Decision-Making in HR: How To Take the Right Approach

In the HR profession, you are constantly making decisions—whether it’s scheduling an interview, choosing a technology provider, or setting strategic priorities. Decision-making is a key part of your daily work. However, we often spend so much time figuring out what needs to be done and meeting expectations that we don’t always have the time to think about how to make better decisions.

Organizations are now, more than ever, expecting HR to take more decisive action. Today, HR plays a key role in helping businesses use their human capital effectively, from routine processes like recruitment to complex decisions shaping organizational culture. Despite this, many HR professionals still feel unequipped to make these decisions confidently.

Contents
The importance of effective decision-making in HR
Complex decisions HR professionals face
The complete approach to HR decision-making: Think, empathize, act
The RED model explained
HR strategies for effective decision-making
FAQ

The importance of effective decision-making in HR

HR’s role has changed dramatically in recent years. Businesses are facing complex challenges like digital transformation and growing skills shortages. As a result, HR needs to take on a more active role in driving business outcomes. 

HR is now central to driving innovation, digital transformation, and business strategy. They shape organizational culture, anticipate workforce needs, and guide companies through growth and change. During significant transitions like mergers, acquisitions, or technological advancements, HR leads the way. Additionally, managing the employee experience—from onboarding to exit—has become a key responsibility.

This shift has also led to a need for HR practitioners to make intricate and high-stakes decisions. These complex decisions also demand a broader range of expertise than HR has needed before.

Complex decisions HR professionals face

HR is responsible for various decisions that majorly impact the business. This includes overseeing complex processes such as defining organizational values and culture and handling day-to-day tasks like recruiting, developing, and retaining employees.

All of these responsibilities play a crucial role in the company’s growth and success. For example, deciding to establish a culture that values continuous learning can lead to higher employee engagement and retention.

As HR’s role becomes more complex, the decisions you face are increasingly complicated. Balancing priorities, managing diverse perspectives, and integrating data-driven insights are now essential, all while ensuring compliance and maintaining organizational culture.

For instance, implementing data analytics in recruitment can help identify the best candidates, but it requires careful consideration to avoid biases and ensure fairness. 

Balancing conflicting priorities

HR professionals are involved in decisions that affect everything from working practices to relationships with employees, customers, and communities. A key challenge you may face is balancing conflicting priorities, such as aligning leadership goals with employee preferences and addressing immediate needs while planning for long-term success.

This can include managing the tension between leadership’s goals and employees’ preferences or addressing short-term needs while planning for long-term success.

For example, several companies, like Amazon and Goldman Sachs, have implemented top-down return-to-work mandates based on leadership’s belief that in-person collaboration is vital for productivity. However, many employees prefer flexible work arrangements. This places HR in the challenging position of reconciling these differing perspectives. 

Another example involves the challenge of balancing immediate hiring needs with strategic workforce planning. Addressing short-term staffing requirements while preparing future leaders through succession planning can cause conflict. It requires careful resource allocation to manage both without stretching budgets or talent pools too thin.

Quick fixes may resolve immediate issues but might not align with long-term goals, potentially hindering future growth. This balancing act needs strategic foresight to prevent talent gaps, especially in leadership roles.

Weighing multiple factors in decision-making

HR decision-making often involves weighing multiple factors beyond just the immediate stakeholders. Changes such as implementing new tools or restructuring departments can have far-reaching consequences across the entire organization.

For example, the dramatic restructuring at Twitter, where 50% of the workforce was laid off in just a few days, shows the complexity of these decisions. Though the goal was financial stability, the decision led to legal challenges, revenue loss, and lasting damage to the company’s culture. 

This case underscores the fact that HR decisions are rarely straightforward. Decisions need to align with business goals and adhere to legal requirements, adding another layer of complexity. Weighing strategic direction against legal, financial, and employee-related implications is crucial to making well-rounded decisions that avoid long-term negative impacts on the organization.

Incorporating data in decision-making

Another layer of complexity comes from effectively using data in decision-making. Data analytics has become a staple in business decision-making, but HR departments have not always been able to keep pace. Skills gaps, fragmented systems, and inconsistent data collection can make leveraging people’s data in decision-making difficult.

