Hr Strategy 12

7/31/2019 Hr Strategy 12

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UK Presidency of the EU

EPAN Human Resources Working Group

Innovative HR strategies project

Contents

Part One About the study 3

1. Introduction 3

2. Background to the survey 3

3. Aim of the project 3

4. The importance of context 4

5. Methodology 4

Part Two The changing world of HR 5

1. The importance of HR 5

2. What is innovative HR? 6

3. Evolving perspectives on HR 6

4. Models for the future 7

5. Implications 10

Part Three Findings 11

1. Overview 11

2. Questionnaire section one The HR Manager 11

3. Questionnaire section two How HR is organised 12

4. Questionnaire section three Internal and external drivers for change 15

5. Questionnaire section four changes made to the HR function over

the last 18 months 15

6. Key changes in HR function (question 4.1) 16

7. Summary of key findings 19

Part Four Illustrative case studies 20


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Appendix One Summary of questionnaire responses 23

Appendix Two References 342 INNOVATIVE HUMAN RESOURCES STRATEGIESPart

One About the study

1. Introduction

This report, prepared specifically for the UK Presidency of the European Union,

presents the results

of a survey into innovative HR strategies conducted across all Member States of the

European Union.

The National School of Government worked closely with the UK Cabinet Office to

design the questionnaire

for the Human Resources Working Group of the European Public Administration

Network. The National

School carried out the analysis of the returned questionnaires and prepared this

report.

Grateful thanks are due to all those who contributed to this study through completing

the questionnaire.

2. Background to the survey

The UK Presidency, within the framework of the current Mid-Term Programme

2004/2005, has focused on

the theme of Innovative HR. The examination of Innovative HR finalises the list of

activities undertaken by the

Human Resources Working Group over the past two years. Studies developed under

previous Presidencies

have included reports into Civil Service pensions and ethics.

Earlier this year, a report of HR management strategies to support organisational

changes was prepared

during the Luxembourg Presidency of the European Union. This report found that, HRstrategies are generally

aligned with governmental strategies, supporting to a certain extent the

organisational changes, but these

were not automatically developed at a local level. It also concluded that HR is not yet

a generator of


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changes. The report concluded that HR is in constant balance between;

Strategy and daily operations

Being proactive and less reactive

Implementing tailored HR solutions for specificities (where off the shelf solutions arenot applicable)

Combining specialist and generalist skills to cover all HR aspects and dimensions.

The findings were that government strategies such as cost reduction, service

improvement and structural

issues were becoming more important and that in the majority of Member States HR

strategies were being

designed to support this wave of change and modernisation.

This survey into innovative HR strategies seeks to explore some of the HR responses

in more detail.

3. Aim of the project

The main aim of this project is to draw out interesting ideas, encourage discussion

and share learning

about HR amongst the HR community of the EU Member States.

It is not the intention to try to dictate what should be done, but to ask what is being

done, why,

how successful it has been and what lessons can be learnt.4. The importance of

context

It is recognised that each Member State is unique with its own history, culture,

legislative base and style

of administration. The roles and services that are included under the term public

service vary and national

public employment systems are different. The Government of each Member State hasits own priorities

and the citizens their own expectations of the state and public services.

There are, however, some global themes that impact on all public administrations and

key academic


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research that challenges the way in which HR has been organised in the past. These

challenges are causing

HR professionals, in all sectors and all countries to rethink their approach and find

better ways of supporting

their organisations.

The extent to which HR organisation has been decentralised in the Member States

varies, but the most

common arrangement is a combination of a central body and local administrations.

This enables governments

to exercise control and achieve consistency whilst also encouraging responsiveness

and flexibility in service

delivery. There is also a variation in the extent and speed of delegation of HRmanagement because of the

difference between position based systems, that allow for individualised approaches,

and career based

systems, that regulate public servants through administrative law.

5. Methodology

The questionnaire was developed by the National School of Government and the UK

Cabinet Office for the

Human Resources Working Group of the European Public Administration Network. A

copy of the questionnaire

is available on CIRCA.

The questionnaire focused on the following:

the selection and development of HR staff

how HR is organised

internal and external factors driving changes in HR and choice of response

changes to the HR function in the last 18 months.

The questions were framed to encourage discussion and illustration, the choices

offered were intended

to clarify the issues rather than constrain the answers.


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It is very clear from the way in which the questionnaires have been completed that

there is no universal

language for HR, and that many of the issues are too complex to be explained

thoroughly in such a simple

format. There are, however, general themes and trends that emerge. Short case-

studies on specific approaches

have been included with web-links where appropriate.

The project team comprised Jean Meyrick from the National School of Government

who authored the report,

Paul Roberts from the Cabinet Office who co-ordinated the project and Malcolm

Gregory from the National

School of Government who developed the questionnaire.

4 INNOVATIVE HUMAN RESOURCES STRATEGIESPart Two The changing world of HR

1. The importance of HR

In all organisations, Human Resource Management is making a transition from

providing an administrative

service dealing with the people towards becoming an integrated partner in the

business. For HR to become

a source of competitive advantage it must be able to provide leadership in theorganisational and

people dimension.

Public administrations are not exempt from this change. Indeed with increased

competition for talented staff,

the role of HR in making sure that public sector organisations can attract and retain

excellent employees,

is even more important.

In most public services, the existing processes of delivery are being challenged by

unstoppable global influences.

Rising customer expectations and new ways of providing services through the use of

new technology impact


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on organisations internally and externally, requiring staff to develop new attitudes

and skills and also to acquire

new knowledge. HR strategies are key to making this happen.

Figure 1 illustrates the journey people management systems have made, and are

making, from personnel

administration towards the provision of Strategic HRM.

Figure 1 HR Maturity Scale

Personnel

Administration

Personnel

Management

Human Resource

Management

Strategic HRM

Level 6

(Nirvana)

All activities link to

strategy that is owned

by all employees

Level 5

Transition from

operational to

strategic focus

Level 4

HRM becomes

integral to

business operations


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Level 3

Performance

measures linked

to reward.

Professional practices

Level 2

Performance

records,

recruitment

criteria

Level 1

Basic records

& compliance

with lawAt level 1, there is control and compliance. At level 2, there is a movement

towards more professional

personnel management systems such as job evaluation and grading systems. At level

3, appraisal systems

linked with performance and reward are introduced to enable performance to be

managed and staff to be

motivated. At level 4, personal accountability rises as there are clear links between

individuals work and

organisational goals and measures. Underperformance is not tolerated and tailored

solutions replace generic

solutions. At level 5, team and project accountabilities become important and the

core work processes are

focused on customers requirements. At level 6, everything, including individual

performance, is aligned

to the strategic objectives.


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This model seeks to describe the different phases or stages that HRM systems are

likely to go through

to make the journey towards true strategic alignment. Very few organisations reach

level 6. This report does

not presume to analyse where individual public administrations are on this scale of

development, but this

question might form the basis for an interesting and challenging conversation

between HR and senior

management within all Member States.

2. What is innovative HR?

We are not advocating that any particular shift on the HR maturity scale is more or

less innovative than

another. Each public administration will need to respond to their own drivers and

contexts. At its simplest,

innovative HR is about the introduction of new practices in the management of

Human Resources that

improve the performance of the people so that they deliver the goals of the

organisation. The more

radical innovations, where the whole system is involved, are about moving into level

4 and upwards.

