Human Resource Management is more like a differential equation that can have multiple solutions. The difficulty is in ensuring that while converting the physical problem to a mathematical problem, the essence of the matter is not lost.

BY PRASAD KURIAN

“Water that is too pure has no fish”! – Zen Proverb

“If we must apply a Mathematical approach to HR, let us go beyond Arithmetic, Human Resource Management is more like a differential equation that can have multiple solutions!” I heard myself telling the senior HR Leader. This was my fourth ‘encounter’ with this gentleman. This time, we were discussing the point of view that HR can get the elusive ‘seat at the table’ by being more data-driven, quantitative, objective and mathematical in its approach. Very similar to what had happened during our previous encounters, this interaction too prompted me to think about the underlying issues in greater depth.

Logic and mathematics are immensely useful tools. Five and a half years of education in engineering; my pre-MBA job as an Aerospace Engineer, the social research related methodology in studies during my MBA, and, the initial years of my HR career spent in Compensation Consulting and Research based HR Products have made me very comfortable with quantitative and mathematical approaches to diagnosis and solution design. Having practiced Six Sigma, I possess experience in the process improvement approach of converting a physical problem into a mathematical problem, finding a mathematical solution, and, converting the mathematical solution into a physical solution. I have also made limited use of statistics, especially during the best practice and benchmarking studies during my five years in HR consulting. However, there was still something that was bothering me regarding my conversation with the senior HR Leader.

Once I stayed with that feeling of discomfort for a while, things began to crystallize in my mind. The first thing that came to mind was an incident which occurred a few years ago when my son was about five years old. I had bought him his first calculator and he was very excited. For the next couple of days, he was chasing me saying, *“Tell me all your problems; I can solve them.”* It was interesting to convince him that most problems cannot be expressed in numerical terms, and, that even those problems that can be expressed in numbers, cannot be always solved using the available functions in the calculator! When I thought about this a bit more, a few other aspects came into fore: –

**Marriage between logic and questionable assumptions**

Logic is a great tool for reasoning. The problem is just that any system of logic is only as good as its assumptions. Great logical reasoning skills with wrong assumptions will very quickly lead to the wrong inference. While this would hold good for any field, the risk is higher in HR as the domain has a large number of unsubstantiated assumptions. Over the last couple of decades, a significant amount of research has been done in the Human Resource domain. And, the very nature of the domain imposes severe limitations on validating the underlying assumptions and HR related decision-making.

**Lost in conversion**

When we look at applying the Six Sigma approach mentioned above (physical problem – mathematical problem – mathematical solution – physical solution) to HR, the difficulty is in ensuring that while converting the physical problem to a mathematical problem, the essence of the matter does not get lost. Otherwise, we might end up solving the quantifiable, but peripheral aspects of the problem, while the core of the problem (which is difficult to quantify) remains unattended. We must remember that many of the things that really matter cannot be counted!

**Misuse of mathematical induction**

Misuse occurs when one tries to apply pure mathematical reasoning to a human process, where it cannot be applied. I came across an excellent example of this in a HR Shared Service Centre (HRSSC)- The Head of this HRSSC was a firm believer in achieving 100% accuracy (zero error) as the performance target. His strategy in achieving this included a motivational talk to the employees with the following line of reasoning*: “Can’t you do one transaction without error? If you can do that what prevents you from repeating the same 12,000 times? This is all that is needed to make an ‘error-free’ year and meet your performance target.”* While such an approach seemed to be perfectly logical, it was completely unrealistic from a performance management point of view. The transactions involved a large amount of manual interventions, making it highly error prone. The ‘zero-error target’ ended up de-motivating the employees (instead of motivating them) as they were highly unlikely to achieve it. This brings a Zen proverb to mind –

*“Water that is too pure has no fish”!*

**Chasing the numbers**

A related problem that crops up when we try to quantify (because quantification is required for further processing) things that are difficult to quantify is that of making simplistic or overly optimistic assumptions to enable quantification, and even, to get the numbers that we want to get. For example, when we try to calculate the time required for doing a particular non-mechanical task, we often do not take into account ‘invisible work.’ The invisible work arises from factors such as the complexity of the situation (that cannot be easily quantified), and the difference between ‘the process map’ and ‘the way things actually get done.’ For the latter, it can be argued that the solution is to fix the process, it might be difficult in a situation when complex interfacing/influencing is required to do the task, or in a situation where fixing the process is difficult at the level of the jobholder (as it involves fixing the ‘ecosystem’ around the process in addition to the process). Emerson was not too far off the mark when he said, *“The results of life are uncalculated and incalculable. The years teach much which days never know”!*

**Banning complexity and complex motivations**

Another problem that emerges is the definition of rationality- a mental model that is too narrow. As Mencken says, *“to every complex problem there is an answer that is clear, simple and wrong”!* In several areas related to people management, there are deep psychological factors operating that render pure ‘logical’ approaches ineffective. Similarly, when we consider only the visible employment contract and ignore the invisible psychological contract, another set of problems come into the fore. Another example could be viewing the interactions with the labour unions, in the context of arriving at a long term settlement as a purely economic negotiation exercise. Here, the reality is that a union is a political entity that has a constituency to satisfy. Hence, even if the management offers a ‘competitive deal’ (by industry standards), the union leaders might have internal compulsions not to accept it, and resort to various pressure tactics (including demonstrations and stoppage of work) – merely for the sake of convincing the members of their constituency that they have done all they can to force the management to offer a better deal.