Even when data is available and shows certain patterns, the underlying reasons for those trends may not be immediately clear. Understanding the human factors involved—such as employee motivation, leadership styles, or team culture—requires subjective interpretation.  

As HR decisions expand, balancing data with human judgment is crucial. HR professionals must interpret complex data, account for human factors, and mitigate subjectivity, understanding that not all data provides clear explanations.

Given the challenges, decision-making in HR requires a combination of core skills. These include:

1. Critical thinking: Essential for analyzing and evaluating information.
2. Empathy: Relates to considering the viewpoints of different stakeholders.
3. Considered action: Involves considering the potential impact and consequences before making decisions. 

The next section will explain how critical thinking, empathy, and considered action can help you make well-informed decisions that meet the organization’s goals and employees’ needs.

The complete approach to HR decision-making: Think, empathize, act

Critical thinking, empathy, and action are the most powerful tools HR decision-makers can use to solve challenges. These three involve evaluating available information, considering different perspectives, and considering long-term effects to make well-informed decisions.

Let’s consider policy implementation as a practical example of using critical thinking, empathy, and action. Imagine your organization is rolling out a new performance management policy. Without assessing how it affects different departments, a one-size-fits-all approach could leave some teams feeling stifled or demoralized by rigid metrics. 

A lack of consultation of employees or managers may raise concerns about fairness or transparency, increasing resistance. Overlooking ethical and legal implications could also expose the company to legal risks and reputational damage.

This example highlights how critical thinking leads to informed, well-rounded decisions. Let’s break it down into the key components: 

• Critical thinking: Start by gathering and analyzing all relevant data to avoid assumptions. In the example, this means collecting insights on work processes and outcomes to tailor the policy to departmental needs.
• Empathy: Understanding different perspectives ensures the human element is considered. Engaging employees through surveys or focus groups can uncover concerns about fairness, allowing you to make specific adjustments, like a clear appeals process.
• Considered action: Evaluating decisions for legal and ethical impact ensures they are responsible. In this case, ensuring fair treatment and addressing bias protects against compliance issues and promotes transparency.

Mastering this formula can help you solve workplace complexities, leading to better outcomes for both your employees and the organization. Following Pearson’s RED model can help you structure your approach in the decision-making process.

The RED model explained

Decision-making is a process you can refine. Pearson’s RED model offers a simple structure to guide your thinking. 

It breaks the process into three key steps:

1. R: Recognizing assumptions
2. E: Evaluating arguments
3. D: Drawing conclusions

By embedding critical thinking, empathy, and considered action into each step, you can approach HR challenges with greater clarity and confidence. Let’s explore how you can apply each component in your work.

1. Recognizing assumptions 

Recognizing assumptions helps us uncover gaps or biases in our thinking and gain a richer perspective on a topic. 

Consider the following scenario: You’re reviewing a promotion for an internal candidate, but some feedback suggests they’re not “leadership material.” Rather than accepting this at face value, you apply the critical thinking, empathy, and considered action formula. 

• Critical thinking: What information do I need to investigate this claim? This could include performance scores, 360 feedback, the current job description, and past performance trends. Additionally, peer or team feedback and the candidate’s participation in leadership training programs can offer further insight.
• Empathy: Who are the key stakeholders, and how does this decision affect them? Whose input should be considered to gain a fuller picture? This could include the candidate, their manager, direct report, and peers. 
• Considered action: What legal risks and ethical factors, like biases, are relevant in this situation? This could include ensuring compliance with anti-discrimination laws, maintaining fairness in the promotion process, and adhering to company policies. Now, it is also important to act by gathering and organizing the data needed to proceed. Initiate feedback discussions or request further performance metrics to verify claims.

At this stage, the focus is primarily on identifying and gathering all the information you need to consider. The next step is to evaluate the strength and relevance of the evidence supporting these assumptions

2. Evaluating arguments

Not all evidence is created equal. The second step in the RED model involves evaluating whether the data supporting an argument is credible, relevant, and sufficient. 

