HR Devolution: rhetoric or reality?

Abstract

Devolution of HR responsibilities from HR to line managers is a key theme in the contemporary HR literature and research review suggests that increasingly organizations are devolving their HR functions to line managers. However, after more than two decades, literature is still divided regarding the relevance and appropriateness of the strategy. While some scholars optimistically promote devolution, others do not. Yet, few studies have focused on questioning and exploring the fundamental issues of the strategy that would help to decide the viability and applicability of HR devolution. This study aims to fill that gap and presents an analysis of why organizations decide to devolve the HR function, what are the challenges organizations face while devolving, how they cope with those challenges, and what are some of the potential gains from the strategy.

According to the participants of this study, the key rationales behind their organizations’ adoption of devolution strategy were to empower the line managers, to make them more responsible, to achieve a strategic approach to HR, and to leverage line managers’ close proximity to the employees. Overall, HR implemented devolution as a proactive strategy to improve the people management processes of the organization; a strategy that was quite well received as it did not elicit much resistance from any stakeholder group. In general, respondents were satisfied with the overall outcomes of devolution, although only moderately. There was a close alignment between pre-devolution expectations and the outcomes of devolution. And some of the goals and outcomes were significantly and positively correlated, perhaps explaining why organizations were satisfied with the strategy. However, while devolution results in improvements in various areas, it also brings with it new challenges and issues that can potentially undermine the positive outcomes of the strategy. This study found evidence of all the major challenges reported in the literature, including, lack of line managers’ HR skills, their apathy towards HR, complaints about increasing workload, HR inconsistency, and line manager short-termism. However, despite these issues being prevalent, many respondents acknowledged that their organizations failed to manage the challenges and issues properly. And a clear mismatch was evident between the challenges faced and measures undertaken in response for those challenges. It was found that 44.1% of the organizations were devolved at the time of this study, while only 10.3% were planning to devolve and 44.1% had no such plan. This indicates HR devolution in New Zealand is perhaps reaching a plateau. The overall implication from the study is that the challenges of devolution reported in the literature are found in New Zealand firms and at the same time, there are less-than-stellar gains and positive outcomes of devolution. Moreover, organizations generally failed to address the challenges properly, which suggests more than a hint of rhetoric in terms of the positive portrayal of devolution. However, if the challenges and issues associated with devolution could be properly addressed, organizations could expect to reap more benefits from implementing this HR strategy.