Faced with rapid change organizations need to develop a more focused and coherent approach to managing people. In just the same way a business requires a marketing or information technology strategy it also requires a human resource or people strategy.
In developing such a strategy two critical questions must be addressed.
• What kinds of people do you need to manage and run your business to meet your strategic business objectives?
• What people programs and initiatives must be designed and implemented to attract, develop and retain staff to compete effectively?
In order to answer these questions four key dimensions of an organization must be addressed. These are:
• Culture: the beliefs, values, norms and management style of the organization
• Organization: the structure, job roles and reporting lines of the organization
• People: the skill levels, staff potential and management capability
• Human resources systems: the people focused mechanisms which deliver the strategy - employee selection, communications, training, rewards, career development, etc.
Frequently in managing the people element of their business senior managers will only focus on one or two dimensions and neglect to deal with the others. Typically, companies reorganize their structures to free managers from bureaucracy and drive for more entrepreneurial flair but then fail to adjust their training or reward systems.
When the desired entrepreneurial behavior does not emerge managers frequently look confused at the apparent failure of the changes to deliver results. The fact is that seldom can you focus on only one area. What is required is a strategic perspective aimed at identifying the relationship between all four dimensions.
If you require an organization which really values quality and service you not only have to retrain staff, you must also review the organization, reward, and appraisal and communications systems.
The pay and reward system is a classic problem in this area. Frequently organizations have payment systems which are designed around the volume of output produced. If you then seek to develop a company which emphasizes the product's quality you must change the pay systems. Otherwise you have a contradiction between what the chief executive is saying about quality and what your payment system is encouraging staff to do.
There are seven steps to developing a human resource strategy and the active involvement of senior line managers should be sought throughout the approach.
Steps in developing HRM strategy:
Step 1: Get the 'big picture'
Understand your business strategy.
• Highlight the key driving forces of your business. What are they? e.g. technology, distribution, competition, the markets.
• What are the implications of the driving forces for the people side of your business?
• What is the fundamental people contribution to bottom line business performance?
Step 2: Develop a Mission Statement or Statement of Intent
That relates to the people side of the business.
Do not be put off by negative reactions to the words or references to idealistic statements it is the actual process of thinking through the issues in a formal and explicit manner that is important.
• What do your people contribute?
Step 3: Conduct a SWOT analysis of the organization
Focus on the internal strengths and weaknesses of the people side of the business.
• Consider the current skill and capability issues.
Vigorously research the external business and market environment. High light the opportunities and threats relating to the people side of the business.
• What impact will/ might they have on business performance?
• Consider skill shortages?
• The impact of new technology on staffing levels?
From this analysis you then need to review the capability of your personnel department. Complete a SWOT analysis of the department - consider in detail the department's current areas of operation, the service levels and competences of your personnel staff.
Step 4: Conduct a detailed human resources analysis
Concentrate on the organization's COPS (culture, organization, people, HR systems)
• Consider: Where you are now? Where do you want to be?
• What gaps exists between the reality of where you are now and where you want to be?
Exhaust your analysis of the four dimensions.
Step 5: Determine critical people issues
Go back to the business strategy and examine it against your SWOT and COPS Analysis
• Identify the critical people issues namely those people issues that you must address. Those which have a key impact on the delivery of your business strategy.
• Prioritize the critical people issues. What will happen if you fail to address them?
Remember you are trying to identify where you should be focusing your efforts and resources.
Step 6: Develop consequences and solutions
For each critical issue highlight the options for managerial action generate, elaborate and create - don't go for the obvious. This is an important step as frequently people jump for the known rather than challenge existing assumptions about the way things have been done in the past. Think about the consequences of taking various courses of action.
Consider the mix of HR systems needed to address the issues. Do you need to improve communications, training or pay?
What are the implications for the business and the personnel function?
Once you have worked through the process it should then be possible to translate the action plan into broad objectives.
These will need to be broken down into the specialist HR Systems areas of: organization development
• employee training and development
• management development
• performance appraisal
• employee reward
• employee selection and recruitment
• manpower planning
• communication
Develop your action plan around the critical issues. Set targets and dates for the accomplishment of the key objectives
Step 7: Implementation and evaluation of the action plans
The ultimate purpose of developing a human resource strategy is to ensure that the objectives set are mutually supportive so that the reward and payment systems are integrated with employee training and career development plans.
There is very little value or benefit in training people only to then frustrate them through a failure to provide ample career and development opportunities
Benefits of HRM Strategy:
• HR strategy incorporated within the corporate strategy
• Basic methodology for measuring HC ROI
• Lean HR department with an explicitly established role within the company
• Strengthening of the “we-the-firm” attitude, increase in employee loyalty
• Increased communication efficiency, lower demands for control
• Overview of the company’s weaknesses and strengths as perceived by employees
• Identification of potential risks related to conflicts and the loss of key performers
• Tools for targeted development of corporate culture influencing motivation and employee satisfaction levels.
• Assistance in the analysis of readiness for the implementation of change, primarily in corporate culture, which cannot be assessed from an “internal perspective” but its understanding is one of the most critical success factors in change management
• Assistance in change implementation – “breaking” the internal resistance to change with the power of experience and knowledge of external consultants
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