3. Evolving perspectives on HR

Traditionally, HR staff focused on administering benefits, payroll and other personnel

functions and not playing

a part in the overall strategy of the organisation. Any proactivity was around the idea

that improvements

in an individual employees performance would automatically enhance organisational

performance. Strategic

HR architecture is more complex. An effective HR system that truly supports the

organisation needs to align

the HR system with the organisations strategy. That is, to move from one perspective

to another.

This evolution is as follows:


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The personnel perspective

The organisation hires and pays people but does not have a way to hire the very best

in changing

circumstances or to develop exceptional employees.

The compensation perspective

Bonuses, incentive pay and meaningful distinctions in pay are used to reward high

and low performers

but the mechanism is not truly linked to the strategic needs of the business. Goes

some way but doesnt

fully exploit the benefits of HR as a strategic asset.

The alignment perspective

Senior management see people as strategic assets but the HR system is not

integrated with the

operational system therefore HR cant be used to leverage the business perspective.

The high performance perspective

HR and other executives view HR as a system embedded within the larger system of

the organisations

strategy implementation. The organisation manages and measures the relationship

between these two

systems and the organisations performance.

(Adapted from: Becker, Huselid and Ulrich 2001)

6 INNOVATIVE HUMAN RESOURCES STRATEGIESThe focus needs to move from inside

to outside the organisation. HR can play a central role in implementing

the organisations strategy and achieving the required outcomes only if they

understand what stakeholders

define as value and build HR architecture to ensure people can create that value.

This concept is central

to improving service delivery.

4. Models for the future


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One of the most influential models of a future for HR has been created by Dave Ulrich

in his seminal work

Human Resource Champions. This work focuses not on what HR professionals do but

on what they deliver.

He identified four generic outcomes for HR:

strategy execution

administrative efficiency

employee contribution

capacity for change.

These four outcomes present four main roles for HR, each described by a metaphor

and illustrated in Figure 2.

Figure 2 Ulrichs definition of HR roles

Role Deliverable/

Outcome

Metaphor Activity

Management

of strategic HR

Implemented strategy Strategic partner Aligning HR and business

strategy

Management

of organisational

infrastructure

Efficient infrastructure Administrative expert Re-engineering processes.

Shared services

Management

of employee

contribution


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Employee commitment

& capability

Employee champion Listening & responding

to employees

Management

of transformation

& change

A renewed

organisation

Change agent Managing changeThe outcomes are described in a matrix along axes offocus and activities as illustrated in Figure 3.

Figure 3 Ulrichs definition of outcomes

8 INNOVATIVE HUMAN RESOURCES STRATEGIESAll four roles are essential parts of an

HR management system, although in many public administrations

they are dispersed across different Ministries or Departments. The challenge for HR is

to understand how

the current HR function performs against this model and identify what changes are

required to attain

a more strategic role. This shift in roles is described in Figure 4.

A private sector example of this shift is Motorola. This global telecom provider

operates in 70 countries and

faced a serious business challenge in the late 90s with the overall economic

slowdown. Their business units

operated in silos with separate HR databases, separate processes, no knowledge

sharing and duplication

of effort. They set out to create One Motorola through the progressive

transformation of their HR system.

This was achieved through the creation of an HR centre of excellence, the

introduction of e-HR with self- service


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and the creation of one single HR database. This centre was eventually outsourced to

an external provider

who works very closely with the HR section in Motorola to ensure that the needs of all

stakeholders are

understood and met. The result has been to considerably reduce the transactional

costs of HR.

This envisaged shift, reinforced by governments drive for better service and reduced

cost, means that HR

sections will need to decide how they can streamline time and effort spent on

transactional tasks and refocus

their efforts to maximise the impact of HR resources. One measure that is used in all

sectors is the ratio of

staff engaged in HR activities to the number of staff they serve. An example of this in

the UK is that recent

benchmarking (by Saratoga) suggests the ratio in central government is 1:42 and the

aim is to improve this

to 1:100+. Figure 5 shows the UK Cabinet Office vision for HR, shifting emphasis and

resources from the

roles of administration and dealing with individuals to becoming a strategic partner

and change agent.

Figure 4 Role shift for HR

From To

HR focus Business focus

Administrative Strategic

Added cost Added value

Problem containment Problem solving

Rules RiskFigure 5 The shift in the balance of HR roles

5. Implications

These models of the HR function provide a structured framework for thinking about

how a more strategic


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agreed regulations and policies.

In Finland, a framework is provided by the States Personnel and Management

Policy and this is carried out

at a decentralised local level in a way which supports local aims and needs.

Other roles that were specifically mentioned included: leading change, improving the

quality of people

management and raising people management capability. These are activities that

implement the strategies

for organisational development and illustrate the shifting roles identified by Ulrich.

Criteria for selecting HR Managers (question 1.2)

Answers to this question illustrate the different approaches that arise from the career

system and position

system of public administration. For example, contrast Luxembourgs response there

exists no specific function

of the HR director with that of Sweden a single agency sets up its criteria and

negotiates them with the

Unions before advertising.

In most administrations, however, there is currently a preference for candidates to

have proven experience

in HR management in the public administration, and/or a public administration

generalist with a professional

qualification in HR.

This preference may need to be challenged if the main role of HR managers is

changing to more strategic

organisational development. This will be a new way of working and different

knowledge and skills will

be required.Specific training and development for HR staff (question 1.3)

There is widespread use of in-house training programmes to develop HR staff. For

example, in Ireland

a foundation level certificate programme is run by the Civil Service Management and

Operations Division, with


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additional professional training from universities or colleges. Slovenia includes HR

content in their

special 14 day programme for senior civil servants.

There is, however, a significant challenge ahead for HR staff if they are to fulfil their

role of providing advice

on strategic organisational development. Although they may be excellent, in-house

programmes may not

be enough to equip HR in their role of transforming public services.

Denmark has a special development programme for personnel managers that focuses

on strengthening their

role as a strategic sparring partner for management and how the value of HR

activities can be documented.

The UK Cabinet Office has developed a framework of professional skills that will

enable staff in all areas

of the Civil Service to develop the skills and experience needed to design and deliver

21st Century services.

As part of this, HR Professional Standards have been developed under four key areas:

knowing the business

demonstrating HR expertise

acting as a change agent

building personal credibility.

Each of these areas is calibrated at three different levels of expertise from middle

management to very senior

civil servants. A self-assessment workbook has been developed that will enable

individuals to assess their own

capability gaps.

The standards can be accessed at http://psg.civilservice.gov.uk/

Use of external HR advisors/specialists (question 1.4)

The majority of external consultants are engaged for specific projects. It would be

interesting to explore


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whether the learning from these projects can be shared more widely across the

Member States.

Six respondents indicated that when advice is needed it is usually provided by

experts from within

the administration, for example on legal issues or financial questions.

3. Questionnaire section two How HR is organised

Management of HR administrative transactions (question 2.1)

This question sought to identify where the transactional functions of HR are currently

being carried out.

Respondents put a very wide interpretation on this and in many cases an element is

the shared responsibility

of many different parts of the administration thus difficult to allocate to a category.

