Strategic Sdm

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STRATEGIC HUMAN

RESOURCE MANAGEMENT

by

ACHMAD SOBIRIN



3/6/2013 free template fromwww.brainybetty.com

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PEOPLE, MANAGEMENT AND

ORGANIZATION

The state of nature:

general scarcity of resourcesand hostility in nature

Gives rise to

Economic, social and political needs of people

To satisfy need, people form

Economic, socialand political

organizations

The management of organizations

facilitate satisfaction of people need’s

Management - the activity that performs certain functions

in order to obtain the effective

acquisition, allocation, and

utilization of human efforts and

physical resources in order to

accomplish some goals

Organized

efforts require




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OUTSIDE VIEW OFTHE ORGANIZATION

INSIDE THE

ORGANIZATION

FORMAL ASPECTS Vision and Mission

• Strategic Plan

•

Organization structure, policy,and Procedures

• Job Descriptions

INFORMAL ASPECTS

Individual perception of the job

• Personal agenda in each level of theorganization

• Organization culture

• Sharing pattern of authority

• Competition among elements in organization

• Interdepartmental trust

• individual belief and value of the employee

• Capability

ORGANIZATION ICEBERG




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Organizational

Culture

Structure

Processes andFacilities

Performance

Measures and

reward

Technology

Resources

TheOrganizational

Stakeholders:Customers

Employees

Shareholders

Partners

SuppliersCommunities

Government

Other

A

B

C

D

H

G

F

• Vision

• Value proposition

• Bus and Revenuemodels

• Objectives

• Strategies

Organizational Architecture

People and

Competencies

E




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EXECUTIVE TRAITS NOW &

IN THE FUTURE

• ALL KNOWING

• DOMESTIC VISION

• PREDICT FUTURE FROM PAST

• CARING THE INDIVIDUAL

• OWNS THE VISION

• USE POWER

• DICTATE GOAL AND METHODS

• ALONE AT THE TOP

• VALUES ORDER

• MONOLINGUAL

• INSPIRE THE TRUST OD BOARDAND SHARE HOLDERS

• LEADER AS LEARNER

• GLOBAL VISION

• INTUITS THE FUTURE

• CARE FOR INSTITUTION &INDIVIDUAL

• FACILITATES VISION FOR OTHERS

• USE POWER & FACILITATION

• SPECIFIES PROCESSES

• PART OF THE EXECUTIVE TEAM

• ACCEPTS PARADOX OF ORDER AMIDST CHAOS

• MULTI CULTURAL

• INSPIRES THE TRUST OF OWNERS,CUSTOMERS AND EMPLOYEES




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The Role of Top Management

Effective

Strategic

Leadership

Exploiting andMaintaining

Core Competencies

DevelopingHuman Capital

Creating andSustaining Strong

Organizational Culture

Emphasizing

Ethical Decisions

and Practices

Establishing

Appropriately Balanced Controls

DeterminingOrganizational

Purpose or Vision




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Functional-Level Strategies

• Focus is on improving the effectiveness of

operations within a company.

– Manufacturing – Marketing

– Materials management

– Research and development

– Human resources




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Mission

Statement

SWOT

Analysis

StrategicPlan

Strategy

Implementation

StrategicOutcomes

External

environment

Internal

environment

StrategicControl

Strategic“fine tuning”

Feed-back & learningStrategic

change

The Strategic Management

ProcessWhat is the role of human resources in the strategy process?

How is this role changing in the new knowledge intensive,

“hypercompetitive” and IT enhanced environment?

SWOT

Analysis

External

environment




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Strategy

Implementation

Strategic

Planning

Involvement….

Flexibility….

Openness….

Participation….

Authority….

Compensation….

Management, organization & decision structure

Characteristics of the Strategic Management

Process

Potential downsides in dynamic industries: Organizational InertiaThe Competency Trap






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Conventional HR Functions

Recruiting Selection process Compensation schemes Training and development

Performance/relationship management Workforce planning Organizational development/structure

Retain the best talent Maximize HR investment Exploit creativity and innovation

New HR Foci:




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Criteria and Considerations

Motivation Teamwork Loyalty Competence

Measure the impact of employees on financial value

What is the value of intangible assets?

