Strategic Role of HR
The strategic role of HR requires a global, long-term, and forward-thinking focus. – help create the right culture and assist in building the right organization. Activities that are strategic in nature include helping prepare for change, forecasting human capital needs for specialized skills and knowledge that will be required to achieve strategic goals, talent management, restructuring the organization, and developing performance management systems that support strategic objectives.
Operational Role of HR
Day to day tasks: Recruiting, resolving ee complaints, communicating with ees. Although not strategic in nature, operational responsibilities must reflect the organization’s goals. HR can play a role i increasing employee engagement by helping to develop comm skills and channels by developing and implementing employee involvement strategies.
Administrative Role of HR
Compliance issues and record keeping through HRIS applications. Benefits/Pay and background check administration are not necessarily considered cored HR functions.
Advice, Service, and Control
In fulfilling their organizational responsibilities, HR staff typicaly provided three types of support: Advice (policy and procedure steps provided to line manager), Service (benefit questions), and Control (evaluating performance)
Strategic, Operational, and Administrative
HR Today – an expanded role. Increasingly, administrative responsibilities are subordinated to allow HR professionals to focus on those expanding roles that contribute more directly to the organization’s bottom line. The scope of roles has broadened into a strong strategic focus, balancing three major responsibilities: Strategic, Operational, and administrative.
5 characteristics that separate a profession from an occupation.
Code of ethics
Body of Knowledge
Globalization – Single supply chain
Globalization = Competition and collaboration. Participants in a single supply chain (a global network that delivers products and services from raw materials to end users.) may be scattered around the world but are united through enterprise management systems. Need multicultural perspectives to function on truly global teams.
refers to the relocation of processes or functions from a “home” country to another country. = cost savings. Because of it’s potentially powerful impact on productivity, offshoring can figure prominently in an organization’s strategy.
OFFshoring is part of a business moved to another country, but remains part of the organization, and the workers there are still employees.
Outsourcing- function is transferred to a different business entity.
KEY: To fulfill HR”s strategic role
HR professionals must understand not only the organization’s business but also the environment in which it operates, key competition, and trends and events that could influence the organization’s success. They must establish key business partnerships with senior management and with key figures in other functions within in the organization.
Offshoring challenges in the HOME country
HR will have to manage:
Changes in work requirements.
Decline in Morale.
Impacts on available skills in domestic job pool.
WARN, Worker Adjustment and Retraining Notification Act. Federal law requirements of 50+ full time employees.
Offshoring challenges in Foreign country
Recruiting, managing, and motivating the new workforce. (laws, practices, culture)
Ensuring communication and coordination.
Acculturation of new workforce.
relocating plants or departments to different parts of the home country that offer lower costs.
Offshoring and HR
Because offshoring can affect so many areas that directly relate to HR, the organization will benefit greatly from early involvement of HR in developing an organizational strategy that includes offshoring.
HR professionals may face ethical dilemmas related to dealings with all stakeholders, from investors to employers and customers. Compliance = Sarbanes-Oxley Act (SOX) of 2002. Law covers both insider trading and whistleblowing issues for publicly held companies.
Sarbanes-Oxley Act (SOX) of 2002
Law covers bos insider trading and whistle blowing issues. Requires publicly held companies not only ensure that their financial statements are accurate, but also demonstrate that they have processes in place to ensure accuracy and compliance.
Sarbanes-Oxley Act and HR
Since people-related costs like salaries and benefits represent a large part of most companies’ budgets, HR bears a significance reporting responsibility. HR should help to ensure that senior management and board members have been training in their responsibilities. HR should ensure the organization has the personnel and expertise to deliver compliance.
Good Corporate Citizen programs
issues of fairness, as employees grow cynical about the disparities between the compensation of executives and that of other workers. HR pros are begin called upon to lead and/or partner in community programs.
Flexible Organizational Boundaries
Organizations need to respond to competition and market changes. Businesses may reshape themselves as part of their strategies; changes directly affect HR. Examples of shifts in boundaries are:
1. Movement in decision making downward and away from a central headquarter.
2. the virtual organization that is created through strategic partnering
3. Mergers, acquisition, and divestiture.
Shifts in decision making
In large organizations decision making may become cumbersome and slow when responding to competitive threats or technological changes and opportunities, as well as differences in cultures within various segments of an organization. = can interfere with the implementation of the strategic plan. Decision making moves
1. downward toward line managers and
2. outward from headquarters to field
Shifts in decision making affect HR
Daily management functions are shared with HR and line managers, such as recruiting and resolving complaints. The shift in responsibilities to line managers may lead to an overall decentralization of HR. Due to the strategic position HR may now be taking, many operational activities may be focused in regional offices rather than at headquarters.