The picture that emerges is that elements of the HR transactional system are

controlled centrally, but the

majority of Member States devolve responsibility for operational aspects of HR

transactions to the Ministries

or Agencies. These Ministries or Agencies may choose to devolve these

responsibilities further to line managers.

12 INNOVATIVE HUMAN RESOURCES STRATEGIESOne example is Germany where theframework laws and payroll administration are centrally controlled. Each

Ministry has its own personnel administration, but line managers are responsible for

the performance of their

own staff through objective setting, training and development and bonus payments.

Little transactional work is currently outsourced except provision of IT.

Responsibilities (question 2.2)

This question aimed to identify where other elements of the HR system (other thanadministrative

transactions) were being carried out. Again, the responses often indicated that

responsibilities were shared

across the administration with legislation and policy being the responsibility of one

central Ministry, but


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the implementation being devolved to all Ministries and agencies. Collective

agreements and organisational

frameworks also influence how things are carried out.

Where a responsibility is centralised it might be in the Ministry for Public

Administration or the Finance

Ministry. The majority of expert advice is obtained from other appropriate Ministries,

for example labour

code advice from the Ministry of Economic Affairs and Labour.

A useful illustration is Cyprus. The Ministry of Finance (PAPD specifically, the Public

Administration and

Personnel Department) is responsible for aligning business and HR strategy, advice,

performance management

for some categories of staff, approval of Ministry/Departmental workforce plans,

organisational design, pay

and grading systems, incentives and commissioning training. The Public Service

Commission recruits staff.

The Ministries/Departments are responsible for performance management and

submitting workforce plans.

In Finland, only expert advice is centralised although there are central frameworks

and policies. All other

responsibilities are carried out by individual organisations and Ministries.

How HR policies support improved services to the citizen (question 2.3)

All governments are keen to improve the services delivered to the public. The way in

which HR policies

will support the improved services fall into two categories:

good service from staff

excellent processes to deliver services.

In Greece, legislation has been passed that introduces a 50 day deadline to respond

to a citizens request

with the provision for compensation to be paid if this is not met.


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administration, into a human resource management more geared towards services

and competences.

It is a common criticism of HR specialists that they only talk to other HR specialists.

Do the HR staff really

know what senior managers think about the services being provided? Partnering the

business through the

provision of strategic HRM requires a strong relationship with senior managers. This

may be a fruitful area

for HR to explore further.

How staff view HR (question 2.4 part two)

Only eight Member States responded to this question and two of those responses

were not known.

This would emphasise the point raised above, that HR really needs to develop a close

relationship with

its customers to understand what their needs are and develop HR services

accordingly.

This raises an interesting question about who the customer is for HR services. In their

latest work, Ulrich and

Brockbank deal with the concept of HR value. They consider that HR professionals

add value when their work

helps someone reach their goals (assuming these are synonymous with

organisational goals). Thus HR specialists

and HR practices must produce positive outcomes for key stakeholders if they want to

add value.

Methods to find out about the needs and opinions of staff

(question 2.4 part three)

There were a large number of methods identified in answer to this question, the mostcommon being;

The Common Assessment Framework, EFQM or benchmarking, discussion and

employee participation.

This makes the lack of response to the previous two questions rather puzzling and

may be a function


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of the questionnaire design.

It does, however, raise interesting questions. If HR sections have such a wealth of

data available to them

what happens to it? How can this be used to inform the development of HR

interventions that will help

to transform the public services?

14 INNOVATIVE HUMAN RESOURCES STRATEGIES4. Questionnaire section three

Internal and external

drivers for change

Main factors driving change (question 3.1)

The majority of responses identified the following as the main factors driving change

in their administrations:

demography of populations (including both an ageing population and increased

mobility of the workforce)

political initiatives (mainly the need to improve service delivery)

changes to budgetary requirements.

HR responses (question 3.2)

The most common response can be summarised as changing the structure of the HR

system and thus the role

of HR staff. This includes becoming more strategic, dealing with transactional HR

processes and delegation

to Ministries. It also involves reducing the number of HR staff and acquiring HR staff

with different skills.

The Commission is putting a strong emphasis on results and performance by;

empowering line managers,

making better use of and giving professional skills to existing staff, planning toincrease managers strategic

role and has plans to recruit new HR staff.

There are, however, a number of Member States whose starting point when

responding to the major


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drivers has been to change or implement new legislation. The Czech Republic is

looking forward to the

implementation of the Civil Service Act in 2007. The view is that it will definitely

improve the efficiency

of the state administration (unifying HR affairs). It will reduce the administration staff

while maintaining

and fostering capable staff. It will also reorganise structures in the Ministries.

Faced with stiff competition from the private sector, Malta has taken action to

enhance the attractiveness

and image of the public service in order to recruit highly skilled and adequately

qualified staff.

Timescales for these responses vary from the end of next year to fiveten years.

5. Questionnaire section four Changes made to the HR

function over the last 18 months

It would have been interesting to take an example of changes to the HR function from

each of the Members

States as a case study. Unfortunately neither time nor the amount of detail on the

questionnaire would allow

for this. It has been possible, however, to describe an example from each of thecategories below, generally

following the structure of the questions in section four. These mini case-studies are in

Part Four. The exception

to this is diversity which has been the subject of a separate UK Presidency report.

Two responses that highlight forthcoming changes might be useful for further study.

One is the Netherlands

where plans are in place to introduce one shared transactional HR service centre for

the whole central

government administration. Another is France, where greater responsibility for HRM is

being devolved

to line managers.6. Key changes in HR function (question 4.1)


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The following table identifies the issues chosen in response to this question. It is clear

from the answers

throughout the questionnaires that there are many more initiatives that could have

been discussed. Responses

to this question often referred to a number of initiatives and they have been

categorised by what seemed

to be the main changes to HR.

Outcomes sought (question 4.2)

Two respondents who went on to complete this part of the questionnaire indicated

that all four suggested

outcomes were sought. These were greater efficiency/less cost, greater

effectiveness/less errors, faster

service to the citizen, more effective workforce planning and deployment.

Additional outcomes were also identified and are listed in Appendix One.

Were the outcomes achieved? (question 4.3)

Most respondents made the point that it is far too early to measure the success of

changes initiated

within the last 18 months.

There are, however, some indications that change is taking effect. In Cyprus, for

example, the recruitment

of new highly qualified staff is seen as influencing a change in attitude.

In another example, feedback from Poland is that the new Civil Service Code of Ethics

is very helpful.

Slovenia considers that fewer enquiries are an indication that new legislation has

been successful.

16 INNOVATIVE HUMAN RESOURCES STRATEGIES

Restructuring HR to separate out transactional

HR services from the provision of strategic HR,

or delegating to line managers

Netherlands


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Austria

Finland

UK

France

Passing legislation or changing conditions of service that will

change the nature of the public service and HR management

in the future

Ireland

Czech Republic

The Commission

Cyprus

Italy

Malta

Poland

Slovenia

Spain

Greece

Action to increase diversity in government administration

Sweden

Denmark

Initiatives to improve performance or productivity of HR staff

Hungary

Germany

Belgium

Lithuania

CommissionDifficulties and solutions (question 4.4 and 4.5)


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Difficulty Overcome by

Size and diversity of organisation Working with networks of representative teams

and also the Trade Unions

Limited budgets Prioritisation of budgets

Culture/attitudes Development of competences

New legislation

Convincing key stakeholders

Training

Staff scepticism/reticence Greater participation

More transparency

Top-down support

Trade Unions Negotiation

Poor senior management engagement Early engagement

Getting basic HR things right

Poor line management engagement Partnership working

Getting basic HR things right

Capability gaps Development of competences training

Political resistance Dialogue

Reaching consensus Subject of a review

Inconsistency in legislation Redefinition

Delays Prioritisation

Managing the quantity of work involved in the

changes

Cooperation between HR and line managers

Integration of new technology Training and developmentLessons learnt in

implementing change (question 4.6)

These can be classified as:


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There needs to be clear communication about why change is needed and what it

will entail.

