1. Lynda Gratton, Veronica Hope-Hailey, Philip Stiles and Catherine Truss
Chapter 8 Linking Individual Performance to Business Strategy: the People Process Model
Lynda Gratton,
Veronica Hope-Hailey, Philip Stiles and Catherine Truss

2. Introduction
A key challenge facing organizations is how they continue to deliver sustained competitive advantage in the short term while preparing for longer-term success.
Sources of sustained competitive advantage lie not only in access to finance or capital, but within the organization, in people and processes capable of delivering business strategies.

3. Introduction Purpose: Assumption:
Build on existing models by mapping, through a case-based methodology, that particular aspect of model which focuses on how the link between strategy and individual performance is played out.
Assumption:
Focus on collecting exploratory data
Case methodology
In-depth data collected from many people
Link between business strategy, human resource strategy and realized human resource management operates in a dynamic manner and within a particular context
Table 8.1 p. 143
Create a map of processes which link business strategy to the performance of individuals and the organization
Use this map to increase our understanding of the elements and leverage points of successful linkage

4. The Emerging Map Proposition 1
Vertical linkage expresses linking a business goal to individual objective setting, to the measurement and rewarding of the business goal; internal people policies and processes and external product market/strategy.
Horizontal linkage created within and between the people processes; cohesion, coherence, synergy.
Temporal linkage is the linkage between the capabilities of the present and the aspirations of the future

5. Proposition 2 Relationship between the Core People Process
Four key people processes
Set objectives which are clearly and consistently linked to the business strategy
Create performance metrics
Reward performance in line with the business goals
Provide short-term training
Set of processes for the future
Creating a leadership cadre
Transforming the basic skills and aspirations
Creating an organizational structure and value set

6. Proposition 2 Three elements of vestiges
Scan and diagnose people capability
Create an understanding of the gap between capability and business requirements
Create a people strategy for design and delivery of people processes

7. Proposition 3 The Strength of the Processes
Create linkage between the business strategy and individual performance
Some very strongly linked
Others weak
Table 8.3 p. 150

8. The Findings (table 8.4 p. 151) Strongly linked: objective setting
Processes for setting annual objectives and agreeing targets were a feature of all the companies
Processes were well documented, systematically rolled out, supported by managers
Employees were aware of the business strategy and how it linked to their performance
Part of the fabric of the culture and an important management discipline

9. The Findings Strongly linked: short-term training
Training was a key aspect of their ability to create the flexible and multi-skilled workforce crucial to delivering both short- and longer-term business performance
Key lever was the ability to maximize the performance of knowledge workers in pursuit of a learning organization
Majority believed they had the skills needed to deliver the performance objectives
Challenging jobs played the most significant role developing employees’ work performance

10. The Findings Strongly linked: leadership development
Complex succession processes supported by
Early identification of high-potential people
Accelerated development of this group
Succession lists
‘Backstopping’ arrangements

11. The Findings Weakly linked: long-term people strategy
Processes are opaque
Most were operating with a relatively weak strategic linkage
Debates about people followed the development of strategy

12. The Findings Weakly linked: scanning long-term people trends
Elements can provide a vehicle to scan the external environment
Probable competitive pressures
Legal trends
Demographic changes
Contractual trends
Understanding trends can prepare for potential skill shortages and help to plan for the impact of work or lifestyle changes
None engaged in frequent scanning of these long-term people trends

13. The Findings Weakly linked: workforce development
Lack of strategic linkage results from:
Profound downsizing and restructuring (destroyed career paths and psychological contracts)
Accelerating changes in the technological and competency base of the organization require new skills
Process required to predict future skill needs were underdeveloped

14. Differences across the processes
Stronger linkage for short-term people processes
Weaker linkage for longer-term orientated processes
Creating alignment is highly complex
Short-termism causes focus on the ‘numbers’ and little incentive to invest in HR because of its inherent long-term return of investment

15. Differences across the companies
Multinational Companies
More strongly linked people processes
More strongly embedded and linked to the strategy
Less ad hoc and unmonitored
Scale of Transformation
Weakest where company had recently experienced major catastrophic transformation and change
Severe weakening of HR processes associated with transformation
Administrative Heritage
Where processes had been in place for many years, they were better embedded and supported

16. Differences across the companies
Administrative Heritage
Where processes had been in place for years they were better embedded and supported
Less apparent where recently introduced
Strongly linked processes are built over time in a consistent manner
Not unusual for a significant gap between rhetoric and reality