REENGINEERING HR FUAD W. AWAD HUMAN RESOURCE INSTITUTE LEBANESE AMERICAN UNIVERSITY.

REENGINEERING HRREENGINEERING HR

FUAD W. AWAD

HUMAN RESOURCE INSTITUTE

LEBANESE AMERICAN UNIVERSITY

Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

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QUESTIONSQUESTIONS

Why HR is so important? How can an organization move from a

traditional personnel management to strategic HRM?

What should be the deliverables of HRM? What are HRM future challenges? How to increase employee results ?


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WHY MANAGING HR IS SO IMPORTANT?WHY MANAGING HR IS SO IMPORTANT?

Rapid change High levels of uncertainty Technological change Rising costs Attracting and retaining human capital Globalization


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TRADITIONAL PERSONNEL MANAGEMENTTRADITIONAL PERSONNEL MANAGEMENT

HR planning Recruiting staff Job analysis Performance review Wage + benefits

administration

Employee training Record Keeping Legislative

compliance Labor relations


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TRADITIONAL PERSONNEL MANAGEMENTTRADITIONAL PERSONNEL MANAGEMENT

The traditional personnel department is often both physically and psychologically separated from the “real work” of the organization.

Traditional personnel management involves a limited number of functional tasks, with personnel activities and staff being relatively isolated from the ‘profit-making heart’ of the organization.


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STRATEGIC HRM - DEFINITIONSTRATEGIC HRM - DEFINITION

SHRM plays a central role in helping organizations reach their strategic objectives.

SHRM interacts fully with other functional areas within the organization.

SHRM helps managers maximize the contribution of employees in achieving competitive advantage.

SHRM is all about promoting efficiency and profitability.


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THE CHANGING NATURE OF HRM: A MODEL FOR MULTIPLE ROLESTHE CHANGING NATURE OF HRM: A MODEL FOR MULTIPLE ROLES

HR professionals must create value and deliver results

Four key roles that HR professionals must fulfill:– Management of strategic HR– Management of transformation and change– Management of firm infrastructure– Management of employee contribution


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HR Roles in Building a Competitive Organization

HR Roles in Building a Competitive Organization

Future/Strategic Focus

Day to day/Operational Focus

Processes People

Management of Strategic HumanResources

Management of Strategic HumanResources

Management ofFirm Infrastructure

Management ofFirm Infrastructure

Management of Transformationand Change

Management of Transformationand Change

Management of EmployeeContribution

Management of EmployeeContribution


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Role Deliverable Metaphor Activity

Managementof strategic HR

ExecutingStrategy

StrategicPartner

Aligning HR andbusinessstrategy:Organizationaldiagnosis

Managementof firminfrastructure

Building anefficientinfrastructure

Admin.Expert

Reengineeringorganizationprocesses:Shared services

Managementof employeecontribution

Increasingemployeecommitmentand capability

EmployeeChampion

Listening andresponding toemployees:Providingresources toemployees

Mgt. oftransformationand change

Creating arenewedorganization

Changeagent

Managingtransformationand change:Ensuringcapacity forchange


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BUSINESS PARTNERS PLAY MULTIPLE ROLESBUSINESS PARTNERS PLAY MULTIPLE ROLES

Today HR professionals want to be labeled business partners.

Narrowly defined this means working with GMs to implement strategy, that is working as a strategic partner.

In fact a more dynamic equation should replace the simple concept of business partner:

Bus. Partner = St.Part + Ad.Ex. + Emp.Ch + Ch. Ag..


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FUTURE CHALLENGESFUTURE CHALLENGES

SIX challenges for the future will propel the HR

community forward: HR Theory HR Tools HR Capabilities HR Value Proposition HR Governance HR Competencies


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FUTURE CHALLENGES - HR THEORYFUTURE CHALLENGES - HR THEORY

To make HR practices more than isolated acts, managers and HR professionals must master the theory behind HR:

Resource dependence (political science): HR practices help the firm acquire a stable supply of scarce resources that helps the firm to compete.