Top management commitment is essential from the outset.

Involve stakeholders, consult and take into account diversity.

A good plan is needed but no one size fits all and it is important to get the simple

things right.

Use quick wins to keep momentum.

Good project management/coordination is essential.

Managers need support in implementing change.

Government priorities (question 4.7)

The responses identified a number of different priorities which are listed in AppendixOne.

The main ones identified were:

Competences/better training for managers and senior staff.

Improved recruitment, diversity and mobility.

Better service management and delivery (quality).

Evaluation system.

Improved strategic HR management and planning.

Plans to continue to respond (question 4.8)

Not all responses completed this question and those that were received cover a

variety of approaches and

illustrate the breadth of HR interventions. The link between government priorities and

HR plans is very clear

in some cases. For example, Ireland refer to a new national partnership agreement

that will address the four

government priorities previously identified.

18 INNOVATIVE HUMAN RESOURCES STRATEGIES7. Summary of key findings

Part three of this report aimed to identify themes from the questionnaires and

illustrate them. The following


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are the key themes that emerged in the answers to various questions:

All governments are looking for an improvement in the quality of services delivered

to the public,

greater efficiency and a reduction in cost.

Governments also recognise that the public service need more, or different skills, in

the future and training,

development and competences are one of the main HR interventions.

The way in which HRM is carried out across the various public administrations may

vary, but most are

aiming to make efficiency savings through the use of IT to support HR transactions.

Many administrations based on the career system are re-examining the legislative

framework governing

the status of public servants, introducing some flexibility into their people

management systems so that

they can respond to the drivers of change.

In many countries the way in which public servants are recruited is being reviewed

to include performance

competence not just academic qualifications.

The influence of thought leaders such as Dave Ulrich is very clear in the changes

either made or being

sought for HR staff to have a more strategic role.

There is recognition that the role of both senior and line managers is essential for

any HR transformation

to be successful. What is less clear is the nature of the relationship that HR specialists

have with them.

The division of responsibilities for performance management between HR and linemanagers is a key issue.

Many of the changes that are being introduced cannot be evaluated in the short-

term.

From the responses provided to the survey, there was very little direct or

coincidental evidence to suggest


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that the Lisbon Strategy has exerted a major influence on the role of HR strategies

within public administration.Part Four Illustrative case studies

Case study Austria

Austria has developed a central HR Information System (HRIS) which provides

services for 160 personnel

offices in 18 Ministries. The services include personnel services i.e.starting and

ending a career in the federal

administration, all events during the career, payroll, data transfer to social insurance

and tax authorities

and also structure of organisation and responsibilities.

This system will be administered by 4,000 people and provide services for 170,000

active staff and 80,000

pensioners. Maintenance of the IT service has been outsourced to the Federal

computer centre.

One of the main drivers for change in Austria is a move to e-Government and the

government priorities are IT,

improved efficiency and reducing headcount whilst improving quality.

The outcome sought from the introduction of HRIS is less costly public administration

with enhanced service.

These outcomes have been achieved. The same or more tasks are being carried out

at a constantly high

quality with a constantly decreasing number of employees. The full effects of HRIS

have yet to be felt

but it should lead to a reduction of at least ten per cent of HR staff with an annual

monetary benefit

of ten million Euros.

The main difficulties encountered were the fear of change, particularly by olderemployees, and the

adaptation of standard software to the needs of public administration.

To overcome these difficulties one-to-one coaching and special training was

developed to help employees


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overcome their fears and financial incentives can also be used. The HRIS software

was re-programmed

or regulations changed.

Case study Slovenia

Major structural and regulatory changes are being introduced in Slovenia as a result

of gaining membership

of the EU. These include the setting up of a new Ministry of Public Administration,

changes to the CSA

(Civil Service Act), implementation of the Freedom of Public Information Act,

introducing the Decree

on Administrative Operation and changing the Decree of Organisation and Post.

These changes focus on making the processes of government more transparent,

reduce the entitlements of

civil servants bringing conditions of service more in line with those of the private

sector, clarify civil servants

duties and standardise and simplify HRM processes. These initiatives have the full

support of the government.

The outcomes expected are a more efficient, less costly public administration with a

one per cent reduction

in employees each year. Faster service and more flexibility in HRM is also sought.

The change methods started with changes in legislation and regulations and these

were implemented through

regular meetings between HR staff and managers in the Ministries and other bodies.

Special training was

developed for new procedures.

Evaluation measures are not yet in place, but informal feedback is that Ministries and

departments are

receiving fewer questions about how to apply the regulations.

20 INNOVATIVE HUMAN RESOURCES STRATEGIESThe main problem encountered was

that the implementation of the regulations needed to be more consistent


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with better definition of processes. Problems were also caused by changes in

regulations and the issues raised

by Slovenia having different types of civil servants.

In order to overcome these difficulties the regulations had to be improved and the

procedures clarified.

The problems were solved by working together with HR colleagues in Ministries and

other bodies.

The main lesson learnt was that a systematic, attentive approach to change is

needed.

Case study UK

Whitehall HR shared services

Three Government Departments (HM Treasury, the Cabinet Office and the Office of

the Deputy Prime Minister

(ODPM)) decided in 2004 that they would seek to transform the way that HR services

had been traditionally

delivered in the three Departments. Responding to Government initiatives, they

decided to examine the

feasibility of creating one HR shared services facility to provide comprehensive

administrative and some advisory

services to all staff in the three Departments and, in accordance with the

recommendations of the Lyons report,

to locate that facility outside the South-East of England.

The principal objectives of the project are to:

modernise and improve the delivery of HR services

achieve savings in the annual running costs of the three HR functions

demonstrate the viability of cross-Department cooperation and thereby contributeto the three Departments

response to the Gershon report

provide a demonstration project from which other parts of the Government and the

wider public sector

can learn.


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The project scope encompasses the following high-level activities:

build an HR shared services facility which will provide a comprehensive HR

administration and level 1

advisory service to all staff of the three Departments. The facility will initially support

the 5,800 staff

of the three Departments, but it is intended that it will be able to support other

Government departments

and agencies in future

install a modern HR information system to underpin the work of the shared services

facility and also

the retained HR functions of the three Departments

provide self-service facilities to employees and managers of the three Departments

introduce standardised and streamlined HR processes

support the use of online tools in routine HR processes, including recruitment and

staffing, absence

reporting and training administration.

The project completed its definition stage at the end of March 2005, and is now part

way through design,

which includes the development of a procurement strategy and the definition of

detailed requirements

in the form of an invitation to tender.Case study Germany

Germany is focusing on enhancing performance related pay and career mobility.

