1. Introduction
A comprehensive Human Resource Strategy plays a vital role in
the achievement of an organisation's overall strategic objectives and visibly
illustrates that the human resources function fully understands and supports the
direction in which the organisation is moving. A comprehensive HR Strategy will
also support other specific strategic objectives undertaken by the marketing,
financial, operational and technology departments.
In essence, an HR strategy should aim to capture "the people
element" of what an organisation is hoping to achieve in the medium to long
term, ensuring that:-
- it has the right people in place
- it has the right mix of skills
- employees display the right attitudes and behaviours, and
- employees are developed in the right way.
If, as is sometimes the case, organisation strategies and plans
have been developed without any human resource input, the justification for the
HR strategy may be more about teasing out the implicit people factors which are
inherent in the plans, rather than simply summarising their explicit "people"
content.
An HR strategy will add value to the organisation if it:
- articulates more clearly some of the common themes which lie behind the
achievement of other plans and strategies, which have not been fully identified
before; and
- identifies fundamental underlying issues which must be addressed by any
organisation or business if its people are to be motivated, committed and
operate effectively.
The first of these areas will entail a careful consideration of
existing or developing plans and strategies to identify and draw attention to
common themes and implications, which have not been made explicit
previously.
The second area should be about identifying which of these
plans and strategies are so fundamental that there must be clear plans to
address them before the organisation can achieve on any of its goals. These are
likely to include:
- workforce planning issues
- succession planning
- workforce skills plans
- employment equity plans
- black economic empowerment initiatives
- motivation and fair treatment issues
- pay levels designed to recruit, retain and motivate people
- the co-ordination of approaches to pay and grading across the organisation
to create alignment and potential unequal pay claims
- a grading and remuneration system which is seen as fair and giving proper
reward for contributions made
- wider employment issues which impact on staff recruitment, retention,
motivation etc.
- a consistent performance management framework which is designed to meet the
needs of all sectors of the organisation including its people
- career development frameworks which look at development within the
organisation at equipping employees with "employability" so that they can cope
with increasingly frequent changes in employer and employment patterns
- policies and frameworks to ensure that people development issues are
addressed systematically : competence frameworks, self-managed learning etc.
The HR strategy will need to show that careful planning of the
people issues will make it substantially easier for the organisation to achieve
its wider strategic and operational goals.
In addition, the HR strategy can add value is by ensuring that,
in all its other plans, the organisation takes account of and plans for changes
in the wider environment, which are likely to have a major impact on the
organisation, such as:
- changes in the overall employment market - demographic or remuneration
levels
- cultural changes which will impact on future employment patterns
- changes in the employee relations climate
- changes in the legal framework surrounding employment
- HR and employment practice being developed in other organisations, such as
new flexible work practices.
Finding the right opportunity to present a case for developing
an HR Strategy is critical to ensuring that there will be support for the
initiative, and that its initial value will be recognised by the
organisation.
Giving a strong practical slant to the proposed strategy may
help gain acceptance for the idea, such as focusing on good management practice.
It is also important to build "early or quick wins" into any new strategy.
Other opportunities may present the ideal moment to encourage
the development of an HR Strategy:-
- a major new internal initiative could present the right opportunity to push
for an accompanying HR strategy, such as a restructuring exercise, a corporate
acquisition, joint venture or merger exercise.
- a new externally generated initiative could similarly generate the right
climate for a new HR strategy - e.g. Black economic empowerment initiatives.
- In some instances, even negative news may provide the "right moment", for
example, recent industrial action or employee dissatisfaction expressed through
a climate survey.
2. Making the HR Strategy integral to the organisation
The human resources practitioner should ensure that the HR
Strategy is integrated with broader organisational objectives. Above all, it
should ensure that the rest of the organisation accepts the Strategy. To achieve
this objective, practitioners should:-
- consult all stakeholders on the nature of the strategy;
- cultivate and develop allies and supporters of the strategy through the
consultation process;
- focus on the benefits which are being derived from the strategy through
talking to and persuading others, and by marketing the benefits of the strategy
with concrete examples of how it has helped;
- check that there is real commitment to the strategy at all levels of the
organisation;
- give regular feedback on the implementation of the plan through employee
newsletters, exhibitions etc;
- where possible, build into the strategy quantifiable outcomes which can be
easily monitored and evaluated, so that it is possible to show the effect;
- make the strategy part of the induction process - especially for senior
managers.
3. A strategic human resource planning model
There is no single approach to developing a Human Resources
Strategy. The specific approach will vary from one organisation to another. Even
so, an excellent approach towards an HR Strategic Management System is evident
in the model presented below. This approach identifies six specific steps in
developing an HR Strategy:-
- Setting the strategic direction
- Designing the Human Resource Management System
- Planning the total workforce
- Generating the required human resources
- Investing in human resource development and performance
- Assessing and sustaining organisational competence and performance
Source: A Strategic Human Resource Management System for the 21st Century.
Naval Personnel Task Force, September 2000
The six broad interconnected components of this system consist
of three planning steps and three execution steps.
The top three components represent the need for planning.