Transaction cost (institutional economics):HR practices reduce costs associated with accomplishing work.


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FUTURE CHALLENGES - HR THEORYFUTURE CHALLENGES - HR THEORY

Contingency theory (business strategy):HR practices align with business strategy to provide a fit that leads to results.

Institutional theory (sociology):HR practices transfer knowledge and ideas from firm to firm making the best practices of an industry routine.

Cognitive psychology (psychology):HR practices help create a shared mindset or culture within the firm.


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FUTURE CHALLENGES - HR TOOLSFUTURE CHALLENGES - HR TOOLS

Leadership depth: HR professionals must establish systems that create or discover future leaders. In the future, HR professionals may be judged by the extent to which they develop future leaders.

Knowledge transfer: Creating systems that transfer knowledge throughout the organization will surely become a critical item in the HR toolkit HR professionals are already called ‘Chief Learning Officers’.


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A DIGRESSION - THE LEADER OF THE FUTUREA DIGRESSION - THE LEADER OF THE FUTURE

Leadership will reside less at the top; it will, rather, be shared throughout the organization.

Charismatic leaders will be less important than the processes the leaders create.

Individual leadership will be replaced by team leadership.

The new leader will be more likely to ask questions than give answers.

Interest in questions and learning will replace focus on solutions and answers

Global thinking will replace domestic focus.


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FUTURE CHALLENGES - HR TOOLSFUTURE CHALLENGES - HR TOOLS

Culture Change: HR professionals must learn to build a case for culture change, must expose gaps between current and desired culture, prepare and implement culture action-plans, coordinate culture-change efforts, and measure results.

Customer-focused HR: HR practices will need to focus both on employees and on external customers. The latter group will be involved in staffing decisions, employee evaluations, training sessions etc.


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FUTURE CHALLENGES - HR CAPABILITIESFUTURE CHALLENGES - HR CAPABILITIES

Effectiveness of the HR functions was measured in terms of accuracy, and administrative efficiency.

Today, new capabilities must be added:– Speed: how quickly can HR work be done without sacrificing

quality?– Implementation: How well can new ideas be turned into

actions with visible results?– Innovation: How able is the HR community to think

creatively about solving old problems and finding solutions to problems not encountered before?

– Integration: How well does HR integrate with strategic plans, customer goals, and employee needs?


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FUTURE CHALLENGES: HR VALUE PROPOSTIONFUTURE CHALLENGES: HR VALUE PROPOSTION

Every HR professional should be able to pass this one question exam: How does your work add value to your business in economic terms?

Employees: How does HR affect

commitment, competence?

HR practices Customers: How does HR affect retention,

satisfaction,

Investors: How does HR affect profitability,

growth, cost, cash flow?


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FUTURE CHALLENGES: HR GOVERNANCE - How work is coordinated.

FUTURE CHALLENGES: HR GOVERNANCE - How work is coordinated.

New organizational forms are emerging:

away from pyramids toward networks

new thinking about management processes

careers may become more horizontal than vertical

compensation systems may be tied less to position than to competence

cultures will cut across internal boundaries

Learning to join together and produce as teams may become as critical to career success as having clear areas of power or control once was.


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FUTURE CHALLENGES - HR COMPETENCIESFUTURE CHALLENGES - HR COMPETENCIES

HR competence is conceptualized using a three

domain framework:

Knowledge of BusinessKnowledge of HR PracticesManagement of Change Processes


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FUTURE CHALLENGES - Knowledge of BusinessFUTURE CHALLENGES - Knowledge of Business

It explains 18% of the performance of HR professionals.

It refers to the ability of understanding business functions not doing them.

It encompasses:– Financial capability– Strategic capability– Technological capability


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FUTURE CHALLENGES - Delivery of HR PracticesFUTURE CHALLENGES - Delivery of HR Practices

It explains 23% of the overall performance of HR professionals.

It refers to the ability of the HR professional delivering sate-of-the-art, innovative HR practices credibility and respect for HR professionals

It encompasses:– Staffing - Development– Appraisal - Rewards– Communication - Organizational Planning


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FUTURE CHALLENGES - Management of ChangeFUTURE CHALLENGES - Management of Change

It explains 41% of the overall performance of HR professionals.