In today’s global supply chain, the businesses remain separate companies but may appear to outsiders as one entity. Commonly formed through the use of outsourcing.
Merger & Acquisitions phases
Enhance productivity and competitiveness by adding to their assets through mergers and acquisitions.
1. Preparation for the M&A
2. Due Diligence
3. Integration of the business entities
4. Implementation, monitoring and measurement.
Organizations shedding assets that do not contribute to the bottom line.
HR Questions for divesture during Due Diligence:
Does the divested unit perform a non-core function? If the divestiture leaves a gap in skills and function, how will that gap be filled? Does the cost of filling this gap outweigh the financial benefits of the divestiture?
M&A phase 1. Prepare for M&A
HR must ensure necessary knowledge and skills have been developed among HR staff and processes are in place to manage the transition.
1. Issue Identification = assemble info about companies involved
2. Team Formation and Training = an M&A team, ensuring all members understand the strategic goals and the implications of the M&A to the goals.
3. Preparation for CHange = identify change factors and plans for effecting change must be drafted.
M&A phase 2. Perform due diligence
An intensive investigation of a corporation begin considered for merger or acquisition to understand the associated risks. These risks may be cultural, structural, technological, financial, or legal.
Compliance issues of Due Diligence in M&A
Compliance dimension to due diligence = obtain information related to benefit issues, such as severance and transfer of 401(k)s, relating to ERISA and tax codes. and non-benefit issues such as compliance with legal requirements such as I-9, visa regulations, FMLA, WARN.
Review claims related to EEO, OSHA, FLSA, and other employment laws, regulations, or ordinances. Focus on both existing claims, threatened, and likely to be asserted but not yet threatened.
HR questions in Due Diligence of M&A
Cultures of org distinct? Can separate cultures be merged, maintained?
Effect on attitudes, actions taken to support morale?
Degree of redundancy? # of EE’s and depts to be eliminated to meet goals. Necessary retraining?
How to integrate HRIS, technology and processes fully?
Differences in comp and benefits?
Collective bargaining issues exist? Financial liabilities in terms of severance and continuation of benefits?
M&A phase 3. Plan Integration.
Develop plans to address usual issues of M&As, as well as issues uncovered during due diligence.
1. EE communication strategies
2. EE separation or transfer processes.
3. Retention programs for key individuals.
4. Change management processes.
5. New strategic plan that reflects the changed organization.
6. An organizational blueprint and staffing plan.
Establish benchmarks to assess effectiveness of the action during the final phase of the process.
M&A phase 4. Implement, monitor, and measure
Don’t assume the process is concluded once the entities have been fully integrated.
Organizational “pulse taking” as change will continue. Integration will introduce people and organizational issues that must now be addressed.
HR critical tasks will be to measure the activity of the new org against the benchmarks identified earlier. HR can help determine is M&A actually helped achieve its strategic plan.
Development of HR as a partner in strategic management. ROI
HR professionals must develop a big picture view of how all depts are interrelated and affect one another.
Understand the financial aspects of their business. How HR affects the bottom line.
HR will be called on to prove their department’s contribution in quantifiable business terms. Outlining the return on investment (ROI) of HR programs is essential.
Effects of Change on HR
1. Development of HR as a partner in strategic management, ROI.
2. Aligning the development of human capital and corporate strategy.
3. Utilizing new technology (e-learning, HRIS)
Aligning the development of human capital and corporate strategy
Work toward retaining and developing current employees – the org’s Human Capital.
Example = add value rather than lower prices. Strategies that emphasize the creation of value will require that all employees understand customer relationship management and customer focus. Org must also ensure quality in products and services.
Aligning the development of human capital and corporate strategy. HR instrumental in:
1. Introducing new concepts related to creating value.
2. Supporting employee activities through training and value-enhancing processes (like work-flow processes that ensure smooth handoffs of customer problems to individuals who can speedily resolve them).
3. Recruiting new employees and creating a pipeline of future employees who will meet the organization’s new requirements.