Success Factors (intangibles):• customer value

• process efficiency

• human resource effectiveness

“Empowerment Index”

How people think, do and respond

Innovating, coordinating & integrating




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Tangible Versus Intangible Assets

Tangible Assets

• Ready Visible

• Rigorously Quantified

• Part Of The Balance Sheet

• Investment Produces Known Returns• Can Be Easily Duplicated

• Depreciates With Use

• Has Finite Applications

• Best Manage With “Scarcity”Mentality

• Best Leveraged Through Control

• Can Be Accumulated And Stored

Intangible Assets

• Invisible

• Difficult To Quantify

• Not Tracked Through Accounting

• Assessment Based On Assumption

• Cannot Be Bought Or Imitated

• Appreciates With Purposeful Use

• Has Multiple Applications WithoutValue Reduction

• Best Managed With “Abundance”Mentality

• Best Leveraged Through Alignment• Dynamic, Short Shelf Life When Not In

Use




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HR’s Strategic Architecture

The HR Function

HR ProfessionalsWith StrategicCompetencies

The HR System

High Performance,Strategically AlignedPolicies And Practices

Employee Behaviors

Strategically FocusedCompetencies, Motivations,And Associated Behaviors




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Transforming The HR Architecture Into A

Strategic Assets

CLEARLY DEFINE THE BUSINESS STRATEGY

BUILD A BUSINESS CASE FOR HR AS A STRATEGIC ASSETS

CREATE A STRATEGI MAP•Leading and Lagging Indicators•Tangibles and Intangibles

IDENTIFY HR DELIVERABLES WITHIN THE STRATEGY MAP

ALIGN THE HR ARCHITECTURE WITH HR DELIVERABLES

HR Function HR System Strategic Employee Behaviors

DESIGN THE STRATEGIC MEASUREMENT SYSTEM•Develop HR Scorecard ( Leading, Lagging, Cost Control,And Value Creation Measures )

•Measure HR Intangibles Firm Performance Relationship

IMPLEMENT MANAGEMENT BY MEASUREMENT

Regularly TestMeasure

AgainstStrategy Map




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HR and Strategy Implementation

HR Strategic

Alignment

EmployeeStrategicFocus

KnowledgeManagementSystem

BalancedPerformanceMeasurement

Strategyimplementation

FirmPerformance

HPWS




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Intersection Of HR

With Strategy Map

Focus Of HR SystemAlignment

HR Deliverable(enabler)

Single PerformanceDriver

•Market Rewards•Career Opportunities

Senior Staff Employment

Stability

R & D Cycle Time




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The Balanced Scorecard

Performance drivers Outcome measures

The balanced scorecard translates the mission

and strategy into a comprehensive set

of performance measures

financial results

process effectiveness

improvement

customer satisfaction

Another attempt to measure the impact of employeeson strategy development and value creation

S M C Skill




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Strategy Map : Competency Skill

Attainment Focus

Increase ShareHolder ValueRevenue From

Current Costumers

Service Partnership

Provide Target Training And Service

Establish Ongoing Assessment Of

Targeted Employees

Understand EmployeeSkill Gaps

SalesCompetencies

F i n a n c i a

l

C o s t u m e r

O p e

r a t i o n s

S

t r a t e g i c




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HR Management in the New EconomyReality or Imagination?

Traditional Economy1. Integrity – lead by example

2. Develop winning strategy

3. Build great management team

4. Inspire to achieve greatness

5. Create flexible, responsiveorganization

6. Reinforce management and

compensation systems

New Digital Economy1. Obsession with customers

2. Build flat cross-functional

organization3. Managing by business model

4. Evangelize and create buzz

5. Encourage risk taking

6. Roll up sleeves and work hard



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Strategic Management IssuesAn Integrative Perspective

Industry profitability - market position

Competitive dynamic - hypercompetition

Business strategy - cost & differentiation

Sustainable competitive advantage

International strategy - globalization

Corporate strategy - scale & scope

Accounting and financial drivers Marketing and operational drivers

Human resources as drivers




Strategic Management IssuesAn Integrative Perspective

Involvement

Participation

Autonomy Openness

Flexibility

Mission statement

Strategic intent

Motivation

Incentives

A sense of direction

Aspirations

Learn through

trial and error

Innovate

Agility and Responsiveness

Human

interaction




The Creation Of Employee Strategic Focus Through

Increasing Measurement Sophistication

ProfitRelationships

Measured

NF NF $$ $$

.46 .62 .82

Measurement-led Management(Acting On Measures)

NF NF $$ $$

Tracking Intangibles Without Managing Intangibles

NF NF $$ $$

HR-Focused Operational MeasuresTRADITIONAL1

2

3

4

STRATEGIC(clear causal

chain identified)

$$ = Financial measuresNF = Non financial measures

B l i C t C t l




Balancing Cost Control

and Value Creation

(empty set)

HR deliverablesdisciplined by

attention to bothbenefits and cost

HR “doables” driven entirely bycost control

Undisciplined attention to

value creation that misjudgesbenefits and/or ignoresefficiency

Operational Focus Strategic Focus

R a t e O f R e t u r n

Th S f




The Synergy of

Measurement Structure

•Emphasis on singleHR policies

•Measures basedon doables

•Operationally focused•Low rate of returnfor HR

•Emphasis on system•Measures includedeliverables and doables

•Strategically focused

•High rate return for HR

narrow broad

HR Architectural Emphasis

imbalance

balance

B o

t t o m - L i n e E m

p h a s i s

E l Of Hi h P f W k




Examples Of High Performance Work

System Measures

• How many exceptional candidates do we recruit for each strategic job opening?

