Is HR allowed to veto a hiring decision by management?

Posted by Robert Norton on

Simply put, generally, no, but there are various scenarios and circumstances.  So, this is really not a yes or no question and requires more information to answer.

Legally, any Officer of the company (a legal status according to the Secretary of State filings in the state in which your company is incorporated) has the right to commit their company legally to any contract, and hence to hire someone.  This status comes with a large “Fiduciary responsibility” to act in the best interest of the company and its stockholders.  It also means you have liability in certain circumstances.  You have a responsibility to all shareholders and cannot make any decisions for personal reasons, only in the best interest of the company.

When on a "Board of Directors" there is a very high standard for that in law called "Utmost good faith". And you can and should be sued and removed for any violation of that responsibility.  But that's another article for another day. 

Of course, if any Officer is also violating clear company policies, that may not stand and should be surfaced to discuss at a higher level.  Or if that officer has a superior, who is presumably also an Officer, they will have the right to override that decision.  Of course, the President/CEO always has the ultimate authority to override virtually any decision, too.  Because every officer reports to the President or CEO.  So, few HR people would have this authority, at least in good companies.  However, they might filter the people you get and impose their own decision-making that way too. 

The reality is this should never really happen in a good culture.  I believe any Manager should have full discretion in hiring decisions.  If there is an HR Department, they should facilitate that process, but have little legal authority or decision-making on who gets an offer.  However, companies can set any policies, which their managers must abide by too.  So, there is no clear answer without a full review of this policy manual and all the facts.  If this is happening, it is a symptom of other problems and discord within the culture that should be resolved.

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Professionals deal with these disputes internally, quietly and privately under high levels of confidentiality to not upset others and also to show the alignment of the management team.  Generally, disputes like this should never go public, even internally in the company.  Any manager doing so is acting unprofessionally and does not understand their responsibilities very well.  A good manager would honor the policies or seek a waiver/exception from someone with superior authority over both HR and them.  Not doing that is a symptom of other issues in the culture and management team.  It means there are unclear lines of authority, and that root cause should be addressed.  Clear lines of authority are critical in any company.  

Good management teams act collaboratively and should rarely, and only behind closed doors, air disputes.  This requires understanding of the bigger picture, maturity, self-control and a team spirit.  If you ask this question, you are still on a learning curve as a manager and not ready to found your own company yet.  You need to study corporate governance and the arts of management and leadership more.  And I say "art" because it is a not simple skill you can learn by reading books, it required experiential learning. 

I was a member of The National Associate of Corporate Directors (NACD) back in the 1990s when I first became a CEO.  They offer some good courses on this.  It is critical to understand your responsibilities as a manager, Officer and a CEO.  Each grows in both power and liability.  

Although this may vary by industry, I am a believer that hiring decisions should be pushed down.  Human Resources is there to facilitate the process of hiring (and firing) decisions of managers, not the other way around.  Even an officer in HR should simply coach and deal with specific hiring tasks, and never have the ultimate hiring decision.  This would be pushing employees on managers and is a formula for disaster. 

Every manager should be supported 100% by other managers and staff, until they are supported zero percent and removed for poor performance.  That's called a "Team".  If there are disagreements the lines of authority should be clear but almost all the time collaborative management, meaning good discussions and only then a decision by one person, should prevail.  Collaborative means it is discussed; it is never a democracy.  People need to be heard, but different people have vastly different experience and so there is no "One person one vote" type thing in a corporation.  Especially in hiring.  The goal would be for all people working with that person to be happy with them, but that may not always be possible.  

Taking more time to hire and less to fire is usually good advice.  Do your due diligence on any important hire, certainly lots on any manager level person.  The hidden costs of a bad hire have been estimated at over $100,000!  And can be more if other employees or customers are lost, or if the company's brand is damaged.  I have a great video here on hiring according to your brand and how Southwest Airlines hires.  It is a great way to look at hiring. 

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Bob Norton is a long-time Serial Entrepreneur and CEO with four exits that returned over $1 billion to investors. He has trained, coached and advised over 1,000 CEOs since 2002. And is Founder of The CEO Boot Camp™ and Entrepreneurship University™. Mr. Norton works with companies to triple their chances of success in launching new companies and products. And helps established companies scale faster using the six AirTight Management™ systems. And helps companies successfully raise capital.

Call (619) SCALE06 or email info@AirTightMgt.com for a complementary strategic consultation.


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