Page iii Human Resources Business Process Outsourcing Page iv Edward E. Lawler III Dave Ulrich Jac Fitz-enz James C. Madden V With Regina Maruca Page v Human Resources Business Process Outsourcing Transforming How HR Gets Its Work Done Image Page vi Copyright © 2004 by Edward E. Lawler III, Dave Ulrich, Jac Fitz-enz, and James C. Madden V Published by Jossey-Bass A Wiley Imprint 989 Market Street, San Francisco, CA 94103-1741 www.josseybass.com No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400, fax 978-750-4470, or on the web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, 201-748-6011, fax 201-748-6008, e-mail:
[email protected] Jossey-Bass books and products are available through most bookstores. To contact JosseyBass directly call our Customer Care Department within the U.S. at 800-956-7739, outside the U.S. at 317-572-3986 or fax 317-572-4002. Jossey-Bass also publishes its books in a variety of electronic formats. Some content that appears in print may not be available in electronic books. Library of Congress Cataloging-in-Publication Data Human resources business process outsourcing : transforming how HR gets its work done / by Edward E. Lawler III ... [et al.]. — 1st ed. p. cm.— (The Jossey-Bass business & management series) "A Wiley Imprint." Includes bibliographical references and index. ISBN 0-7879-7163-4 (alk. paper) 1. Personnel management—Contracting out. I. Lawler, Edward E. II. Series. HF5549.H865 2004 658.3—dc22 2004011139 Printed in the United States of America FIRST EDITION HB Printing 10 9 8 7 6 5 4 3 2 1 Page vii The Jossey-Bass Business & Management Series Page viii This page intentionally left blank Page ix Contents Preface The Authors 1. Forces for Change 2. New Roles for HR 3. Evaluating the Effectiveness of HR 4. Design of the HR Function 5. Exult 6. BP 7. Bank of America 8. International Paper 9. Prudential 10. Lessons Learned 11. Outsourcing and the Future of HR Index xi xvii 1 23 43 61 77 93 131 153 173 195 211 231 Page x This page intentionally left blank Page xi Preface Above all else, this book is about how the role of the human resources (HR) function can be redefined in order to create more effective organizations. Major changes in business conditions have placed new and increased demands on the HR function. To meet these demands, some of the traditional HR work must be done differently, and HR needs to provide new services. HR must excel at both delivering traditional transaction services and providing high value-added strategic services. If HR stays at the transactional level, the department will become an afterthought. If HR goes strategic but lacks the ability to deliver on operational tasks, it will lose credibility. Finding new and innovative ways to do HR-related transactional (administrative) work should be a concern for both business leaders and HR professionals. The same is true for finding ways HR can contribute to the formation and implementation of business plans and strategies. Business leaders need to raise the bar for the function by stating what is expected from HR professionals.