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Md. Mominul Ahsan Linking HR with Business Strategy

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HR Vision <ul><li>A pro-active, highly effective, business focused and value adding global function. </li></ul><ul><li>A function that has the capability, capacity and attitude to influence and support the business agenda. </li></ul>

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Human Resource Management <ul><li>“ HRM is the function performed in organizations that facilitates the most effective use of people to achieve organizational and individual goals.” </li></ul><ul><ul><li>Ivancevich and Glueck </li></ul></ul>

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Analogies <ul><li>What is the most valued commodity? </li></ul><ul><li>Human Resource </li></ul><ul><li>All stems from the right people, at the right time and the right place. </li></ul><ul><li>Human body – blood supplies nutrition to perform </li></ul><ul><li>Heart pumps blood – HR manages human talent – the organisations heartbeat!! </li></ul>

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The Role of People in Organisations <ul><li>People are probably the most valuable “resource” that an organisation possesses. </li></ul><ul><li>In the same way that machinery must be maintained, staff have to be looked after in such a way that they can produce their best effort. </li></ul><ul><li>This involves their welfare , training , safety and motivation . Also would deal with recruitment, disciplining, compliance with legislation. </li></ul><ul><li>A happy workforce is likely to be an efficient workforce. </li></ul>

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A New Mindset: HR as an Investment, Rather than an Expense <ul><li>Historically: HR and people were not considered tangible assets. The ‘means of production’ was a machine bolted to the factory floor. People merely operated it. </li></ul><ul><li>Today: The intangible of human capital (what people know + their level of commitment to the organization) is the prime driver of organizational results. </li></ul>

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HR as an administrative function vs. HR as a strategic partner capable of enhancing the organization’s performance WHAT DOES HR STRATEGIC ALIGNMENT MEAN?

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Strategy <ul><li>A strategy represent the way an organization uses its resources to gain and sustain a competitive advantage. </li></ul><ul><li>It can be described by the organizaton’s mission, goals and objectives, strategic intent, and functional policies. </li></ul>

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Strategic HR <ul><li>Strategic management – making those decisions that define the overall mission & objectives of the organisation, determining the most effective utilisation of its resources and crafting and executing the strategy in ways that produce the intended results </li></ul>

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Strategic HR (continued) <ul><li>Business strategy </li></ul><ul><li>Focus </li></ul><ul><li>Alignment </li></ul><ul><li>Process integration </li></ul><ul><li>Information management </li></ul><ul><li>Innovation </li></ul><ul><li>Measurable results </li></ul><ul><li>Partner </li></ul><ul><li>Change agent </li></ul><ul><li>Passionate about people as the source of organizational success </li></ul>

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How to define the HR Strategy <ul><li>Corporate Strategy </li></ul><ul><li>Local Business context </li></ul><ul><li>Input from Management team and other Business Leaders </li></ul><ul><li>Input from HR Management team & HR community </li></ul><ul><li>Corporate HR diagnostic survey of senior business leaders and HR Leaders </li></ul>

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Strategic vs traditional HRM <ul><li>Is involved in operational planning only </li></ul><ul><li>Has medium status and authority (e.g. HR director) </li></ul><ul><li>Is concerned primarily with hourly, operational and clerical employees </li></ul><ul><li>Participates in formulating overall organisational strategic plan and aligning HR functions with company strategy </li></ul><ul><li>Has high status and authority for HR Manager </li></ul><ul><li>Is concerned with all managers and employees </li></ul><ul><li>Planning and strategy formulation </li></ul><ul><li>Authority </li></ul><ul><li>Scope </li></ul>Traditional HRM Strategic HRM Dimensions

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Strategic vs traditional HRM (continued) <ul><li>Makes operational decisions only </li></ul><ul><li>Has moderate to small integration with other organisational functions </li></ul><ul><li>Does not coordinate all HR functions </li></ul><ul><li>Is involved in making strategic decisions </li></ul><ul><li>Is fully integrated with other organisational functions e.g. marketing, finance, production </li></ul><ul><li>Coordinates all HRM activities </li></ul><ul><li>Decision making </li></ul><ul><li>Integration </li></ul><ul><li>Coordination </li></ul>Traditional HRM Strategic HRM Dimensions

