This document discusses how HR can contribute to and align with business strategy in three main ways: 1. HR can operationalize business strategy by implementing the people-related aspects of strategic plans. 2. HR can provide its own "people thrust" that is either connected to or disconnected from organizational aims through HR best practices. 3. HR can be an integral part of business strategy formulation by having two-way influence between business and HR strategies through mutual involvement in planning. The level of integration between business and HR strategies depends on factors like the planning process, HR's involvement in decision-making, and the extent HR is aligned with business objectives. Measuring HR and people management performance is important to

1. HR’s contribution to business
strategy

2. 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

3. Types of linkage between
business & HR strategy
business strategy
integrative
informs HR actions
passing ships:
independent HR two way linkage:
and business mutual influence
strategies

4. 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 HR’s alignment with business -
broad objectives and current imperatives

5. Understanding the decision
making process
 If decided by  Get a seat at the
formal processes decision making
table
 If matters are  Build coalitions,
settled beforehand work to influence
outside meetings
 If real action  Ensure you have
happens at business partners
operational level effective at BU
level

6. Stakeholder management
 board  what is their stake?
 executive committee  what are their goals?
 senior managers  what are their
 line managers expectations?
 team  how will change affect
leaders/supervisors them?
 employees  what do they know
 employee already?
representatives  what influence do
 external suppliers they have?
 what power do they
 government bodies
have?
 other agencies

7. Characteristics of strategic HR
A philosophy underpinning people
management
Seeing people as a competitive
resource

8. 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

9. Service-Profit-Chain Model
Line Customer Customer
Company Employee Change in
Managemen satisfaction spending
Culture Commitment sales
t with service intention
Employee
Absence

10. Characteristics of strategic HR
A philosophy underpinning people
management
Seeing people as a competitive
resource
A planning approach to resources
■ numbers
in line with
■ skills business need
■ potential
Adds long-term rather than short
term value

11. Characteristics of strategic HR
 Integrated – brings together
multifaceted activities

12. People management
integration
vertical
integration business
strategy
reward employee training work culture leadership
relations & devt orgn style
horizontal integration

13. 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

14. 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

15. Connecting business & HR
strategies
Internal
drivers
Business HR Business Imple-
Monitor
strategy strategy plans mentation
External
drivers

16. How is people & business
alignment achieved
 What is the Big
organisation’s big idea
idea?
 What are the
business priorities? Business
priorities
 What are the
people priorities?
 How do they link?
People
priorities

17. Establishing people priorities
What causes people to come to work,
be motivated and perform?
What stops them from
being effective?

18. A model of capability
Individual capability
ability: motivation:
skills, training engagement
education involvement
Development Deployment
access: application:
resourcing OD
recruitment product
succession market
strategy
Organisational action

19. 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

20. 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?

21. 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

22. HR’s own problem areas
Obstacles to
success:
■ time
■ capacity
■ focus
■ capability
■ positioning
■ organisation

23. The ‘default’ operating model
Corporate HR
centres shared consultancy
of expertise services pool
BU BU BU BU BU
business partner business partner business partner business partner business partner

24. HR’s own problem areas
Obstacles to  Relationships with
success: management not
■ time working.
■ capacity The villains:
■ focus ■ HR – not letting go
■ capability ■ the line – not
■ positioning taking it up
■ organisation ■ senior mgt –
sending wrong
signals

25. 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

26. What should HR do?
 Construct a workforce plan
 Establish the supply/demand balance
 Are the right people, in right jobs?
 Review your recruitment model
Why do
■ able to attract - all types? they
join?
■ brand
■ proposition
 Review your retention model Why do
they
■ right level of wastage? leave?
■ numbers, types, quality

27. A strategic review of
recruitment and retention
H
Attract &
retain
Organisational
impact
Outsource
Commoditise
L
H Market availability L

28. Different propositions for
different groups
Hire Exploit Fire
Attract Nurture Retain

29. What should HR do? (2)
 Are you able to motivate staff?
How do
■ degree of engagement you
know?
■ what motivates them?
■ what demotivates them?
■ what impact does pay and performance
management have?
 How well are employees aware of
■ the bigger picture?
■ their job?
■ what success looks like?

30. 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?

31. What should HR do? (4)
What is the organisation’s
■ Ability to change/innovate
How good is the organisation’s
governance structure?
How strong (and respected) are the
organisational values, eg
■ On diversity?
■ Whistleblowing?
■ Meritocratic progression?

32. 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

33. Improve measurement
People
HR
management
efficiency
efficiency
People
HR
Management
effectiveness
effectiveness

34. Examples of measures in multi
dimensional measurement
Cost/Income
Process metrics
against
Ratios
Customer views
headcount
Strategic alignment
Human Capital
Functional positioning

35. Human capital measuring & doing
business goals
HR policies
& practices
HCM
measuring
reporting acting
managing
internal external people
business
performance

36. … thank you