HR strategy Creating the framework for successful people management
HRstrategy Creatingtheframeworkforsuccessful peoplemanagement
Questionsthistoolisdesignedtohelpyouanswer
WhatarethemainbuildingblocksofHRstrategy? • HowcanIbuildanHRstrategythatcontributestobusinesssuccess? • HowdoIknowifIamdevelopinganeffectiveHRstrategy? •
Wewouldwelcomeyourfeedback Ifyouhaveanyqueriesaboutthesetoolsorwouldliketocontactus,youcangetintouchwiththeCIPDat: 151 The Broadway London SW19 1JQ Tel: 020 8612 6200 Fax: 020 8612 6201 Email:
Benefitsofthistool
Foryou:
IdentifythekeycharacteristicsofaneffectiveHRstrategy. •
ClarifytheissuesthatneedtobeaddressedindevelopinganeffectiveHRstrategy. • BuildanHRstrategythatengagestheorganisationindeliveringthatstrategy. •
Foryourorganisation:
- Establishaclearprocessforintegratingpeoplemanagementwithbusiness
strategy.
Reviewexistingpracticeandensurefuturepracticehelpstosustaincurrentand • futureorganisationalperformance.
Whoisthetoolfor? StudentswishingtoenhancetheirknowledgeofHRstrategyinpractice. • • OrganisationswishingtoreviewtheircurrentapproachtoHRstrategy.
What’sinthetool? AshortoverviewofthecontextofHRstrategy. • Asummaryofthestepsrequiredtoformulatestrategy. • QuestionstoconsiderwhendiagnosingprioritiesforanHRstrategy. • Achecklistforimplementingstrategy. • ThecontextofHRstrategy
ThereisnouniversalprescriptionforanHRstrategy.Itspurposeshould
betoprovideaframeworkforapplyingpeoplemanagementpractices
toachievebusinessoutcomes.Thereforeeachstrategywillbeunique anddependentontheoperatingenvironment,businessgoalsetcofthe organisationtowhichitapplies.
HRstrategyshouldbeconcernedbothwiththedeliveryofeffective peoplemanagementservicesandinnovatingnewpoliciesandpractices.
Itisthereforealsoaboutmakingdecisionsaboutwhatneedstochange, managingthosechangesandestablishingwhatneedstostaythesame.
Thistooloutlines:
- keystepsintheHRstrategydevelopmentprocess
- diagnosingHRpriorities • implementinganHRstrategy.
Beforeyoubegin,askyourself:
• Isthisthefirsttimestrategyistobeformulatedorisitanupdating
ofanexistingstrategy?
• Doesawell-definedbusinessstrategyorplanalreadyexist?Ifnot,
whatinformationcanbeobtainedaboutbusinessintentions?
• WhatistheinitialassessmentofthekeyissueswithwhichtheHR
strategyshouldbeconcerned?
- Whatistheinitialviewofthestrategicintent–howarethekey
issuestobeaddressed?
• Aretheresourcesavailabletodevelopandimplementthestrategy?
• TowhatextentistopmanagementsympathetictotheideaofanHR
strategy?
- Whatdoestopmanagementhopetogetoutofitanddothey
recognisethelinktobusinessoutcomes?
• Willlinemanagerssupportstrategyinitiativesanddotheyhavethe
skillstoimplementthem?
- Howarestaffgenerallylikelytoreacttothestrategy?Canany
difficultiesbeanticipated,andifso,howcantheybedealtwith?
- Whoshouldbeinvolvedindevelopingthestrategy?
Equippedwiththeanswerstothesequestionsyoucanthenbeginto
considerhowyoumighttakethestepsrequiredtoformulatetheHRstrategy
summarisedinthefollowingdiagram.
Decidewhoistobeinvolved
i
and-how
Prepareactionplans i Doesthisprovideenoughdatatomakeanaccurateassessment? Whatotherdatamightyoucollect?