• What proportion of all new hires have been selected based primarily onvalidated selection methods?

• To what extent has your firm adopted a professionally developed and validatedcompetency model as the basis for hiring, developing, managing, and rewardingemployees?

• How many hours of training does a new employee receive each year?

• What percentage of the workforce is regularly assessed via a formal performanceappraisal?

• What proportion of the workforce receives formal feedback on job performancefrom multiple sources?

• What proportion of merit pay is determined by a formal performance appraisal?

• If the market rate for total compensation would be fiftieth percentile, what is your firm’s current percentile rankings on total compensation?

• What percentage of your exempt and nonexempt employees is eligible for annualcash or deferred incentive plans, or for profit sharing?

• What percentage of the total compensation for your exempt and nonexemptemployees is represented by variable pay?

• What is the likely differential in merit pay awards between high-performing andlow-performing employees?








HR Efficiency Measures (Doables) (2)

Cost of injuries

Cost per grievance

Cost per hire

Cost per trainee hour

HR department budget as a percentage of sales

HR expense per employee

HR expense/total expense

Incidence of injuries

Interviews-per-offer ratio (selection ratio)

Lost time due to accidents

Measures of cycle time for key HR processes

Number of applicants per recruiting source (by

quality)

Percentage of payroll spent for training

Percentage of performance appraisals completed

on time

Response time per information request

Sick days per full-time equivalent per year

Speed of salary action processing

Time needed to orient new employees

Time to fill an open position

Total compensation expense per employee

Total HR investment/earnings

Total HR investment/revenues

Turnover by recruiting sources






Number of hires per recruiting source (by

quality)

Number of courses taught by subject

Number of recruiting advertising programs in

place

Number of safety training and awareness

activities

Turnover costs

Turnover rate by job category and job

performance

Variable labor costs as percentage of variable

revenue

Workers’ compensation costs

Workers’ compensation experience rating







A Of i i i




An Example Of Establishing Links Between The

HR System And Performance Drivers In A

Strategy Map

High TechSourcing

RetentionPolicies

Stable High-Talent R&DWorkforce

New ProductCycle Time

CostumerSatisfaction

HR Ali t




HR Alignment

StrategyImplementation

Emphasized andBalanced

HR Competencies

HR Professionalsand General

Manager

HR System

Aligned to HRDeliverables

HR Role

Internal andExternalViews

•Employee Strategic Focus•Effective strategy execution•HR as Strategic Asset





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GE’s HR -Development Opportunities

1. Employee-relations problem-solving assignment

2. HR-generalist assignment3. Technical specialization assignment

4. Organization-effectiveness intervention experience

5. Process-consulting experience

6. Community-relationship experience

7. Stretch job assignment

8. Exposure to global issue9. Staff assignment

10. Cross-functional experience

11. Fix-it assignment

12. Start-up assignment

13. Large-scale change effort

14. Organization-structuring assignment

15. Corporate assignment

16. HR functional-leadership assignment

17. Business-team partnership experience

18. Business-leader support assignment

19. Exposure to role models

20. Extended professional network

Keys and Process For




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Making Changed Happened (1)

Key Success Factors For Change

Do we have a leader … •Who owns and champions the change?•Who demonstrates public commitment to making ithappen?

•Who will garner resources to sustain it?•Who will invest personal time and attention tofollowing it thorough?

2. Creating a shared needed Do employees ...•See the reason for change?•Understand why the change is important•See how it will help them and/or the business in theshort and long term

1. Leading Change

3. Shaping a vision(what will it look likewhen we are done)

Do employees … •See the outcomes of the change in behavioral terms(that is, what they will don differently as a result of thechange)?•Get exited about these outcomes?•Understand how the change will benefit costumersAnd other stake holders?

Question for Assessing and Accomplishing Change





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Do the sponsor of the change … •Recognize who else needs to be committed to thechange for it to happen?•Know how to build a coalition of support for thechange?•Have the ability to enlist the support of key individuals

in the organization?•Have the ability to build a responsibility matrix tomake change happen?

5. Building enabling systems(how will it beinstitutionalized)

Do the sponsor of the change … •Understand how to sustain the change thoroughmodifying HR systems (e.g., staffing, training, appraisal,

rewards, structure, communication)?•Recognize the technology investment required to•implement the change?•Have access to financial resources to sustain the change?

4. Mobilizing commitment(who else

Needs to be involved)




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Do The sponsor of the change … •Have a means of measuring the success of thechange?

•Plan to benchmark progress on both the result of thechange and the implementation process?

7. Making it last (how will itbe initiated and sustained)

Do the sponsor of the change …•Recognize the first steps needed to get started?

6. Monitoring anddemonstratingprogress (how will itbe measured)

Documents

Strategic Sdm