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HR Strategic Priorities <ul><li>Improve Talent Sourcing </li></ul><ul><li>Build the leadership, technical and organizational capability to ensure the company can sustain her ambitions. </li></ul><ul><li>Leveraging Cultural Change to enable successful delivery </li></ul><ul><li>Ensure the capacity, capability and attitude to successful influence and support the business agenda </li></ul><ul><li>Talent Management </li></ul><ul><li>Ensuring the strategic capabilities </li></ul><ul><li>Supporting the cultural change </li></ul><ul><li>HR Capability </li></ul>Outcome Strategic HRM

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Economic Benefits of Strategic Human Capital Management <ul><li>Increase Revenue </li></ul><ul><li>Improve Customer Satisfaction </li></ul><ul><li>Improve Quality </li></ul><ul><li>Increase Productivity </li></ul><ul><li>Reduce Cost </li></ul><ul><li>Reduce Cycle Time </li></ul><ul><li>Increase Market Capitalization </li></ul>http://www.darinphillips.com

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Aligning Business Strategy & Talent Strategy Implementing an organization’s business strategy requires people who consistently demonstrate the talents that embody the knowledge, skills and traits required to achieve high performance. Business Strategy Talent Strategy How will our organization be positioned in the marketplace? Who are our core customers and our competitors? What is our unique value proposition? How will we create value for our customers, employees and owners? What will drive organizational performance and create exceptional results? What talents are required in our people to deliver our critical capabilities and achieve our performance goals? How will we define success? How will we know when performance meets customer, employee and owner expectations? What resources are required to develop the talent necessary to achieve our business strategy? Critical Capabilities Performance Competencies Performance Measures

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To give our best performance at work we need to check 9 key enablers: <ul><li>I know what I’m expected to do </li></ul><ul><li>I want to do it </li></ul><ul><li>I have the ability to do it </li></ul><ul><li>Someone will notice if I do it </li></ul><ul><li>I know how well I’m doing it </li></ul><ul><li>Processes help me to do it </li></ul><ul><li>I have the resources to do it </li></ul><ul><li>The environment is right </li></ul><ul><li>I can do it better next time </li></ul>I know what I’m expected to do I want to do it I have the ability to do it Someone will notice if I do it I know how well I’m doing it Processes help me to do it I have the resources to do it The environment is right I can do it better next time

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<ul><li>I know what I’m expected to do </li></ul>(and why it needs to be done) Everyone has many different roles in life: We need to know what’s expected of us ~ and by whom ~ in each of our roles. (1) Project team member Subordinate Quiz team organiser Mentor Brother Father Cousin Neighbour Member of … Patient Husband Son Social contact Boss Friend Someone who knows about Excel Head of Sales Son-in-law Colleague

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<ul><li>I know what I’m expected to do </li></ul>(and why it needs to be done) Having a goal , or target, helps us focus on what’s important. (2)

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<ul><li>I want to do it </li></ul>There are basically two reasons why people do things: Because they want to or Because they have to. It’s a popular myth that money are effective ways to motivate people at work. or fear But there are more productive bases for performance, such as good job design, which makes the job worth doing for its own sake.

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<ul><li>I have the ability to do it </li></ul>The ability to do something comes from two sources: potential + acquired skills and knowledge First looks at selecting people who have the potential to do a good job ~ and then goes on to explore: <ul><li>how we learn, and </li></ul><ul><li>how to plan and implement training </li></ul>

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<ul><li>Someone will notice if I do it </li></ul>There’s little satisfaction from doing a good job if no-one notices. You can show your people that their efforts are appreciated ~ or that they aren’t quite coming up to scratch ~ and you can even make the most of the dreaded annual appraisal. The popular theme of leadership is treated with a healthy dose of realism, who matters to me

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First we have to decide what the standard should be: (But why should we believe what they say?) then get feedback on how we did, from our own observations, and objective measures, Satisfaction in a job well done is a good feeling but for real satisfaction we have to compare for ourselves what we actually did against our own “quality standards”. and from others. <ul><li>I know how well I’m doing it </li></ul>Olympic Gold School sports cup