It refers to the creation of an overall organizational capacity for change.

It encompasses:– Diagnosing problems– Build relationships with clients– Articulate visions– Set leadership agendas– Solve problems– Implement goals


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FUTURE CHALLENGES - CredibilityFUTURE CHALLENGES - Credibility

HR professionals must be credible. The behaviors

that enhance credibility are:

1- Accuracy: Being accurate in all HR work

2- Consistency: Being predictable

3- Meeting commitments:Doing what you say you will do on time and within budget.

4- Chemistry: Being personally comfortable with peers, subordinates, and supervisors.


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FUTURE CHALLENGES - CredibilityFUTURE CHALLENGES - Credibility

Confronting appropriately: being able to disagree and challenge at the appropriate time, in the appropriate setting, and in the appropriate manner.

Integrity: behaving ethically. Thinking outside the box: offering alternative

perspectives, having a point of view willing to express it.

Confidentiality. Understanding all HR actions in light of the

needs of the business.


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Leaders MatterLeaders Matter

The HRI, Eckerd College, Fla. “Major Issues Impacting People Management” (1997): found leadership to be the #1 issue for effective people management.

Mckinsey consulting firm, “War for Talents” (1998), found that firms with leadership depth were much more profitable that those without it.


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What is Effective Leadership?What is Effective Leadership?

Effective Leadership = Attributes Results

Terms of the equation are not cumulative, they multiply each other.

Some have predisposition for one side:

– Focus on ‘results’ leaders do whatever it takes to accomplish short term objectives leaders care more about what they accomplish than about how it is accomplished lack the risk of sustainable results.


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What is Effective Leadership?What is Effective Leadership?

– Focus on ‘attributes’ not paying enough attention to results development of leadership through attributes. However without appropriate attributes leaders cannot be effective over time.

Attributes and Results matter; theyare the DNA of leadership.Togetherthey create a road map forimproving leaders


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Balanced OutcomesBalanced Outcomes

A Model of Balanced Outcomes

Process - Centric

People - Centric

InternalFocus

External Focus

OrganizationResults

Investor Results

EmployeeResults

Customer Results


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Balanced OutcomesBalanced Outcomes

Balanced does not mean equal. Balance requires constant juggling, the goal

being not let any of the four results areas fall from neglect.

A consulting firm may focus on customers first, employees second, and investors third.

A supermarket favors employees first, customers second and investors third, linear correlation leading from employee satisfaction to customer satisfaction to investor results.


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Employee Results: Investing in Human Capital


How can leaders get more out of their employees?

As business becomes increasingly knowledge and service driven, employee results will continue to become more, not less, important.

How can leaders build Human Capital?


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H C = Employee Employee

capability X Commitment


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Human Capital - Principles and CautionsHuman Capital - Principles and Cautions

Human Capital is underutilized Human Capital is one of the few assets

that can appreciate Human Capital is portable Human Capital requires a different way of

thinking about careers Human Capital within a firm correlates

with customer perception of the firm


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Human Capital - Principles and CautionsHuman Capital - Principles and Cautions

Human Capital draws everything else together investments in physical plant, technology, new products, distribution systems, and marketing collectively function thanks to an organization’s Human Capital Human Capital is the business of the day.


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What is Employee Capability?What is Employee Capability?

Employee capability = Knowledge, skill, ability and motives of each individual employee in his/her position.

Two levels of capability:– Technical know how skill needed to get

the work done.– Social know how how employees work

together interpersonal skills and sensitivity to how workers work together.


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What is Employee Capability?What is Employee Capability?

A leader’s job is to clarify:– what employees need to know and do,– then figure out how to make sure

employees do what is needed.


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What is Employee Commitment?What is Employee Commitment?

Commitment represents how people in an organization will behave rather than how they could behave (their capability)

Competitive demands - be more global, more customer responsive, more flexible,more learning oriented, more team driven, more productive - require more committed employees who give their emotional, human, and physical energy to firm success.


