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Chapter 5- Planning for people

BUSINESS STRATEGY
 Foundation for all org decisions
 Business strategy- Decisions, processes, and hchoices that firms make to position themselves for
sustainable success
 HR Strategy- about how to manage their people
 Senior leaders have to consider external environment, consumer trends, competitive positioning,
internal strengths and weaknesses
 Defines pivotal elements for success
 Leaders can ensure that all resources are deployed and managed in relation to their importance to
strategic success
 Ensuring Coherence in Strategic Direction
o Organizations are successful if everyone strives for common goals
 Form a hierarchy of vision, mission, strategic objectives
o Vision must be inspiring, overarching, long term, emotionally driven
 May or may not succeed depending on strategy
 Alignment of strat, analysis, implementation is key
o Mission statement includes PURPOSE and basis of COMPETITION and
COMPETITIVE ADVANTAGE
 Most important audience is employees
 Builds common understanding of purpose and basis of advantages
 Guidance on how org can fulfill or move toward higher level goals (vision and
mission)
o SMART objectives
 Specific, measurable, appropriate, Realistic, Timely
 Channel efforts toward common goals and motivate and inspire
 Measures performance and distribution of rewards
o Downside to planning business strategy
 Locks companies into vision of future that may not come to pass
 How do you plan for future when future changes quickly??
 Make a planning process democratic, including line managers to
customers to suppliers
 Top managers listen and prepare to shift plans
 Recognize that customers are arbiters of choice

RELATIONSHIP OF HR STRAT TO BUSINESS STRAT


 HR strat parallels implementation of biz strat
 HR implications of proposed strats, external constraints, management practices, short term plans
for long term needs??
 Planning is top down, while execution is bottom up (FIGURE 5-1)
 First question is “How do we compete”
o Identify processes that firm must execute well to compete well
o Then org delights internal and external customers bc high performance
 Need right competencies, incentives, and work practice
 Execution proceeds bottom up, incentives inspire high performance
 High performance work practices:
o Worker empowerment, participation, autonomy
o Self-managed and cross functional teams
o Commitment to superior product and service quality
oFlat organizational structures
oUse of contingent workers
oFlexible design of work defined by roles and output requirements, not job-specific
requirements
o Rigorous staffing and performance management practices
o Worker-family friendly HR policies that reward employee development and learning
 Strategic Workforce Plans
o Parallel plans for biz as a whole
o What do proposed biz strats imply with respect to human resources?
o What kinds of internal/external constraints will (or do) we face?
 i.e. projected shortfall in supply of college graduate electrical engineers
o (FIGURE 5-2) shows how strategic workforce focuses on firm-level responses to
people-related business issues
o people-related business issues:
 “what type of skills must managers have to run business in the future”
o broader issues about tech change, complex orgs in the market, external force response
like legislation and litigation, demographic changes, multinational competition
 environment drives issues, which drive actions, which encompass programs
o HR concerns dealt only when affect manager’s ability to function
 Immediate issue (downsizing, labor shortage) or longer term (succession plan)
o Issues like diversity, changing managerial skill requirements, growth or no-growth
assumptions, mergers, retraining needs, health and safety directly related to
competitiveness of the organization and threaten its ability to survive
THE END OF THE JOB?
 mid 90s, “end of the job” bc post-job workers will be self-employed contract workers
 changes in jobs bc fluid orgs that want to stay competitive have their employees adapt quick
o librarians used to shelve and recommend boos but now teach about the internet
o auto-assembly plants have ppl trained to operate machinery, not those hired in HS
 BUT STILL jobs are used to organize and group tasks