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<ul><li>Processes help me to do it </li></ul>A process is a series of activities linked together: Processes call for strong but light-touch management ~ ensuring the inputs and outputs are right but freeing people to do the transformations their own way. (1) Most work activities involve: inputs from someone or somewhere else transformation which changes or adds value outputs to someone or somewhere else Pour glass of wine Hang wallpaper Gloss Emulsion Undercoat Sand woodwork Strip old wallpaper

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<ul><li>Processes help me to do it </li></ul>Teams are made up of people each bringing their own skills, talents and experience to a common task. (this doesn’t necessarily make them easy to manage.) (2) Teams have a character ~ and a life-cycle ~ of their own which managers can use to achieve the best results. FORMING STORMING NORMING PERFORMING MOURNING (adjourning)

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<ul><li>Processes help me to do it </li></ul>The way people make decisions ~ and the many things that can go wrong ~ have been studied for decades. (3) We often use mental models ~ to decide what to do, but these can be misleading and cause us to make mistakes. No Yes Yes/perhaps No Yes Do the skills/ knowledge/ understanding of relevant employees meet the requirements? No Don’t know Yes No Define the training requirement Yes Yes Are there difficulties in achieving objectives, implementing strategy, getting work done? No Is the problem attributable to lack of skills/ knowledge/ understanding? Can the required skills/ knowledge/ understanding be defined? Can the situation be improved through training? Perhaps you should try something more challenging. Further research/ analysis required, but not a training-related issue. Further research/ analysis required. Further research/ analysis required. Further research/ analysis required, but not a training-related issue? No Would training be beneficial for other reasons? Not a training-related issue.

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<ul><li>I have the resources to do it </li></ul>Work activities have 3 stages: Inputs are the resources needed to get the job done. There are 5 kinds: people & skills raw materials part-completed work tools & equipment information Managers have to see that necessary resources are there when they’re needed inputs transformation outputs

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<ul><li>The environment is right </li></ul>(1) An organisation’s culture is like an individual’s personality. It begins with the characteristics that were put in place when it was first established: ~ and develops and changes in response to experiences throughout the organisation’s lifetime. Because of this it’s very hard to change (despite what you might have heard). The key to success is to understand the culture you’ve got ~ and learn to work with it.

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<ul><li>The environment is right </li></ul>(2) An organisation’s climate can be summed up as “what it feels like to work here.” It has a big effect on performance and unlike organisational culture it responds quickly to management action. Favourable climate High performance work satisfaction participation freedom for ideas freedom for concerns freedom to question freedom to try new things purposive threat environmental threat

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<ul><li>The environment is right </li></ul>(3) Everyone experiences stress from time to time. BUT ~ we aren’t designed to work in crisis mode for very long. If it carries on ~ or if we’re vulnerable for any reason ~ it can lead to ill health, depression and accidents, and to poor performance! Stress is nature’s way of keeping us alive ~ it prepared our ancestors for “fight or flight” when faced with a crisis.

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<ul><li>I can do it better next time </li></ul>The characteristics of a “learning organisation” ~ and how to encourage organisational learning and growth. Learning almost inevitably leads to change. People can be frightened of change, usually because they don’t know ~ and can’t control ~ what it will mean for them. This shows various ways of finding out where you are now, where you’d rather be, and how to get from here to there without destroying morale or losing your people’s support.

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<ul><li>Putting it together </li></ul>“ How People Work” begins with the pieces of a jigsaw. On its own, none of these is enough to bring about the best performance you or your people can give ~ but together they can lead to real improvements. It shows how organisations are systems where every part interacts with all the others. People are the most important parts of the system. Helping them to work more effectively is the key to organisational success. I know what I’m expected to do I have the ability to do it I know how well I’m doing it I want to do it The environment is right Someone will notice if I do it Processes help me to do it I have the resources to do it I can do it better next time

