Strategic HR Management and Planning

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Developing Talent at

Consumer goods conglomerate Procter and Gamble has had a long, successful history based on hiring at the entry level and developing and promoting its managers and executives from within. The key to this success is the organizations Build from Within program, which tracks the performance of every manager within the organizations top 50 jobs consistently has three internal replacement candidates lined up and ready to assume responsibility. Loyalty of employees is paramount to ensuring the success of such a program, and P&Gs history of grooming and training its employees promotes such loyalty. 2*

Developing Talent atFewer than 5% of the organizations non-entry-level hires come from outside the organization, and its rigorous and competitive screening process, in which fewer than 5% of applicants are hire, ensures that P&G hires those best suited for the organization and its culture.P&Gs 138,000 employees are tracked via monthly and annual performance reviews in which managers discuss business goals, personal goals, and how theyve trained others to assume responsibility. The latter is a key factor in the upward mobility of any manager. P&G prides itself in being able to fill any opening internally in an hour. All executives are required to teach in the organizations training programs, and the CEO assumes direct responsibility for the development of the organizations top 150 employees.2*

Strategic Planning and HR PlanningStrategic Human Resources Management (SHRM)The pattern of human resources deployments and activities that enable an organization to achieve its strategic goalsStrategy formulationproviding input as to what is possible given the types and numbers of people available.Strategy implementationmaking primary resource allocation decisions about structure, processes, and human resources.2*

Linking Strategic Planning and HRPStrategic Analysis What human resources are needed and what are available?Strategic FormulationWhat is required and necessary in support of human resources?Strategic ImplementationHow will the human resources be allocated?2*Human Resources PlanningStrategic Planning

2*Linking Strategic Planning and Human Resources

Step One: Mission, Vision, and ValuesMissionThe basic purpose of the organization as well as its scope of operationsStrategic VisionA statement about where the company is going and what it can become in the future; clarifies the long-term direction of the company and its strategic intentCore ValuesThe strong and enduring beliefs and principles that the company uses as a foundation for its decisions2*

Since Mission, Vision, and Values influence HRPSmall Group DiscussionIn groups of 4, discuss the Mission and Vision, ofUniversity of Baguio

Discuss whether or not the university is fulfilling its obligations according to the stated Mission and Vision.To what extent do the employees contribute to this?To what extent is the organization committed to motivate their people to be dedicated in helping the organization achieve company goals and objectives?

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Step Two: Environmental ScanningEnvironmental ScanningThe systematic monitoring of the major external forces influencing the organization.Economic factors: general, regional, and global conditionsIndustry and competitive trends: new processes, services, and innovationsTechnological changes: robotics and office automation Government and legislative issues: laws and administrative rulings Social concerns: child care and educational priorities Demographic and labor market trends: age, composition, literacy, and immigration2*

The Competitive EnvironmentAssignment (Short bond paper; due: December 7, 2011)List and discuss the competitive environment ofABS-CBN

Who are its competitors? What distinct advantages does ABS-CBN have over its competitors? What can the company do to make sure they have the best pool of manpower considering the nature of competition in their industry?2*

Step Three: Internal Analysis2*

Culture: Auditing Values, Beliefs, and AttitudesCultural AuditsAudits of the culture and quality of work life in an organization.How do employees spend their time? How do they interact with each other? Are employees empowered?What is the predominant leadership style of managers?How do employees advance within the organization?2*

Capabilities: People as a Strategic ResourceCore CapabilitiesIntegrated knowledge sets within an organization that distinguish it from its competitors and deliver value to customers.Sustained competitive advantage through people is achieved if these human resources:Are valuable.Are rare and unavailable to competitors.Your best competitive assets walk out the door every night.Are difficult to imitate.Are organized for teamwork and cooperation.2*

Composition: The Human Capital ArchitectureStrategic Knowledge WorkersEmployees who have unique skills that are directly linked to the companys strategy.Example: R&D scientistsCore EmployeesEmployees with skills to perform a predefined job that are quite valuable to a company, but not particularly unique or difficult to replace.Example: salespeople2*

Composition: The Human Capital Architecture (contd)Supporting LaborEmployees whose skills are of less strategic value and generally available in the labor market.Example: clerical workersAlliance PartnersIndividuals and groups with unique skills, but those skills are not directly related to a companys core strategy.Example: consultants2*

Forecasting: A Critical Element of PlanningForecasting involves:forecasting the demand for laborforecasting the supply of laborbalancing supply and demand considerations.2*

