STRATEGIC MANAGEMENT CERTIFICATION PREP COURSE

Transcription

1 STRATEGIC MANAGEMENT CERTIFICATION PREP COURSE Katherine Kelly, MOL, SPHR, SHRM SP President, OmahaHR Overview Strategic Management 01 Role of HR in Organizations 02 Management Process 03 Strategic Planning Organizing Leading Controlling 1

2 Role of the HR Professional Traditional Roles Advisory Staff function. Power is credibility. Service Operating department that provides a service. Control Enforcer of policies and procedures 2

3 Current HR Roles Strategic Global, long term, forward thinking Operational Involves day to day tasks (recruiting, orienting) Administrative Compliance, record keeping, HRIS system Strategic Role Internal Consultant Problem solver Change Agent Plans and brings about change in organization Business Partner Understands the business and financials 3

4 Key Indicators of Effectiveness Effectiveness Degree of attainment of goals Efficiency Maximized output with minimized inputs (i.e. least cost) Success Factors OLD: Size, role, clarity, functional specialization NEW: Speed flexibility, integration, innovation Roles Generalist Responsible for a variety of activities Specialist In depth knowledge or expertise in HR specialty area 4

5 Characteristics of Profession National Organization Code of Ethics Research Defined Body of Knowledge Credentialing process or Organization Ethical Models Justice Imposes rules fairly and impartially (win/lose) Rights Individual rights are not to be violated (hard to apply) Utilitarian Greatest good for the greatest number (most common) 5

6 Ethical Issues Privacy in the workplace Whistle blowing Conflicts of interest Bribes, payoffs, and kickbacks Organizational abuse Insider trading Diversity Copyrights and intellectual property Corporate responsibility Sarbanes Oxley Act of 2002 (SOX) All organizations must comply Created the Public Company Accounting Oversight Board (PCAOB) Banned company loans to executives Protects whistleblowers CEOs accountable for errors in audits Required internal controls 6

7 Outsourcing Transference of services/functions Typically administrative and not essential Reduce operating cost Free internal resources Manage an out of control function Outsourcing Drawbacks Declining morale as some fear job loss May not produce cost savings May not reach established goals timely 7

8 Outsourcing Process Analyze needs and define goals Define the budget Create a request for proposal (RFP) Solicit RFP s from chosen contractors Evaluate RFP s Choose and notify the selected contractor Negotiate contract Implement the project and monitor the schedule Complete the project and evaluate it HR Cost / Activities 60% Administration Recordkeeping Compliance 30% Service Delivery Recruiting Training Performance Management 10% Strategic Compensation Succession Development 8

9 Outsourced Functions Health insurance Recruiting Payroll/HRIS Outplacement Compensation surveys Employee relations Temporary workers Benefits management EEO/Affirmative Action Training Leave administration Unemployment compensation Technology Trends 9

10 Tools High speed access Increased bandwidth Wireless systems Personal Digital assistants (PDA s) Mobile Web Voice activated computers Multi function cell phones Tool Privacy Internet usage, monitoring Computer viruses Electronic harassment 10

11 Managing Change Steps to Implement Change Determine the need for change Prepare alternate plans Discuss alternatives and gauge reactions Make a final decision Establish a time and action plan Communicate the change Implement and evaluate the change 11

12 People s Reaction to Change Denial Anger Bargaining Depression Acceptance Role of HR During Change Involving people in the change process to obtain commitment Ensure top management is visible and supportive of the changes Communicate with employees throughout the process Reinforce change with incentives Use peer and group influences to obtain support for the change Educate employees that change is an ongoing, necessary process Anticipate resistance and find ways to deal with it 12

13 Management Process Process Planning Organizing Leading Controlling 13

14 Strategic Planning Process Why to Strategic Plan? Gives a competitive focus Focuses on the needs Product Development Talent Management Succession Planning Defines short and long term objectives Short: 6m 1y Intermediate: 1 3y Long: 3 5y Planning only works if organization aligns as a working unit No silos 28 14

15 Process Where is the company now? Where does the company want to go? How will the company get there? Budgeting Top Down Senior executives set the budget and drive the results down to divisions and departments Bottom Up Business units drive the budgeting Zero Based Budgeting process is done without consideration to past results 30 15

