KANBrief 3/20

Standardization in human resources management: long overdue, or superfluous?

Standardization projects in the field of human resources management are growing in number, particularly at international level. The benefits and drawbacks of such standardization, and how – indeed if – it can be applied to human resources issues, are discussed here by Harald Ackerschott, chairman of DIN's mirror committee on human resources management, Jan-Paul Giertz, head of the section responsible for codetermination and human resources management at the Hans Böckler Foundation, and Carsten Rogge-Strang, CEO of the employers’ federation of the private banking industry (AGV Banken) and member of KAN.

What are the strongest arguments for and against standardization in the field of human resources management?

Carsten Rogge-Strang: Consistent standards offer advantages, above all when objective comparison is assured – as is the case for example in technical standardization. In the area of human resources management however, it is questionable whether metrics applied to social systems yield informative value. For example, the German national soccer squad was trailing its opponent Brazil in the 2014 World Cup semi-final in all key metrics such as ball possession, shots on goal or corner kicks. Yet Germany won by a resounding 7:1 – because it had the better team spirit. This factor was however not reflected in the metrics. This is also the main problem with standardization in the field of human resources management: the corporate culture is a key factor in a company's success, but it is not one that readily lends itself to objective measurement.

Harald Ackerschott: The number of goals scored is obviously a further key metric, and is particularly important in your example, since Germany went on to win the final. What indicators should be evaluated and what conclusions should drawn from the results is always problematic. The current discussions and developments were originally prompted by the initiative on the part of the Society for Human Resource Management (SHRM) in the USA. Together with other exporting countries, Germany had voted against these projects at the International Standards Organization (ISO), but was outvoted. The international standards are therefore currently in development. Consequently, it is important that we bring German interests to bear with a concerted voice. Our intention is to defuse the standardization referred to above a little, by lobbying for the outcomes to be guidelines rather than standards.

Jan-Paul Giertz: Mr Ackerschott has summed it up well: standardization activity in the area of human resources management is taking place despite legitimate concerns. There is also great unease in the employee camp regarding the standardization of human resources management. Firstly, we have our doubts that social systems can be objectified based upon a standardization philosophy that is primarily technical in nature. Secondly, we see a risk of pseudo-objectivity when companies are evaluated by means of systems of metrics that claim to be internationally applicable when, as closer inspection shows, this is often not the case. To take up the soccer metaphor again: German companies work together in ways often not observed in other countries. Our national regulatory framework can also be described as unique.  We do not seek to oppose the professionalization of human resources management or enhancement of HR departments' ability to act strategically; but this should not lead to conflicts with other levels of regulation. We therefore consider the educational guideline to be the only acceptable standardization format in this sphere.

Mr Rogge-Strang, you mention technical standards. How can the principle of standardization that it reflect the scientific and technical state of the art be applied to standardization in the sphere of human resources management?

Rogge-Strang: This principle is intentionally very technical in nature and is fully justified with respect to technical standardization. It cannot however be applied in this form to standardization in the area of human resources management. The latest findings of research into human resources are often considerably further removed from the situation in the field than the research findings in technical sectors. Put simply, the social partners discuss change amongst themselves, machines do not. When the strictest of standards are laid down without differentiation, as is the case in some standardization projects, they will not lend themselves to the shaping of industrial relations, which is normally geared to minimum conditions. At the same time, the principle certainly holds true that standardization should be factually relevant and must therefore also reflect what is socially accepted. Were we to take this into account in standardization in the sphere of human resources, we would have made significant progress.

Ackerschott: I would like to draw a distinction with respect to Mr Rogge-Strang's comments. It is certainly true that DIN's approach to standardization is more likely than ISO's to give consideration to the situation on the ground. In the DIN standardization approach, the focus does not lie directly upon the state of scientific progress. However, I would like to say something about the technical state of the art. Germany is a land of engineers, and we limit the concept very much to areas such as electrical and mechanical engineering. In English, the term "technical" is used more broadly than its equivalent in German. In the English-speaking world, even psychology has its “technical" aspects. If I may be allowed to make a comment of my own on this concept: I don't like the way in which human resources often chooses to ignore science. The academic disciplines of human factors and psychology have made observations that practitioners choose for the most part to ignore. There are many areas in which I would like to see standardization going some way to eliminating the clutter of the service sector. In no way does this concern the core responsibilities of the social partners.

Rogge-Strang: Differentiating from the area of responsibility of the social partners is very important. Alongside the state, the social partners have a statutory legitimacy as setters of standards in the area of industrial relations. Labour legislation and collective wage agreements are always an outcome of technical and political processes of negotiation conducted by highly competent parties who take their wider responsibility very seriously. Within the standardization of human resource issues, this sphere is now being encroached upon by a growing number of parties representing specific lobby interests. This complicates the issue.

