HUMAN RESOURCE IN A

BUSINESS CONTEXT

WEEK 5: Strategic HR & business partnering

CONTENTS

1. Strategic HRM

2. HR – line: practical difficulties

3. Theory: Business Partnering

LEARNING OUTCOMES

This lecture is designed for you to:

Understand the strategic role of HR

Consider the practical difficulties of achieving the

strategic role of HR as a business partner

Understand the theory and typologies of business

partnering

Line Management

Company Culture

Employee Commitment

Customer satisfaction with service

Customer spending intention

Change in sales

Employee Absence

IES SERVICE-PROFIT-CHAIN MODEL

CHARACTERISTICS OF STRATEGIC HR

A philosophy underpinning people management

Seeing people as a competitive resource

A planning approach to resources

numbers

skills

potential

Adds long-term rather than short term value

in line with business need

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

horizontal integration

vertical

integration

PEOPLE MANAGEMENT INTEGRATION

business strategy

reward employee relations

training & devt

work orgn

culture leadership style

8

Human

capital

Social

capital

Structural

capital

Network

Capital

Client

Capital

Organizational

Capital

Intellectual

Capital

Resourcing

Pay and Reward

Delivery

The HR

Wheel

HOW IS PEOPLE & BUSINESS ALIGNMENT

ACHIEVED

What is the

organisation’s big

idea?

What are the

business priorities?

What are the

people priorities?

How do they link?

Big idea

Business priorities

People priorities

CHANGE DRIVERS RE: STRUCTURE

Customer

driven

Co

nsen

sual

Deutsche Post: in 3.5 years?

Cost driven

Royal Mail: in 6 months

Imp

ose

d

CHANGE DRIVERS RE: ROLES

Current

capability

driven

Bro

ad d

escrip

tion

Radical

reform

Clear d

escriptio

ns

Difficult ROI

Measurement & No

Direct Relations to

Profitability

Section 3.2; 3.3

Lack of Infrastructure

Investment

Section 2.4; 3.5

HR confined to Admin

/ Execution Roles

Section 2.1; 3.4

Mgmt vs. Employee

Model

(HR as Intermediary)

Section 3.1; 3.2

Conflict of Interest

Section 2.3; 3.1; 3.2

HR as a tool to

deliver bad news

Section 3.1

Lack of New Aspiring

HR Talents

Section 3.6

HR Lack Exposure to

Strategic Thinking

Section 2.5; 2.6; 3.5

Lack of Measurement

Enforcement

Section 3.3; 3.4

Management see no

value add of HR

Section 2.7; 3.4

HR lacks business

Acumen

Section 2.6; 3.5

“Invasion” by Other

Departments

Section 2.6; 3.5

HR remains in a supporting role rather than a driver for

strategic change

Section 2.8

Legend:

Causes

Section X Section in this

paper discussing

the issue

HR

PROFESSION’

S WEB OF

CHALLENGES

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?

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

HR’S OWN PROBLEM AREAS

Obstacles to success:

time

capacity

focus

capability

positioning

organisation

Relationships with

management not

working.

The villains:

HR – not letting go

the line – not

taking it up

senior mgt –

sending wrong

signals

THE ‘POLO’ PROBLEM

Strategic

Operational

Administrative

HSE & COI SOURCES OF ADVICE

ON STRESS FOR HR MANAGERS

Less likely to approach

More likely to approach

More credible Less credible

HSO

EAP*

Department of Health

Occupational Health*

Internal sources

External sources

Samaritans

HSE

Mind Direct Gov

ACAS

CIPD

ACAS

Business/Industry Bodies

Employee Union

SOURCES OF ADVICE ON STRESS

FOR EMPLOYEES

Less likely to approach

More likely to approach

Less credible

HR

Line Manager

Intranet

EAP*

Department of Health

Occupational Health*

Internal sources

External sources

Samaritans

Union

HSE

Mind Direct Gov

BBC

Channel 4

Internet

Friends & Family

ACAS

Citizens Advice

GP

NHS Direct

Colleagues

More credible

ALSO, SPECIFIC CHALLENGES…

Shared services

Monopolistic

tendencies

Costs creep back

De-skilled jobs

lost knowledge

narrow focus

De-personalised work

remote

no human touch

Undervalued

Business partners

Poor initial job spec

boundaries

strategic content

line customer fit

Operational support

not strategic adviser

Remote from

employees

Risk of going ‘native’

SPECIFIC CHALLENGES, CONT

Centres of expertise (consultants)

Better than external provision?

too internally focused

expensive

gold plating

ivory towers

under occupied or dumbed down

Corporate centre

Numbers squeezed

Unclear interface with CoE over policy making

Overly political: detached from function

Too focused on top team operational HR support

THE BENEFITS (& DISBENEFITS) OF HR

SHARED SERVICES

decentralised centralised

shared services

Higher costs

Variable standards

Different control environments

Duplication of effort

Central overhead cost

Less responsive to business unit needs

More remote

Pooled experience

Enhanced lateral career progression

Cross-organisational synergies

Lean, flat organisation

Recognition of administrative activities Dissemination of good practice

Business units retain control of decisions

Recognition of local priorities

Responsive to client needs

Common systems and support

Consistent standards and control

Economies of scale

Critical mass of skills

ROLES OF HR PROFESSIONALS

• Business partner – sharing responsibility with their line management

colleagues for the success of the enterprise.