**House built on sand**

We also have the interesting problem of processing/computing data without paying adequate attention to the ‘level of measurement’ that generated the data. Typical problems involve taking ‘ordinal’ or ‘interval’ data and apply computing methods that are valid only for ‘ratio’ level data. This could be more of a problem in HR, since many HR professionals are not well versed in quantitative methods. The numbers can give us a false sense of surety, and, doing arithmetic operations with those numbers to derive inferences can give us a false sense of confidence on the decisions based on those inferences. There is a huge difference between being able to calculate something, and being able to get an understanding. If our objective is to influence ‘that something’, being able to calculate it without being able to understand, it can only do more harm than good. Often, it becomes very difficult to convince HR leaders who are ‘too sure of their numbers and calculations’ that HR process maturity takes time, or even that ‘it takes 9 months to make a baby regardless of how many couples you put on the job’. This becomes very pertinent especially in those situations where a business leader or the CFO (without any HR background) has been moved into the role of the HR Head! This brings us to a more fundamental issue. The over-reliance on numbers sometimes indicates a (stated or unstated) shift in the underlying paradigm for people management in the organisation- from a relational paradigm to a transactional one.

**Wishing away the paradoxes and dilemmas**

People Management, by its very nature, is a field full of paradoxes. A paradox occurs when there are multiple perspectives/opinions (*doxa*) that exist alongside (*para*)- each of which is true – but they appear to contradict/to be in conflict with one another. A paradox cannot be resolved in the same manner as a problem. In order to deal with a paradox effectively, we must wrestle with it till we reach a level of understanding that enables us to see the paradox in a new light, and arrive at the most appropriate solution in that particular context. Often, there are multiple solutions -making HR more like a differential equation (that has multiple solutions) and not like arithmetic (where there is one right answer)! It can also be argued that dealing with some of the issues, HR is even more complex than dealing with differential equations, because, in some of those paradoxical situations, choosing from multiple ‘correct’ solutions is a matter of aesthetics and not logic! One can develop a keen sense of such ‘aesthetics’ only through years of struggle with the paradoxes and dilemmas in HR.

**HR: A Differential Equation… Not An Arithmetic One**

- Logical reasoning with wrong assumptions leads to a wrong inference faster.
- Conversion of a physical problem to a mathematical one is essential.
- Forced mathematical induction without context evaluation is dangerous.
- Understanding complex motivations is a critical factor.
- Level of measurement must be detailed.
- A paradox can’t be resolved in the same way a problem can be solved, it will have multiple solutions not one right answer.

So where does this leave us? To me, the best approach is that of ‘triangulation,’ that combines qualitative methods with quantitative methods to develop a more comprehensive understanding of the reality. We should make an effort to figure out if the particular HR issue that we are dealing with is more like a ‘problem’ or more like a ‘paradox’ and deal with it accordingly. Data and analysis are very useful. But, they are not substitutes for understanding and wisdom. Even when it comes to the matter of strategy making, it has been argued that the core strategy making process is essentially intuitive, with data and analysis being useful as an input/trigger for strategy making, and also as a tool for doing a reality check on the strategy created. The same holds in the case of HR strategy as well! We must also remember that in the physical world which functions beyond mathematics there are ‘singularities’ where ‘normal rules/algorithms’ no longer work!

Similarly, benchmarking is definitely a very useful tool. But benchmarking should be done with the context included and not just the numbers. For example, benchmarking a ratio like the ‘ratio of the total number of employees to the number of employees in HR’ can be misleading without the understanding of context specific factors like the mandate/deliverables of the HR function, the HR operating model, the degree of outsourcing, the degree of automation (degree of Employee and Manager Self-Service), profile of the workforce. etc. Casual benchmarking can be easy but dangerous! We must ensure that HR processes and practices follow from the HR Philosophy of the company and not the other way around. Staying away from the obsession with ‘best practice benchmarking’ might help in carving out what the organisation uniquely needs. Yes, we must leverage the power of numbers in HR. However, let us use them responsibly – by ensuring that the numbers and calculations accurately reflect the underlying reality!

**References**

**Authors Blogs:**

‘Passion for work and *anasakti* ‘,

‘Appropriate metaphors for organisational commitment ‘

‘To name or not to name, that is the question’

‘Performance ratings and the above average effect’

‘Research and a three-year old’

‘Truths stretched too far’

‘Salary negotiations and psychological contract’

‘Truth and Beauty: Elegance and Motivations in HR’

‘Making problems disappear’