ALTERNATIVE PERSPECTIVES ON JOBS


 Jobs determine standards of living, places of residence, status, self-worth
 Jobs are vehicles through which work is accomblished
 Who specifies content of job? Who decides how many are necessary? What are minimum
qualifications? How should performance on each job be measured?
 Job Design
o Focuses on processes and outcomes of how work is structured, organized, experienced
 Should link closely to biz strat
o Jobs vary from narrow tasks to broad tasks that require multiple skills
o Narrow range of tasks  focus on efficiency
o Broad range  focus on innovation and competitiveness
o So many theoretical perspectives to designing jobs
 Scientific Management—“One Best Way”
o Dominant approach to job design
o Frederick W. Taylor & the stopwatch
 Time-and-motion studies reveal most efficient way to perform work by
minimizing wasteful movements or unnecessary steps
 Believed once best way to work identified, workers selected on basis of ability to
work that way & trained in that standard way to perform the job
o Consistent with cost-rleadership business strategy
 Design jobs that are simple to perform and easily leanred
 Minimize abilities required to perform work, minimize training costs
o BUT jobs designed only to maximize efficiency leads to predictable psychological
consequences, that are well documented
 Job dissatisfaction, surface attention to work, depersonalization, frustration
 Lack of growth and feelings of alientation
o To counter unpleasant consequences, researchers turn to job rotation, enlargement, and
enrichment
 Job Design Today
o Think about outcomes organizations seek to achieve in job design
 Short term: motivation, satisfaction, learning
 Long-term: effective performance, minimize withdrawal, minimize stress,
maximize creativity and employee health
o Jobs and work must differ in the nature of the tasks they require, extent of knowledge,
social physical characteristics, skill and ability requirements, time pressures, workday
cycles, virtual vs co-located work
o Not all individuals experience work in the same way
 Ability to achieve proximal and distal outcomes will be affected by several
important conditions
 How each person experiences meaningfulness and responsibility
 Identifying the Work to be Done and Personal Characteristics Needed to do the Work
o One must be able to specify work to be done and personal characteristics required
o Job description (written summary of task requirements) and Job specification (written
summary of worker requirements)
 In the past, narrow in scope
 Today, orgs begin to develop behavioral job descriptions and work-role req
 Behavioral job descriptions incorporate behavioral statements like “actively
listens, builds trust, adapts his/her style to fit audience
o Job specs should say MINIMAL acceptable qualifications, not an IDEAL candidate
o Required denotes infexibility, desirable implies flexibility

JOB ANALYSIS AND THE ADA ACT OF 1990


 Job analyses not legally required under ADA but they should be done
o 1. Law makes it clear that job applicants have to understand essential functions of a job
before responding to “can you perform…”
o 2. Existing job analyses may need to be updated to reflect additional dimensions of jobs
(physical, environmental, mental demands)
o 3. Summary of results is normally prepared in writing
 video job description works too, concrete evidence of physical, environmental,
mental demands of jobs
 candidates unable to perform a job because of physical/mental disability may
self-select out to minimize legal challenge
 employers have to link required knowledge, skills, abilities, and other characteristics to functions
 ADA makes it imperative to distinguish “essential” from “nonessential” functions prior to
announcing job or interviewing candidates
o If disabled can perform essential functions, employers MUST make reasonable
accommodation
 Restructuring job so someone else does nonessential tasks that disabled cannot
 Modify work ours/schedules so disabled can commute in off-peak periods
 Reassigning a worker that becomes disabled to a vacant position
 Modifying or acquiring equipment (i.e. braille typewriter)
 Adjusting/modifying exams, training materials, HR policies
 Providing qualified readers/interpreters
 Competency Models
o Attempt to identify variables related to overall organizational fit and identify personality
characteristics consistent with org’s vision/mission
 i.e. motivation, persistence, innovation, flexibility
o form of job analysis focusing on broader characteristics of ppl and using them to inform
HR practices
o focus on all KSAOs (knowledge, skills, abilities, other characteristics (motives, traits,
attitudes, personality))
o consist of set of competencies necessary for successful performance
 behavioral indicators associated with high performance are specified
o DIFFERS from job analysis
 Competency approaches include understanding org’s biz context and comp
strategy to establish direct line-of-sight between individual competency and org
competency
 Job analyses don’t make that connection
 But rigor and documentation enable them to withstand legal challenge
 Competency modeling is NOT a substitute for job analysis
o No singular approach to studying work, much variability in implementation
o No single type of description of work content
 How do we study job requirements?
o Number of methods, but none alone are sufficient
o Use combo to obtain total pic of task and demands
 Adv vs Disadv page 167
o 1. Job performance
 analyst performs job under study to get firsthand exposure
o 2. Observation
 analyst observes worker/group doing a job, records what, why, how
o 3. Interview
 workers’ own descriptions of what they do, why, and how
 standard format to collect imput from all workers
 all questions and responses restricted to job-related topics
 standardization allows comparison of differing opinions
o 4. Critical incidents
 articles of actual reports that illustrate effective or ineffective workers
 i.e. when asked about a bottle of wine, the wine steward described
without hesitation
 possible to abstract and categorize the incidents according to general job area
they describe
o 5. Structured questionnaires
 list tasks, behaviors, or both
 job approach: task-> what gets done
 worker-oriented/ability-requirements approach: behaviors-> how job is
done
 workers rate each task or behavior in terms of whether or not it’s performed
 rate characteristics like frequency, importance, level of difficulty
 ratings provide basis for scoring and developing a profile
 relatively precise comparisons across jobs
o regardless of method, workers must be experienced and knowledgeable
o analysts tend to provide high levels of agreement about components of jobs
 but no diff in info quality provided by diff genders/races or high/low performers
o popular methods are observation, interviews, structured questionnaires
 Job analysis: relating method to purpose
o Combo of methods is one that best fits purpose of job-analysis
 Table 5-2 page 168
 i.e. job-performance method is most appropriate for developing tests, interviews,
training design, and design of performance appraisal systems