4. Reporting to management about the financial return on this strategy.
Fulfilling the strategic role of HR will require vision and an understanding of basic management functions.
Theorist Henri Fayol.
PLANNING, organizing, directing, controlling
Four key management functions, Henri Fayol.
Planning – Studying the future and arranging the means for dealing with it, which encompasses forecasting, setting goals, and determining actions.
example – Forecasting future staffing needs.
planning, ORGANIZING, directing, controlling
Four key management functions, Henri Fayol.
Organizing – Designing a structure to assist in goal accomplishment that effectively relates human and nonhuman resources to the tasks of the enterprise.
example – Designing and interview process.
planning, organizing, DIRECTING, controlling
Four key management functions, Henri Fayol.
Directing – Engaging in those activities that ensure effective operation, including leadership and motivation of employee action toward goals.
example – Scheduling and conducting interviews.
planning, organizing, directing, CONTROLLING
Four key management functions, Henri Fayol.
Controlling – Ensuring that everything is carried out according to the plan.
example – Measuring recruiting efforts and effectiveness. Comparing the ROI for a training initiative to the plan.
Critical Management Skills for HR
HRCI identified 4 skill development areas to deal with corporate and personal challenges:
3. Third-party Contractors
A project is a series of tasks and activities that has a stated goal and objectives, a schedule with defined start and end dates, and a budget that sets limits on the project’s dedicated use of resources – both monetary resources and human resources.
Common Project Characteristics
Stated Goal and Objectives – All projects are established to fulfill some need or requirement in the organization. Within each project there is a goal to be reached. Objectives outline a path for achieving the goal.
Schedule – Project have a time line that culminated in a target completion date.
Resource budget – All projects will use various resources (people, equipment, time, money).
HR example of Project Characteristics
Stated Goals and Objectives: An HR manager sets a goal to audit all job descriptions and reclassify employees based on the new FLSA criteria. Key objectives are to: Review all job description in light of the new regulations. Make changes to the job description. Reclassify employees, if necessary. Communicate and explain the changes to employees, supervisors, and managers.
Schedule – The HR manager sets a completion date for two weeks before the company must be in compliance with the new rules.
Resource Budget – A project team is established that includes the HR manager and two staffing specialists. Together they determine that they will need clerical help to make the necessary changes to the job descriptions.
Project Phases and Roles 1-5.
2. Selection of Manager and Team.
3. Planning, scheduling, monitoring, and control.
Projects: 1. Conception
1. Conception. Project idea is born, goals and objectives are established. Obtain a project sponsor from senior management to ensure success. Obtain a champion, or cheerleader of the project.
Projects: 2. Selection of manager and team
2. Selection of manager and team. The PM retains overall project responsibility, while leaders manage day to day team tasks. The PM should possess not only organizational and controlling skills but also the ability to listen, negotiate, solve problems and enhance teamwork. Must define special knowledge or skills that individual team members must possess and assigns the team members.
Three roles of a Project Manager
1. Interpersonal. The PM is a leader and a liaison, build team norms and foster harmony.
2. Informational. PM is a spokesperson, gathering and disseminating info and helping team communicate effectively.
3. Decisional. PM allocates resources, negotiates differences, and encourages project progress.
Projects: 3. Planning, scheduling, monitoring, and control.
3. Planning, scheduling, monitoring, and control.
The most labor-intensive phase of the process. The project schedule is outlines, resources are assigned and the work takes places. PM oversees quality, progress and use of resources. Evaluations may be conducted. PM must be alerts to risks and obstacles and take action to mitigate risk and remove obstacles.
Projects: 4. Completion 5. Evaluation
Generally in a culminating event, such as the launching of a new software system. Project completion should be documented in a report that details accomplishments and gasps, observations for future success, and next steps.
using the objectives defined at the project start
Project Planning Tools: Gantt and PERT Charts = Gantt Chart
Gantt chart aka a horizontal bar, milestone, or activity chart. Graphically displays activities of a project in SEQUENTIAL order and plots them against time.
– The steps of the project and their anticipated sequence and duration must be known.
– Each activity represents the amount of work required to proceed fro one point in time to another.
– Activities not necessarily related.
Used when planning a project or monitoring the progress of a project.
Project Planning Tools: Gantt and PERT Charts = PERT Chart
Program Evaluation review Technique PERT.