Giertz: If rules are to be effective and relevant, they should be underpinned by scientific evidence. Yet many standardization initiatives are more the product of management surveys conducted by large consultancies, anecdotal evidence, and above all, the individual commercial interests of consultants in the field of human resources management – not to mention growing geopolitical interests in standardization. A more scientific approach would be advantageous in this respect. And that would also mean that standardization initiatives should simply not be launched until enough knowledge has been gained. At the same time, I would warn against ascribing universal validity to the existing international research results in the field of human resources. The dominance of the English-speaking world in this field is often an obstacle to the results being transferred to Germany, as Mr Rogge-Strang has rightly pointed out. Standardization must therefore be both evidence-based and geared towards the field, i.e. it must be functional in a specific environment. In our view, this is not always true of international standardization initiatives.

If we consider human resources management: what contribution can or should standardization make in this sphere, and at what point should we draw the line?

Ackerschott: There are two sides to standardization. The first is providing information on the state of progress of science and technology. The second is harmonization. In simple technical terms, the plug must fit the socket. When standards begin to constrain entrepreneurial action however, we should reconsider. Where provisions go too far, voluntary commitments could be considered as an alternative. In principle however, standardization is able to make important information from reputable sources available to a wide public. And to add my weight to Mr Giertz' argument at this point: his comments on evidence-based standardization are fully consistent with our position here in Germany, and this is in fact the main reason for Germany's strong commitment and involvement at international level.

Rogge-Strang: When it comes to developing a common understanding and definitions of certain human resources issues, for example, standardization can certainly make an additional contribution to regulating and shaping industrial relations – but no more than that. The limits of standardization activity are reached when it begins to impact upon the typical areas of activity of the social partners that are defined by statutory instruments. These particularly include working hours, remuneration and work organization. The whole system of industrial relations has been carefully balanced in regulatory instruments, ensuring social peace and stability. Standardization of HR topics must respect this. For us, at least, that is the main reason for our involvement, and less the evidence-based aspect.

In this context, what role do the social partners play on national and international standardization committees for human resource management issues?

Rogge-Strang: When compared to their importance, the role played by the social partners on these committees – particularly those of the international standards bodies – is far too modest. This is due in particular to the fact that representatives of employers' and trade unions' umbrella associations, representing thousands of companies and millions of employees, have the same voting weight on a standards committee as a single human resources consultant. A German consensus that reflects the interests of the social partners is thus of little value at international level. In addition, some countries lack structures based on social partnership and use international standardization as a regulatory instrument. This leads in some cases to absurd results. One recent example was a standardization project launched by Iran concerning remuneration systems, which contained highly questionable approaches to job evaluation. This subject affects the principle of autonomous collective bargaining in Germany.

Giertz: That's correct. A really striking example of excessive intervention. We at the trade unions were not able to halt this standardization project at European level, not even by means of a protest note from the European Trade Union Confederation (ETUC). We are not completely inactive internationally, however. The ETUC has for some time had a liaison role on TC 260. This role, which my colleagues in Brussels assume with their vast expertise and strong commitment, is extremely demanding, as it requires them to represent the views of diverse trade union organizations. With regard to remuneration systems, the positions of these organizations were very similar. That is not true of every standardization project, however. What is viewed in Germany as "encroachment" may be regarded in other European countries at first glance as a solution to a problem. Where working conditions are not governed comprehensively in a national regulatory framework, a trade unionist can also see the benefits of an international standard. However, this once again highlights the fundamental problem of non-comparability.

Ackerschott: The role of the social partners is an immensely important issue. But human resources management is precisely an area in which I would like to see even greater involvement by the social partners on international standards committees – particularly considering that this is a US initiative. The international working committees present the best opportunity for influence to be exerted effectively. This is where experts contribute their expertise to the shape of the project, independently of any national mandate. Individual representatives are already showing great commitment and I would like to see even more experts participating in this way. 

Up to now, standards in the area of human resources management have had the character of guidelines. A switch to certifiable standards is currently being discussed at international level. What is your view of this discussion?

Ackerschott: At present, a discussion is not really taking place at international level. With influence from Germany, a position was recently drafted to focus the work on guidelines. We note however that some parties at international level are very much interested in standards that would lead to certification. We have therefore reopened the discussion in Germany in order to create clarity for our position. As a result, our focus is as before not on human resources standards with the explicit objective of certification.

One thing we must all remember: HR topics are already addressed in standards, including through the back door of quality management. In such cases, they are more binding in nature, and at the same time the authors of the standards concerned are less familiar with social security systems and human behaviour. This is a potent combination.

Giertz: I have already mentioned our red line regarding the standardization format. Social systems cannot be managed in the same way as technical processes. Provision should also be made here for different degrees of freedom at company level, in exactly the same way that we allow for them in our labour policy, which is based on social partnership. Standardization should at most have a supporting function here.

Rogge-Strang: Speaking from the perspective of the social partners, I would be very much in favour of limiting standardization in this sphere to the guideline format. The bureaucratic overhead and pressure for certification, particularly for small and medium-sized enterprises, would otherwise increase enormously. This is not matched by any reasonable benefit. And it is indeed important that in other areas of standardization, such as quality management of work processes, ergonomics or social responsibility, HR topics are limited to guidelines. We have a lot of work ahead of us.