Efficient and cost effective HR HR Operating Models, Integrated Lean Six Sigma and HR Technology

Joanna Harrop

Joanna Harrop M.B.A., M.A. Cass Business School, City University of London, United Arab Emirates

The University of Manchester, United Kingdom The George Washington Business School, United States

Joanna Harrop is a Human Resources expert with 16 years of managerial experience gained in global NASDAQ 100 and FTSE 100 corporations based in England and in the United Arab Emirates.

Joanna worked in all areas of HR and developed a particular interest and expertise in organisational change and development supported by an effective and cost efficient HR performance. Her HR recommendations were cited in professional CIPD publications and the Middle East Journal of

Business. She can be contacted on harrop.joanna@gmail.com.

Objective

This presentation will provide a brief guidance on key aspects determining the effectiveness and cost efficiency of HR in organizations.

It will highlight the role of the correctly implemented and aligned with the rest of the business HR operating model, the importance of an effective work methodology (Integrated Lean Six Sigma) and the importance of deployment of HR technology.

It will provide an ample proposition of tools, metrics and monitoring systems, which when used enhance effectiveness and cost efficiency of HR.

Human capital has been recognized as an organization’s greatest asset and the main source of competitive advantage.

Thus, companies focus on EFFECTIVE and COST EFFICIENT HUMAN RESOURCES in order to reduce internal costs and enhance business profits.

Deployment of HR technology enables effective and cost efficient HR services.

HR OPERATING MODEL

Effective and cost efficient HR Operating Model:

• Creates common framework for HR processes

• Is adjusted to the specific needs of the organization

• Maintains standard controls and compliance

• Allows for a greater degree of outsourcing and offshoring (if needed)

HRT

D. Ulrich model should be aligned with what organizational needs, examples:

A large number of HRBP, global HRSS combined with HR help desk but no

CoE because HRBP are required to be able to solve all HR issues.

HRBP for all main departments with a specific operational expertise, CoE and HR help desk with a shared payroll. No

HRSS.

HRBP, global HR help desk and HRSS and 3 tier CoE: global, regional and local levels)

HRBP, regional administrative service centres and HR help desk together but

with payroll executed locally. No CoE, as Leadership Team with HRBP and Strategy

Unit make all decisions.

HRSS for global operations combined with CoE, HRBP and local payroll.

HRBP with Talent Development Specialists placed in individual busines units. HR

Strategy Consultancy Unit and global HRSS.

Watch out!

Three key limitations that prevent the model from fully supporting the HR efficiency and cost effectiveness:

(1) Limited HR Shared Services communication with the rest of the business

(2) Incorrect use of metrics and measurements within the organization

(3) Lack of participation of line management (non HR roles)

Limited HR Shared Services communication with the rest of the business

Watch out!

Most frequent problem areas:

- HRBP overburdened with transactional workload.

- HRBP general understanding of business operations and strategy (training needs assessment).

- Lack of use of technology for regular meetings/updates directly with the entire business.

Incorrect use of metrics and monitoring within the organization

The use of metrics and measurements within the organization:

• Correct implementation of a clearly-defined people strategy.

• A strategic alignment matrix.

• Identification of core competencies.

• Human capital metrics.

• Balanced Scorecards (Norton and Caplan) and Key Performance Indicators.

Correct implementation of a clearly-defined people strategy

The HR People Strategy

↕

Organizational Effectiveness

▪ Is the HR strategy aligned with organizational goals?

▪ Are we building future workforce capability?

↕

Employee Engagement

▪ What is the opinion of internal clients about the HR service?

▪ Are the employees able to contribute an extra competitive advantage?

↕

HR Programs Effectiveness

▪ Are the HR programmes delivering planned results?

▪ Do various departments collaborate on the HR programmes?

↕

HR Function Effectiveness

▪ Is the HR function cost-effective?

▪ What are the future investments into Human Capital development?

A strategic alignment matrix will guide the correct measuring of identified individual core organizational competencies against the organization’s performance level and allow specific action plans to be established.

Organization’ Core

Competency

Strategic Importance

(1 = not important, 5

= very important)

Organization’s

Performance Level (1 =

very poor, 5 = very

good)

Priority

(Low,

Mediu

m or

High) Action Plan

e.g.

Client experience 5 4 High Performance

Incentives.

Attrition/Turnover of

Staff 5 3 High

1. Employee

engagement

questionnaire. 2.

Revise: Recruitment,

induction processes.

3 Phases of

performance

management. 4.

Opportunities for

development

etc.

The core competencies should be identified and scored cross-functionally by management in all organizational departments. The scores need to be placed in the strategic alignment matrix, which clearly highlights areas for urgent action.

HCM Drivers Leadership Practices

Employee

Engagement Knowledge Accessibility Workforce Optimization Learning Capacity

HCM Practices

Communication.

Management’s

communication is open and

effective.

Job design. Work is

well organized and

taps employees’ skills.

Availability. Job-related

information and training

are readily available.

Processes. Work processes

are well defined, and training

is effective.

Innovation. New ideas are

welcome.

Inclusiveness. Management

collaborates with employees

and invites input.

