Strategic Human Strategic Human Resource Management Resource Management

HOW TO DEVELOP AN HR PLAN

By : Marsha Thomas-Frederick

WORKFORCE ANALYSIS SPECIALIST

HR PLAN SPECIALIST

2010:09:22

What is Strategic HRM?What is Strategic HRM?

Strategic Human Resource Management (HRM) is the

shaping of the workforce around the organisation’s business needs

and managing the behavioural changes to match the desired

environmental goals.

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What is Strategic HRM?What is Strategic HRM?

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Change in HRMChange in HRM

TRADITIONAL HR STRATEGIC HR

Reactive Proactive

Employee advocate Business partner

Task focus Task/enablement focus

Operational issues Strategic issues

Qualitative measures Quantitative measures

Stability Constant change

How? (tactical) Why? (strategic)

Functional integrity Multi-functional

People as expenses People as assets

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Holbeche, 2001, p. 5

Change in HRMChange in HRM

TRADITIONAL HR STRATEGIC HR

Focus Employee relations Partnerships with internal and external customers

Role of HR Transactional, change follower and respondent

Transformational, change leader and initiator

Initiatives Tactical, reactive, fragmented Fast, proactive, integrated

Time horizon Short-term Short, medium, long (as necessary)

Control Bureaucratic-roles, policies, procedures

Organic, flexible, holistic

Job design Tight division of labour, independence, specialization

Broad, flexible, cross-training, rotational

Key investments Capital, products People, knowledge

Accountability Cost center Investment center

5Strategic Human Capital management MERCER-SBF-SMU Executive Programme

Change in HRMChange in HRMROLE DELIVERABLE/OUTCOME METAPHOR ACTIVITY

Management of Strategic

HR

Executing Strategy Strategic partner Aligning HR and

business strategy

‘organisational

diagnosis’

Management of firm

infrastructure

Building an efficient

infrastructure

Administrative Expert Re-engineering

organisational

processes ‘shared

services’

Management of employee

contribution

Increasing employee

commitment and capability

Employee champion Listening and

responding to

employees ‘providing

resources to

employees’

Management of

transformation and change

Creating a renewed

organisation

Change agent Managing

transformation and

change ‘ensuring

capacity for change’

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Ulrich, 1997, p.25

Key issuesKey issues1. What are the key components of

the strategic direction of the organisation?

2. What is the vision, mission and core values of the organisation and each department and section?

3. What Key Result Areas (KRAs) and or Key Performance Indicators (KPIs) the organisation has to achieve?

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Situational/SWOT Analysis Situational/SWOT Analysis

Situation Analysis

Internal Analysis

Strengths Weaknesses

SWOT Profile

External Analysis

Opportunities Threats

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Sources of Sources of Primary/Secondary DataPrimary/Secondary DataOrganisation’s Strategies - Strategic Plan - Budget Estimates - Key organisational documents,

speeches etc. - Interviews with key stakeholders

Organization's KRAs and KPIs - Strategic Plan - Performance Appraisal forms - Key organisational documents - Interviews with key stakeholders 9

Overarching HR Overarching HR FrameworkFramework

Competency MethodologyA Competency can be defined as certain underlying characteristics which a person possesses which will enable him/her to deliver superior performance in a position. These underlying characteristics are of two types;

Threshold CompetenciesDifferentiating Competencies

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Competency Methodology Competency Methodology c’tdc’tdThreshold or technical competencies are

the characteristics which any jobholder needs in order to do a job effectively, such as qualifications and experience

Differentiating competencies are those characteristics that superior performers have but are not present in average performers. These are displayed by attitudes and behaviours exhibited.

The ideal employee would have both types of competencies; hence they would be able to perform at their best since they possess the knowledge, skills, abilities, attitudes and behaviours necessary to perform any task, activity or career.

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Competency Methodology Competency Methodology c’tdc’td

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How to develop the HR How to develop the HR Plan?Plan?

Step 1: Select a Model to Guide the

Process

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Why use a Model?Why use a Model?A model an abstract representation of

reality, so it shows the outcome of the process from the beginning.

It is a guide which allows one to focus on the main aspects of a phenomenon

It allows for the physical manifestation of a visionary concept.

It allows one to know and understand the subject matter at hand.

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How to develop the HR How to develop the HR Plan?Plan?

Step 2: Conduct a Workforce Analysis

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What is a Workforce What is a Workforce Analysis?Analysis?

