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This is an excerpt of Ben Horowitz’s The Hard Thing About Hard Things, p 139-142.

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Everyone in the technology industry seems to agree that people are paramount, yet nobody seems to be on the same page with what the people organization--human resources-should look like.

The problem is that when it comes to HR, most CEOs don't really know what they want. In theory, they want a well-managed company with a great culture. Instinctively they know that an HR organization probably can't deliver that. As a result, CEOs usually punt on the issue and implement something that's suboptimal, if not worthless.

Ironically one of the first things you learn when you run an engineering organization is that a good quality assurance organization cannot build a high-quality product, but it can tell you when the development team builds a low quality product. Similarly, a high quality human resources organization cannot make you a well-managed company with a great culture, but it can tell you when you and your managers are not getting the job done.

The Employee Life Cycle

The best way to approach management quality assurance is through the lens of the employee life cycle. From hire to retire, how good is your company? Is your management team world-class in all phases? How do you know?

A great HR organization will support, measure, and help improve your management team. Some of the questions they will help you answer:

Recruiting and Hiring

• Do you sharply understand the skills and talents required to succeed in every open position?
• Are your interviewers well prepared?
• Do your managers and employees do an effective job of selling your company to prospective employees?
• Do interviewers arrive on time?
• Do managers and recruiters follow up with candidates in a timely fashion?
• Do you compete effectively for talent against the best companies?

Compensation

• Do your benefits make sense for your company demographics?
• How do your salary and stock option packages compare with the companies that you compete with for talent?
• How well do your performance rankings correspond to your compensation practices?

Training and Integration

• When you hire an employee, how long does it take them to become productive from the perspective of the employee, her peers, and her manager?