2*Model of HR Forecasting

Forecasting Demand for Employees2*Forecasting Demand

Quantitative Approach: Trend AnalysisForecasting labor demand based on an organizational index such as sales:Select a business factor that best predicts human resources needs.Plot the business factor in relation to the number of employees to determine the labor productivity ratio.Compute the productivity ratio for the past five years.Calculate human resources demand by multiplying the business factor by the productivity ratio.Project human resources demand out to the target year(s).2*

Qualitative ApproachesManagement ForecastsThe opinions (judgments) of supervisors, department managers, experts, or others knowledgeable about the organizations future employment needs.Delphi TechniqueAn attempt to decrease the subjectivity of forecasts by soliciting and summarizing the judgments of a preselected group of individuals.The final forecast represents a composite group judgment.2*

2*HR Planning and Strategy Questions to Ask Business ManagersWhat are your mission, vision, and values?What are your current pressing business issues?What are our organizational strengths?Who are our competitors organizational strengths? How do we compare?What core capabilities do we need to win in our markets?What are the required knowledge, skills, and abilities we need to execute the winning strategy?What are the barriers to optimally achieving the strategy?What types of skills and positions will be required or no longer required?Which skills should we have internally versus contract with outside providers?What actions need to be taken to align our resources with strategy priorities?What recognition and rewards are needed to attract, motivate, and retain the employees we need?How will we know if we are effectively executing our workforce plan and staying on track?Workforce planning requires that HR leaders periodically interview their managers to gauge future workforce needs. Here are some sample questions to ask.

Forecasting the Supply of Employees: Internal Labor SupplyStaffing TablesMarkov AnalysisSkill InventoriesReplacement ChartsSuccession Planning2*

Forecasting Internal Labor SupplyStaffing TablesGraphic representations of all organizational jobs, along with the numbers of employees currently occupying those jobs and future (monthly or yearly) employment requirements.Markov AnalysisA method for tracking the pattern of employee movements through various jobs.2*

2*Hypothetical Markov Analysis for a Retail Company

Internal Demand Forecasting ToolsSkill InventoriesFiles of personnel education, experience, interests, skills, etc., that allow managers to quickly match job openings with employee backgrounds.Replacement ChartsListings of current jobholders and persons who are potential replacements if an opening occurs.Succession PlanningThe process of identifying, developing, and tracking key individuals for executive positions.2*

2*An Executive Replacement Chart

Succession-Planning ChecklistRATE THE SUCCESS OF YOUR SUCCESSION PLANNINGFor each characteristic of a best-practice succession-planning and management program appearing in the left column below, enter a number to the right to indicate how well you believe your organization manages that characteristic. Ask other decision makers in your organization to complete this form individually, compile the scores, and compare notes.

2*Assessing a Firms Human Capital

Step Four: Formulating StrategyStrategy FormulationMoving from simple analysis to devising a coherent course of action.SWOT analysis A comparison of strengths, weaknesses, opportunities, and threats for strategy formulation purposes. Use the strengths of the organization to capitalize on opportunities, counteract threats, and alleviate internal weaknesses.

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Corporate Strategy2*

Business StrategyValue CreationWhat the firm adds to a product or service by virtue of making it; the amount of benefits provided by the product or service once the costs of making it are subtracted (value = benefits costs).Low-cost strategy: competing on productivity and efficiencyKeeping costs low to offer an attractive price to customers (relative to competitors).Differentiation strategy: compete on added valueInvolves providing something unique and distinctive to customers that they value.2*

2*Key HR Activities Associated with Merger or Acquisition Phases

2*Key HR Activities Associated with Merger or Acquisition Phases (contd)

Business Strategy (contd)Functional Strategy: Ensuring AlignmentExternal Fit/AlignmentFocuses on the connection between the business objectives and the major initiatives in HR.Internal Fit/AlignmentAligning HR practices with one another to establish a configuration that is mutually reinforcing.2*

Step Five: Strategy ImplementationTaking Action: Reconciling Supply and DemandBalancing demand and supply considerationsForecasting business activities (trends)Locating applicantsOrganizational downsizing, outsourcing, offshoringReducing headcountMaking layoff decisionsSeniority or performance?Labor agreements2*

Step Six: Evaluation and AssessmentEvaluation and Assessment IssuesBenchmarking: The process of comparing the organizations processes and practices with those of other companiesHuman capital metricsAssess aspects of the workforceHR metricsAssess the performance of the HR function itself

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2*Ten Measures of Human CapitalYour most important issuesHuman capital value addedHuman capital ROISeparation costVoluntary separation rateTotal labor-cost/revenue percentageTotal compensation/revenue percentageTraining investment factorTime to startRevenue factor

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