recognition initiatives are the single most powerful communication tool they have at their disposal and best support their organizations’ ability to achieve its goals. Further, these leaders understand talent is a differential advantage and rewards and recognition constructively focus that advantage.

Valuing employees and recognizing their achievements have finally made the transition from the “soft side of business” to a legitimate business imperative, and with their new enlightenment, CEOs were quick to throw down a few challenges to the HR profession.

Don’t just copy ‘best practices.’ While admitting that it’s nice to hear what other companies are doing, CEOs expressed skepticism about other companies’ ‘best practices’ being useful because of the huge variances in businesses and cultures, and the low probability that another organization will get the same results. Instead, they challenged HR to refine and improve differentiations in performance within the organization and to find customized solutions for their businesses.

Take great care of your best employees. CEOs don’t want to be slaves to compensation fairness and have no objection to the most valuable and talented employees making more money. Reward business essential performers by paying them better than market value and working through the metrics to improve connections between how individuals are valued and rewarded. Evaluate the workforce based on the company’s needs, and if there’s not a match, then change the workforce and/or the rewards, but always err in favor of the best performers.

Variable pay is the secret sauce. Research confirms that the top 40 percent of employees add five times the value of the other 60 percent. CEOs warned HR to beware of base salaries that are too homogenized because of too much focus on adhering to competitive job market base pay rather than reflecting people’s true value. They’d like to see HR more involved and supportive of pay for performance.

Focus on the most important things. CEOs want HR to be more proactive and concentrate on business relevant needs first. Business metrics should be at the center of performance management and HR would be wise to always think in terms of the business, key talent, and metrics. Evaluate each opportunity like this:

  • What is the value to the business and does it reflect real business success?
  • Does it fit the talent we need now and in the future?
  • Is it responsive to workforce trends?

Has this been your experience with your CEO, and what’s your reaction to this research?

Michelle M. Smith

Michelle M. Smith

Michelle M. Smith is Vice President, Marketing, of O.C. Tanner. A highly accomplished international speaker, author, and consultant on performance improvement, Michelle is a respected authority on leadership, internal branding and employee engagement. She’s published and presented more than 1,000 articles and lectures and is a trusted advisor to many of the world’s most successful organizations and the governments of the UK and the US.

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