Workforce Analysis (WFA) is a systematic process whereby an

organization identifies the human capital required to meet

organisational goals in the present and to determine whether the

organization possesses the talent necessary for optimal functioning in

the future

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What is a Workforce Analysis What is a Workforce Analysis c’tdc’td??It requires an understanding of the

make-up of the current workforce and an investigation into the future workforce.

It determines the knowledge, skills, abilities, experience and numbers required at present, where and when they will be needed, and forecasts future labour market needs.

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Understanding Workforce Understanding Workforce CompositionComposition

What your workforce looked like before

What your workforce looks like now

What your workforce will look like in the

future

Why do Workforce Analysis?Why do Workforce Analysis?

WORKFORCE ANALYSIS

Strategic HR

RetentionRestructurin

g

Training

Recruitment

EmployeeEngageme

nt

Talent Manageme

nt

How to do a Workforce How to do a Workforce Analysis?Analysis?It involves three distinct phases:

1. Supply Analysis2.Demand (or Needs) Analysis 3.Gap Analysis

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How to do a Workforce How to do a Workforce Analysis Analysis c’tdc’td??

Phase I—Supply Analysis: Evaluating the Current Resources

This phase is generally the easiest because much of the information has been collected already somewhere in the organization.

Evaluating current employee and demographic data will help identify future needs as well as a projected workforce strategy

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How to do a Workforce How to do a Workforce Analysis Analysis c’tdc’td??Below is a list of the kind of data you will need and some

potential sources of it.

Existing Employee Data. - Most of the employee data is available to authorized

users through the HRIS

What are the demographics of your current workforce? (Gender, ethnic, disabled, full/part time, classified/LTE, etc.)

How many people are performing each job? Where are the jobs located? What is the employee/supervisor ratio? What are the pay rates of current employees? What is the likelihood of attrition through retirements? How many people have left the organisation and where

did they go? How many people have we been recruiting? Which jobs have the most/least people and why?

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How to do a Workforce How to do a Workforce Analysis Analysis c’tdc’td??Phase II—Demand Analysis:

Evaluating the Future Needs

To assess future needs, determine the answers to the following questions:

How essential is each job? What job functions, if any, could be consolidated? How many people are needed in the future to

perform each job? What knowledge, skills, competencies and abilities

(KSA) are needed to perform anticipated job functions?

What technology changes will be made? What processes could be done more efficiently or

effectively ?23

How to do a Workforce How to do a Workforce Analysis Analysis c’tdc’td??

Phase III—Gap Analysis: Comparing Supply and Demand

This phase can be completed in a fairly straightforward manner. Simply take the demand analysis results and match them to your supply results. Any mismatches indicate either a projected unmet need or a surplus, either of which presents a challenge.

To fill the gaps between current resources and future needs, use the results of the other core components of your workforce analysis to craft possible solutions. 24

ANALYSIS DATA SOURCES STATUS CHECKS METHODS

Demand Forecast Budget, projected labour outlook, projected retirements, organisational and strategic plans, organisational design, organisational size

New programmes, changes in technology, changes in strategic plan, pending legislation, changes in business processes, conditionalities of external agencies ( IMF)

Method Staffing Table Approach Regression Analysis Time Series Analysis Linear programming

Supply Projection

Employee profiles, organisational charts, budgets, job descriptions

Strategic objectives, technology, current skills sets, current job classifications, sources of HR metrics, quality, efficiency, ethics, equity

Skills Inventory Replacement Charts Succession Planning Flow Modeling/Markov

Analysis Computer simulations

Feasibility Budgets, current strategic plan, SWOT analysis

Managerial attitudes, change orientation, organisational culture, Employee Satisfaction Survey

Cost benefit analysis in both qualitative and quantitative terms

Workforce Analysis Methods

Purpose of a WFA in an HR Purpose of a WFA in an HR PlanPlanIt allows one to identify the key strategic

areas of focus upon which to build the plan.

It makes HR more scientific since the plan is built upon data driven evidence.

It allows HR to be more strategic since HR interventions will be linked to HR issues which will be addressed in the HR Plan.

Action Planning will be tailored to current HR realities and aimed at addressing the core HR challenges rendering greater likelihood for successful implementation.

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How to develop the HR How to develop the HR Plan?Plan?