Initially this required

a draft structure reform law but later involved Ministries in:

organisational restructuring

development schemes focusing on communication skills, management competency

and international experience

changes in recruitment strategy with a view to improving skill and demographic mix

improved methods to deal with conflict of interest.


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The outcomes sought were a more efficient, effective and faster public service. The

methods used to introduce

the changes included management rules for senior staff, project management,

focusing of knowledge

management and personnel resources, quality circles and improved feedback.

The results of the change have yet to be evaluated.

The main difficulties encountered were; the scepticism and reticence of staff, the

need to refocus and train

staff, including senior staff, financial constraints. These difficulties were overcome

through participation,

especially of unions, greater transparency, focusing resources, gaining top down

support and flexibility

in resource planning.

The main lesson learnt during the introduction of this change was to involve staff as

early as possible.

22 INNOVATIVE HUMAN RESOURCES STRATEGIESAppendix One Summary of

questionnaire responses

Section One The HR Manager

Three responses, where currently the main role of HR is to manage transactionalfunctions, noted that the aim

is to move towards strategy and advice.

Other roles included; leading change, improving the quality of people management

and raising people

management capability.

Three respondents made the point that the aim is to select the best individual for the

job and this involves

fine judgement on their ability to perform well. All of the above criteria might be used

as indicators in this

selection process.

* Many public administrations include HR as part of structured development

programmes for managers. Others offer seminars on specific


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topics, particularly those who recruit qualified HR staff.

Only two responses indicated no training was provided.

The responses to the question asking which of the staff received training? mainly

indicated HR staff

but it was clear in a number of cases that HR as a topic was included in senior

management programmes.

Q1.3 Specific training and development for HR staff

Training to gain professional qualifications 6

Structured training programme (but see note * below) 13

Training provided by a government agency 9

Training bought through the market 4

Q1.1 The main roles of HR Managers

Supply advice on strategic organisational development 19

Providing expert advice 14

Managing transactional functions 13

Q1.2 Criteria for selecting HR Managers

Proven experience in HR management in the public administration 14

Proven experience in HR management in the private sector 7

Public administration generalist for training 9

Public administration generalist with professional qualification in HR 10Six responses

indicated that when advice is needed it is usually provided by experts from within the

administration.

Section 2 How HR is organised

Respondents put a very wide interpretation on this question and in many cases anelement is the responsibility

of many different parts of the administration thus difficult to allocate to a column. The

above table reflects

the information provided in the questionnaires but should not be seen as an accurate

reflection of the way


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in which HR responsibilities are carried out.

It does, however, show that little transactional work is currently outsourced.


Q 2.1 Management of HR administrative transactions

Element Centrally Ministry/Dept

agency

Line manager Outsourced

Regulations 4

Policy 5

Conditions 1

Pay 2 2

Personnel planning 2 2

Pensions 2

Recruitment 4 5 3

Payroll/salaries 4 5 1

Records 2 5 2

Promotion 1 1

Training and

development

2 3 5 1 (some)

Sickness 2

Time management 2 1

Performance

management

1 2

Employee relations 1


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Appraisal 2

IT 1

Q 1.4 Use of external HR advisors/specialists

External consultants for specific projects 16

Fixed term appointments for specific roles within the administration 6

Advisors to own HR managers 4Respondents often indicated that responsibilities were

shared across the administration.

Collective agreements and organisational frameworks also influence how things are

carried out.

Not all questionnaired gave information on all activities.

Q 2.3 How HR Policies support improved services to the citizen

Encourage public sector ethics (& codes of conduct) 5

Recruitment of skilled good quality staff 5

Retention of skilled good quality staff 2

Rewards 2

Policy to support diversity 2

Reduce sick absence 1

Increase staff motivation 1

Employee participation 1

Staff development 7

Training in customer care 2

Professional qualifications 1

Devolved authority to enable responsiveness 4

Simpler procedures 1

Reduced bureaucracy 3

Improved management 4

Introduction of specified deadlines 1


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Improved communications 3

Citizens charters 3

Complaints and suggestions procedures 1

Satisfaction survey introduced 1

Quality approach 4

Efficiency gains 3

e-government 4

Restructuring 3

Q 2.2 Responsibilities

Activity Centralised Ministry/dept

agency

Line managers

Aligning business

& HR strategy

11 6

Expert advice 17 1

Performance

management

8 10

Workforce planning 10 10

Organisational design 6 12

Pay and grading 14 5

Recruitment 4 14 2

Reward (incentives) 7 9 1

Staff commitment 6 7 1Only nine Member States responded to this question.

Only eight Member States responded to this question.


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Q 2.4 How senior managers view HR

Quality can be improved 1

HR needs to be more strategic 3

Want direct transactional services 1

Management Information is insufficient 1

Want revised processes current ones too bureaucratic 2

Want quicker devolvement of responsibility to line managers 1

Want to be more connected with the HR agenda 1

Want more support from HR rechanging needs 1

HR should spend more time on HR activities and less on the work of leaders 1

HR should include continuous reform and assessment 1

Regulations too rigid 1

HR needs to solve problems not create obstacles 1

Q 2.4 (part 2) How staff view HR

Not quite satisfied 2

Senior staff are not competent because systems to appraise, develop,

and reward staff are poor

1

HR needs modernising 1

Leaders dont perform essential HR activities 1

Managers want direct transactional services 1

Not known 2Section Three Internal and external drivers for change

Q 2.3 (part 3) Methods to find out about the needs and opinions of staff

Surveys 4

Evaluation 2


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Discussion/feedback 6

Common Assessment framework 8

Employee participation/Trade Unions 5

EFQM/Benchmarking 6

Information sharing sessions 1

Internet chat rooms 1

Complaints 1

Specific projects 2

Diagnostic internet mirrors 1

Q 3.1 Main factors driving change

Workforce mobility due to EU enlargement 4

Political initiatives 15

Changes to budgetary requirements 12

EU employment legislation 7

Demography of populations 16

Sustainable development 3

Environmental issues 2

Corruption 6

Observation of practice in other countries 4

Need to meet international standards 5

New legislation 3

Increasing productivity 1

A new government 1The overriding political initiative is the need to improve service

delivery.

Demographic trends include both the ageing population and also mobility of the

workforce.


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Three of the references to international standards were concerned with e-

government.

Timescales for these responses vary from the end of next year to fiveten years.


Q 3.2 HR responses

Delegation to ministries 8

Recruitment of new HR staff 8

Reduction in the number of HR staff 4

Change in role of HR staff to become more strategic or deal with

transactional HR processes

13

Professionalising HR 1

New regulations 3

Restructuring for efficiency 1

Wide ranging review of the public service 3

Training 1Section four Changes made to the HR function over the last 18 months

Responses to this question often referred to a number of initiatives and they have

been categorised

on what seemed to be the main changes impacting on HR.

Q 4.2 Outcomes sought

Respondents who went on to complete this part of the questionnaire indicated that all

four suggested

outcomes were sought. These outcomes were:

greater efficiency/less cost

greater effectiveness/less errors

faster service to the citizen

more effective workforce planning and deployment.


