Strategic Human Resource Development

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Strategic Human Resource Development

• K. Peter Kuchinke
• Professor, Human Resource Development
• University of Illinois at Urbana-Champaign
• Yuan-Ze University, April 2008

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Outline

• Strategic HRD
• Context, models, and definition
• Applications
• Human Capital Formation, Organizational
  Learning, and Implications for Life-long
  Learning Policies
• Case Examples

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The New HRD

• Employees as org. assets
• Driving business strategy
• Spanning organizational functions
• HRD Deliverables
• Performance
• Capacity Building
• Problem solving/consulting
• Org. change and development

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The New HRD

• Employees as org. assets
• Driving business strategy
• Spanning organizational functions
• HRD Deliverables
• Performance
• Capacity Building
• Problem solving/consulting
• Org. change and development

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Strategic HRD

• Integration of HRD with strategy formulation and
  implementation
• Long-term view of HR policy
• Horizontal integration among HR functions
• Vertical integration with corporate strategy
• SHR as core competitive advantage

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Firm Capitals

• Human Capital
• Knowledge, skills, abilities of individuals
• Social Capital
• Relationships in social networks
• Structural, cognitive, relational dimensions
• Intellectual capital
• Knowledge and knowing capability of social
  collectivities
• Procedural/declarative tacit/explicit
  individual/social
• Value and Uniqueness of capitals

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Multiple Roles for HR (Ulrich, 1997)
Future/Strategic Focus
Mgmt of Trans- Formation/Change
Mgmt of SHR
Processes
People
Mgmt of Employee Contributions
Mgmt of Firm Infrastructure
Day-to-day/Operational Focus
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Definition of HR Roles
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Universal/Best Practice Models

• TQM
• Corporate culture, communications,
  voice/involvement, job design, training,
  performance measurement/evaluation, rewards,
  health/safety, selection/promotion, career
  development
• Peters and Waterman In search of excellence
• Org. culture, leadership, customer focus, core
  competency
• High involvement management (Lawler)
• Developing skills and knowledge, pay for
  performance, investment in HR, flexible
  operations, self-designing work systems,
  autonomous work-teams

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Universal HR Models

• Pfeffer (1998)
• Employment security
• Selective hiring
• Self-managed teams/decentralization of
  decision-making
• Comparatively high pay linked to firm performance
• Extensive training
• Reduction of status differentials
• Shared information
• Quality Awards (M. Baldrige, State Awards, etc.)
• HR Focus (work systems, education/training,
  well-being and satisfaction)

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Human Capital Architecture
Uniqueness of HC High
Quadrant 1 Emplt Mode Internal
development Emplt Rel. Organization focused HR
Configuration Commitment
Quadrant 4 Emplt Mode Alliance Emplt Rel.
Partnership HR Configuration Collaborative
HC Value Low
HC Value High
Quadrant 2 Emplt Mode Acquisition Emplt Rel.
Symbiotic HR Configuration Market-based
Quadrant 3 Emplt Mode Contracting Emplt Rel.
Transactional HR Configuration Compliance
Uniqueness of HC Low
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Architecture of Intellectual Capital
Uniqueness of IC High
Core Knowledge
Idiosyncratic Knowledge
IC Value Low
IC Value High
Compulsory Knowledge
Ancillary Knowledge
Uniqueness of IC Low
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Contingent HRD (Kuchinke, 2004)

• Propositions
• HRD Structure and Staffing Industry Specific
• HRD Investments conservative (System Maintenance
  vs. change)
• HRD Core Processes Determined based on Perceived
  Utility

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Strategic HRD Roles

• Swanson/Toracco (1995)
• Helping implement strategy
• Helping determine strategy
• Setting strategy

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Human Capital Formation

• Acceleration in changing organizational forms,
  roles, and processes
• External
• Globalization
• Technology
• Demography
• Competition
• Internal
• Cycle time
• Product innovation and introduction
• Process innovation and improvement
• Change as constant permanent white water (P.
  Vaill)
• Shortened half-life of knowledge