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What is Employee Commitment?What is Employee Commitment?

The only way firms can recapture commitment is by treating workers in ways that respect their individuality i.e avoid “one-size-fits-all” management practices. They create apathy.

To create commitment, a complementary management style, “mass-customizing the employee deal” must be fostered.


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How to Measure Employee CommitmentHow to Measure Employee Commitment

Three “large gauges” help leaders measure employee commitment:– work force productivity– organizational structure– employee retention.

Productivity = output per unit of input. Firm revenues/direct employee costs

(salaries&benefits)


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How to Measure Employee CommitmentHow to Measure Employee Commitment

Profits/employee costs Total $ spent for sales force

compensation/total revenues. $ Volume of units produced /$ costs

of manufacturing employees. Cost per hire.


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How to measure Employee Commitment: Organizational ClimateHow to measure Employee Commitment: Organizational Climate

Organizational Climate = Culture Organizational culture includes :

– Perceived quality of management & supervision

– Fairness of compensation and benefits– Employees’ relationships with coworkers– Quality of communication within the

organization


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How to Measure Employee Commitment : Organizational ClimateHow to Measure Employee Commitment : Organizational Climate

– The way decision-making processes used

– Quality of facilities and equipment provided

– Mechanisms of feedback to higher management

Conduct periodic audits of workforce practices and employee attitudes.


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How to Measure Employee Commitment: Employee RetentionHow to Measure Employee Commitment: Employee Retention

Companies that constantly loose good people in large numbers may have a leadership problem.

The ideal number is not zero; some turnover is healthy.

Leaders should be aware of turnover trends over time.

There is a high positive correlation between productivity and reduced turnover.


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How to Build Employee CommitmentHow to Build Employee Commitment The idea is to customizing employee relationship,

so that employee commitment increases. Employee commitment will demand utmost

flexibility from every organization. Five dimensions can help organizations move

toward productive flexibility:– work arrangements rewards– work impact community– growth opportunities


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How to Build Employee Commitment : Work ArrangementHow to Build Employee Commitment : Work Arrangement

Flexibility may be built into where, when, and how work is done.

“At-Home” call center representatives, flexible hours, changing policies around uniforms, campus like physical settings, on-site child care centers etc….

These arrangements allow for the work/life balance that is crucial to many employees.


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How to Build Employee Commitment : Work ImpactHow to Build Employee Commitment : Work Impact

Employees prefer work that requires creativity and welcomes innovative solutions.

By creating work settings where employees can see and feel the impact of their work, leaders increase employee commitment.


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How to Build Employee Commitment: Growth OpportunitiesHow to Build Employee Commitment: Growth Opportunities

Commitment increase when employees do work that they can learn from.

These opportunities come when leaders provide employees with skill training, job assignments requiring new skills, feedback on performance etc…

Allowing employees to customize their growth opportunities provides them with further opportunities to learn and shifts responsibility for that learning to the employees themselves.


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How to Build Employee Commitment : RewardsHow to Build Employee Commitment : Rewards

Commitment increases when employees receive public affirmation of a job well done recognition + compensation & benefits.

Giving employees choices about the form of their compensation helps create commitment.


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How to Build Employee Commitment : Community How to Build Employee Commitment : Community

A worker’s relationship with peers, supervisors, and executives is one of the biggest predictors of commitment.

When community replaces hierarchy, employees feel they work for people who care about, respect them as individuals, and they reciprocate with increased commitment.

Community can be fostered by :


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How to Build Employee Commitment : CommunityHow to Build Employee Commitment : Community

– Giving employees the luxury of helping to select their teammates

– connecting with customers– forming relationship of trust with

supervisors.

REENGINEERING HR FUAD W. AWAD HUMAN RESOURCE INSTITUTE LEBANESE AMERICAN UNIVERSITY.

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Transcript of REENGINEERING HR FUAD W. AWAD HUMAN RESOURCE INSTITUTE LEBANESE AMERICAN UNIVERSITY.