Definingthebusinessstrategy
Mostorganisationshaveatleastashort-termbusinessplanifnotalong-term strategy.WhenHRpeopleareactiveatboardlevelasbusinesspartnersthey aremorelikelytohavebeeninvolvedintheformulationofbusinessstrategy. Theywouldthereforealreadyhavehadtheopportunitytoensurethatthe peopleissuesareaddressedduringthisprocess,makingtheHRstrategyan integralpartofthebusinessstrategy. WhateverthepositioningofHRresponsibilitywithintheorganisationitis importantthatHRstrategyisalignedtobusinessneed.ThisrequiresHR professionalsnotjusttobeabletounderstandthebusinessstrategybutto beabletoarticulateitsimplicationsforhumanresourcemanagementandthe consequencesforHRstrategy.
Analysethecontext
HRpeoplemustunderstandnotonlytheprovisionsofthebusinessstrategy butalsothecontextinwhichitispreparedandimplemented.Thismeans appreciatingthestrengthsandweaknessesoftheorganisationandthethreats andopportunitiesitfaces.Italsomeansassessingthecorecompetenciesof theorganisation–whatit’sgoodatdoingandwhatithastocontinuetobe goodatdoing–andidentifyingitscriticalsuccessfactors,especiallythose concernedwithpeople.
Action1
Listyourorganisation’sHRpoliciesagainstthestatedaimsofthe businessplan. Canyouidentifyanygaps?
Action2
Assesswhatinformationyouhaveavailabletoassessthe competenciesofyouremployees,forexample,from:
trainingneedsanalysis
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- managementfeedback.
developmentplans
performancemanagementdata
jobdescriptions
Identifybusinessneeds
Thisisthecrucialstage.Yourtaskistoidentifythebusinessissuesthatshould beaddressedbytheHRstrategy.Itisnecessarytobeaspreciseaspossible.
Forexample,thebusinessstrategymightincludeplansforproduct/market developments.Inthissituation,youneedtofindoutwhattheresourcing
implicationsareintermsofnumbersandskillsanddeviseplanstosatisfythem.
Ormaybeamergeroracquisitionisproposed.Inthiscaseyoumaybeinvolved ina‘duediligence’exercisetoassessthehumanresourcecapabilitiesofthe businessthatmightbetakenover.Whetherornotyouhavebeeninvolved
atthisstage,youwillneedtodevelopastrategyfordealingwiththehuman
resourceimplicationsofthemerger,suchasrationalisingpaystructures.
Insomecircumstancestheremayonlybesomeverybroad-brushstrategic intentionsexpressedbytopmanagement,likeimprovingperformance, productivity,qualityorlevelsofcustomerservice.Youwillhavetobeprepared totakeapartthis‘strategicintent’andassesshowHRpracticescanmakea
specifiedandadded-valuecontributiontoachievingthesebroadgoals.
Action3
Lookateachbusinessneedinturn,whetherspecificoradeclaration ofintent.MapthisagainstthelistofexistingHRpractices.Getagroup oflineandHRcolleaguestorateeachpractice’slikelycontributionto achievingthatneed.
IdentifykeyHRissues
ThekeyHRissuesarethosethatdirectlyaffecttheachievementofbusiness goals.Theymaybearrangedundergeneralheadingssuchasorganisation structureordevelopment,ortheymaybemorespecificsuchastheneed todevelopintellectualcapitalortoimprovecommunicationandreporting relationships.
Developthestrategicframework
Thestrategicframeworkwilldefinethemainstrategicgoals,their interconnectionsandtheirpriorities.Thelinksbetweenthemwillneed tobeidentifiedsothatmutuallysupportingprocessescanbedeveloped, forexample,performancemanagementprocessesorhumanresource developmentprogrammes.Thiswillenableprioritiestobeestablished.In somecasesthestrategieswillbebundledtogether.Inothercasestheymight beimplementedinsequenceonthegroundsthatthereisonlysomuch innovationandchangethatanorganisationcancopewithatanyonetime. However,theevidencesuggeststhatapiecemealapproachtochangeisnotas effective.Itisimportantthatinterrelationshipsandsequencingareconsidered withcareandnothingshouldbedonewithoutassessingitsconsequencesfor otheraspectsofthebusinessorHRstrategy.
