Nathan Peirson
Chief People Officer
Onit
Ruthlessly Simplify HR: Make Strategic Trade-offs for Business Impact
Thesis
“HR's core mission is to drive business impact by ruthlessly simplifying processes, focusing on foundational needs before growth, and designing the organization to support strategic objectives, even if it requires making pragmatic trade-offs.”
What you'll take away
- 1Prioritize foundational HR fixes and eliminate non-value-adding administrative processes (e.g., complex performance ratings) to directly drive business impact.
- 2Design HR organizations based on current business objectives and resource constraints, making intentional trade-offs in areas where 'B minus' performance is acceptable to achieve 'A' in critical domains.
- 3Shift performance management from an annual, backward-looking rating process to frequent, forward-looking conversations focused on aligning priorities and providing support.
- 4Cultivate curiosity and actively seek out uncomfortable stretch assignments to foster continuous personal and professional growth.
- 5Consistently coach HR teams to focus on activities that directly impact business strategy, pulling them back from low-impact administrative tasks.
What most organizations get wrong
- •Eliminating traditional performance ratings: Nathan advocates for replacing universally disliked annual performance ratings with quick, quarterly 'performance connects' focused on alignment and support, arguing that ratings often don't add value.
- •Rejecting 'HR for HR's sake': He explicitly states that HR activities must always drive business outcomes, challenging a purely administrative or self-serving view of the HR function.
- •Accepting 'B minus' performance in some HR areas: In resource-constrained environments, it's strategic to accept less-than-optimal performance (e.g., a 'B minus') in some HR domains to allow for excellence in areas most critical to current business growth.
In Nathan's words
“At the end of the day, it's not about just doing HR stuff for HR stuff's sake. It's about what are the things that are going to drive the business.”
This quote articulates his fundamental philosophy that HR's value is measured by its contribution to business outcomes.
“I don't think ratings are inherently like a bad thing. I just think some organizations that they make sense, some organizations can handle them better, and some organizations are small, they're nimble, that they know who the performers are. We were just at a point where it wasn't adding value to us.”
He explains the nuanced and context-dependent reasoning behind his decision to eliminate performance ratings at Onit.
“If I've got constraints around budget or headcount, that's fine. I can decide what I can do with that. And it could be operations. It could be very focused on, look, we've got to have strong rigor around compliance and being able to run payroll and do the basics of HR.”
Illustrates a pragmatic, resource-constrained approach to designing an HR function, focusing on fundamental necessities.
“I always tell people, look, we're going through this kind of culture shift. So don't expect it to all be right the first time. Don't expect everything to be smooth and easy.”
This highlights a realistic and empathetic perspective on leading organizational and behavioral change within an HR team.
“Stay curious, get uncomfortable if you want to grow.”
This succinct advice emphasizes personal development through continuous learning and stepping outside one's comfort zone.
The problems this episode addresses
- •Organizations struggle with over-engineered HR policies and processes that prioritize box-checking over tangible business outcomes, wasting time and resources.
- •Ineffective annual performance rating systems are universally disliked, consume significant time, and fail to drive meaningful employee engagement or improve performance.
- •HR teams often get mired in low-impact administrative tasks, diverting focus from strategic initiatives that could significantly impact the business.
- •Leaders face challenges in clearly aligning HR objectives with broader business goals, leading to misaligned expectations and diluted impact.
- •Rapidly scaling HR functions in hypergrowth or M&A environments while simultaneously ensuring foundational stability, compliance, and effective operations.
In this episode
Built by People podcast features insights from world's top HR leaders
Built by People
Dave Zirin shares a little bit about his career journey
WSJD Live: Career Journey
At Onnit, you focused on foundational fix before growth
In the Elevating the HR Function: Building a Foundation
You spoke about eliminating administrative processes that weren't adding value including performance ratings
WSJD Live: Performance Reviews and Ratings
Nathan, in your experience speaking at the PE Summit, you discussed org design
The Process of Organizational Design
How do you help HR teams stay focused on impact rather than traditional administrative processes
How to Keep the HR Team Focused on Impact
Nathan: Stay curious, get uncomfortable if you want to grow
Employee Quotes
Nathan, thank you so much for joining us on Built by People podcast
Nathan on Built by People
Topics covered
Organizations and entities mentioned
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