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Additional outcomes were identified and included:

increased motivation

elimination of bureaucracy

greater flexibility

transparency

mobility

streamlining of the organisation

Q 4.1 Key changes in HR function

Restructuring HR to separate out transactional HR services

from the provision of strategic HR

Netherlands

Austria

Cyprus

Finland

UK

Enabling line managers to manage performance through devolved

power and development

France

Passing legislation that will change the nature of the public service

and HR management in the future

Ireland

Czech Republic

Italy

Malta

Poland

Slovenia


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Spain

Greece

Action to Increase diversity in government administration Sweden

Denmark

Initiatives to improve performance or productivity of HR staff Sweden

Hungary

Germany

Belgium

Finland

Improving HR through written instructions or training Lithuania

Commission

Changes to conditions of service to make the public

service more attractive

Malta meeting the challenges posed by accession to the EU

higher quality of HR services and strategic advice.

Methods included:

visits for top management to organisations recognised as having best practice

training/mentoring

project control

extensive discussions (for example with staff or Trade Unions)

legislation/regulations

quality circles/re-engineering

improved communication/feedback

developing competency frameworks

recruiting external talent.

Q 4.3 Were the outcomes achieved?


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in the changes

Cooperation between HR and line managers

Integration of new technology Training and developmentQ 4.6 The lessons learnt are:

Need for transparency.

Staff need to be informed about why the change is needed and what it entails.

Good communication is essential.

Use quick wins to keep momentum.

Get the simple things right.

No one size fits all.

Practical rather than theoretical.

Consult and take into account diversity.

Good project management/coordination is essential.

Get top management commitment from the outset.

Involve and inform stakeholders.

A good system of monitoring and evaluation is important.

Attitude change is difficult to achieve.

HR needs to be closely integrated into the strategic management of the

organisation.

Policy is made of small steps taken gradually.

Managers need support in implementing change.

Involve HR as soon as possible.

There needs to be a systematic, attentive approach to implementing change.32

INNOVATIVE HUMAN RESOURCES STRATEGIES

Q 4.7 Government priorities No of responses

Change priority 1

Review of careers in the Public Service 1

Leadership development 1


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Re-engineering 3

New management culture 4

Better service management and delivery (quality) 11

Competences/better training for managers and senior staff 2

Addressing skill gaps 2

Increased professionalism of HR 2

Improve efficiency 9

Improved recruitment, diversity and mobility 3

New remuneration system 4

Evaluation system 3

New legal framework/better regulation 2

Simplification of procedures 1

Improved job descriptions 1

Better IT 1

Better HR information systems 2

Reinforcing ethics and integrity in the public service 1

Efficient and effective use of EU structural funds 4

Improved strategic HR management and planning 1

Better change management 1

Motivating employees 1

Introducing more flexible structures 1

Pension reform 1

IT support of all HR processes with standard software 1

Deregulation/decentralisation/outsourcing 1

Improved HR services 1Q 4.8 The HR response was:

National Partnership agreement (Ireland).


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Strengthening of decentralised model by cooperation and exchange of experiences

through SAGE (Sweden).

11 initiatives (Austria).

Set up the right structures, processes and systems that will support change

(Cyprus).

Focus on job evaluation and competency framework for top civil service positions

(Estonia).

Programmes of professional training (France).

Human Governance programme to share a new culture in the public administration

(Italy).

Continuation of the federal government programme Modern state/Modern

Administration and assessment

of reform approaches (Germany).

New legislation and more financial resources (Greece).

Ongoing partnership between Civil Service Corporate Management and the HR

community (UK).

Professional Skills for Government Programme (competences) to develop both HR

and Management capability (UK).

Prioritisation and planning of projects (Belgium).

Not all respondents completed this question, but the answers above illustrate the

breadth of HR interventions

and variety of approaches.34 INNOVATIVE HUMAN RESOURCES STRATEGIES

Appendix Two References

Kearns Paul, (2003) HR Strategy: Business focused, individually centred, Butterworth

Heinemann.

Becker Brian E., Huselid Mark A., Ulrich Dave, (2001) The HR Scorecard:

Linking People, Strategy and Performance, Harvard Business School Press.

Ulrich Dave, (1997) Human Resource Champions: the next agenda for adding value

and delivering results,

Harvard Business School Press.


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HR Transformation in the civil service, Cabinet Office MPM team (2004).

Ulrich Dave, Brockbank Wayne, (2005) The HR Value Proposition, Harvard Business

School Press.

Corporate Development Group

Cabinet Office

G14 Admiralty Arch

U.S. Office of Personnel Management

Office of Merit Systems Oversight and Effectiveness

Strategic Human Resources Management:

Aligning with the Mission

September 1999This page intentionally left blank.STRATEGIC HUMAN RESOURCES

MANAGEMENT:

ALIGNING WITH THE MISSION

Contents

Executive

Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i

I.

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . 1

What is Alignment? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1

Why Align? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

The Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3

II. Strategic Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . 5

Agencywide Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5


46/105

HRM Integration in Agency Strategic Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7

Agency HRM Strategic Measures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

HR Involvement in Agency Strategic Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9

Agency Annual Performance Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11

HR Strategic Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12

III. Strategic Implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . 15

Strategic HRM Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15

HRM Measurement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18

IV. Strategic

Relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Corporate HR and Top Agency Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21

The HR Office and Line Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23

Accountability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24

V. Where Do We Go From

Here? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

26

Appendix A - Non-Federal Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . A-1

Private Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1

Non-Federal Public Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-

2


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Appendix B - HRM Alignment Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . B-1

Internet Sites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-

5This page intentionally left blank.U.S. Office of Personnel Management Page i

EXECUTIVE SUMMARY

Human resources alignment means integrating decisions about people with decisions

about the

results an organization is trying to obtain. By integrating human resources

management (HRM)

into the agency planning process, emphasizing human resources (HR) activities that

support broad

agency mission goals, and building a strong relationship between HR andmanagement, agencies

are able to ensure that the management of human resources contributes to mission

accomplishment and that managers are held accountable for their HRM decisions.

This is

especially important in light of the Government Performance and Results Acts (GPRA)

push to

align all agency activities, including HRM, toward achieving defined agency strategic

goals and

measuring progress toward those goals.

In fiscal year 1999, the U.S. Office of Personnel Management (OPM) embarked on a

special study

to determine how much progress Federal agencies have made toward aligning HRM

with agency

strategic goals in support of HRM accountability and agency mission accomplishment.

Our key

findings and conclusions are summarized as follows.

C Many more agencies than expected include HR representatives in the agency

planning process

and integrate human resources management goals, objectives, and strategies into

agency


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strategic plans. However, most agencies are still struggling in this area. Therefore,

agency

executives and HR leaders need to work together to fully integrate HRM into the

planning

process so that it will become a fundamental, contributing factor to agency planning

and

success.

C Although some agency HR offices have begun focusing on organizational activities

that assist

agency decision-making, most are still emphasizing internal HR office efficiency

efforts. While

internal issues are important to the success of any HR program, HR offices also needto

examine the big picture and find ways to impact the success of the agency as a

whole.

C Most agencies are in some way measuring the efficiency and/or effectiveness of the

HR

function. These measures, however, are generally output-oriented, focus on internal

HR

processes and activities, and are used to make improvements to HR-specific policiesand

procedures. As HR refocuses its activities to broader organizational issues, HRM

measures

also need to be expanded to gauge the impact HRM has on agency goals and mission.

