HRs contribution to business strategy

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HRs contribution to business strategy

• Peter Reilly

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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

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Types of linkage between business HR strategy
business strategy informs HR actions
integrative
passing shipsindependent HRand
businessstrategies
two way linkagemutual influence
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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 HRs alignment with business - broad
  objectives and current imperatives

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Understanding the decision making process

• If 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

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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?

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Characteristics of strategic HR

• A philosophy underpinning people management
• Seeing people as a competitive resource

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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

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IES service-profit-chain model
Line Management
Company Culture
Employee Commitment
Customer satisfaction with service
Customer spending intention
Change in sales
Employee Absence
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Characteristics of strategic HR

• A 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
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Characteristics of strategic HR

• Integrated brings together multifaceted
  activities

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People management integration
business strategy
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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

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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

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Connecting business HR strategies
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How is people business alignment achieved

• What is the organisations big idea?
• What are the business priorities?
• What are the people priorities?
• How do they link?

Bigidea
Businesspriorities
Peoplepriorities
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Establishing people priorities
What causes people to come to work, be motivated
and perform?
What stops them from being effective?
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A model of capability
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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

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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?

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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

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HRs own problem areas

• Obstacles to success
• time
• capacity
• focus
• capability
• positioning
• organisation

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The default operating model
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HRs 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

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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

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What should HR do?

• Construct a workforce plan
• Establish the supply/demand balance
• Are the right people, in right jobs?
• Review your recruitment model
• able to attract - all types?
• brand
• proposition

Why dothey join?
Why dothey leave?

• Review your retention model
• right level of wastage?
• numbers, types, quality

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A strategic review of recruitment and retention
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Different propositions for different groups
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What should HR do? (2)

• Are you able to motivate staff?
• degree of engagement
• what motivates them?
• what demotivates them?
• what impact does pay and performance management
  have?

How do you know?

• How well are employees aware of
• the bigger picture?
• their job?
• what success looks like?

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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?

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What should HR do? (4)

• What is the organisations
• Ability to change/innovate
• How good is the organisations governance
  structure?
• How strong (and respected) are the organisational
  values, eg
• On diversity?
• Whistleblowing?
• Meritocratic progression?

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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

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Improve measurement
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Examples of measures in multi dimensional
measurement
Customer views
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Human capital measuring doing
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For further information contact www.employment-st
udies.co.uk peter.reilly_at_employment-studies.co.uk
thank you