How HR can Improve its Credibility as Business Partners in Organizational Effectiveness and Development

Transcription

1 How HR can Improve its Credibility as Business Partners in Organizational Effectiveness and Development Chearlene Glover-Johnson, Ph.D. Organizational Development Consultant for Small Business Development Lawton, Oklahoma

2 Objectives Examine HR s role in the organizational structure of Operational Management. Examine ways HR can provide value in Organizational Management effectiveness and development. Define Operations Management. Discuss the Transformation Role and Process in Operational Management. Identify the Critical Processes in relationship to HR & Operations Management. 2

3 How HR becomes Strategic Partner What should HR do and what can it do in order to become a more strategic business partner and greater contributor to organizational effectiveness? Many ways that HR can contribute to business strategy: Helping to identify and design strategic options Picking the best options Facilitating the implementation of the strategic options the company chooses to pursue Help with tactical and decisions 3

4 How HR becomes Strategic Partner Usually new strategies require different behavior and different performance from many individuals and parts of the organization. This type of change should be a real sweet spot for HR. Critical to understand how the organization operates and manages its operations. 4

5 HR s Role via Understanding Operational Management Know how to measure the effectiveness and growth of people and processes from long term and short term perspectives. Know how to lead necessary organizational change initiatives. Able to demonstrate HR s value by aligning the organization's vision, mission, and goals with day to day operational activities, including organizational design, development, performance measures, and standards. 5

6 HR s Role in Understanding Operations Ensuring workplace activities are accurately reflected in job descriptions, job postings, interviewing questions, applicant tracking systems, etc. Creating/monitoring metrics to assess organizational effectiveness and development. Recognizing/eliminating barriers to organizational effectiveness by better aligning HR processes to the operations of the business. Plan/design org structures that align with the effective delivery of activities in support of the achievement of org strategy. Assess critical competencies required for organizational staff. 6

7 How to ensure HR and Operations are a Conflict-Free Zone Conflict between operations departments and human resources departments is nothing new. Line managers have and will always disagree with human resources staff on one issue or another. Conflict often arises regarding what operations managers, often called line management, are responsible for and what is the primary role of human resources staff. 7

8 How to ensure HR and Operations are a Conflict-Free Zone Regardless of what causes conflict between HR and line management, the company's business model should delineate responsibilities and duties for their respective areas. Conflict between operations and human resources often is based on division of responsibilities and line of authority. 8

9 How to ensure HR and Operations are a Conflict-Free Zone In companies where the human resources staff provides consultancy to line managers, the business model gives operations managers more control of their employees and greater latitude concerning workforce planning and staffing issues. However, this type of model can result in conflict or catastrophe if line managers aren't fully aware of human resources processes or if they have more authority regarding staffing matters than they should. 9

10 How to ensure HR and Operations are a Conflict-Free Zone The level of authority given line managers concerning human resources matters should depend on if they have a firm grasp of fair employment practices and whether they have well-developed leadership skills. HR should understand the authority and delegation of responsibility within Operations Management to ensure respective responsibility and authority within the organization. The Key is: 10

11 What is Operations Management? Critical to the success of any business. Creative, innovative and energetic use of resources for improving the process, people, products and services. Effective use of all available resources (i.e., financial, human, facilities, etc.) to effectively produce products and services. Central Core Management Function (aka CCMF). Function responsible for managing the process of creating goods and services. Planning, Organizing, Coordinating, and Controlling all resources needed to produce goods or services.

12 SMART Start: Operations Management SMART Principle Specific Measurable Achievable Realistic Timed and Tracked Why Goal Setting and Tracking? 1. Focus is on important things needed to move forward. 2. Track actions taken and accomplishments made. 3. Allows you to break big tasks into small steps. 4. Shows you which activities give the best results.

13 Operations Management The Core of Business Functions PRESIDENT OR CEO MARKETING OPERATIONS HUMAN RESOURCES FINANCE MANAGEMENT INFORMATION SYSTEMS (MIS) Customers Goods and Services People Money Information A business can t function without Human Resources and Operations Management.

14 Role of Operations Management Understanding strategic objectives: Translate goals into activities for performance, quality, speed, dependability, flexibility, and cost. Developing an operations strategy: Decision-making guidelines aligned with goals. Designing the products, services and processes: Determine physical form shape and composition of product, services and processes. Planning and Controlling: Deciding what resources should be doing and make sure it is getting done. Improving the performance of operation: Continually monitor and improve overall performance.

15 Benefit of Operations Management Four Main Advantages: Reduces costs of producing products and services and being efficient. Increases revenue by increasing customer satisfaction through quality and service. Reduces amount of investment ($) necessary to produce type and quantity of products and services by increasing effective capacity of business operations. Provides for future innovation by building a solid base of operations skills and knowledge within the business.