Let’s say the internal candidate has strong technical skills, but there is mixed feedback about their team management. One argument supports promoting based on technical expertise, while the other questions their leadership ability.

• Critical thinking: Examine the data you collected earlier. Does it reveal any patterns that validate or contradict the claim about the candidate’s leadership ability? What do the team feedback and participation in leadership programs tell you about their readiness for a management role?
• Empathy: Understand the different perspectives. How do team dynamics or external challenges help explain the mixed feedback? Talk to key stakeholders to understand their concerns or reasons for their feedback, making sure to consider all viewpoints.
• Considered action: After evaluating the arguments, weigh the evidence and feedback. Prioritize conversations with key team members to understand their concerns better. If necessary, conduct additional interviews or reviews to validate the input. 

At this stage, the focus is on evaluating arguments objectively and accurately. This involves examining the strengths and weaknesses of all the available evidence. It helps prevent biases and emotions from clouding your judgment and sets the stage for a well-rounded, informed decision in the next stage of the model

3. Drawing conclusions 

The final step involves combining all the information to make a final decision. The goal is to ensure that your conclusion is not only evidence-based but also considers the human impact and consequences.

Let’s apply it to our scenario: After evaluating the data and feedback, you find the candidate has strong technical skills but has areas for improvement in leadership. 

• Critical thinking: Use the insights from performance scores, feedback, and past trends to draw a data-driven conclusion. Assess how their strengths and leadership gaps affect their fit for the role. Do they have the potential for growth? And if so, how can it be supported? 
• Empathy: Reflect on how this decision will affect the candidate and their team. Would promoting them now, with room for leadership growth, set them up for success? Or could it risk creating tension within the team? Consider the impact on the candidate’s morale and motivation and how it could affect team dynamics.
• Considered action: Communicate your decision and explain the next steps. If you promote the candidate, share a leadership development plan to help them grow in line with team needs. Also, meet with the team to explain how this decision benefits both the individual’s career and the organization’s goals. This ensures transparency and addresses any concerns, showing that your decision is well thought out and aligned with long-term goals.

This approach makes sure the decision is thorough and benefits both the candidate’s growth and the organization’s goals. By considering all these elements, you ensure each decision is carefully made and takes into account both the data and the human side.

HR strategies for effective decision-making

Beyond using frameworks like the RED model to guide your thinking, there are practical strategies that can enhance your decision-making.

1. Leverage data-driven insights: Focus on improving data accuracy and integrating systems. Start with key metrics (e.g., turnover rates, engagement scores) and create simple dashboards to track trends and inform decisions.
2. Implement feedback mechanisms: Regularly gather employee feedback through pulse surveys and exit interviews. Use the insights to challenge assumptions, adjust policies, and communicate how feedback drives change.
3. Strengthen legal and ethical understanding: Attend legal and ethics training regularly to stay updated. Create a decision-making checklist for key decisions and consult with legal teams to catch potential risks early.
4. Continuously grow and develop: Focus on continuously expanding your skills and knowledge to make better decisions. Our HR Consulting Course equips professionals with essential skills for strategic decision-making, and our People Analytics Certificate Program will help you make better, data-driven people decisions.

To sum up

With the increasing complexity of modern HR roles, effective decision-making is a cornerstone of HR success. Using structured tools like the RED model helps you to take a thoughtful, critical approach to solving complex problems, while strategies such as leveraging data and fostering continuous feedback can help you ground your decisions in real insights.

To stay ahead, HR professionals must actively work on enhancing their decision-making capabilities. Whether through ongoing learning, data literacy, or ethical understanding, the more you refine these skills, the more confident you can become in your decisions. 

FAQ

Annelise Pretorius

Assessment Subject Matter Expert

Annelise Pretorius is a registered psychometrist with 10+ years of experience working with psychometric assessments and people data. In her career, Annelise has developed talent acquisition strategies for different companies and worked on people projects, covering topics such as learning and development strategy, career pathing, and sales team performance improvement. As an Assessment SME at AIHR, Annelise is responsible for designing and delivering learning and skills assessments for clients and Academy members.