Action4
WithagroupofHRandlinecolleagues,usingtheoutcomesfrom
Action3considerhowpracticesfittogetherandwhatnewpractices mightneedtobeimplementedtosupportbusinesspriorities.
DefinespecificHRstrategies
Younowneedtoamplifythestrategicframeworkbystatementsofthe businessneedsthevariousindividualHRstrategiesaredesignedtosatisfy.
Youmustexplainhowtheywillmeettheneeds,theresourcesrequired,the programmeforimplementation(thiswillinvolveprioritisation)andtheir
benefitsintermsofaddedvalue.Thestrategymaybesetoutinsummarised formwithsupportingmaterialprovidingmoredetail.
AssessHRcapabilityandresourcesrequired
ThenextstepistoassessthecapacityofHRtodowhathastobedone.This meanslookingattwothings: 1. Subjectcurrenthumanresourcemanagementtoclosescrutinytoassess strengthsandweaknessesinrelationtothedemandsthatwillbemade onit.TheweaknessesmayincludeinadequateprocessesorgapsinHR activitiesthatwillinhibittheabilitytomeetstrategicgoals.
2. Assesstheextenttowhichthefunctionitself–howitisstructuredand theskillsofitsmembers–iscapableofrespondingtonewdemands.If additionshavetobemade,thenacost-benefitanalysismustbecarriedout toanswerthequestion‘Whataddedvaluewillbegainedbythisaddition toHRresources?’ DiagnosingHRpriorities
WhenformulatingHRstrategies,thekey
questionsare:
1 Whatarethekeycomponentsofthebusinessstrategy?
2 HowcanHRstrategiessupporttheachievementofthebusiness
strategy? theopportunitiesandthreatsitfaces?
4 Whataretheimplicationsofthepolitical,economic,social,
technological,legalandenvironmentalcontextsinwhichthe organisationoperates?
5 Towhatextentistheorganisationinastableordynamic
(turbulent)environmentandhowwillthisaffectourstrategies?
6 Whatisthenatureofthecorporateculture?Doesithelpor
hindertheachievementoftheorganisation’sgoals?
7 Whatneedstobedonetodefineorredefineourvaluesin-such
areasasquality,customerservice,innovation,teamworkingand theresponsibilityoftheorganisationtoitsemployees?
8 Whatdoweneedtodotoincreasecommitment?Howdowe
communicateourintentionsandachievementstoemployees andwhatstepsdowetaketogivethemavoice–ieobtaining feedbackfromthemandinvolvingthemintheaffairsofthe organisation?
9 Towhatextentdoweneedtopursueastrategyofhigh-
performanceorhigh-commitmentmanagement,andwhatwould bethemainfeaturesofsuchastrategy?
10 Howingeneralcanweincreasetheresourcecapabilityof
theorganisation?
11 TowhatextentdoexistingHRpracticesmeetfuturebusiness
needs?Whatneedstobedoneaboutanygapsorinadequacies? WhenformulatingHRstrategies,thekey
questionsare:
12 Inthelightofthisgapanalysis,whatspecificaspectsof
HRM(processesandpractices)doweneedtofocusonwhen formulatingstrategy?
13 Howcanwebest‘bundle’togetherthevariousHRpractices?
14 HowcanweachievecoherenceindevelopingthedifferentHR
practices?
15 Howcanweachievetheflexibilityrequiredtocopewithchange?
16 Whatkindofskillsandbehavioursdoweneednowandinthe
future?
17 Areperformancelevelshighenoughtomeetdemandsfor
increasedprofitability,higherproductivity,betterqualityand improvedcustomerservice?
18 Willtheorganisation’sstructureandsystemsbeabletocopewith
futurechallengesintheirpresentform?