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HR Architecture <ul><li>HR Function: </li></ul><ul><li>HR Leader? </li></ul><ul><li>HR Dept? </li></ul><ul><li>HR Competencies </li></ul><ul><li>Policies & </li></ul><ul><li>Practices </li></ul><ul><li>Workforce: </li></ul><ul><li>Human capital </li></ul><ul><li>Commitment </li></ul><ul><li>Energy </li></ul><ul><li>Fit </li></ul><ul><li>Culture: </li></ul><ul><li>Norms </li></ul><ul><li>Beliefs </li></ul><ul><li>Cohesion </li></ul><ul><li>Harmony/ </li></ul><ul><li>Conflict </li></ul>

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<ul><li>Challenges facing Human Resources </li></ul><ul><li>Current Scenario </li></ul><ul><ul><li>Internal Factors - A Vicious Circle </li></ul></ul><ul><ul><ul><li>Perception of De-motivated Workforce. </li></ul></ul></ul><ul><ul><ul><li>Low Productivity </li></ul></ul></ul><ul><ul><ul><li>High Employee Turnover </li></ul></ul></ul><ul><ul><ul><li>Low External Customer Satisfaction. </li></ul></ul></ul><ul><ul><ul><li>Damage to Company Image. </li></ul></ul></ul><ul><ul><ul><li>Loss of Revenue/Business </li></ul></ul></ul>

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<ul><li>Challenges facing Human Resources </li></ul><ul><li>Current Scenario </li></ul><ul><ul><li>External Factors </li></ul></ul><ul><ul><ul><li>Pressure of Localization of Manpower. </li></ul></ul></ul><ul><ul><ul><li>Boom/ Recession in Economy leading to Increase/ Decrease in Business and Competition/ Survival. </li></ul></ul></ul><ul><ul><ul><li>Demand for Qualified Manpower exceeding Supply. </li></ul></ul></ul><ul><ul><ul><li>Restrictions on Import of Qualified Manpower </li></ul></ul></ul><ul><ul><ul><li>Increase of Compensation and Benefits in Public Sector </li></ul></ul></ul>

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Challenges facing Human Resources De-motivated Workforce Damage to Company Image Loss of Business Low Customer Satisfaction High Employee Turnover Low Productivity

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<ul><li>Challenges facing Human Resources </li></ul><ul><li>What does HR need to do in order to succeed? </li></ul><ul><li>A1 - To become Leaders in our business we do not need to do different things, we just need to do things differently. </li></ul><ul><li>A2 – Need Total Cooperation and Support from the Management at all levels. </li></ul><ul><li>Result - Benefits derived from changes made by HR are intangible but have an extremely high impact on Company performance and bottom line. </li></ul>

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HR IN A NUTSHELL: 06/10/09

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HR MODELS & THEIR AIMS IN BUSINESS <ul><li>IV : Strategic Partner </li></ul><ul><li>HR is a major influence on business strategy </li></ul><ul><li>HR systems drive business strategy </li></ul><ul><li>III : Business Partner </li></ul><ul><li>Line management owns business as a part of their role </li></ul><ul><li>HR is an integral member of management teams </li></ul><ul><li>II : Human Resource Management </li></ul><ul><li>Business Orientation </li></ul><ul><li>Services provided expressed as outputs or inputs </li></ul>I : Administrative Free up the line to focus on the business

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HR MODELS & THEIR FOCUS <ul><li>II : Human Resource Management </li></ul><ul><li>Build performance management capabilities </li></ul><ul><li>Developing managers- linking competencies to job requirements and career development </li></ul><ul><li>Enhancing organization change capabilities </li></ul><ul><li>Building an HR network organization wide </li></ul><ul><li>I : Administrative </li></ul><ul><li>Establish policies & rules </li></ul><ul><li>Functional orientation </li></ul><ul><li>Personnel Administration </li></ul><ul><li>Government regulations </li></ul><ul><li>Labour relations </li></ul>

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HR MODELS & THEIR FOCUS <ul><li>IV : Strategic Partner </li></ul><ul><li>Self-service for transactional work </li></ul><ul><li>Transactional work outsourced </li></ul><ul><li>Knowledge Management </li></ul><ul><li>Focus on organization development </li></ul><ul><li>Change Management </li></ul><ul><li>III : Business Partner </li></ul><ul><li>HR focused on the development of people & organizations </li></ul><ul><li>Leadership development </li></ul><ul><li>Leveraging competencies, building organization work redesign capabilities </li></ul>

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Thank You