Hr's contribution to business
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This document discusses how HR can contribute to and align with business strategy in three main ways: 1. HR can operationalize business strategy by implementing the people-related aspects of strategic plans. 2. HR can provide its own "people thrust" that is either connected to or disconnected from organizational aims through HR best practices. 3. HR can be an integral part of business strategy formulation by having two-way influence between business and HR strategies through mutual involvement in planning. The level of integration between business and HR strategies depends on factors like the planning process, HR's involvement in decision-making, and the extent HR is aligned with business objectives. Measuring HR and people management performance is important to
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Hr's contribution to business
- 1. HR’s contribution to business strategy
- 2. Understanding strategic formulation Not 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
- 3. Types of linkage between business & HR strategy business strategy integrative informs HR actions passing ships: independent HR two way linkage: and business mutual influence strategies
- 4. 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 permitted Legitimate areas for HR input Extent of HR’s alignment with business - broad objectives and current imperatives
- 5. Understanding the decision making process If decided by Get a seat at the formal processes decision making table If matters are Build coalitions, settled beforehand work to influence outside meetings If real action Ensure you have happens at business partners operational level effective at BU level
- 6. Stakeholder management board what is their stake? executive committee what are their goals? senior managers what are their line managers expectations? team how will change affect leaders/supervisors them? employees what do they know employee already? representatives what influence do external suppliers they have? what power do they government bodies have? other agencies
- 7. Characteristics of strategic HR A philosophy underpinning people management Seeing people as a competitive resource
- 8. Making the case: what Human Capital HR can deliver Improved utilisation of talent Higher productivity Reduced costs Better service delivery Organisational integration Aligned culture & organisational values Greater employee engagement Stronger employee proposition etc
- 9. Service-Profit-Chain Model Line Customer Customer Company Employee Change in Managemen satisfaction spending Culture Commitment sales t with service intention Employee Absence
- 10. Characteristics of strategic HR A philosophy underpinning people management Seeing people as a competitive resource A planning approach to resources ■ numbers in line with ■ skills business need ■ potential Adds long-term rather than short term value
- 11. Characteristics of strategic HR Integrated – brings together multifaceted activities
- 12. People management integration vertical integration business strategy reward employee training work culture leadership relations & devt orgn style horizontal integration
- 13. Characteristics of strategic HR Integrated – 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
- 14. Characteristics of strategic HR Integrated – 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
- 15. Connecting business & HR strategies Internal drivers Business HR Business Imple- Monitor strategy strategy plans mentation External drivers
- 16. How is people & business alignment achieved What is the Big organisation’s big idea idea? What are the business priorities? Business priorities What are the people priorities? How do they link? People priorities
- 17. Establishing people priorities What causes people to come to work, be motivated and perform? What stops them from being effective?
- 18. A model of capability Individual capability ability: motivation: skills, training engagement education involvement Development Deployment access: application: resourcing OD recruitment product succession market strategy Organisational action
- 19. What are external influences? Conduct environmental scanning: what is the legal context how tight/loose is the labour market are the right skills available at what price what is the output from schools, universities, etc what are the political priorities
- 20. 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?
- 21. What stops HR succeeding? Human capital not recognised as a source of advantage Weak organisational leadership Poor teamworking across organisation Business strategy poorly defined There is little forward planning People resources assumed to be unlimited, free or fully trained Resources are hoarded & not shared
- 22. HR’s own problem areas Obstacles to success: ■ time ■ capacity ■ focus ■ capability ■ positioning ■ organisation
- 23. The ‘default’ operating model Corporate HR centres shared consultancy of expertise services pool BU BU BU BU BU business partner business partner business partner business partner business partner
- 24. HR’s own problem areas Obstacles to Relationships with success: management not ■ time working. ■ capacity The villains: ■ focus ■ HR – not letting go ■ capability ■ the line – not ■ positioning taking it up ■ organisation ■ senior mgt – sending wrong signals
- 25. Results Inadequate HR service performance Concentrating on low value tasks HR policies are disjoined & inconsistent They serve functional not organisational needs Weak functional leadership Poor internal reputation Human capital not exploited, developed
- 26. What should HR do? Construct a workforce plan Establish the supply/demand balance Are the right people, in right jobs? Review your recruitment model Why do ■ able to attract - all types? they join? ■ brand ■ proposition Review your retention model Why do they ■ right level of wastage? leave? ■ numbers, types, quality
- 27. A strategic review of recruitment and retention H Attract & retain Organisational impact Outsource Commoditise L H Market availability L
- 28. Different propositions for different groups Hire Exploit Fire Attract Nurture Retain
- 29. What should HR do? (2) Are you able to motivate staff? How do ■ degree of engagement you know? ■ what motivates them? ■ what demotivates them? ■ what impact does pay and performance management have? How well are employees aware of ■ the bigger picture? ■ their job? ■ what success looks like?
- 30. 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?
- 31. 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?
- 32. Measure people and HR functional performance Through for example Critical success factors/areas Key performance indicators Service level reviews Customer surveys Employee attitude surveys Process mapping/activity analysis Audits/reviews (incl... quality) Scorecards Benchmarking
- 33. Improve measurement People HR management efficiency efficiency People HR Management effectiveness effectiveness
- 34. Examples of measures in multi dimensional measurement Cost/Income Process metrics against Ratios Customer views headcount Strategic alignment Human Capital Functional positioning
- 35. Human capital measuring & doing business goals HR policies & practices HCM measuring reporting acting managing internal external people business performance
- 36. … thank you
Editor's Notes
- Or may be the Holy Grail for HCM is knitting together the measuring of human assets for reporting purposes and acting upon that information to drive how people are managed in the organisation. Simply producing the data is not enough, especially if it is overly influenced by traditional accountancy models. Proving to the world that business performance is affected by the management of people may be desirable for both internal and external consumption to ensure that employees place in the business is given its rightful place.