How to create value through human resources?

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How to create value through human resources?

By Mansour Baker, SHRM-CP

Posted 01 September 2020 | Revised 25 January 2022

Strategic Intend

Organizations can only deliver strategic intent if certain ‘Levers’ operate.

Exhibit 1

We need to think about the results we are seeking

HR seeks to get results from strategic intent

What should HR provide?

Its own understanding of Mission and Vision so that managers and staff are clearer on their role
The key strategic objectives so that the ‘HR delivery is clear’
An organization structure to provide clarity on how accountabilities are shared
Processes that are being developed
Performance levels and targets
An understanding of the importance of technology for the delivery process

How should HR provide these and what about Measures?

Seeking to be clear on Mission and Vision
Identifying the key strategic objectives
Working on the organization
Linking strategies to activities so that we understand more about the processes
Setting performance levels and targets
Seeking to harness technology for the delivery process

HR Mission & Vision Example

Mission: To become an employer of choice aiding; meeting the manpower plan by providing quality staff and then helping managers to develop and motivate their staff in an efficient and effective way.

Vision: The company is a benchmark for high performing staff continually seeking new and higher standards of excellence.

Mission & Vision Provide a Strategic Platform

HR needs to understand the existing organizational and strategic imperatives.

How is value added?

Know how
Developing opportunities
Changing ideas into profitable businesses

What is the value of the business?

Current & fixed assets
People
Information
IT
Ability to respond to customer needs

What is the combination of?

Culture
Structure
Style
Leadership
Vision
Responsibility
Accountability
Communication
Change

HR Strategic Objectives

The following key strategic objectives:

To develop a manpower plan which provides the human resource requirements of the business
To develop the organization to support the key value-added processes being clear on how jobs add value and seeking to enrich these positions in line with job holder capabilities
To identify the best talent in the market and recruit in accordance with the job requirements specified in the manpower plan
To develop this talent internally so that they are fully empowered, following a well thought out clear career path that meets the succession plans for the company
To support the development process with training facilities that develop the required technical and behavioral skills
To ensure the performance management process facilitates the highest standards of management and motivates staff to seek stretching targets in line with top level organizational objectives
To fairly and competitively reward all staff so that the best is retained and continue to develop, sharing in the added value that they contribute
To develop policies and procedures which provide a clear message to staff on company’s expectations, level of integrity, manner of presentation, required conduct and all employment terms and conditions
To manage employee relations so that staff can communicate their needs and concerns while being fully informed of organizational directives – knowing that they are valuable to the organization and are fairly treated
To coordinate all HR activities throughout the regions so that uniform standards of excellence are applied in all geographies, ensuring that staff feel they belong and contribute to common goals

The next step is to set targets for key activities and the relevant performance measures.

Exhibit 2

How the organization is structured is crucial

Many organizations are re-engineering the HR function to meet best practice standards

Seen as fully accountable for the most valuable asset in the business: Human Resources sometimes now referred to as ‘Human Capital’.

Is a strategic function; focuses on high level business issues and seeks to minimize routine functions through automation and in some cases out-sourcing.

Relies heavily on state-of-the-art technologies to ensure systems are integrated and inter-active.

The Head of HR sometimes referred to as the Chief Human Resources (or Human Capital) Officer is held fully accountable for all HR Strategic Activities:

Developing the Manpower Plan with Line and Business Unit Managers is an essential strategic component which is input into the Business Plan and revised annually in order to determine the budget
Also accountable for the Compensation Strategy; Development of Policies; Organizational issues and the whole area of ‘Talent Management’
Frequently a member of the Top-Level Strategic Committee

Centralize/Decentralization Issues

If a company operates in several regions and will continue to expand into new geographies. It is essential that HR service lines offer consistent high standards of excellence in all locations.

HR is held fully accountable for all human resource related services provided, regardless of the location. HR at the Head office makes all strategic decisions and passes these out to the regional offices for action:

Manpower Plan; Organization Development; Development of Policies; Management of Performance; Compensation Strategy

HR therefore retains ‘functional control’ of its staff across all regions:

Recruitment; Execution of Duties; Development; Compensation; Promotion; Performance Review

The HR Function in the Regions is accountable for all routine/operational tasks:

Recruitment of Staff; Employee Induction; Local Payroll; Communication and Compliance with HR Policies & Procedures; Personnel Assistance; Assistance to Line Managers; Maintenance of the HR Database; Problem Solving

HR Enabling Environment

Inspired leadership
Clear, doable targets
Strong Bonds
Accurate Assessment
Willing to Develop Others
Manage Stress & Conflict
Able to develop opportunities and counter threats
Understand Strengths & Weaknesses

Exhibit 3

Enablers to improve business performance

How well are HR services being delivered?

