HR’s contribution to business strategy. Understanding strategic formulation Not always as per...
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Transcript of HR’s contribution to business strategy. Understanding strategic formulation Not always as per...
Understanding strategic formulationNot always as per textbook:
■ intended strategies■ emergent strategies■ political strategies
How does HR contribute:■ operationalises business strategy■ provides separate people thrust:
• connected with organisational aims• disconnected: HR best practice model
■ is an integral part of business strategy
Types of linkage between business & HR strategy
two way linkage:mutual influence
passing ships:independent HRand businessstrategies
integrative business strategy informs HR actions
Linking business & HR strategy Factors that affect this linkage:Planning process
■ formal or informal■ deliberative or emergent
Degree and timing of HR involvement
Extent of challenge permittedLegitimate areas for HR inputExtent of HR’s alignment with business - broad objectives and current imperatives
Understanding the decision making processIf decided by formal processes
If matters are settled beforehand
If real action happens at operational level
Get a seat at the decision making table
Build coalitions, work to influence outside meetings
Ensure you have business partners effective at BU level
Stakeholder management board executive committee
senior managers line managers team leaders/supervisors
employees employee representatives
external suppliers government bodies other agencies
what is their stake?
what are their goals?
what are their expectations?
how will change affect them?
what do they know already?
what influence do they have?
what power do they have?
Characteristics of strategic HRA philosophy underpinning people management
Seeing people as a competitive resource
Making the case: what Human Capital HR can deliverImproved utilisation of talentHigher productivityReduced costsBetter service deliveryOrganisational integrationAligned culture & organisational values
Greater employee engagement Stronger employee proposition etc
Line Managemen
t
Company Culture
Employee Commitmen
t
Customer satisfaction with service
Customer spending intention
Change in sales
Employee Absence
Service-Profit-Chain Model
Characteristics of strategic HRA philosophy underpinning people management
Seeing people as a competitive resource
A planning approach to resources■ numbers■ skills■ potential
Adds long-term rather than short term value
in line with business
need
horizontal integration
vertical
integration
People management integration
business strategy
reward
employee
relations
training
& devt
work
orgn
culture
leadership style
Characteristics of strategic HRIntegrated – brings together multifaceted activities
Comprehensive – covers the entire operation (at BU or corporate level)
High value added – focuses on business critical issues
Builds social capital – helps sharing, networking and relationships
Characteristics of strategic HRIntegrated – brings together multifaceted activities
Comprehensive –covers the entire operation (at BU or corporate level)
High value-added –focuses business critical issues
Builds social capital – helps knowledge sharing, networking and relationships
Anticipates change – through horizon scanning and internal sensing
Connecting business & HR strategies
Businessstrategy
HRstrategy
Businessplans
Imple-mentation
Monitor
Internaldrivers
Externaldrivers
How is people & business alignment achievedWhat is the organisation’s big idea?
What are the business priorities?
What are the people priorities?
How do they link?
Bigidea
Businesspriorities
Peoplepriorities
Establishing people priorities
What causes people to come to work, be motivated and perform?
What stops them from being effective?
A model of capability
ability:skills, training
education
motivation:engagementinvolvement
application:ODproductmarket strategy
access:resourcing
recruitmentsuccession
DeploymentDevelopment
Individual capability
Organisational action
What are external influences?Conduct environmental scanning:what is the legal contexthow tight/loose is the labour market
are the right skills availableat what pricewhat is the output from schools, universities, etc
what are the political priorities
What is the state of the current workforce?What proportion is skilled for their current and for future jobs?
What is its demographic shape?How committed are employees?
■ attendance■ productivity■ staying or leaving
What are collective relationships like?
To what extent is employee potential being harnessed?
What stops HR succeeding?Human capital not recognised as a source of advantage
Weak organisational leadershipPoor teamworking across organisation
Business strategy poorly definedThere is little forward planningPeople resources assumed to be unlimited, free or fully trained
Resources are hoarded & not shared
HR’s own problem areas
Obstacles to success:■ time■ capacity ■ focus■ capability■ positioning
■ organisation
The ‘default’ operating model
BUbusiness partner
BUbusiness partner
BUbusiness partner
BUbusiness partner
BUbusiness partner
consultancypool
centresof expertise
sharedservices
Corporate HR
HR’s own problem areas
Obstacles to success:■ time■ capacity ■ focus■ capability■ positioning■ organisation
Relationships with management not working.The villains:■ HR – not letting go
■ the line – not taking it up
■ senior mgt – sending wrong signals
Results
Inadequate HR service performance Concentrating on low value tasksHR policies are disjoined & inconsistent
They serve functional not organisational needs
Weak functional leadershipPoor internal reputationHuman capital not exploited, developed
What should HR do?
Review your retention model■ right level of wastage?■ numbers, types, quality
Why dothey
leave?
Why dothey join?
Construct a workforce planEstablish the supply/demand balance
Are the right people, in right jobs?
Review your recruitment model■ able to attract - all types?■ brand■ proposition
A strategic review of recruitment and retention
Market availability
Organisationalimpact
H
L
H L
OutsourceCommoditise
Attract &retain
What should HR do? (2)
How well are employees aware of■ the bigger picture?■ their job?■ what success looks like?
How do you
know?
Are you able to motivate staff?■ degree of engagement■ what motivates them?■ what demotivates them?■ what impact does pay and performance management have?
What should HR do? (3)
How skilled are line managers in■ Appraising performance?■ Giving feedback?■ Developing skills?
How effectively are ■ Employees allocated to jobs?■ How well are jobs/the organisation structured?
■ Employees moved to meet business needs?
What should HR do? (4)
What is the organisation’s ■ Ability to change/innovate
How good is the organisation’s governance structure?
How strong (and respected) are the organisational values, eg■ On diversity?■ Whistleblowing?■ Meritocratic progression?
Measure people and HR functional performance Through for exampleCritical success factors/areasKey performance indicatorsService level reviewsCustomer surveysEmployee attitude surveysProcess mapping/activity analysisAudits/reviews (incl... quality)ScorecardsBenchmarking
Improve measurement
HRefficiency
PeopleManagement
effectiveness
People management efficiency
HReffectiveness
Examples of measures in multi dimensional measurement
Process metricsRatios
Human Capital
Cost/Incomeagainstheadcount
Strategic alignmentFunctional positioning
Customer views
internal external
businessperformance
managingpeople
business goals
HR policies& practices
HCMmeasuring
reporting acting
Human capital measuring & doing