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Edward Lawler Center for Effective Organizations Marshall School of Business University of Southern California
2001 Center for Effective Organizations, University of Southern California
Natural Resources Economic/Financial Location/Market Access Technology Human Assets Organizational Capabilities Core Competencies
EL7J
Core Competencies
z
Focus: technical and production skills needed to develop and make the firms products Example: miniaturization, precision manufacturing, imaging, digital signal processing
Organizational Capabilities
z
Focus: organizational designs and management practices that enable strategic performance Example: customer focus, speed to market, quality
EL14H
Organizational Capabilities
Quality Focus Quick Response Innovation Customer Focus Stateless/Global Partnering Change Management Learning Growth Cost Control Leadership
EL2E
Resource Allocation
OLD: Competitive advantage is in obtaining and allocating low cost financial capital and physical assets. NEW: Competitive advantage is in obtaining, developing, and allocating human capital and knowledge assets
EL1I
Intangibles account for more of market value: From 20% in 1980 to 40% in 1998 of market value missing without them. Investors say non-financial measures important: 35% of investment decisions driven by them Management most important non-financial information
EL11J
6 9 Percent Change
12
15
EL10J
Percent Change
12
15
EL11J
Percent
60 50 40 30 20 10 0
En Co viron mm me un nt/ ity cia l ons
M Cu arke sto t/ me r
Op era ti
p le
N= 205
2001 Center for Effective Organizations, University of Southern California
Ad apt abi l
Fin an
Peo
ity
103% 88%
53%
EL14K
Model 1 - Administrative
Aims:
Free up the line to focus on the business Reduces wasted internal energy
Process:
Establish policies, rules and systems to create internal equity Functional orientation - get the basics in place Personnel administration Government regulations Labor relations
Planning:
No formal consideration of HR (personnel) factors in the business planning process; post-hoc action planning by HR (personnel) function
EL3E
We want to have more people selling instead of watching people sell and fewer human resources people watching -- God only knows what they watch
Bob Lipp Citigroup Cost Cutter Fortune Magazine, January 11, 1999
2001 Center for Effective Organizations, University of Southern California
EL6J
EL3C
Process:
Planning:
Job Opening
Merrill Lynch has an opening for a Director, Executive Development. They would like someone to come in to assess their current executive development and revamp it as necessary in a way that aligns their people with their strategic goals. The job is worldwide and they would like a thought leader to move into the position, a practical intellectual. Compensation could go as high as $1,000,000.
E-Mail from a Head Hunter
2001 Center for Effective Organizations, University of Southern California
EL9J
EL5D
Old
Strategy Advice
New
Service
Strategy
Advice
IT SelfService
Service
EL4J
Process:
Planning:
EL5E
EL15H
Planning:
EL12K
Ideal HR Function
N=232 All N=68 USA
Business Partner Skills HR Practices Linked with Strategy T&D Linked with Strategy Provide People Consulting Select Best Talent High-Commitment Work Environment Performance-Enhancing Reward Systems Align Culture with Strategies Provide Change Management Services
Based on 1999 HRPS SOTA/P Study
2001 Center for Effective Organizations, University of Southern California
Maintaining Records
Collect, track and maintain data on employees
Auditing/Controlling
Insure compliance to internal operations, regulations, legal, and union requirements
HR Service Provider
Assist with implementation and administration of HR practices
Practice Development
Develop new HR systems and practices
98HRPS1A(4)
No Role in Business Strategy -----------------------------------Implemented Business Strategy -----------------------------------Input and Helped Implement Business Strategy -----------------------Full Partner in Development and Implementation --------------------
98HRPS1A(8)
Line Managers
53 61 52 65 56 57
76 76 55 71 85 87
EL3I
78
27
HR should be a partner to me in my efforts to build a stronger executive talent pool
Source: McKinsey War for Talent Corporate officers survey
EL5J
Y Y Y Y Y Y Y Y
Shared Services -------------------------------------------2.9 Joint Line HR Development --------------------------- 3.3 Decentralized Generalist ------------------------------- 3.6 Small Corporate Staff ---------------------------------- 2.9 Some HR Activities by Line Managers -------------- 2.6 Self-funding HR Services ------------------------------ 1.7 Rotate People into HR ---------------------------------- 1.8 Rotate HR People out to Other Functions ------------ 1.8
Scale Response: 1 = Little or No Extent, 2 = Some Extent, 3 = Moderate Extent, 4 = Great Extent, 5 = Very Great Extent
98HRPS1A(11)
Shared Services
Not At All Some All
Y Y Y Y Y Y Y Y Y Y Y Y
Employee Record Keeping -----------------------------Recruitment and Selection -----------------------------Career Planning -----------------------------------------Organization Development/Design -------------------Legal Support --------------------------------------------Affirmative Action --------------------------------------Union Relations -----------------------------------------Compensation --------------------------------------------Benefits ---------------------------------------------------Employee Training --------------------------------------Management Development -----------------------------HR Information Systems --------------------------------
