HR International Planning 28/02/2013

Today’s sub-topics 1. The Strategic Importance of HR Planning for Alignment and Change 2. Overview of the HR Planning and Change Process 3. Scanning and Assessing the External and Organizational Environments 4. Determining HR Objectives and Metrics 5. Developing HR Plans and Timetables 6. Implementing the HR Action Plans for Alignment: Facilitating Change 7. Review, Revise and Refocus

1. The Strategic Importance of HR Planning for Alignment and Change Alignment When HR policies and practices facilitate the behaviors and competencies needed for organizational success, the HRM system, and the needs of the organization, the HRM system is in a state of alignment. - Vertical Alignment When the HRM system fits with all other elements of the organizational environment – the culture, strategy, structure. - Horizontal Alignment When all the HRM policies and practices that comprise the HRM system are consistent with each other so that they present a coherent message to employees concerning how employees should behave while at work.

The Strategic Importance of HR Planning for Alignment and Change Types of Organizational Change - Degree of Change When organizations make major adjustments in the ways they do business, it usually creates the need for radical change. Incremental change is an ongoing process of evolution over time, during which many small changes occur routinely.

The Strategic Importance of HR Planning for Alignment and Change - Timing of Change Reactive change occurs when an organization is forced to change in response to some event in the external or organizational environment. When an organization takes action in anticipation of upcoming events or early in the cycle of a new trend, it undergoes anticipatory change.

The Strategic Importance of HR Planning for Alignment and Change Learning Organizations Such an organization continually finds new ways to satisfy customers and other stakeholders by skillfully integrating the resources of information, technology and people in order to produce and then effectively use, new knowledge. Learning organizations are changing all the time.

2. Overview of the HR Planning and Change Process The elements of Human Resource Planning - Scanning and Assessing the Environment It is the first phase of the planning process, potential targets, relative advantages and disadvantages. - Objectives and Metrics HR Objectives state in quantitative or qualitative terms what is to be achieved with regard to the organization’s human resources. HR Metrics are the measurements that are used to assess progress against HR objectives.

Overview of the HR Planning and Change Process - Plans and Timetables HR Plans can be thought or as blueprints for action, specifying who needs to do what, where and how. HR timetables specify when each planned activity will be completed.

Overview of the HR Planning and Change Process The HR Triad HR professionals and line managers play significant roles and share great responsibility for the HR planning processes. Their goal is to understand the external environment and work towards ensuring that the organization is capable of being effective in the context of a changing environment. Aligning Business Planning and HR Planning In times of greater environmental stability, HRP focused almost exclusively on matching human resource demand with human resource supply. → What about now?

3. Scanning and Assessing the External and Organizational Environments Organizational Analysis An assessment of the external and internal environments is often referred to as organizational analysis. The aim is to fully understand the current environment before taking action for both the human resources and for the company as a whole.

Scanning and Assessing the External and Organizational Environments HR Forecasts They estimate the firm’s future human resource needs by focusing on: - Developing estimates of how many people with which competencies would be needed. - Forecasting the likely supply of people and skills. - Implementing plans to ensure that the right number and type of people would be available at the right time and place.

Scanning and Assessing the External and Organizational Environments Employees’ Opinions - Employee Surveys e.g. ‘YUM!’ restaurant uses it to asses the state of the organization’s culture in order to determine whether any managerial actions are needed to improve it. - Focus Groups It brings together a small number of employees to discuss a specific issue during a conversation guided by a trained facilitator.

Scanning and Assessing the External and Organizational Environments - Involving Employees in Developing Plans Employees opinions can be the primary method of organizational analysis. They can be the basis for a larger-scale plan to ensure the organization’s effective implementation of its strategic issues. → Especially important when we refer to (customer) service?

4. Determining HR Objectives and Metrics Linking HR Objectives to Strategic Business Objectives - The number of employees that will be needed as a consequence of anticipated growth or decline. - New competencies and behaviors that will be required as a consequence of aspiring to provide higher quality customer service. - Higher levels of productivity needed as a consequence of identifying the reduction of operating costs as an objective.