19 Arewemakingthebestuseoftheskillsandcapabilitiesofour
employees?
20 Areweinvestingenoughindevelopingthoseskillsand
capabilities?
21 Arethereanypotentialconstraintsintheformofskillsshortages
oremployeerelationsproblems?
22 Areouremploymentcoststoohigh? 23 Istherelikelytobeanyneedforde-layeringordownsizing? 24 Howshouldweinvolvepeopleindevelopingthestrategy? 25 Howcanweensurethestrategicplansareimplemented?
ExampleA.FundamentalsofHRstrategyatanot-for-profit organisation
Thestrategyisfocusedonthefollowingcoreoutcomes:
continuousdevelopmentandimprovementofHRstrategy
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- Reachout–developthecommitmenttorespectallstaff.
- Involveandlisten–recognisethecontributionsofindividuals.
- Overcomeinjustice–encouragefairandjustprocesses.
- Recogniseandnurture–provideopportunitiesfordevelopment.
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- Rewardtomanageteamversusindividualincentives.
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organisationaldevelopmentinsupportofthecorporateplanand changemanagementleadership
promotionofapositiveemployeerelationsclimate
effectiveuseofstaffresources
commissioningtraininganddevelopmentappropriatetobusiness andemployeeneed. Theprioritiesforactionareinformedbythecorporateplanandthe needtosupportservicesformanagers.Theyarealsoshapedbyasetof corevalues:
ExampleB.CorecomponentsofHRstrategyinaneducation sectorestablishment
Investinintellectualcapitaltoensurethecontinuedsupportof customers.
Manageperformancetoensureperformanceisinlinewithcore values.
Designjobstoensuretheyrelatetothewholebusinesswhile providinginterestingandstimulatingworkforindividuals.
Creatework–lifebalancetoensurestaffachievetheiroptimumlevel offlexibility. Thisorganisationbelievesitmustalignallthesecomponents,otherwise itwouldbecomedysfunctional.
ThereisoftenagapbetweentherhetoricofHRstrategiesandtherealityof
whathappenssubsequently.Thisisessentiallyachangemanagementissue.
Everyoneconcernedwithimplementation,especiallylinemanagers,needsto beincludedinachangemanagementprogramme.
Themainfeaturesofsuchaprogrammeas
describedbyArmstrong(2001)are:
• Strongcommitmentandvisionaryleadershipfromthetop.
- Clearunderstandingofthe leversforchangeinthe
organisation.
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Appropriatetemperamentandleadershipfromthose concernedwith managingchange.
- A learningorganisationthatcreatesaclimateforchange andlearnsfromfailures.
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Participationintheplanningandimplementationofchange bythosemostaffectedbyit.Theaimshouldbetogetthem to‘own`thechange.
• Arewardsystemthatencouragesinnovationandrecognises
successinachievingchange.- Strategiesforchangeare adaptable–theabilitytorespond
swiftlytonewsituationsanddemands,whichwillinevitably arise,isessential.
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Hardevidenceanddataontheneedforchangeaswellas howtosatisfyit.
- Anemphasison changeinbehaviour,notenforcingvalues.
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Processes,structureandsystemsaredesignedandalignedto delivertherequiredchanges.
- i Anticipationof implementation problems.
- Activeandvisible championsofchange.
- Ongoingcommunicationaboutwhy changeisessentialand howitwillaffecteveryone.
FromtheCIPDwebsite
Understandingthepeopleandperformancelink:Unlockingtheblack
box.
Furtherreferencesandreading
ARMSTRONG,M.(2001).Ahandbookofhumanresourcepractice,8th
edition.London.KoganPage.Thelibraryholdsarangeofbooksandresourcesofferingmoredetailed guidance.Ifyouwouldlikefurtherinformation,pleaseconsultthe
ThistoolisbasedonasummaryextractfromtheCIPDbookStrategicHRM:
MichaelArmstrongand Thekeytoimprovedbusinessperformanceby AngelaBaron Howtousethetool
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