Abstract – Importance of aligning HR strategy with corporate
Human resources alignment means integrating decisions about people with decisions about the results an organization is trying to obtain (U.S Office of Personnel Management, 1999). Agencies have the ability to ensure that managers are held liable for their HRM decisions and that the management of human resources (HR) has its contribution to accomplishment of the mission. This is achieved through the integration of human resources management (HRM) into the process of agency planning. It is important in light of the Government Performance and Results Act (GPRA) push to align all agency activities, towards achieving defined agency strategic goals and measuring progress toward those goals.
According to Richard E. Wintermantel and Karen L. Mattimore (1997), HR’s mission has expanded in the recent years and the expansion is still progressing. HR proffessionals were seen as servants and were expected to work under the managers. They were treated as low class employees who were to be submissive and respond quickly when called upon. HR professionals have moved from their traditional role towards a more progressive one involving success of business.
Currently, the HR professionals can aid develop business ideas and strategies that assist in building competitive advantage by capitalizing on the availlable human resoures. This proffessionals turn out to be successful by assisting the business through creation of winning strategies and being able to do so, they feel self-actualized. At present, they are taken as fellow leaders by managers, who welcome and allow them to participate fully in strategic meetings. To ensure that this mission turns out to be successful, they must be respected and treated as valued assets in the organization (Richard E. Wintermantel and Karen L. Mattimore, 1997).
Main HR Challenges
According to Mikaela Kooiker (2008), the following listed are the main HR challenges:
- Seen as a strategic business partner contributing to the vision of the organization.
- Creating a plan for matching future needs of the organization with proposed hiring, separation, related financial issues of compensation, and employee benefits.
- The linkage of organizational goals with employee performance and the subsequent work with employee to enhance the best performance (Mikaela Kooiker, Dec 2008)
Strategic Relationships between HR and management
Generally, in the majority of the situations, HR executives are invited into the agency decision-making process during the implimentation phase and therefore, do not take part in the whole decision-making process (U.S Office of Personnel Management, 1999). As a way of elevating HR’s role to management partner, successful agencies attribute their success to the following factors:
- Reporting relationships – HR has a more visible role in agency decision-making, in agencies with direct reporting relationship between the head of agency and head of HR.
- Management advocates – HR enjoys more involvement in the agency decision-making in the agencies that have a strong HR advocate in its’ senior management.
- Credibility – HR employees who are formerly program managers tend to earn more credibility from the other managers since they have first hand information on the concerns of the program.
- Culture – In some agencies, the recognition that its people are its most important asset has traditionally been part of the culture. Thus, HR leader naturally has a voice in agency decisions.
- Value – In order to be considered as a member of the management team, HR has to bring value to discussions or otherwise not accepted (U.S Office of Personnel Management, 1999).
View of HR Productivity
Most of the HR organizations are engaging into building competitive advantage for the organization. Despite variations in these organizations in terms of their progress, most of them are moving towards roles as internal consultants. The HR professionals are expected to work with managers to assist in creation of business strategies and also manage the business’ intellectual resources (Richard E. and Karen L. Mattimore, 1997).
The metrics used in the evaluation of HR productivity must be consistent with the mission of the function in question. Each function should then define the organization’s mission, specific objectives, and a few future pivotal strategies. The function should then measure its success in the fulfilment of the objectives, as all other metrics held irrelevant for that function. In order for HR to attain its full potential and maximize its impact on success of business, then HR proffessionals must develop a clear role and vision they can play. This will be more influential with selection of metrics to evaluate their contributions in relation to their goals (Richard E. and Karen L. Mattimore, 1997).
Though HR’s organizations mission has expanded recently, the metrics used in evaluating their productivity remain the same. This organizations must clearly define their mission and identify tangible objectives which can be used to measure success.
Strategic implementation Area of HR contribution
The managers most valued HR’s contributions, are also the same requiring the most improvement and include employee relations, development, recruitment and staffing (U.S Office of Personnel Management, 1999). Managers wish to see an increased HR involvement and innovations in these areas, something which would be difficult to achieve without the help already provided by HR. Apart from the above mentioned areas of HR improvement, there are other areas that the HR offices contribute to align with mission accomplishment such as:
- Agency Reorganizations: Most of the agencies and sub-components have had to redefine their missions and restructure the program areas that support those missions. This is as the result of downsizing, streamlining, and budget cuts that have been occurring in recent years (U.S Office of Personnel Management, 1999).
- Workforce Planning: In this time of budget cuts, downsizing, and an aging Federal workforce, workforce planning is very important in increasing agencies’ ability to achieve their stated missions. More agencies are taking steps in puting up strong workforce planning systems (U.S Office of Personnel Management, 1999).
- Linking Performance Management to Mission Accomplishment: Agencies are now formulating systematic approaches to aligning performance management to strategic goals. Most of these agencies plans, involve the cascading of the alignment to the level of employees. Some agencies are using team based performance management approaches such as informal team assessments, performance targets and awards linked to mission goals while a majority mandate the likage of employee level plans to agency goals (U.S Office of Personnel Management, 1999).
Designing a performance plan can be done by recognizing the general objectives and goals of the organization’s strategic plan. The next step is to identify work unit and individual accomplishments which shall be measured to identify the appropriate measures. The accomplishments are then converted into performance elements (MEP Handbook, Jan 2001).