Determining HR Objectives and Metrics Developing Metrics to match the Objectives - ‘Bottom-Line’ Metrics e.g. A human capital return-on-investment (HC ROI) HR ROI = Revenue – (Operating expense – {Compensation cost + Benefit cost}) / Compensation cost + Benefit cost e.g. In organizations that are focused on keeping costs low, a simple index of HR Expenses might be appropriate: HR Expense Ratio = Total of all HR Expenses / Total operating expenses

5. Developing HR Plans and Timetables Considering Alternatives e.g. Southwest Airlines - After the 09/2001 attack on the World Trade Center / Pentagon / Twin Towers, most major airlines soon began announcing plans to cut their workforces by an average of 20%. - But Southwest Airlines’ Chair Herb Kelleher, was determined to do everything possible to avoid layoffs.

Developing HR Plans and Timetables - Instead of cutting costs through layoffs the company: Scrapped its plans for growth. Delayed deliveries of new aircraft. Prepared for possible damage to its stock price. - This approach was possible because the company was debt free and had $1 billion in cash.

Developing HR Plans and Timetables - Layoffs and RIFs: reductions in forces - Reducing Turnover: retain workers for longer - Outsourcing: work that had been performed inside the company is contracted out to another company - Off-shoring a company decides to continue to do the work itself but the work is moved to another country

Developing HR Plans and Timetables Building a Complete HR Plan - Staffing plans Forecasts about future labor demand and supply. - Talent management plans Succession planning: ensure that the organization is prepared to fill key positions when current employees leave for whatever reason.

Developing HR Plans and Timetables Talent pool: a list of employees who have been identified as having high potential for advancement – usually because they are top performers in their current positions. Replacement chart: the titles of key jobs in the organization are displayed along with the names of current incumbents.

Developing HR Plans and Timetables - Training Plans Help employees to see how they fit into the organization’s bigger picture e.g. United Stationers, HR professionals worked with line managers to develop business awareness modules for employees (link with the HR Triad). - Leadership Development Plans Who will be available / competent. Especially important for firms whose strategic objectives include transitioning to a transnational organizational structure.

Developing HR Plans and Timetables Timetables - Timelines for Developing Talent Analyze the environment. Develop a model of the needed skills. Develop a strategy for building talent pool. Assess and train current managers and recruit new ones. Meet with senior executives.

Developing HR Plans and Timetables - Timelines for Layoffs and Plant Closings e.g. for employers with 100 or more employees, some elements of the HR timetable are specified by the Worker Adjustment and Retraining Act of 1988 (WARN). Employees must describe their planned actions and give at least 60 days’ notice of those actions to employees.

6. Implementing the HR Action Plans for Alignment: Facilitating Change Involving Employees - For a change effort to be effective, those who are affected by it must buy into it. - Task forces, focus groups, surveys and informal conversations are some of the ways that managers can use to involve employees (and other stakeholders) in planning change efforts.

Implementing the HR Action Plans for Alignment: Facilitating Change Establishing Accountability - Who is responsible for making the needed changes? - If the change is a success, will only managers reap the rewards? - If things don’t go well, will the lower level employees be the ones who suffer most? - Involvement is likely to be most effective when people have a stake in the outcomes that result.

Implementing the HR Action Plans for Alignment: Facilitating Change Change has already started - Honest 2-way communication. - Empowered employees. Managing resistance to change - Fear: will they (employees) be able to develop the competencies required to be effective in the new situation?

Implementing the HR Action Plans for Alignment: Facilitating Change - Misunderstandings: and lack of trust, people resist change when they don’t understand or have a different understanding of its implications. - Cynicism: is change something that new (and old) managers do in order to make their mark / further establish their positions?

7. Review, Revise, Refocus Certain measures needed to define the criteria for evaluating whether a (change) program or initiative is successful or in need of revision. ‘Short-term wins’ (Kotter) – regular evidence that the new ways of doing things are paying off.