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Nature of Work

• Robert Reich The work of nations (1991)
• Routine production
• Personal Service
• Symbolic Analyst
• Normative and rational models of management
  (Barley Kunda, 1992)
• Industrial betterment (1870 - 1900)
• Scientific management (- 1923)
• Welfare capitalism/human relations (- 1955)
• Systems rationalism (- 1980)
• Organizational culture (- present)
• Correlates with economic expansion/contraction,
  environmental and technical certainty/uncertainty
  Kondratieff longwaves)

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HR Capitals

• Human Capital
• Individual level store of knowledge, skills,
  abilities (e.g., Becker)
• Social Capital
• Group level, network characteristics, density,
  centrality, marginality (e.g., Adler and Kwon,
  2002)
• Intellectual Capital
• Firm-level, formal (e.g., patents), informal
  (e.g., process knowledge (e.g., Nahapiet
  Ghoshal, 1999)

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Organizational Learning

• Information processing perspective
• Environmental scanning, information acquisition,
  interpretation (Daft and Weick, 1984)
• Information acquisition, storage, dissemination,
  interpretation (Huber, 1991)
• Tacit -- explicit knowledge (Polyani, 1967)
• Org. Knowledge creation spiral (Nonaka, 1995)

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Learning Organization

• Senge (1991)
• Systems thinking
• Personal mastery
• Mental models
• Building shared vision
• Team learning
• Marsick and Watkins (1998)
• Continuous learning at individual, group, and
  system levels
• Knowledge generation, sharing, and evaluation
• Systems thinking capacity
• Employee participation and accountability
• Supportive culture and structure

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Human Capital Formation

• Firm-level
• Corporate classrooms (Eurich, 1984)
• US 65 b/2006 direct cost, 220b total
• 45 of firms provide formal training
• 90 hours per year
• External training
• Corporate universities
• Non-US examples
• Informal training, on-the-job training, action
  learning

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OECD Human Capital Research

• OECD (1999)
• Formal education,
• Non-formal/enterprise-based training and labor
  market initiatives
• Experiential learning
• Learning in informal environments
• HC Measurement
• Educational attainment, i. e. years of schooling
  etc.
• Adult skills (i.e. reading, math)

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OECD Human Capital Research

• Measures of investment
• Expenditures on education and training
• Time investment
• Returns on investment
• Employment patterns
• Earnings
• Firm-level outcomes
• National level outcomes
• Social benefits
• Health outcomes
• Crime, teen pregnancy

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OECD Human Capital Research

• Policy issues
• Adequate levels of HC investment
• Appropriate sharing of investment costs
• Optimal allocation of scarce resources
• Equitable distribution of investments
• Monitoring, measuring, and accounting

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Firm-level HC formation

• Accountability and measurement
• Business/education partnerships
• Life-long learning
• Burden-sharing
• Technology and innovative learning strategies

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Johnson Diversey CaseCurrent vs. Future State of
HR
Strategic Partner
Change Agent
35
20
25
40
Employee Advocate
Administrative Expert
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Current vs. Future State of HR
Strategic Partner
Change Agent
35
20
25
40
Employee Advocate
Administrative Expert
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OD Responsibility
Level Process Owner
Global - OD Team
Regional - Head HRBP
Client - HRBP Manager
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Organization Development Roles Responsibilities

• The OD COE has a dual responsibility
• Global implementation of strategic interventions
• Cultural assessment and alignment
• Performance Management
• Succession Planning
• Leadership Bench strength
• Support to HRBPs on regional and client
  interventions
• Process improvement tools
• Intervention design
• Knowledge transfer of OD skills

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Global OD Model
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Global OD Services

• Program Management of global initiatives -
• Core Employee Development
• ESD
• Performance Management
• Leadership Development
• Consultation with senior leaders regarding -
• Customized interventions
• Assessment tools
• Services contracted with HRBPs (based on the
  capacity of the OD COE) -
• Regional OD intervention design

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HRD in Practice

• 3M Company Industrial Markets Initiative (IMI)
• 3M 75,000 employees in 60 countries
• Sales US 15 Billion, 303rd on Fortune 500 list
• IMI Cross-Business Cooperative Strategic Effort
  with 6 divisions
• Gap Analysis

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HRD in Practice

• East Central Minnesota Human Resource Development
  Partnership
• 5 family-owned businesses/rural MN
• Total workforce 300, range 12 - 123
• Pine Technical College
• WorkKeys assessment and training
• Problems Solving Interpersonal Skills,
  Communication Skills

