HR STRATEGY FORMULATION PROCESS Facilitators: Basanta Raj Sigdel Santosh Koirala

2 Environment Analysis  Analysis and diagnosis of an organization, often referred to as an Organization Audit or SWOT analysis  Undertaken to assess an organization’s ability to deal with its Internal and External Environment by identifying its Strengths, Weaknesses, Opportunities and Threats

Internal Environment Organisation / Supply side analysis 3 An analysis of internal organizational factors which reviews and investigates the prevailing processes, resources and performance of organization. The analysis identifies major strengths and weaknesses - of all the key functional elements (Structure, Functions, HR, Finance, IT, Rules, Procedures, etc.).

External Environment Demand side analysis 4 Covers the various stakeholders outside the organization. The analysis indicates the opportunities and threats faced by the organisation from its relationship with external stakeholders. Major categories of external environment: 1. Forces and trends – PEST 2. Clients, customers, or payers 3. Actual or potential competitors or collaborators

SWOT Profile SWOT Profile 5

InternalStrengthsWeaknesses 1. Mandate / Vision / Mission 2. Structure 3. Systems / Processes 4. Organizational resources 5. Performance / outputs Qualified and trained health professionals Mobilization of health professionals to remote area ExternalOpportunitiesThreats 1. Political 2. Economic 3. Social 4. Technological Health sector as one of the priorities of government Retaining competent health professionals in the country 6 SWOT Profile- an example

Considerations  SWOT as very meaningful tool rather than a causal ‘warm-up’ for strategy formulation  Use precise, verifiable statements ("Cost advantage of Rs……/unit in sourcing resources x", rather than "Good value for money")- be specific 7

Considerations 8  Reduce long lists of factors, and prioritize them, so that you spend your time thinking about the most significant factors.  Make sure that options generated are carried through to later stages in the strategy formation process.

Considerations  Apply it at the right level - for example, we might need to apply SWOT Analysis at service-line level, rather than at the much vaguer whole organization level.  Use it in conjunction with other strategy tools (e.g. Core Competence Analysis) so that you get a comprehensive picture of the situation you're dealing with. 9

Strategic Issue  Fundamental policy questions or critical challenges that affect o An organization’s mandates, mission and values o Organization/management o Costs, financing o Services o Consumers, users…. About which something can be done. John M. Bryson, Strategic Planning for Public and Nonprofit Organizations: A Guide to Strengthening and Sustaining Organizational Achievement, rev. ed. (San Francisco: Jossey-Bass, 1995),

Strategic issue- example How to provide basic health services to all Nepalese at their doorsteps? 2. How to improve sanitary condition of hospitals?

Prioritization of Issues 12  Urgency  Potential impact  Actionable/feasible  Resources  Stakeholder readiness  Integration  Importance

Mission, Vision and Objectives 13

Mission  Encapsulates the values and articulates the overall, long-term objective.  Brief statement that reflects the core values of an organization.  Communicates an organization’s long- term objectives – why the organization exists. 14

Mission- an example 15  Providing basic health services to all citizens

Vision  A vision is a dream or picture of future success.  A Vision statement outlines what the organization wants to be in certain future point of time. It is a source of inspiration, and gives shape and direction to the organization’s future.  “Vision binds people together around a common identity and sense of destiny” - Peter Senge 16

Vision- an example 17  All Nepali having basic health services at their doorsteps.

Setting Objectives 18  To reach the envisioned state and accomplish mission, what we want to achieve (objectives/goals) in the following four dimensions o Service recipients/consumers o Financial (investments and return) o Internal processes o Learning and growth

Setting Objectives 19  Set few objectives in each of the dimensions, for example: o Enhance research and development capacity of DoHS.

Strategy Formulation 20  Strategic options  Strategy evaluation and selection  Strategic plan preparation

Strategy Choice 21  Feasibility  Cost  Quality  Acceptability  Reversibility, etc.

Considerations 22  Organizational competence and resources to capture opportunities  Environmental threats to its long term well being  Personal values and aspirations of managers  Societal obligations and ethical considerations  Organizational culture

Strategy- example 23  Fostering institutional networking and coordination

Strategic Plan 24 ObjectiveStrategyMeasures/ Indicators TargetInitiatives ResourcesCritical Success Factors What Who When Improve health service Increase number of health professi onals Decreased Doctor- Patient ratio 10 % by 2017 Increa se the numb er of stude nts / seats MoH P, Pvt. Sect or 2014Budget, Infrastruct ure, RP MoF, Availabilit y of RP, Involvemen t of Pvt. Sector, Govt. policy

Formulation of HR Strategy 25  HR strategy can influence as well as be influenced by organizational strategy  More likely to follow the organizational strategies- dominated by service/market and financial considerations  The process involves generating strategic HRM options and making appropriate choices

HR Strategy formulation method 26  Assess feasibility  Determine desirability  Determine goals  Decide means of achieving goals

HR strategy formulation approach 27  Best practices of HRM (universal, and contingent)  Best fit: HR strategies appropriate to the circumstances of organization including culture, operational processes and external environment  Configurational (bundling): bundle of HR practices- horizontal integration- will lead to greater performance and strategic fit

 However beautiful the strategy, you should occasionally look at the results. - Winston Churchill 28 Implementation

Gap in implementation 29  Rhetoric and reality in the area of human resource management, between HRM theory and HRM practice, between what the HR function says it is doing and how that practice is perceived by employees, and between what senior management believes to be the role of the HR function, and the role it actually plays.

Gap in implementation 30  the tendency of employees in diverse organizations only to accept initiatives they perceive to be relevant to their own areas;  the tendency of long-serving employees to cling to the status quo;  complex or ambiguous initiatives may not be understood by employees or will be perceived differently by them, especially in large, diverse organizations;  it is more difficult to gain acceptance of non-routine initiatives;  employees will be hostile to initiatives if they are believed to be in conflict with the organization’s identity, e.g. downsizing in a culture of ‘job-for-life’;  the initiative is seen as a threat;

Gap in implementation 31  inconsistencies between corporate strategies and values;  the extent to which senior management is trusted;  the perceived fairness of the initiative;  the extent to which existing processes could help to embed the initiative;  a bureaucratic culture that leads to inertia

The big question: WHY CHANGE INITIATIVES FAIL? 32 Change management will fail when one is STUPID : Sponsorship not forthcoming Team member do not function as agents of change Unclear vision and commitment Poorly planned change programme Inappropriate / insufficient communication Don’t take account of culture

33 The SUCCESS Principle Shared vision Understand the organization Cultural alignment Communication Experience help where necessary / Executive support Strong leadership Stakeholder buy-in / Systematic planning / Short-term wins

Reflection/feedback Basanta Raj Sigdel Santosh Koirala 34

The story continues… 35