Strategic Human Resource Management

There are three key places on our website where you can learn about strategic human resource management:

• Building a High Performance Organisation (essay in Adobe Acrobat PDF fromat)
  
• Managing Vision, Purpose, and Culture (program description)
  
• Ideas: Helpful Reading (bibliographies)

Please find below some additional food for thought:

• Assumptions and Lessons
  
• The Big Picture: HR and the Bottom-line
• HR Competencies
  
  

Assumptions and Lessons:

Three crucial lessons for human resource and organisational development professionals (these remarks inspired by Dave Ulrich, Human Resource Champions, Harvard Business School Press, 1997):

1. Deliverables: "HR should not be defined by what it does, but by what it delivers -- results that enrich the organisation's value to customers, investors, and employees." As an individual contributor, focus less on what you do and more on what you deliver. At the end of the day, no one cares if you are going to "write content" or "facilitate sessions" or teach on-line versus in the classroom. They will care, however, if you are going to help increase sales, cut costs, help others bring more projects in on time, or improve quality of work life. So understand the results you are trying to achieve for your organisation (your "deliverables") and stay focused on those results -- in selling, designing, implementing, and assessing your programs.
   
   
2. Strategic HRM: all HR activity (including workplace learning) should help an organisation achieve its vision and strategic objectives, whether directly or indirectly. That is, all HR activity should be "strategic." It is therefore crucial that you understand precisely how everything you do (everything you deliver) contributes to the attainment of your organisation's mission, vision, and strategy. Otherwise, how can you put a value on your work, and how can the organisation value your work? Note, however, that contribution can be indirect. For example, improving quality of work-life can have a substantial impact on the bottom line by reducing errors & accidents, reducing absenteeism & turnover, and improving productivity & customer service.
   
   
3. Know the business: in order to make the biggest positive impact on and add the most value to your organisation, you must know the business and you must know how your work will impact the organisation. How can you help your organisation achieve its mission, vision, and strategy? Make sure you understand:
   
   
   • Your organisation's mission, vision, strategy, and culture
     
   • The key drivers of business performance in your industry
     
   • The needs and expectations of your organisation's customers
     
   • Your organisation's core competencies and competitive advantage

- Act like a specialist but think like a generalist!

The Big Picture: HR and the Bottom-Line

The following two models describe a very common cycle of failure. In this vicious cycle, companies cut the wrong things when times are tough, only to worsen their situation.

The basic logic, something that every business person knows through experience and common sense, is that if employees are stressed, poorly supervised, or feeling out of the loop, organisations will experience an increase in turnover, absenteeism, errors, and accidents, and a decrease in productivity and customer service levels. These in turn lead to higher costs, lower profits, and lost market share.

The Employee-Customer-Profit Linkage
Source: Ulrich et al., "Employee & Customer Attachment," Human Resource Planning 14/2.

Downward Performance Spiral
Source: Jeffrey Pfeffer, The Human Equation: Building Profits by Putting People First (Harvard Business School Press 1998).

What A People Based Strategy Does
Source: Pfeffer, The Human Equation (HBS Press 1998), p. 301. For a critique of "decentralization," see Ulrich, Human Resource Champions (HBS Press 1997), pp. 89, 95.

HR Competencies: SOTA 96
Source: Ulrich & Eichinger, Human Resource Planning Society: based on 25 US & 15 European "thought leaders." "Are You Future Agile? … The First Annual State of the Art (SOTA) Report," Human Resource Planning, 18, no. 4 (1995): 30-41.

What do you need to know and be able to do to make a strategic contribution to your organisation? You are probably more likely of have a long & successful career in HR (or in business) if you focus your own personal learning efforts on any of the highest priority items on these lists. Which of the following skills or capabilities would be most exciting & meaningful for you to focus on? Where are your strengths? Where is your passion? Where are your greatest opportunities for improvement? And where are the greatest opportunities for improvement for your HR and OD teams? The following highest-ranking items are listed in order of importance based on the SOTA 96 survey (low ranking items not listed here).

Important issues for HR executives today:

1. Managing culture; capacity for change
   
2. Leaders: attract & develop next generation
   
3. Becoming more effective business partner
   
4. Helping client organisation redesign itself to compete more effectively
   
5. Reinvent HR function: customer focus & cost justified; measure results of HR

HR needs knowledge of business to:

1. Link HR activities to business strategy
   
2. Understand internal customers
   
3. Contribute to strategic plans
   
4. Link HR activities to customer value
   
5. Understand issues facing external customers

Skills essential for senior HR executives:

1. Personal credibility; integrity & trust
   
2. Business knowledge & savvy
   
3. Personal leadership; functional credibility
   
4. Leading change
   
5. Analytical, critical thinking, prob. Solving
   
6. Global strategic & planning skills
   
7. Political savvy; interpersonal skills

Importance of HR practices / technologies (for the future):

1. Change management
   
2. Strategic HR planning
   
3. Executive development
   
4. Organisational effectiveness
   
5. Culture management
   
6. Rewards & Recognition
   
7. Global HR operating skills
   
8. Team building / management
   
9. Organisation diagnosis
   
10. Performance management