Step 3: Review Organisation’s Strategic Direction

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Review of Organisation’s Review of Organisation’s Strategic DirectionStrategic Direction

Review of vision, mission , core values as well as primary and secondary data sources to yield the following;

Situational Analysis SWOT Analysis Organisation’s Strategies Organisation’s Key Result Areas Organisation’s Key Performance Indicators

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How to develop the HR How to develop the HR Plan?Plan?

Step 4: Review Organisation’s Internal HR Processes,

Procedures andSystems

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Why do Internal HR Why do Internal HR Review?Review?

There is the need to gain an appreciation for the organisation's current HR Processes, Procedures and Systems since;

These will be strengthened and built upon in the HR Plan

Identifies priority areas upon which to allocate resources

Is part of the HR Architecture to aid in the realization of strategic goals and initiatives

Is a prime indicator of whether there is any strategic HR in the organisation.

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How to develop the HR How to develop the HR Plan?Plan?

Step 5: Building the HR Plan

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Building the HR PlanBuilding the HR PlanEach Strategic Area of Focus (SAF) as

identified in the Workforce Analysis is then developed to show its objectives, strategies and timelines.

A system of HR Measurements are developed to aid in tracking organisational performance with respect to achieving the SAF as identified.

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Ensuring Closure of the Ensuring Closure of the HR PlanHR Plan

A detailed Action Plan involving the breakdown of each SAF is then developed with a focus on activities, deliverables, results/impact, who accountable/responsible for the activities as identified.

An implementation strategy is then crafted

A proposed costing for the plan is then undertaken

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CASE STUDY EXAMPLECASE STUDY EXAMPLE

Developing a Strategic HR Plan for an entire Public

Service Organisation in the Commonwealth Caribbean.

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Context of Project Context of Project Conceived due to Government's need

to reform and modernise the Public Sector which is a critical success factor for growth and development of the economy.

Ability to enable the improvement of the country’s competiveness – regionally and internationally – by nurturing a new culture of productivity and results-based performance 35

Aim of HR PlanAim of HR Plan

To ensure that staff is equipped with the requisite skills,

knowledge and attitudes to ensure improved efficiency,

productivity, quality and innovativeness both in respect of

current needs, and those anticipated in the future as a result of economic, social and

political change.36

Pre-work leading to PlanPre-work leading to PlanAn HR Audit on the Public Service was done with the following results;

Review of Human Resource PoliciesPersonnel Files ReviewPerformance Management/AppraisalHR ProcessesHiring and Orientation ProceduresSkills Gap Analysis – spreadsheet of

demographic data arising from personnel files review

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Key Objective of HR PlanKey Objective of HR Plan

To bring the deliverables of the HR Audit to life by providing the

strategic approach to HR as the context, and alignment of the

current organisational HR systems, practices, processes and policies

with novel approaches which when combined would then contribute to

the culture change necessary for the achievement of Government’s goals

and objectives. 38

Step 1: Selection of ModelStep 1: Selection of Model

The results-based, performance-driven,

competency-adept model was utilised to create the

linkages between the strategic HR function and

the organisation’s business goals and objectives.

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The ModelThe Model

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Source: A Strategic Human Resource Management System for the 21st Century. Naval Personnel Task Force, September 2000 (Adapted)

Strategic Direction

The strategic direction & outcomes that the organisation

seeks to achieve

HRM System

Shaping HRM for organisational success

Planning the Total Workforce

Deciding the numbers and competence of personnel the organisation requires

Generating Required Human Resources

Attracting, assessing and initially assigning the people needed in the organisation’s total workforce

Assessing and Sustaining Organisational Competence & Performance

Measuring the organisation’s progress towards its desired outcomes and adjusting the system accordingly

COMPETENCY & RESULTS BASED PERFORMANCE

Investing in Human Resource Development & Performance

Developing & reinforcing competence and performance in individual groups and teams in the organisation’s total workforce

Step 2Step 2: Conduct a : Conduct a Workforce Workforce AnalysisAnalysisKey inputs;1.Skills gap Analysis spreadsheet which

was reconfigured by adding additional fields and mathematical formulae to aid with calculations.

2.The HR Audit Report which detailed a review of the corporate plans, organisational charts, job descriptions, key result areas, vision for the next three years for ministries and department and the Employee Satisfaction Survey results which lends to an understanding of the organisational culture. 41

Key Inputs to WFAKey Inputs to WFA

3. The approved 2009/2010 Budget for the Country.

4. Major documents detailing the Country’s and Public Sector strategies.

5. Findings of the HR Forecasting Survey – a data collection instrument developed for the Workforce Analysis

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The Supply Analysis The Supply Analysis

Key findings;Total number of employeesDepartments with the

highest/lowest number of employees.