FROM JOB ANALYSIS TO STRATEGIC WORKFORCE PLANNING


 after identifying behavioral requirements, org is ready to identify # of employees and skills
required
 now need understanding of available competences to plan for changes to new jobs required by
new corporate goals
 strategic workforce planning (SWP) is formal process that connects biz strat to HR strat
o ensures right ppl are in the right place at the right time at the right cost
 “buy-build-borrow-rent” equipment decisions produce uncertainty bc environment always
changes short or long term
 SWP is an iterative process that takes 3-5 years to reach full potential
o Delivers business intelligence on top of HR data
 Four value adds
o Uncovers significant differences among business units or locations
 Reveals how regional supply of talent compares to demand
 Where company has highest return from HR investment
o Provides metrics and other tools to support biz decisions
 3M uses productivity metrics to see which countries should have additional or
fewer resources
 UBS used to signal when bank needed to change workforce plans from scenarios
o Enables leaders to compare long-term implications of alt business and HR scenarios
o Supports diff kinds of planning at diff levels of the organization
 SWP does not just retrieve info on demand
 Raises discussion from tactical to strategic level while incorporating long-term
considerations like labor supply, regulatory changes, infrastructure
 SWP Systems
o Talent inventory
 Catalogue skills, abilities, and potential of current workforce
o Workforce forecast
 Predict future people requirements based on analysis of future supply of labor,
future labor requirements
 Affected by analysis of external conditions
o Action plans
 Enlarge pool of people qualified to fill the projected vacancies through
recruitment, selection, training, placement, transfer, promotion, etc.
o Control and evaluation
 Provide feedback on effectiveness of SWP by monitoring attainment
o In practice, this is simple
o But should not be based on long-term plans of each business unit
o Should begin at country level, where operational decisions are made
TALENT INVENTORY
 Fundamental requirement of effective SWP system
 Organized database of existing skills, abilities, career interests, and experience
 Address the following
o Who should be included
o What specific info should be included
o How can info be obtained
o What is most effective way of recording info
o How can inventory results be reported to decision makers
o How often should this be updated
o How can security of info be protected
 Answers provide direction and scope for subsequent efforts
o i.e. IBM has Workforce Management Initiative
 lets managers search for employees with precise skills
 saved IBM $500 million and improved productivity
 helped managers analyze what skills staffers possess and how talents match up to
business outlooks
 info typically included:
o current position info, previous positions, other significant work experience, education,
language skills, training and development programs attended, community/industry
leadership, current and past performance appraisal data, disciplinary actions, awards
 important to specify primary uses of data
o provide direction and scope regarding who and what kinds of data should be included
 common uses include IDing candidates for promotion and succession planning
 talent inventories and workforce forecast MUST complement each other
o talent inventory not useful for planning unless analyzed for future requirements
o vice versa