Organizations must determine their strategic direction and the outcomes they
seek. This is usually accomplished with some form of strategic planning. Classic
strategic planning is a formal, top-down, staff-driven process. When done well,
it is workable at a time when external change occurs at a more measured
pace.
However as the pace and magnitude of change increases, the
approach to strategic planning changes substantially:
- First, the planning process is more agile; changes in plans are much more
frequent and are often driven by events rather than made on a predetermined time
schedule.
- Second, the planning process is more proactive. Successful organizations no
longer simply respond to changes in their environment, they proactively shape
their environment to maximize their own effectiveness.
- Third, the planning process is no longer exclusively top-down; input into
the process comes from many different organizational levels and segments. This
creates more employee ownership of the plan and capitalises on the fact that
often the most valuable business intelligence can come from employees who are at
the bottom of the organizational hierarchy.
- Lastly, the strategic planning process less reactive and more driven by line
leadership.
Once strategic planning is under way, a process must be
undertaken by the organization to design and align its HRM policies and
practices to provide for organizational success. The remaining step in planning
is to determine the quality and quantity of human resources the organization
needs for its total force.
The rest of the HR strategic system exists for and is guided by
these plans, policies, and practices. These execution components contain
mechanisms that generate the correct skill sets, invest in staff development and
performance, and productively employ them in the organisation. The last
component provides a means to assess and sustain the competence and performance
of the organization and the people in it with regard to outcomes that the
organization seeks.
4. Analysis
Using the process model discussed earlier, the specific components of the HR
Strategic Plan are discussed in greater detail below.
4.1 Setting the
strategic direction
This process focuses on aligning human resource policies to
support the accomplishment of the Company's mission, vision, goals and
strategies. The business' goals sit at the heart of any HR strategy and in order
to align business and HR you need to answer one key question, "Can your
organisation's internal capability deliver the organisation’s business
goals?"
Many organisations cite their people as their primary source of
competitive advantage. Successful companies continuously identify and adopt
innovative human resource management policies and practices to sustain that
advantage. More importantly, they structure work and design training,
performance management, pay, and reward policies to help members of the
organization succeed in achieving desired organizational outcomes. In other
words, they integrate and align HRM policies and practices to reinforce employee
behaviors that can best realize the leaders' strategic intent. In the most
successful companies, the set of policies and practices that collectively make
up a company's HRM system is the critical management tool for communicating and
reinforcing the leaders' strategic intent.
Recommended actions:-
- Conduct an external environmental scan and evaluate its impact on the
organisation
- Identify the organisation's vision, mission and guiding principles
- Identify the mission's outcomes and strategic goals
- Consult all relevant stakeholders
- Evaluate the impact of legislation on the organisation
4.2 Designing the Human Resource Management System
This stage focuses on the selection, design and alignment of
HRM plans, policies and practices. Various options may be open to the
organisation such as drawing on industry best practices.
Emerging HRM policies and practices range from outsourcing
certain non-core functions, adopting flexible work practices (telework, work
from home) and the increased use of information technology. Not every industry
trend may be appropriate for a specific organisation. In addition, it is
essential that a cost-benefit analysis of implementing new HRM policies and
practices be undertaken. For example, the costs (monetary and in allocation of
resources) of implementing a new job grading system may outweigh the benefit of
such an undertaking. There may be more cost-effective alternatives available to
the organisation at this point in time.
Particular HRM policies and practices may be necessary to
support strategic organisational objectives, such as improving the retention of
women in the organisation or promoting diversity, especially the representation
of designated groups amongst senior management.
A good approach in selecting the appropriate HRM policies,
procedures and practices is to identify the appropriate HRM practices which
support the organisation's strategic intent as it relates to recruitment,
training, career planning and reward management.
Recommended actions:-
- Identify appropriate human resource plans, policies and practices needed to
support organisational objectives
- Identify relevant human resource best practices
- Conduct an employment systems review
4.3 Planning the total workforce
Determining future business requirements, especially those
relating to manpower requirements, represents one of the most challenging tasks
facing human resource practitioners.
The development of a workforce plan is a critical component of
any human resource strategy and one of the expected outcomes of human resource
practitioners activities. Despite this, manpower or workforce planning, as well
as succession planning, has only recently enjoyed a resurgence in popularity. To
some extent this has been prompted by the need to develop employment equity and
workplace skills plans and set numerical employment equity targets. The failure
of many organisations to develop and implement workforce planning is rather
indicative of the lack of strategic planning itself.
Workforce planning is a systematic process of
identifying the workforce competencies required to meet the company's strategic
goals and for developing the strategies to meet these requirements. It is a
methodical process that provides managers with a framework for making human
resource decisions based on the organization’s mission, strategic plan,
budgetary resources, and a set of desired workforce competencies. Workforce
planning is a systematic process that is integrated, methodical, and
ongoing. It identifies the human capital required to meet organisational
goals, which consists of determining the number and skills of the workers
required and where and when they will be needed. Finally workforce planning
entails developing the strategies to meet these requirements, which
involves identifying actions that must be taken to attract (and retain) the
number and types of workers the organisation needs.