Prioritize a ‘First-Cut’ view of delivery of services to be provided based on current HR issues.

Sample HR service delivery from high to low:

Manpower Plan
Organization Development
Employee Relations

HR Processes may need to be re-engineered and some changes will have a significant impact.

Exhibit 4

Magnitude of HR Process Improvement

‘Snap-Shot’ of Delivery: Stronger Strategic Focus

Exhibit 5

Becoming more strategic should be a top priority

Becoming more strategic is a top priority

Technology will Play a Key Role

HR should leverage technology to help deliver integrated decision tools to managers and staff to fast track the development of HR solutions. HR should seek to facilitate the development of managers and staff and the communication of HR processes using HRIS tools.

Exhibit 6

HR priority fully integrated relational database

We know change is not easy

Ability to change is related to +ve and-ve forces.

+ve

Future Vision
Powerful Leaders
Major Opportunity
Wanting to Change
Major Crisis Competition

-ve

Successful
Long History
Focus on Routine
Stable Environment
Fear Change
Few Threat

Exhibit 7

+ve and-ve forces

How HR services will be delivered?

HR Framework

A company exists in a business environment made up of customers and clients, their end users, competitors, government regulations, and other conditions in which they do business. Everything in human resource (HR) is about meeting the needs of a company customers better than the competition.

In the context of a business environment, a company has its own Vision, Strategy, Priorities and Goals that allow it to win in the business environment. The effectiveness of these is measured simply by the ability to have customers buy their products or services, and not their competitors. Everything HR does must focus on assisting the organization implement its business strategy.

For a company to implement its strategy, it must have the core capabilities to support the strategy. This does not mean competencies, but the fundamental core abilities that a company needs to compete and win in the marketplace. For example, one such capability is to bring new services or products to a market quickly, or to deliver services in a creative and unique ways, or to deliver services to precise client specifications and terms. Organizational capabilities are created through a co-ordination of people, technological and financial resources.

The prime role of company leaders is to effectively manage their people to develop the corporate capabilities to allow it to win in the marketplace. At the same time, everything that HR does should be focused on leveraging those human competencies to create capabilities that allow a company to win with its strategy in the marketplace. This is how talent aligns with the market, and why all HR work must focus on leveraging human talent.

The strategic framework represents the five fundamental of HR core processes

The below 5 HR core processes are the levers that the organization has at its disposal to maximize its talent and the competencies that individuals bring. They are integrated, not separate, and a change in one area impacts the others: an OD effort that redesigns a work flow needs to look at the impacts on the people, the impact on employee’s well-being, and the new performance issues. Every one of these processes also has a strategic and tactical component: a change in benefits affects business profit and raw costs, but can improve motivation.

Workforce Planning & Staffing: This is the process of identifying, planning, projecting, and getting the right people today, and knowing what a company needs for tomorrow. It is about methods to attract, integrate and retain talent.
Organizational Development: This is the process that examines organizational processes and systems to ensure they are aligned with the business strategy and customer needs. Planning, measurement, structure, work flow, and budgets can all be developed to enable good work systems and practices.
Performance Management: Once the essential talent has been hired and good processes are in place, an effective process needs to be in place to ensure a company gets the outcomes that it desires by identifying, reporting, measuring and tracking its performance, in everything it does.
Learning & Development: Talent needs change over time, and there is a critical need for a learning and development process to continue building existing talent.
Employee Relations: This process focuses on the needs of individual employees, providing support so that employees can work effectively and sustain their efforts over time. It is also about managing the relationship between the employee and the needs of the larger organization.

The HR Plan

The HR Plan is a document which guides the new HR organization on what it needs to focus on. It’s like having a car without a driver…the car is simply a means to get the driver somewhere.

Exhibit 8

The HR Plan will focus on 3 broad initiatives

How HR services will be delivered?

HR services will be delivered by center of excellence, HR service center, and HR business partners. The service delivery is as follows:

Center of Excellence
Center of excellence are comprised of teams of technical HR experts (e.g., recruitment, compensation design, and organization development) who are shared by the business units. Center of excellence provide strategic, design and consultative services to HR business partners and assist the HR service center in resolving complex issues.

HR Service Center
The HR service center is a shared service that responds to employee inquiries and processes HR transactions to significantly reduce HR business partner and center of excellence involvement in routine administrative tasks and inquiries (e.g., benefits, payroll, and data maintenance).

HR Business Partners
HR business partners are dedicated to providing business unit specific strategic and consultative services to executives and line managers related to the people-related issues impacting their business unit. Business partners “broker” technical talent (e.g., recruitment services, compensation design, and organization development) from the center of excellence to deliver HR solutions.

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