Used to Schedule, Organize, and Coordinate tasks within a project.
(US Navy 1950’s Polaris submarine missile programs) aka CPM Critical Path Method.
Used for very large, complex projects with a high degree of intertask dependency.
A PERT chart presents a graphic illustration of a project with circles or rectangles representing project milestones. Arrows indicate the sequence of tasks.
Requires two inputs: Events required and Sequence of events.
PERT chart as an HR Training Development effort
Task A: training objectives and audience needs are defined.
Task B: training is designed, providing early info about content and requirements for delivery – ex. group size, trainers needed, space and equipment.
Task C: training materials are developed, based on design.
Task D: during the extensive development period, staff will secure the trainers and resources needed.
Task E: program will be piloted
Task F: program will be revised and implemented.
PERT Chart tasks
Tasks that must be completed in sequence (A,B,C,E,F) are called dependent or serial tasks, take longest to complete, are referred to as CRITICAL PATH. These tasks must be completed on time for the whole project to be completed on time.
Task D is not dependent on any of the other tasks and can be completed simultaneously with the other tasks. It is referred to as Parallel or Concurrent task.
PERT Chart – Benefits and Disadvantages
Identify minium length of time needed to complete.
Identify tasks that can be delayed if resources need to be reallocated to catch up on critical tasks.
Relationship of tasks to TIME is not as immediately obvious as with Gantt charts.
Organizational concerns during project implementation
1. Continuous Communication
example – the CS Mgr will make announcements at company meetings and send weekly email updates to all employees.
2. Identification of Success Factors
example – customers have been asking for a change, CS team is positive about the new process, top mgmt support the project. These all increase likelihood of success.
3. Use of Established Methodology
example – PM and team have decided to use a Gantt chart to track project process and timeline.
4. Use of Contractors
example – a training firm will work with the CS dept during the restructuring. They will conduct outbound sales training and monitor sales calls for QA.
Managing change: Understanding change in Organizations
1. Determine the need or desire for change.
-based on environmental scanning and internal assessments.
2. Prepare tentative plans.
-brainstorming, goals & objectives outlines.
3. Discuss alternatives and probable reactions
-input from all levels is desired, focus grps to discuss concerns and questions. Once managers understand EE’s issues and reactions, a plan to deal with them is outlined.
4. Make a final decision. (recommend to Sr. Mgmt)
5. Establish a project plan and a timetable
6. Communicate the change.
-company wide meeting, with follow up meetings in each department to explain and discuss.
7. Implement and evaluate the change.
-modifications to the implementation may be warranted.
Peoples reaction to changed
People generally perceive change with one of three different reactions:
1. Resist the change
2. Remain neutral regarding it
3. Welcome the change upon announcement.
Stages people go through in change
Elisabeth Kubler-Ross, On Death and Dying:
1. Shock and denial
3. Depression and detachment
4. Dialogue and bargaining
Role of HR during change.
1. Show personal commitment & positive attitude
2. Involve people in the change process so they will be more commirted to the changes.
3. Ensure top management is visible and supportive
4. Remind top mgmt it takes time for EE’s to arrive at the same place as they who knew about changes earlier.
5. Communicating with all
6. Reinforcing change with incentives
7. Use peer and group influence to show support for change
8. Educate that changes is an ongoing, necessary process.
9. Anticipate resistance and find ways to deal with hit.
The organization, shareholders, employees, and communities.
Practice of buying services externally rather than producing them internally. An arrangement with a third party. HR outsourcing is in HR administrative functions. Strategic management and development are not outsourced.
Reasons to outsource are to save money, decrease delivery times for HR services, increase productivity and services offerings, and manage legal risk by improving compliance.
Suggestions for outsourcing
1. create a detailed RFP request for proposal that defines exactly what you will be getting.
2. Decide how complaints and work disputes will be handled.
3. Develop a strong alliance with your outsourcing partner, but maintain your status as the customer.
4. Prepare the entire organization for the change.
Be cautious in making outsourcing decisions. Don’t:
Give up more strategic capability than realized.
Prohibit the internal development of critical skills and knowledge.
Run the risk of decline in morale as employees fear a loss of jobs.