WORKFORCE FORECAST
 estimate labor requirements at some future time period
 two types
o external and internal supply of labor
o aggregate external and internal demand of labor
 internal supply relates to INSIDE the organization
o age distribution of workforce, terminations, retirements, new hires
 internal and external demand forecasts depend on behavior of biz factor to which HR needs can
be related
o subject to many uncertainties (domestic or worldwide econ conditions, tech, consumer
behavior)
 forecasting external workforce supply
o hiring new employees are essential
o projections of external labor market conditions & estimates of supply of labor
 Bureau of Labor Statistics, National Science Foundation, Department of Ed
 National Assoc of Colleges and Employers have survey of offers to grads
 (naceweb.org)
 orgs in varied industries like oil and gas, digial advertising, construction, etc. use
projections to prevent surpluses or deficits of employees
 forecasting internal workforce supply
o starting point for projecting future labor supply is current supply
 form of risk management
o succession plan
 developed for management employees, nonmanagement employees, or both
 similar to insurance policy, being there when you need it
o top challenge identified was fueling business growth, with improving leadership
development and growing talent internally viewed as key vehicles for implementing biz-
growth strategies
o some deep-seated reasons why firms don’t deal with succession issues:
 personality, ego, power, mortality
o assuming barriers can be overcome, developing a plan should include
 gaining alignment on biz strat
 assessing current performance and promotion readiness
 identifying replacement candidates based on fit with biz strat
 identifying career development needs
 integrating career goals with company goals
 leadership-succession planning
o considered by many firms to be sum and substance of SWP
o stated objective: to assure top quality and ready talent for all executive positions
o responsible executive makes formal presentation to corporate policy committee
 consists of assessments of stress and weaknesses of units’ executive resources
 highlights present performances and potential of key execs and potential
replacements
o policy committee reviews and critiques info, adds insight to line management
o important to note that common set of leadership attributes links all management practices
 thinks from outside in
 drives innovation and growth
 develops, teaches, and engages others
 makes courageous decisions
 leads with energy, passion, urgency
 lives company values
o 5 broad objectives
 align available KSAOs with strat of business
 identify talent and development needs early
 build depth in org, leverage talent across businesses, drive diversity
 performance-appraisal process captures and documents individual
results
 management team conducts consensus reviews
 use assessments of performance and leadership attributes to build mgmt.
consensus on each employee’s contributions and development needs
 3M leadership attributes underlie assessment, development, and succession
 Lessons to apply
o Ceo must drive talent agenda.
 Commitment from the top is key
o Identify and communicate a common set of leadership attributes to serve as a “road map”
for people in leadership positions and all other employees
o Use candid, comprehensive performance reviews as building block for assessment,
development, and management consensus of performance and potential
o Keep to regular schedule for perf reviews, broader talent reviews, and IDing talent pools
o Link all decisions about talent to strat of org
 Forecasting workforce demand
o Multiple uncertainties
 Changes in tech, consumer attitudes, patterns of buying behavior, local / natl /
intl economies
 Forecasts of demand are more subjective than quantitative
 Identify pivotal talent
o ID jobs that drive strat and revenue
o Differentiate your org in the marketplace
o Link specific positions to quantifiable revenues, biz objectives, and biz ops
 Assessing future workforce demand
o Central purpose of SWP is to ensure that biz demands for talents are met ASAP
 What is impact if not filling open sales positions
 What is correlation btwn safety violations and accidents?
o To develop estimate of numbers and skills needed, ask questions like
 What are key biz goals for the next __ years
 What are top three priorities we have to execute well
 What are critical workforce issues we face
 What are 3-5 core capabilities we need to win in markets
 What actions are necessary to align resources with priorities
 How accurate is accurate
o Accuracy varies by firm and industry type
o Factors like duration of planning period, quality of data on which forecasts are based,
degree of integration with strategic biz planning… all affect accuracy
o As SWP matures, org boundaries disappear so talent and skills are managed and utilized
more efficiently
o Also SWP gains broader support
o SWP starts incorporating tools from other functions and frameworks (finance, marketing,
supply chain management
o SWP becomes more data driven
 Integrating supply and demand forecasts
o Forecasts must result in understandable and meaningful product
o REQUIRES concise statement of projected staffing requirements that integrates supply
and demand forecasts
 Make or buy
o Is it better to select workers who already have skills or select workers that don’t but can
be trained to perform?
o Guidelines for determining buying vs making
 Accuracy of forecast of demand: if not accurate, do more buying
 Possess “scale” to develop?: if not, do more buying
 Job ladder to pull talent through? If not long, do more buying
 How long will talent be needed? If not long, do more buying
 Change culture/direction? If yes, more buying

CONTROL AND EVALUATION OF SWP SYSTEMS


 Purpose of control and eval is to guide SWP activities
 Measure performance w/ qualitative and quantitative objectives
 Quant objectives make control and eval more objective
o Measures deviations from desired performance more precisely
 BUT eval and control should always match degree of development of the rest of the SWP process
o In new SWP systems, eval is likely to be qualitative
 LOOK AT TExTBOOK