• Strategist – addressing major long-term issues affecting the management and

development of people and the employment relationship.

• Interventionist/innovator – developing new approaches to people

management.

• Internal consultant – analysing and diagnosing problems and proposing

solutions.

• Monitor – ensuring that the organization’s HR policies are implemented

properly and consistently.

General criteria • contribution to organizational effectiveness

• achievement of specified goals

• specified quantified measures

• stakeholder perspective (management, line managers and employees)

Organizational quantified

criteria

• added value per employee

• added value per £ of employment costs

• sales value per employee

• costs per employee

Employee behaviour

criteria

• retention and turnover rates

• absenteeism

• frequency/severity rates of accidents

• ratio of grievances to number of employees

• time lost through disputes

• number of references to employment tribunals

HR function service-level

criteria

• average time to fill vacancies

• time to respond to applicants

• cost of advertisements per reply/engagement

• training hours/days per employee

• time to respond to and settle grievances

• cost of induction training per employee

• cost of benefits per employee

EVALUATING THE HR FUNCTION

THE ULRICH/BROCKBANK

2005 MODEL OF HR ROLES

Employee advocate – focuses on the needs of today’s employees through listening,

understanding and empathizing.

Human capital developer – in the role of managing and developing human capital (individuals

and teams), focus on preparing employees to be successful in the future.

Functional expert – concerned with the HR practices that are central to HR value, acting with

insight on the basis of the body of knowledge they possess. Some are delivered through

administrative efficiency (such as technology or process design), and others through policies,

menus and interventions. Necessary to distinguish between the foundation HR practices –

recruitment, learning and development, rewards etc – and the emerging HR practices such as

communications, work process and organization design and executive leadership development.

Strategic partner – consists of multiple dimensions: business expert, change agent, strategic

HR planner, knowledge manager and consultant, combining them to align HR systems to help

accomplish the organization’s vision and mission, helping managers to get things done, and

disseminating learning across the organization.

Leader – leading the HR function, collaborating with other functions and providing leadership to

them, setting and enhancing the standards for strategic thinking and ensuring corporate

governance.

Source: Ulrich, D and Brockbank, W (2005) The HR Value Proposition, Harvard Press, Cambridge, Mass

THE PROFESSIONAL STANDARDS OF THE CIPD

Personal drive and

effectiveness

The existence of a positive, ‘can do’ mentality, anxious to find ways round obstacles and

willing to exploit all the available resources to accomplish objectives.

People management

and leadership

The motivation of others (whether subordinates, seniors or project team members)

towards the achievement of shared goals, not through the application of formal authority

but rather by personal role modelling, the establishment of professional credibility and the

creation of reciprocal trust.

Professional

competence

Possession of the professional skills and technical capability associated with successful

achievement in personnel and development.

Adding value through

people

A desire not only to concentrate on tasks, but rather to select meaningful outputs that will

produce added-value outcomes for the organization, or eliminate/reduce performance

inhibitors, whilst simultaneously complying with all legal and ethical considerations.

Continuing learning Commitment to continuous improvement and change by the application of self-managed

learning techniques, supplemented where appropriate by deliberate planned exposure to

external learning sources (mentoring, coaching etc).

Thinking and applied

resourcefulness

Application of a systematic approach to situational analysis, development of convincing,

business-focused action plans and (where appropriate) the employment of

intuitive/creative thinking to generate innovative solutions and pro-actively seize

opportunities.

Customer focus Concern for the perceptions of personnel’s customers, including (principally) the central

directorate of the organization, a willingness to solicit and act upon customer feedback as

one of the foundations for performance improvement.

Strategic capability The capacity to achieve a strategic vision for the future, to foresee longer-term

developments, to envision options (and their probable consequences), to select sound

courses of action, to rise above the day-to-day detail, to challenge the status quo.

Influencing and

interpersonal skills

The ability to transmit information to others, especially in written (report) form, both

persuasively and cogently, display of listening, comprehension and understanding skills,

plus sensitivity to the emotional, attitudinal and political aspects of corporate life.