17 26 63 41 16 21 41 11 4 22 24 9
48 57 32 42 26 42 32 48 36 66 61 37
35 17 6 16 59 37 27 41 60 12 15 55
98HRPS1A(9)
Y Y Y Y Y Y Y Y Y Y Y Y
Employee Record Keeping -----------------------Recruitment and Selection ------------------------Career Planning ------------------------------------Organization Development/Design -------------Legal Support --------------------------------------Affirmative Action --------------------------------Union Relations ------------------------------------Compensation --------------------------------------Benefits ----------------------------------------------Employee Training --------------------------------Management Development -----------------------HR Information Systems --------------------------
5 5 26 10 3 3 2 0 0 10 6 10
42 51 64 60 20 49 26 43 33 61 63 61
53 44 10 31 77 49 72 57 67 29 31 30
98HRPS1A(10)
Benefits --------------------------------------Employee Education and Training ----Employee Assistance ----------------------Legal Affairs --------------------------------Management Development --------------Recruitment ---------------------------------HR Information Systems -----------------Organization Development --------------Strategic Planning -------------------------HR Planning ---------------------------------
98HRPS1A(2)
Outsourcing Problems
1998
Y Y Y Y Y Y Y Y Y Y Y
Services not as good as promised -----------------Resources to manage ---------------------------------Cost higher than promised -------------------------Managing contractors lack skills -----------------Contractors dont know company ----------------Switch to new outsources difficult ----------------Cannot have HR systems needed -----------------Negative reaction from HR employees ----------Negative reaction from business units ----------Negative reaction from employees ---------------Loss of competitive advantage ---------------------
53% 51% 47% 41% 40% 37% 35% 32% 29% 29% 15%
98HRPS1A(3)
Traditional
Staffing
Planning
Organizational Development
EL11H
Business Partner
Vice President Human Resources
Centers of Excellence
Rewards Staffing Training & Development Communications
HR Generalists
Service Centers
Information Technology Claims Processing Employee Assistance
EL12H
EL13H
HR Practices Fit/Integration Line ownership Corporate /Generalists Power Balance Generalists Going Native Specialists Going Corporate Purchase Outside Sell Outside
2001 Center for Effective Organizations, University of Southern California
EL8J
EL10K
Completely Integrated HR Information System Most Processes are Automated but Not Fully Integrated Some HR Processes are Automated Little Automation Present in HR Function No Automation Present
Response Scale: 1 = Not Meeting Needs, 10 = All Needs Met
EL15K
EL33L
Old
Strategy Advice
Future New
Strategy
Service Strategy
IT Self-Service
Advice
IT SelfService
Service
EL46L
EL31L
EL34L
Y Y Y Y Y Y
Post Job Openings -------------------------------------- 86% Salary Planning/Administration ---------------------- 72% Change Benefit Coverage ----------------------------- 76% Change Address and/or Personal Information ----Apply for a Job ----------------------------------------Obtain Advice and Information on Handling Personnel Issues ----------------------------- 46% 61% 71%
Y Y
1 2
52% 41%
Scale Response: 1 = Not at All, 2 = Partially, 3 = Completely Scale Response: 1 = Not Effective, 2 = Somewhat Effective, 3 = Very Effective, 4 = Not Applicable
98HRPS1A(13)
78% 75% 75% 69% 57% 56% 39% 38% 25% 20%
Source: Watson Wyatt 2000
DF21L
Vision of Net-Enabled HR
Individual portals containing all of the key information needed to enhance productivity and satisfaction
z z
Real-time business information Knowledge management links to specialized expertise and communities of practice Reinvented and personally tailored HR processes
Prompts triggered by life stage events Ciscos travel reimbursement Trilogys reward choices
z z z
Real-time eLearning Two-way employee communication Productivity enhancing tools for managers and workers
DF50L
Vision of Net-Enabled HR
Intranet becomes the focus for strategically managing all aspects of the firm-employee relationship
z
Linking competencies used for recruiting, skill development, promotions e.g. relating employee commitment to customer satisfaction, productivity, turnover rates
DF51L
s f e li e B
IT
Va
Talent Procurement
IT
lue s
IT
IT
Values
Development
IT
FIT
IT
Compensation
IT
Beliefs
IT
Career Management
IT
Performance Management
s lue Va
EL13K
Bel i e f s
Increase efficiency
z z
Enhance employees Net capability Strengthen the B2E relationship Save employees and managers time Enable scalable growth
To deliver the strategic B2E vision HR will need to develop a new set of capabilities:
z
Enhanced understanding of the business strategy and processes CRM and branding: internal and external
Data mining
z z
Technology fluency Building and managing effective strategic supplier relationships Knowledge management
DF32L
Impact on Employees Commitment/Satisfaction Impact on Competitive Advantage Data Ownership Use of Push Technology Digital Divide Role of IT Function Development Approach Part of General Portal What is Done Best with Personal Contact How to Organize HR Function
EL43L
Approaches to eHR
EL30L
Exult Model
Sell to Top Historical Cost Contract and Equity Position Process Analysis Process Changes Gainsharing eHR and Call Centers Transfer Employees Downsize HR
EL44L
Managing Dualities
Follower Reactive Administrator Controller Conscience Employee Advocate Doer Leader Proactive Strategist Business Partner Business Person Manager Consultant
EL4D