With the expected accomplishments developed for the work unit, the accomplishments to be included as elements into the plan are identified. Types of element to use are selected and priorities assigned. Standards for the elements are then developed and performance is monitored to provide feedback to the employees. Finally, to ensure effective starndards and elements that meet requirements, the Performance Plan should be cheked (MEP Handbook, Jan 2001).
Example of HR productivity – HR Role in closing the Growth Gap
The growth of a company attracts talent and increases the momentum through creation of more capital. This can transform the market valuation of a company. However, many companies have a significant growth gap which is the difference between what the core business can deliver and the expectations of the CEO and the top management team (Donald Laurie et al, 2006). HR must be aligned closely to the CEO growth agenda and adapt existing challenges so as to effectively bridge the gap. New demand will therefore arise on HR, which means creation of new social networks, agendas, structures and processes for increased growth. According to Donald Laurie et al (2006), there are five key principles for creation of New Gap Platform as described:
- Selection of a chief growth officer (CGO) to mobilize resources into new spaces and platforms. This aids in closing the growth gap by enabling the organization access new growth platforms.
- Identify and select appropriately, a group or team that can turn many ideas into NGPs.
- Development of conditions which will allow independent operations of units following NGP mission development.
- Making a high level of certainty on issues such as governance, finance and answers to decision making.
- The processes involving innovations and development among other activities that are important in keeping continuity of NGP.
According to Donald Laurie et al (2006), HR helps in selection of CGO and the NGP team in terms of job descriptions, candidate profiling, and succession planning which can be key in creating the conditions allowing the NGP team to be both independent and interdependent. HR policies aligned to the core of the businesses, undermine NGP development (Donald Laurie et al, 2006).
HRM Measurement – how to measure the HRM Productivity
According to the U.S Office of Personnel Management (1999), HR strategic plan measures, tend to focus on internal HR programs, policies, and processes, and can therefore point to deficiencies in these areas. This information can be used by HR officials in improving on the affected areas with exceptions from an organizational perspective where the measures are generally not very helpful in determining achievement of HR goals.
Some agencies, though few, have implemented elaborate systems and interesting approaches to measure their HRM performance. The HR office is used to keep track of HRM measures in the strategic and annual performance plans which are forwarded to the planning office for sharing and distribution of the information. As a common practice, few agencies actually use the information to enhance goal attainment with the majority not analysing the data to see its possible application in desion making and upgrading their standards (U.S Office of Personnel Management, 1999).
HR staffs find that measures from HR strategic plans seem to be more useful than those in the agency strategic or annual plans. Benchmarking as a practise, is preffered by many HR offices in identifying ways of improving service and align with the results of business. The Balanced Scorecard which is generally used at the business unit level, is a framework which most agencies use in translating strategy into operational terms. This is reached at by the measure of a range of perspectives which include learning and growth, customer and finally financial relations and usages.
Activity Based Costing (ABC) is a method of cost management that determines the true cost, for a service or product (U.S Office of Personnel Management, 1999). Finding the true cost allows agencies to discover cost improvement opportunities, prepare and actualize strategic and operational plans, and improve decision-making.
Recommendations – HR Needs to:
- Expand its traditional administrative role in order to have a significant impact on an organization’s value creation (John P. Righeimer, Maverick Energy).
- Ensure the human asset is effectively aligned with the strategy that is chosen by organization as much as possible to ensure maximum efficiency is attained.
- Operate at both strategic and administrative levels, recognize its administrative role, and expand its influence beyond administrative role and towards a strategic role.
- Define the competencies and skills that it will need to be a strategic contributor. HR needs to build their business knowledge, financial skills, as well as consulting skills.
- Become technologically oriented, so they can be free from routine administrative work, as well as leverage information about the workforce.
- Measure its impact on organizational strategy and its efforts to build programs to better manage success of an organization’s human assets (John P. Righeimer, Maverick Energy).
Accountability should be shared especially due to the growing relationship between HR and management, along with NPR and GPRA mandates. Both the HR staff and managers are accountable for effective and legally complient HRM due to the increased sharing of mandate (U.S Office of Personnel Management, 1999).
Report shows that approximately half of the responding agencies agree with the sharing of HRM accountability between managers and HR staff. This is true because HR staff is accountable for HR compliance and managers for business results achieved through good HRM. Both are therefore responsible for the overall effectiveness of the HRM program. However, the other half still feels that the ultimate accountability falls on the HR staff. They are the ones responsible if actions are found non-compliant, and little attention is given to whether managers’ HRM decisions are an effective use of resources (U.S Office of Personnel Management, 1999).
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Laurie Donald and Lynch Richard, Laurie DL, Doz YL, & Sheer CP. (2006). Aligning HR to the CEO Growth Agenda: Creating New Growth Platforms. Harvard: Accelare Inc.
Righeimer John P. Aligning Human Resources & Strategic Plans: Maverick Energy U.S. Office of Personnel Management, Office of Merit Systems Oversight and Effectiveness. (1999).Strategic Human Resources Management: Aligning with the Mission.
United States Office of Personnel Management, Workforce Compensation and PerformanceService. (2001). AHandbook for Measuring Employee Performance:Aligning Employee Performance Plans with Organizational Goals.
Wintermantel Richard E., and Mattimore Karen L. (1997). In the Changing World Of Human Resources: Matching Measures to Mission. Fall, Human Resource Management.