Executive Summary
The article “Remodeling HR at Home Depot” by Robert Grossman (2008) describes the effect that Home Depot’s slashing of more than half its HR work force had on the company. 1,200 human resource managers were cut from the staff. Describing an HR manager in every store as a luxury that they simply could not afford to have any longer, Home Depot decided to take a new, low-cost approach to addressing human capital issues.
Pros and Cons
Prior to the 2008 economic crisis, Home Depot’s HR had advocated a bottom-up approach to management, with consultations, incentives and stock benefits offered routinely to employees. It had been a good approach while the firm was expanding. But when contraction hit, HR needed to trim its sails and reorganize. As such, there were pros and cons of Home Depot’s revamping of its HR function. The pros were that the reduction in staff saved the company a great deal of money. Centralizing the HR function allowed more oversight to be possible at reduced cost. However, the cons are that moving HR managers out of the stores does mean there are less boots on the ground to deal directly with human capital issues. Centralization might make the HR function more efficient and low-cost from one perspective, but it does not fill the gap in the need for human connectivity on a localized plane that human capital so often needs.
How Home Depot’s Delivery of HR is Desirable
The dimensions of the retail industry that made HR successful early on was found in the press-the-flesh model, where workers were promoted for being innovative and efficient. Customers came first and workers were rewarded for supporting that idea. Managers were kings in the local stores. That was desirable so long as business was booming. When business contracted, the kings were questioned and found to be unnecessary. Centralizing power allowed for more efficient management of more stores by fewer people. The retail industry was not changing in terms of the customer...
Home Depot worked it so that HR managers were no longer running the show from each local store but instead the stores were all being managed from regional districts. This created more uniformity in the kind of service offered from one place to the next.
Eliminating HR Positions
Eliminating HR positions may work from a business perspective if it allows the company to keep costs down. HR managers are important and help to promote the workplace culture, but as Home Depot has shown, that job can be performed off-site with routine visits to stores conducted to make sure that everything is operating smoothly. Stores will still require some form of HR management, however. Moving it off-site is one option, but it depends on how effectively the stores can manage their human capital issues without an HR manager being physically present at the store. Can the employees be happy by being in touch with HR managers from a distance? It is very much like a long-distance relationship, and those can work, but it requires understanding on both parts, and sacrifices. If the culture is there to help promote this type of relationship then it work very well. The HR manager can effectively manage multiple store fronts at once from a distance, overseeing reports sent in from workers on the front lines and making decisions as needed on a case by case basis. This is a perfectly effective way for the operation to be conducted and one that retailers have found to be satisfactory over a long period of time.
Transfering the Home Depot Experience to Kuwait
It is possible to transfer the experience of Home Depot to a Kuwaiti organization, but the organizational culture of the Kuwaiti organization will have to make adjustments in order to accommodate the conditions of this type of arrangement. Organizations in the Middle East tend to be very top-down in terms of organization, and managers are quite frequently hands-on.…