Commitment. Jobs are

secure, employees are

recognized, and

advancement is

possible.

Collaboration. Teamwork

is encouraged and

enabled.

Conditions. Working

conditions support high

performance.

Training. Training is practical

and supports organizational

goals.

Supervisory skills. Managers

eliminate barriers, provide

feedback, and inspire

confidence.

Time. Workload allows

employees to do jobs

well and enables good

work/life balance.

Information sharing. Best

practices are shared and

improved.

Accountability. High

performance is expected and

rewarded.

Development. Employees

have formal career

development plans.

Executive skills. Senior

executives eliminate

barriers, provide feedback,

and inspire confidence.

Systems. Employee

engagement is

continually evaluated.

Systems. Collection

systems make information

easily available.

Hiring. New employees are

chosen on the basis of skill;

new hires complete a

thorough orientation.

Value and support. Leaders

demonstrate that learning is

valued.

Systems. Leadership

development and transition

systems are effective.

Systems. Employee

performance management

systems are effective.

Systems. A learning

management system

automates aspects of

training.

Human Capital Management matrix (Bassi, I., and McMurrer, D.)

Lack of participation of line management (non HR roles)

Lack of participation of line management (non HR roles):

• Better training on HR (soft skills, HR processes and HR technology)

• Improve ways to communicate with HRBP / HRSS

• Identification of possible other issues affecting engagement

Examples of tools to help in Identification of issues affecting engagement:

• Hackman and Oldham’s Motivating Potential Score (MPS) tool

• Surveys, 1:2:1 and Gemba Walk

• McGregor, L. and Doshi, N. tool

Source: hbr.org ׀ November 2015 Primed to Perform in McGregor, L. and Doshi, N. “How Company Culture Shapes Employee Motivation”.

INTEGRATED LEAN SIX SIGMA

Integrated Lean Six Sigma is a methodology based on two main concepts:

• Zero Waste

• 100 % Engagement

Both of the concepts support the HR department in achieving and sustaining effective and cost efficient HR.

Zero Waste

There are three criteria for determining what adds value, adopted to the HR zero waste perspective:

• Employee must be willing to wait/pay for the activity.

• The activity must be done right first time.

• The activity must effectively change the HR process, product or service.

Ways to reduce waste and make HR processes effective and cost efficient:

• Detailed process maps (assists with deselecting waste steps).

• Value stream maps (assist with change).

• Systematic performance monitoring and management.

Detailed process maps assist with:

• Deselecting waste steps

• Transparency of the cross functional cooperation of the HR functions

• Setting correct measurements / monitoring e.g. SLA (based on time required for each step)

Receive HR request

Review HR request

Update HR system

Receive external information

Update HR system

Raise requisition to Recruitment

Update HR system

Update HR system

Request calculations from Payroll. Prepare document

Detailed process maps help to clarify the process for everyone involved.

Usually there are at least 3 version of the same process:

(Source: The Rise Global, Process Maps)

There is a Technology available that can assist in creation of the process maps !

Value stream maps: can be used for HR service delivery waste reduction during transition/change periods:

• Create a current state map showing how the HR services serve employees today.

• Create a future-state map showing the reduction of waste and the effects of the changes.

• Develop and implement a plan to reach the future state.

• Prepare new process maps.

Systematic performance Zero Waste monitoring among others provide:

• Dash Boards comparing: daily, weekly, monthly, quarterly etc. results e.g.. SLA, KPIs.

• Metrics monitoring fluctuation of work volumes.

• Metrics monitoring absenteeism.

Aims to provides REASONS for the above and detect and forecast TRENDS

100 % Engagement

Ways to achieve HR and operational excellence through 100% People Engagements (in Integrated Lean Six Sigma):

1. Basic IL6SG Training

2. Daily Management System

3. Hoshin Planning

4. Gemba Walks

5. Kaizen Ideas Programme

Basic Integrated Lean Six Sigma training to all employees assists in implementation of continuous improvement culture, which improves effectiveness and cost savings.

Sets the transparency of what is expected and the CI mindset.

Daily Management System are routine 10 minute long morning meetings:

• Review of KPIs status from the previous day

• Propositions for improvements to exceed KPIs

• Requests and comments from the HR administrative/operations team

• Identifies issues that require root cause analysis

Aim is to:

• Engage and empower the workforce in proposing improvements

• Focused and result oriented culture

Hoshin Planning deployment allows for management of objectives. It is a 7-step process used to succeed in 3-5 year plans. It eliminates the waste that comes from inconsistent direction and poor communication.

Gemba Walks allows the manager to observe the real job on the shop floor level in order to look for waste , opportunities to improve processes and engage with the employees.

Kaizen Ideas Programme offers rewards and recognition for system improvements.

Reinforces the culture of continuous improvement where all employees are actively engaged in improving the department / company’s operations.

TECHNOLOGY

The HR Operating System and Integrated Lean Six Sigma depend on deployment of HR Technology for efficiency and cost savings:

• HR Data Management

• HR Requests / Enquiries

• Cloud technology:

- talent and development programmes

- e-HR technologies, intranet, apps and etc.

- communications, meetings/updates with the entire business.