16 The Transformation Role The Transformation Role of Operations Management: The process of converting inputs (raw materials) into finished goods and services (outputs). Human resources, facilities, processes, equipment, materials, technology, and information. The Transformation Process Model: INPUTS: Energy Materials HR/People Equipment Information Money TRANSFORMATION ROLE OF OPERATIONS MANAGEMENT OUTPUTS: Products (Goods and/or Services)

17 The Transformation Process Is directly responsible for all activities and decisions that affect product design and delivery. Costs Planning Coordinating Production Delivery Customer Feedback Problems and Problem Solving Influences how much material resources are consumed to manufacture goods or deliver services. Ensures there is enough inventory to produce quantity needed for customers. Ensures what is made is what the customer wants. Is the function that businesses use; improves overall performance and the financial bottom line.

18 Manufacturers Tangible product Product can be inventoried Low customer contact Longer response time Capital/Money intensive Services Intangible product Product cannot be inventoried High customer contact Short response time Labor/People intensive (aka: Human Resources) Differences: Manufacturing vs. Service Operations

19 HR and Operation Management Talent Structure HR Performance Development

20 Operation Management Decisions Two Levels of Decisions in Operations Management: Strategic: Broad scope and long-term. The first decision made; sets direction for the business; and determines tactical decisions. Tactical: Specific day-to-day issues; frequent/routine. Focus on quantities and timing of resources; how specific resources are used; and provides feedback to strategic decisions. STRATEGIC DECISIONS HUMAN RESOURCES (Strategic & Tactical) Operations Strategy a. Organization Structure b. People Development TACTICAL DECISIONS Operations Design

21 HR & Operation Management Decisions Talent, Structure & Culture Strategic Planning & Alignment Effectiveness & Efficiency Performance & Learning

22 Critical Processes The Success of Business Operations. Production Plan (based off the Business Plan). Identifies resources needed by OM to support the business plan (6 to 18 months). Authorizes allocation of resources to meet objectives of the strategic business plan. Details production rate and size of workforce, amount of inventory, overtime, hiring-firing of employees, back-ordering of orders. Updated and evaluated monthly. Master Production Schedule (MPS). Anticipates scheduling for building specific finished goods and providing specific services. Shows operational effectiveness and cost planned for a given period. Details how operations will use available resources and the time frame in which each product will be built. Reviewed weekly or daily.

23 Critical Processes The Success of Business Operations. Material Requirements Planning (MRP). Uses the MPS, bill of material data, and inventory records to determine specific requirements for materials. Determines what the business plans to build and when from the MPS. Calculates materials needed to build products in the schedule and plan for needed materials. More specific and detailed plan. Rough Cut Capacity Planning (RCCP). Converts the direct labor and production time of the MPS into specific capacity requirements. Calculates a rough estimate of the workload placed upon critical resources. Workload is compared against the demonstrated capacity for each critical resource.

24 Planning Process Relationships BUSINESS PLAN HUMAN RESOURCE PLAN PRODUCTION PLAN ROUGH CUT CAPACITY PLANNING MASTER PRODUCTION SCHEDULE MATERIAL REQUIREMENT PLANNING

25 Critical Processes The Success of Business Operations. Measuring Productivity Levels. Measures Productivity: How efficiently inputs are converted into outputs. Productivity Levels are a measure of how well resources are used. Computed as a ratio of outputs (goods or services) to inputs (labor and materials). Total Productivity = Output Inputs Example: $10,000 finished units with a $5,000 combined input value $10,000 (output) $5000 (input) = 2.0 (Total Output Productivity) Inventory Determination. Quantities of goods, product, materials in stock. Determines the value of goods from perceived value by the customer to the cost of purchasing material and/or parts. Includes raw materials, parts, work in-progress, supplies and equipment. Must maintain inventory throughout the entire supply chain.

26 Critical Processes The Success of Business Operations. Types of Inventory/Stock Cycle Stock: Amount of stock needed over a set period of time. Safety Stock: Inventory for uncertainties in supply and demand. Seasonal Inventory: Varies seasonally based up supply and demand. Transportation/Pipeline Inventory: Supply in transit-being moved from one location to another. Maintenance, Repair, and Operating (MRO): On hand stock used for office supplies, cleaning, tools and parts for equipment repair. Independent Demand versus Dependent Demand. Independent: Demand for a finished product (computer, bike, pizza). Dependent: Demand for component parts (intel chip, frame, cheese). Quantities for dependent demand result from independent demand. Example: To produce 200 cars (independent demand), the resulting quantities of wheels, windshield wipers, and brake systems (dependent demand) needed is 800 wheels, 400 windshield wipers, 200 brake systems.

27 Effective Organization Management CEO s and Managers must: Accept that HR is a partner and a central core function of business regardless of its size or industry! Understand HR s crucial role in organizational effectiveness through the org culture, structure, talent, performance, and development. Work with HR to effectively plan, organize, coordinate, and control all resources needed to produce goods and services. Realize the critical management function HR serves in areas of resources, equipment, technology, and information that are vital to business success.

28 QUESTIONS?