16 Phases of Planning Process Phase 1: Strategy Formulation Phase 2: Strategy Development Phase 3: Strategy Implementation Phase 4: Strategy Evaluation Phase 1: Strategy Formulation Develop (if not already in existence) the organization s mission and vision statements. Define or validate organizational values. Many organizations use a core values statement. 16

17 Strategy Formulation M/V/V Mission Who and what the company is; what is it purpose for being Vision The desired state of the organization; an evolutionary plan for an organization s future state Values Can be viewed as the moral compass of the organization Integrity Teamwork Honesty Trust Business circumstances may change, but values generally remain constant 33 Phase 2: Strategy Development 1. Conduct a SWOT analysis. 2. Establish long term objectives 3. Identify Strategies 17

18 SWOT Analysis S What are the strengths of the organization? W What are the organization s internal weaknesses? O The opportunities that will move the organization forward. T Threats or factors that will prevent the organization from moving forward. 35 SWOT (Internal Focus) Strengths Tenure Financial Position Reputation Leadership Others? Weaknesses Lack of succession plan Lack of communication processes Lack of internal cross training Others? 36 18

19 SWOT (External Focus) Opportunities First to market with a new product Relaxed laws related to mortgage lending practices Others? Threats Competitors Union Strikes Contraction of labor market Others? 37 Phase 3: Strategy Implementation Establish short term objectives Develop action plans Allocate resources Four types of resources: 1. Financial 2. Physical 3. Human 4. Technological Motivate employees 1. Performance based pay and incentives 2. Recognition programs 3. Learning opportunities 38 19

20 Phase 4: Strategy Evaluation Review strategies. Measure performance. Take corrective action. Internal Assessment Skills Inventories Aggregate Workforce Profiles Replacement Charts 20

21 External Assessment (Environment) Economic Conditions International Factors Technological Factors Social Factors Employment Factors Demographic Factors Political Factors 41 Forecasting Techniques 21

22 Forecasting Techniques Judgmental Forecasts 1. Managerial estimates 2. Rule of thumb 3. Delphi techniques 4. Nominal group technique Statistical Forecasts 1. Simple linear regression 2. Multiple linear regression HR Planning 22

23 HR Planning 3 States Expansion growth evidenced by an overall increase in workforce. Transition stable workforce which may involve training in new processes, technology, etc. Contraction reduction in the workforce The bottom line of an HR plan having the right people, at the right place, at the right time. HR Budgeting 23

24 Steps in HR Budget 1. Identify each HR program in plan 2. Differentiate legally required programs form those not legally required Evaluate each program as it relates to organizational objectives and feasibility 3. Prioritize programs 4. Determine the cost for each program Evaluating HR Effectiveness 24

25 Evaluation Tools KPI s key performance indicators Executive dashboard visual/graphical summaries of KPI s Balanced scorecard approach Management tool that provides a concise picture of the overall organization in four quadrants General HR Metrics HR Expense Factor: HR expenses divided by Total operating expense HR to Employee Ratio: #HR FTE s: #Total FTE s, i.e. 1:100 Human Capital ROI: Revenue (Operating Expense [comp + benefit costs]) divided by (Comp + benefit costs) Human Capital Value Added: Revenue (Operating Expense [comp + benefit costs]) divided by # FTE s Revenue Factor: Revenue divided by FTE Absence Rate: [(# of days absent during the month) divided by Avg # of employees during month) x (# of workdays)] x 100 Turnover Rate: # Separations during the month divided by Avg # of employees during the month x 100 Retention Rate: (# of same employees at end of period) divided by (# of employees at beginning of period) 50 25

26 Recruitment Metrics Time to Fill: # days elapsed between requisition approval and new hire start date Cost per Hire: (Advertising + agency fees + referral fees + applicant travel + relocation + sign on bonus + recruiter pay and benefits) divided by # of new hires Vacancy Rate: (# of vacant positions divided by total # of positions) x 100 Training Metrics Training ROI: [(Benefits Costs of Training) x 100] divided by Costs of Training Training Cost per Employee: Total Training Costs divided by # of Employees 52 26

27 Organizational Metrics Return on investment (ROI) Net present value (NPV) Break even analysis Cost benefit analysis Full time equivalent (FTE) 27