Gender Profile of the workforceAge Profile of the workforceYears of service of employeesAbsenteeism analysis across

ministries/departments. 43

The Supply AnalysisThe Supply Analysis c’td c’td

Number of VacanciesDistribution of VacanciesMost and least Populated jobsSeparationTermination vs. HiresHires by Contract

Each of these key findings was married with relevant HR theory to highlight Strategic Areas of

Focus 44

The Supply AnalysisThe Supply Analysis c’td c’td

In addition an analysis was undertaken in each ministry and department to ascertain whether the composition and number of the staff was sufficient to aid in the achievement of the KRAs of each ministry and department.

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The Demand AnalysisThe Demand AnalysisArising out of the HR Forecasting Survey which was done on each ministry and department for the next three years, the following resulted;

The position most in demand in the future

The minimal educational requirement for jobs in the future.

New competencies requiredNew jobs required

A profile for the future worker emerged46

Gap AnalysisGap Analysis Analysis of issues arising out of the

Supply and Demand Analysis as well as an in-depth analysis of numbers and composition of staff required for the present and in the future.

Areas where there are vacancies and a proposed plan for filling these.

Identification of priorities with respect to Strategic Areas of Focus

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Some of the Strategic Areas Some of the Strategic Areas of Focus of Focus

Job AnalysisRetentionRecruitmentSuccession PlanningTraining and Development

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Step 2.1: Development of Step 2.1: Development of a TNAa TNATraining Needs Assessment (TNA)

was done by building on the outcomes of the Workforce Analysis via an instrument designed linking department’s mission, KRAs and competencies and linking these to training needs, types of training and their urgency.

Findings of the TNA corroborated with findings of the WFA with respect to additional competencies and skills required for the future 49

Step 3: Review of Step 3: Review of Organisation’s Organisation’s Strategic DirectionStrategic Direction

The Situational Analysis focused on factors in four categories; social/legislative, political, economic and technological.

Availability of resourcesChanging governmental prioritiesImpact of regional and global

initiatives on the national agenda  50

Review of Organisation’s Review of Organisation’s Strategic Direction Strategic Direction c’tdc’td

Arising out of the Situational Analysis a SWOT Analysis was undertaken

Key areas upon which to focus for successful implementation

Key issues which may impact negatively on the initiative.

Identified areas which could improve organisational effectiveness

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Review of Organisation’s Review of Organisation’s Strategic Direction Strategic Direction c’tdc’td

The Strategic Direction of each ministry and Department was ascertained since each ministry and department has its own vision, mission, core values and Key Result Areas (KRAs).

Strategic areas upon which to focus to improve service delivery

Identification of change management initiatives to help create a common Public Service culture

Development of major initiatives to aid in employee engagement 52

Step 4: Review of Internal HR Step 4: Review of Internal HR Systems Systems

Overview of HRM SystemRecruitment and SelectionPerformance Management

SystemTraining and DevelopmentCompensationOther HR SystemsHRIS

Current HR Systems show some leaning toward Strategic HR 53

Step 5: Building the PlanStep 5: Building the PlanPrioritised Strategic Areas of Focus (SAF) broken out to show objectives, strategies and timelines.

Some of the SAF were identified as Main Interventions since these were necessary to inculcate the changes necessary to create efficiency, and performance

Others were deemed Cross Cutting Interventions since these created the behaviour change necessary for the successful implementation of the HR Plan. These are a feature throughout each intervention and is carded for the lifecycle of the implementation of this HR Plan 54

Building the Plan Building the Plan c’tdc’td

HR Scorecard and HR Strategy Maps were created specifically for the Public Service Organisation to assist them to identify and link the key HR Metrics with specific outcomes.

A detailed Action Plan was developed to link activities from the HR Plan to key deliverables. In addition it specified who was accountable and responsible for the various activities and outcomes.

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Building the Plan Building the Plan c’tdc’td

An Implementation Strategy was developed to breathe life into the Action Plan by creating a visual image of how the plan should occur.

Each strategic initiative and its various activities were then ascribed an element of costing to assist the client with their resource allocation.

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THE ENDTHE END

Any questions?

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