The outsourcing process 9 steps
1. Analyze needs and define goals (most critical stage)
2. Define the budget (expected ROI)
3. Create a RFP request for proposal.
4. Send RFP’s to the chosen contractors.
5. Evaluate contractor proposals.
6. Choose a contractor.
7. Negotiate a contract
8. Implement the project and monitor the schedule.
9. Evaluate the project.
Request for Proposal RFP
An RFP is a written request asking contractors to propose solutions and prices that fit the customer’s requirements. Contractors asked to provide:
1. Executive Summary (synopsis of service/products)
2. Company Information (size, financials, viability, experience.)
3. Deliverables (how to meet needs/objectives)
4. Project Team/Resources. (who involved)
5. References (previous clients)
Evaluating a Third-Party Contractor (outsourcing)
Criteria to consider:
Scope of Resources – Company Reputation/References – Ability to Meet Specifications – Customization Options – Results of Site Visit – Additional Value Added Capability – Price – Previous/Existing Relationship – Commitment to Quality of Product & Services – Flexible Contract Terms – Location – Schedule – Cultural Match
Negotiate a Contract (outsourcing)
This contract will describe not only the key deliverables for the project but will include additional info such as implementation time frames, payment terms, performance standards (including response times), training expectations, and upgrade costs and responsibilities.
Evaluate the project – example
During the planning process, the HRIS project team defined benchmarks that could be used to evaluate the system once it was implemented – e.g., percentage of error, number of times support is required. The team now evaluates the system’s performance and works with the contractor to correct deficiencies. The team determines that an annual evaluation will be sufficient to plan changes to the system required by legal changes or changes in compensation and benefits.
Trends in Technology
1. Business Process Integration – (Business to Business B2B e-commerce with enterprise application integration
2. E-Procurement – (shift to online ordering process.)
3. Electronic Record Keeping (critical policies be in place for the conversion, migration, and storage of records as well as for legal destruction of records.)
4. Electronic Signatures (June 2000, Electronic Signature in Global and National Commerce Act)
5. Application Service Providers (ASP’s) (Attendance tracking applicant tracking, other workforce mgmt issues.)
HR Role in Managing Technology
1. Help identify new technologies that can support achieving the orgs strategic goals.
2. To facilitate the rapid pace of change due to technology.
3. To manage the cultural change and strategic redirection associated with the introduction of new technology.
Technology has simplified some admin tasks like benefits and record keeping, increasing attention on more strategic tasks like knowledge and talent management and strategy development.
Application Service Providers (ASP’s)
An ASP hosts and manages an organization’s softward applications on the Internet. Org pays on a subscription basis. Examples – application tracking system.
HRIS Human Resource Information System
a systematic tool for gathering, storing, maintaining, retrieving, and revising HR data.
Application of HRIS in Strategic Management
1. Provides environmental scanning results.
2. Provides quality and productivity improvements
Application HRIS in Workforce Planning and Employment
1. Tracks, hiring, promotions, transfers, and termination rates for each employee by job group.
2. Records the number and percentage of each minority group in apprenticeship and training programs.
3. Prints EEOC data in the required format.
4. Prints applicant flow and utilization reports to assist in monitoring affirmative action programs.
Application of HRIS in Human Resource Development
1. Outline career path development
2. Records information such as education, skills, and completed training programs.
3. Registers employees for courses, monitors costs, schedule trainers and classrooms
4. Evaluates employee performance.
Application of HRIS in Total Rewards
1. Tracks salary survey results
2. Facilitates benefit administration
3. Facilitate employee self-service
4. Tracks historey of tuition reimbursement.
5. Facilitates analysis and comparison of salaries across job classifications.
6. Tracks retirement planning
7. Tracks COBRA & HIPAA documentation
Application of HRIS in Employee & Labor Relations
1. Stores employee discipline records.
2. Records labor distribution data
3. Records union service data
4. Maintains attitude survey results
Application of HRIS in Risk Management
1. Identifies trends in on-the-job accidents and illnesses and helps in development of preventive measures.
2. Tracks insurance and workers’ compensation claims by accident
3. Tracks safety records
4. Monitors medical examinations and follow-up procedures resulting from injury or illness.
5. Identifies high-risk conditions.
6. Monitors accidents and their costs by type and location.
the 6 HR Functional areas
1. Strategic Management
2. Workforce Planning and Employment
3. Human Resource Development
4. Total Rewards
5. Employee and Labor Relations
6. Risk Management
Describe steps to obtain new HRIS – Project Management Outsourcing steps.
1. see page 1-34 Module 1.1