Then,

the measurement data can be used to inform agency-level decisions. Executive

Summary

U.S. Office of Personnel Management Page ii

C The relationship between HR and management is becoming more collaborative. HR

executives

are beginning to earn a seat at the management table. HR offices are becoming

more


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consultative and involved in day-to-day line management activities. Nevertheless,

there is still

a long way to go if HR is to become a strategic partner at all levels. To do so, HR

needs to

build its own internal competencies to deal with organizational issues, educate itself

on agency

and program missions, and find ways to offer creative and innovative solutions to

organizationwide issues.

Although many National Performance Review (now known as the National Partnership

for

Reinventing Government) initiatives, such as downsizing, reorganizing, streamlining,

and

delegating HR authorities, were meant to improve HRs ability to focus on

organizational issues,

they have not taken hold as quickly or thoroughly as hoped. Therefore, HR is still

doing most of

the process work, and its ability to focus on alignment has been limited. However, as

HRs role in

agency planning, activities, and decision-making advances -- and it is advancing -- so

too will the

alignment of human resources management with agency mission accomplishment.

Legal Compliance

Efficient HR Processes

Effective HRM Programs

Alignment

with Strategic

Goals of the

Organization

For consistencys sake, this report uses the term agency when referring to the

broadest form of the Federal

1


50/105

organization. For instance, the Department of Agriculture, along with all its

components, is an agency. When

addressing specific components within an agency, the report will refer to them as

sub-components.

U.S. Office of Personnel Management Page 1

I. INTRODUCTION

Hierarchy of Accountability

A company is known by the people it keeps.

- Unknown

What is Alignment?

Strategic human resources management...strategic alignment...alignment withmission accomplishment. These are just a few of the terms being used to describe

the new, evolving role of

Federal human resources management (HRM). What do these terms really mean? If

you were to

ask agency personnelists, managers, or employees, you would probably get a wide

range of

answers. So, its important to establish from the beginning what we are really talking

about.

Human resources management alignment means to integrate decisions about people

with

decisions about the results an organization is trying to obtain. Our research indicates

that

agencies that successfully align human resources management with agency mission

accomplishment do so by integrating HRM into the agency planning process,

emphasizing HR

activities that support mission goals, and building strong HR/management

relationships.

1

In addition to being a vital contributor to

agency mission accomplishment, HRM


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alignment is the ultimate level of HRM

accountability, as demonstrated in the

Hierarchy of Accountability. While HRM

accountability must begin with basic legal

compliance, it ultimately encompasses all four

levels of the pyramid, including demonstrating

how HRM supports achievement of the

agency strategic goals.

Why Align?

Why the sudden emphasis on aligning HRM activities with agency missionaccomplishment?

Basically, it comes down to demonstrating the value of human resources

management to theIntroduction

Now known as the National Partnership for Reinventing Government.

2

U.S. General Accounting Office. Major Management Challenges and Program Risks: A

Governmentwide

3

Perspective.


agency. In the past, one of HRs primary roles has been to ensure compliance with

laws, rules,

and regulations. Although this is still, and will always be, a necessary function, many

recent

developments have led to a strong emphasis on results.

The National Performance Review (NPR) took on the task of reinventing government

to make it

2


52/105

work better, cost less, and get results. NPR mandated many initiatives that changed

the focus of

HR from just compliance toward results, including downsizing the HR function,

delegating HR

authorities to line managers, calling for HR to demonstrate its business value, and

enhancing

customer service. Through these initiatives, management of human resources would

become

more responsive to mission-related needs because it would take place at the line

level, and the HR

staff would be able to expend more of its energy on broader organizational issues.

The Government Performance and Results Act (GPRA) of 1993 has also played a largepart in

focusing agencies on results. The purpose of GPRA is to improve Federal program

effectiveness, accountability, service delivery, decision-making, and internal

management, thereby

improving confidence in the Federal Government. This is achieved by demonstrating

organizational results through strategic planning and performance measures.

Although the primary focus

of GPRA is on programmatic functions, agencies are also required to describe how

administrative resources, such as HR, are being used to achieve strategic goals.

Further, the General

Accounting Office (GAO) and the Office of Management and Budget (OMB) have

evaluated

many of these efforts, and are calling for agencies to improve their discussions of

HRM alignment

in strategic and annual plans. Therefore, the human resources function is

increasingly being

aligned to the agency strategic plan, which requires HR to show how it is supporting

mission

accomplishment.

Alignment has already occurred in other key administrative functions. When

Congress devel-oped


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a statutory framework to introduce performance-based management into the Federal

Government,

it initiated financial, information technology, and procurement reforms through such

mandates as

the Chief Financial Officer Act and Information Technology Management Reform Act.

Human

resources management is the administrative missing link to this comprehensive

package.

3

The private sector has recognized that it is not just financial and technological capital

that provide

companies with the competitive edge, but people, or human capital. Withoutattracting and

retaining the right people, in the right jobs, with the right skills and training, an

organization

cannot succeed. Therefore, people have been recognized as companies most

important asset. As

the Federal Government moves toward a performance-based management approach,

we, too,

need to realize the importance of our human resources. A huge percentage ofagencies budgetsIntroduction


is spent on human resources -- salaries, benefits, training, work life programs, etc.

Nowhere else

do you make that substantial an investment and not measure the return.

Not only do human resources provide the competitive edge, but several recent

studies have

confirmed that the quality and innovation of HR practices impact business results.

These studies

were able to draw a correlation between increased quality of HR practices and

increased business


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success. Among other benefits, HR alignment with mission accomplishment increases

HRs

ability to anticipate its customers needs, increases the agencys ability to implement

strategic

business goals, and provides decision-makers with critical resource allocation

information.

Finally, HR alignment is a vital process to advance agency accountability. By

defining, maintaining, and assessing HRM goals and measures, communicating them

throughout the agency, and

using the information to make management decisions, agencies are able to ensure

that the

management of human resources contributes to mission accomplishment and that

managers are

held accountable for their HRM decisions in support of mission accomplishment.

The Study

Once we defined what alignment means and why it is important, we wanted to find

out where

agencies currently stand in terms of aligning their human resources management

with agency

mission accomplishment. Therefore, the Office of Personnel Management (OPM)embarked on a

special study designed to explore the following objectives:

< Assess how well human resources management is linked to agency mission

accomplishment;

< Explore the role played by the HR staff in agency strategic planning;

< Determine how the HR service providers work with line managers to carry out

agency

strategic goals; and

< Identify best practices aligning HRM with the agency strategic plan and goals.

In order to obtain information pertaining to these objectives, we did the following:

< Reviewed 31 agency strategic and 28 annual performance plans;


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< Conducted an extensive literature and Internet search;

< Gathered information from agency HR professionals, supervisors, and employees at

17

agencies of various size through the fiscal year 1998 and 1999 OPM Oversight

reviews;Introduction


and

< Interviewed nine additional leading agency HR Directors.GPRA Strategic Planning

Process - Simplified

Performance

Reports

Status report on

achievement of agency

goals

Annual

Performance Plan

Operational level

strategies, measures,

and timeframes to support

strategic goals

Strategic Plan

High level agency goals,

strategies, and needed

resources

resources


II. STRATEGIC PLANNING


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You got to be careful if you don't know where you're going, because you might not

get there.