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HRD in Practice

• Lucent Technologies
• Global Fortune 50 Telecommunication Co, 140,000
  employees, US28 Billion Revenue
• Leadership and Culture Audit for 2 US and 1
  German production sites

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HRD in Practice

• Parkland College, Champaign, Illinois
• Publicly funded community college in East Central
  IL
• 17,000 Annual Students, 50 in Occupational
  programs
• Business Training Center
• Workforce Preparation Center

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HRD in Practice

• HRD responds to
• Global Challenge
• Quality Challenge
• Social Challenge
• High Performance Work Systems Challenge
• Source R. A. Noe (1999) Employee Training and
  Development

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HRD Definitions

• HRD is
• the integrated use of training and development,
  organization development, and career development
  to improve individual, group, and organizational
  effectiveness. (McLagan, 1989)

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HRD Definitions

• HRD is
• a process of developing and/or unleashing human
  expertise through organization development and
  personnel training and development for the
  purpose of improving performance. (Swanson, 1995)

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HRD Careers

• Classic Roles (McLagan, 1996)
• HR Strategic Advisor
• HR systems designer
• Org. Change Consultant
• Org. Design Consultant
• Learning Program Specialist
• Instructor/Facilitator
• Individual development and career consultant
• Performance Consultant
• Researcher

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Roles and Job Titles in HRD

• Advertised as
• Instructional designer
• Trainer
• Training and development specialist
• HR specialist
• Learning systems architect
• Chief learning officer
• Education specialist
• ..

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Example HRD Consulting Firm

• Process Mgmt International
• Focus Quality Management, ISO 9000, Org. Change
• Products Seminars, consulting, assessments,
  books
• Size 50 employees
• Instructional Design (5), Trainers (10),
  Consultants (25), Admin (10)
• Strategic Alliances in Europe
• Revenue (2005) 5,000,000
• Clients Chevron, IRS, Zytec, Medtech, Graton
  Beverages

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HRD in Practice

• East Central Minnesota Human Resource Development
  Partnership
• 5 family-owned businesses/rural MN
• Total workforce 300, range 12 - 123
• Pine Technical College
• WorkKeys assessment and training
• Problems Solving Interpersonal Skills,
  Communication Skills

42
HRD in Practice

• Lucent Technologies
• Global Fortune 50 Telecommunication Co, 140,000
  employees, US28 Billion Revenue
• Leadership and Culture Audit for 2 US and 1
  German production sites

43
HRD in Practice

• Parkland College, Champaign, Illinois
• Publicly funded community college in East Central
  IL
• 17,000 Annual Students, 50 in Occupational
  programs
• Business Training Center
• Workforce Preparation Center

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Example Multinational Corporation

• Abbott Laboratories
• 60,000 employees in 120 countries
• Five divisions
• Corporate and division level HRD
• Director of Training and Organizational
  Development, Ph.D. HRD
• Staff of 15 (instructional designers, trainers,
  OD consultants)
• Performance Management, Leadership Development,
  Quality Management, Expatriate Training, New
  employee orientation, regulatory/mandated
  training
• Diversity Initiatives
• Clients Everybody!
• Divisional and corporate roles (committees,
  councils, strategic planning)

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HRD in Practice

• 3M Company Industrial Markets Initiative (IMI)
• 3M 75,000 employees in 60 countries
• Sales US 15 Billion, 303rd on Fortune 500 list
• IMI Cross-Business Cooperative Strategic Effort
  with 6 divisions
• Gap Analysis

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Careers in HRD

• Faster than average growth (DOL) through 2014
  www.bls.gov/oco/ocos021.htm
• Over 800,000 people employed in HR/HRD jobs
  (2005)
• About 600,000 people engaged in learning
  activities, organizational HRD
• Trends
• Better preparation of HRD professionals
• Focus on Strategic HR
• Technology, International, Diversity
• Broader career options and career paths
• Competition for good jobs
• Strong employment opportunities outside of US

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Trends in Professional HRD Work

• Higher Visibility
• Higher Accountability
• Greater Cross-Functional Involvement
• Higher Performance Demands
• Multiple Projects
• Greater need for comprehensive business knowledge
• Need for solid research and theory know-how