A workforce plan can be as simple or as complex as the
organisational requires. Workforce planning can be conducted for a department,
division or for the organisation as a whole. Whatever the level or approach
being adopted, it must nevertheless be integrated with broad-based management
strategies.
In addition to workforce planning, ensure that organisational
structure and jobs ensure the efficient delivery of services and effective
management of the organisation as a whole.
Recommended actions:-
- Determine the appropriate organisational structure to support the strategic
objectives
- Structure jobs (competencies, tasks and activities) around key activities
- Develop a workforce plan designed to support the organisations strategic
objectives
- Compile workforce profiles, identifying designated groups, an inventory of
current workforce competencies, competencies required in the future and
identified gaps in competencies
4.4 Generating the required human resources
This process focuses on recruiting, hiring, classifying,
training and assigning employees based on the strategic imperatives of the
organisation's workforce plan.
A comprehensive workplace skills plan will identify appropriate
training priorities based on the organisations workforce needs now and in the
future. New recruitment practices may need to be adopted to increase the
representation of designated groups, or securing essential skills in the
organisation. A comprehensive "learnership strategy" may assist in developing
future workforce needs, identified either in terms of the organisations
workforce plan or required in terms of industry black economic empowerment
charters.
Recommended actions:-
- Evaluate recruitment and selection practices in light of the organisation’s
strategic objectives
- Develop and implement a comprehensive workplace skills plan (with a thorough
training needs analysis)
- Implement a learnership strategy
- Adopt or clarify occupational levels and category classifications
4.5 Investing in human resource development and
performance
Traditional
approaches to career planning, performance appraisals, reward management and
employee development must be re-appraised in light of the vision,
characteristics and mission outcomes as reflected in the HRM plans, policies,
and practices.
Development responses will aim to increase business skills, the application
of business skills (sometimes called competencies) and the behavioural elements
- all of which contribute to an organisation's effective performance. In many
ways, the Skills Development legislation have required organisations to
re-engineer their developmental methods and practices. New concepts such as
lifelong learning and recognising prior learning should form an integral
component of the process of investing in employees.
Clearly, where a workforce planning exercise reveals that there
is little projected growth in the workforce or that promotional or career
development opportunities are limited, strategies aimed at employee retention
will be very different from organisations which are experiencing considerable
growth and expansion.
Investment initiatives for the individual, team and
organisation are all geared to achieve high levels of organisational
performance. It is important that at an individual level, particularly for
senior staff, that they feel their development needs are agreed and that they
are provided with the skills to do their jobs. At a team level, it defines the
individuals' ability to work flexibly with others and align individual and team
skills and activities to business goals - all of which ensures that the
organisation is equipped to achieve its goals.
Reward strategies aim to align the performance of the
organisation with the way it rewards its people, providing the necessary
incentives and motivation to staff. Its components can be a combination of base
pay, bonuses, profit sharing, share options, and a range of appropriate
benefits, usually based on market or competitor norms and the organisation's
ability to pay.
Recommended actions:-
Identify appropriate policies, procedures and practices in respect of
- Career pathing
- Performance appraisals
- Employee development and learning
- Reward Management (compensation and benefits)
- Promotions and job assignments
- Separation
4.6 Assessing and sustaining organisational competence and
performance
Finally, few
organizations effectively measure how well their different inputs affect
performance. In particular, no measures may be in place for quantifying the
contribution people make to organizational outcomes or, more important, for
estimating how changes in policies and practices, systems, or processes will
affect that contribution. Implementing clear quantifiable measures, identifying
milestones in the achievement of specific organisational goals, and using
concepts such as a "balanced scorecard" will articulate the results of the HR
Strategic Plan in measurable terms. Regular evaluation of the plan will also
assist in fine-tuning the HR strategic plan itself.
Recommended actions:-
- Evaluate organisation culture and climate
- Implement succession planning
- Evaluate HR strategy using quantifiable measures, e.g. balanced scorecard
- Revise and adapt HR strategy
5. Conclusion
While HR strategies must be developed to support the
achievement of the organisation's objectives, it is a two-way process. HR
strategies can themselves be critical inputs in determining the strategic
initiatives for the organisation. A fatal error, however, is to develop and
implement HR strategies without having regard for the goals and objectives which
the organisation has explicitly or implicitly identified. A common mistake is
the development of workplace skills plans which are not linked to any strategic
goals or objectives or which have no affirmative action components.
Similarly, the isolated identification of affirmative action
numerical targets without first conducting a workforce and succession planning
exercise is in most instances, simply meaningless.
References:
The approach adopted in this article is substantially based on the SHRM Model
developed by the Naval Personnel Task Force, US Department of Navy. The material
presented here is in the public domain.
A Strategic Human Resource Management System for the 21st Century. Naval
Personnel Task Force, US Department of Navy, September 2000
Developing a Human Resources Strategy A good practice guide. South East
Employers, June 1999
The Human Resources Standards Generating Body has developed a specific Unit
Standard addressing the development of a Strategic Human Resource Plan, entitled
"Contribute input into the human resources management strategic plan".