- Yogi Berra

Agencywide Planning

To some agencies, strategic planning is a way of life. To others, its an exercise. To

almost all,

its a requirement. As part of GPRA, agencies, unless specifically exempted, follow a

continuous,

three step strategic planning process:

Strategic planning allows agencies to map out where they are, where they want to go,

and how

they plan to get there. Some agencies adopted the idea of strategic planning even

before GPRA

was enacted, whereas others are just beginning to understand its potential benefits.

The results of

the fiscal year 1999 Merit System Principles Questionnaire (MSPQ), an OPM

Governmentwide

survey of supervisors and employees, show that agencies are beginning to embracenot only the

concept, but also the practice, of strategic planning.Agency Head

Sets strategic

direction within

defined mission

Planning Office

Coordinates tracking

of agency goals and

measures

Top Management


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Develops top level

goals, strategies,

measures

Line

Develops programmatic

implementation plans

Employees and

Stakeholders

Provide input

Typical Agency Planning Process

Strategic Planning


MSPQ Results

C 62% agree that their agency has a process for developing strategic, long-range

plans

and updating them periodically.

C 65% agree that operational goals and objectives are set to help the agency meet

strategic, long-range plans.

C 54% agree that progress toward goals is measured.

C 61% agree that information is collected for assessing performance.

The strategic planning process varies from agency to agency. On one end of the

spectrum are the

agencies which have very collaborative processes involving senior management, line

supervisors

and employees, and stakeholders throughout the entire process. On the other end

are the agencies which develop plans at the top management level with little input

from the line or stakeholders or that plan functionally, having each program office

submit its own goals and strategies


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with little to no collaboration among offices. The typical strategic planning process is

a mixture

of these:

HRM Integration in Agency Strategic Plans Strategic Planning


The management of agency human resources is an integral part of how an agency is

going to

achieve its mission goals. Without people, there is no one to do the work. Therefore,

integrating

HRM into the agency strategic plan is the first step in aligning it with the mission.

Even though GAO and OMB are pushing for improvement of HRM alignment

discussions in

strategic and annual plans, GPRAs primary focus is still on agency programs, rather

than

corporate functions. Therefore, we assumed at the beginning of this study that not

many agency

strategic plans would have addressed HRMs role in mission accomplishment. We

were

pleasantly surprised. Out of the 31 strategic plans reviewed, 87 percent hadaddressed HRM in

some way. Below is a breakdown of how integration between HRM and the agency

plan is

achieved, a count of how many strategic plans have integrated HRM in a particular

way, and

some examples of actual agency approaches.

How used: # of plans: Examples:

Mission Goals 8

(Listed side-by-side

with program goals)

Social Security Administrations Mission Goal: To be an employer


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that values and invests in each employee.

Air Forces Mission Goal: Ensure a high quality force of dedicated

professionals and provide an enhanced quality of life and strong sense of

community.

Support Goals 8

(Listed in a separate

section from the mission

goals but described as

critical to the mission)

Transportations Corporate Management Strategy that supports

mission goals: Foster a diverse and highly skilled workforce capable of

meeting or exceeding our strategic goals with efficiency, innova-tion,

and a constant focus on better serving our customers now and into the

21st Century.

Objectives and 22

Strategies

(Action items that

support mission and/or

support goals)

Treasurys objective in support of its mission goal to improve

management operations: Improve capacity to recruit, develop, and

retain high caliber employees. This is followed by a list of strategies

aimed at achieving the objective.

Energys HR strategy that supports the mission objective to ensure the

vitality of DOEs national security enterprise: Ensure that sufficient

personnel are available to meet long-term national security


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requirements.

Critical Success Factors 12

(e.g., needed resources,

improvements, etc)

Health and Human Services highlights Quality of Worklife as a crosscutting

management responsibility that can enhance the performance

and accountability of its programs.

Values 9 NASA lists its workforce, or People, as its greatest strength.

The table can be somewhat misleading, however. Although some agencies are

clearly ahead of

the pack, integration of HRM in agency plans is still evolving. When looking at theactual

placement of strategic plan HRM discussions, they are generally segregated from the

program-Strategic Planning


matic goals, objectives, and strategies. Considering that an agencys mission cannot

be achieved

without its people, this is an important point. Could this be an indication that human

resources

management is not yet recognized as a critical contributor to agency mission

accomplishment? In

any case, it is clear that though there are some exceptions -- as evidenced by some

of the

examples above -- full HRM integration into agency strategic plans has not yet been

realized.

The human resources issues addressed in agency plans provide insight into whataspects of human

resources management are most important to agency management. In reviewing the

plans, or

even just by looking at the examples above, it is clear that diversity, recruitment,

retention,


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employee development, and workforce quality are the major areas of interest.

Although these

could be looked at as process or output programs, when they are designed and

implemented well,

they lead to the ultimate result: the right people, with the right skills, in the right

positions to

carry out the agency mission.

Agency HRM Strategic Measures

Defining practical, meaningful measures that assess the effectiveness of agency

human resources

management and its support of mission accomplishment is a topic that agencies have

been

struggling with. It is easy to measure a process -- how long does it take to complete

an action? It

is easy to measure productivity -- how many actions were completed in any given

time frame?

But how do you measure the outcome of human resources management? How does

an agency

know if it has the right people, with the right skills, in the right positions to carry out

the agency

mission? Have any agencies found a way to do this? To help answer these questions,

we looked

to see if agencies are including HRM measures in their strategic plans, and what

types of

measures they have identified.

Not surprisingly, 71 percent of the plans did not identify any HRM measures.

Moreover, the

meaningfulness and practicality of the 29 percent of agency identified measures

could be stronger.

About one-third of the 29 percent contain measures that are not really measures.

They are lists of


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activities or projects that, when completed, will help to reach the goal. In other

words, they are

strategies labeled as measures. The other two-thirds of that 29 percent have fairly

good measures

that are tied to specific mission or support goals and provide seemingly relevant

information.

However, even these fairly good measures tend to focus on HR processes (outputs)

rather than

intended outcomes. For example, some agencies measure the average number of

employee

training hours to measure workforce skill levels, rather than what skills are actually

gained

through the training or what skills the workforce actually possesses. See the

following chart for

some examples of the better HRM measures we saw in agency strategic plans.

Agency Goal Measures

Air Force Recruit and retain the force to execute Air C Percentage of recruits

categorized as high

Force core competencies. quality

C Air Force enlisted reenlistment rateStrategic Planning


Education The Departments employees are highly C By 2000, 75% of Department

managers will

skilled and high-performing. agree that staff knowledge and skills are

adequate to carry out the mission

C By 2000, 75% of employees will demonstrate

the basic computer competencies identified in

the Departments computer competency

standards

Energy Ensure that all DOE employees are C Meet annual DOE technical Qualification


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appropriately trained and technically Program goals

competent commensurate with their C Meet or exceed competency requirements for

environment, safety, and health employees that perform physically hazardous

responsibilities. work

HR Involvement in Agency Strategic Planning

Now that we have seen what types of goals, objectives, strategies, measures, and

other forms of

HRM integration are present in agency strategic plans, we should look briefly at how

these were

developed. The legitimacy and ultimate value of these pieces of the plan will depend

substantially on where they came from.

Historically, me

Hr Strategy 12

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