By: MZIWETHU KUBONI
Question 1 1
High Potential Employees 3
Talent Management Strategy 7
Question 2 10
Recommendations to Hire HIPOs 10
Recruiting HIPOs 11
Selection and Placement 12
Question 3 15
3.1 Benefits of Strategic Human Resources Development 19
5. Conclusion 19
6. References 19
Organizations are looking at implementing the Strategic Human resource strategy to gain competitive advantage. The strategy among other things it emphasizes on using people to gain the said competitive advantage. Dealing with people can be a complex issue, people generally do not like new things. Change brings uncertainty; hence the strategic human resources management strives to identify the type of employees that can be able to adapt to the change and align their career ambitions with the organisational goals to achieve success for both the organization and the employee. These kinds of employees are called High potential employees, these are the people who can take the organisation to the next level if the strategy choice is correct and implemented correctly.
2. QUESTION 1
2.1 High Potential Employees
The article is looking at what to look for when sourcing High potential employees. There are certain ways that these were developed by other companies and some companies never bothered to develop these kinds of employees. The article is basically looking at what the companies must do to obtain these employees, what specifics the HR must look for. These are the people who give the organisation the competitive advantage as people is one of the best assets the organisation must use to achieve the goals.
The research is about the current situations that the companies are facing when looking at investing on the employees. Generally, companies will take all their employees for training, but this has not yield the desirable results. Some employees do not add value at all to the company after the company has spent all a lot of money for training. Which means no ROI for the organisation. However, this is not affordable anymore, its practically impossible to just train all the employees and this is because of budgets constraints. A plan to reduce the cost but making sure that the organisation goals are still achieved had to be formulated. Hence it became more important for companies to identify the “high potential” employees that can be trained and/or recruited to come and join the organisation as this will be fast and cheaper option. The article notes that scientific studies have long suggested that investing in right people/candidates will maximize organizations’ returns. Study suggest that top 20% accounts for 80% of organisational output.
High potential employees can motivate their teams to be much more productive. Having talented people in the group usually helps by raising the bar amongst the team. Other employees may get influenced about the high quality of job others are doing. This means talented employees can help in developing and motivating other employees to pull up their socks. They can increase the team productivity by 5-15%, this is achieved by just adding a star performer in your team. They can do this by word or deed, peers can see the good work they do and start imitating which becomes the culture of that team. When identifying these ‘HIPOs”, it must be noted that they are not only able to develop themselves for their own benefit but for the benefit of the entire organisation. Fortunately, the study has indicated that science is able to identify the high potential employees by looking at the range of measurable qualities.
The research identified three must have qualities when looking for the high potential employees and these are;
Ability, the first this is to understand that the person knows what the job requires and can do the job in question. This can be judged by the knowledge and skill the candidate has. And, is the candidate able to learn and master the skill required for the job. When looking for a person for a job that will require innovation then you cannot hire a person who’s has worked in one department for all his/her career for 20 yrs. This person clearly shows that he/she is not used to knew things and might struggle if new ways of doing things are produced. Some people find it difficult to adapt to change but unfortunately change is required at times. Also, if the job requires some more thinking out of the box, a mere certificate won’t help unless the candidate is willing and able to do that. Complex jobs will require in depth thinking. Organisation should have means and ways to identify this ability when recruiting and be able to measure it as well.one of the ways to do this is by doing the IQ or cognitive ability test.
Social skills, this category talks to how will the candidate be able to be part of team as teamwork is a big thing in achieving the goals. This can only be possible if there is a good relationship amongst the co-workers and management. This involves two fundamental abilities which are the ability to manage yourself and ability to manage others. This speaks more to high level of emotional intelligence. Social skills are crucial when it comes to team work, most of the task must be completed by teams not by individuals. Sometimes things go wrong, and tempers go high and this may lead to total derailment from the goal. Candidate must be able to work under such conditions when people on the group/team disagree with him/her. Employee must be able to move past situations and be able to deliver on the job at hand. Importantly the person must be able to keep the eyes on the ball under any circumstances of relationships being the bad boss or annoying colleague.
Drive, this is about the will and motivation of the candidate to work hard in order achieve the goal. Drive is measured about how the individual is willing to work hard and how ambitious the individual is. A talent without a drive to achieve goals can be a waist sometimes, hence once talent is there you also need to see if drive is also there to drive this talent to achieve the set goals. Talented people may be used in getting the answers right the first time and when the tough gets rough are quick to give up. So, we need a person who will stop at nothing to get job done correctly, people who are able to seek help when they cannot solve the problem. Hunger for success must be what drives the person, fulfillment should come after delivering a complex project. This include an ambition to skill yourself further if necessary. Drive is what keeps the person going when the skills fall short and because of being persistence answers are bound to come.
The concept of high potential employees was previously ignored by all organisation HR departments until recently. HR is now obsessed with HIPO because of the contribution they will probably bring in the organisation. Performance of the organisation among their competitors can be decided based on the kind of work force the company has. Having strong HIPOs in your organisation can lead to long lasting benefits and contribute well in succession planning in the organisation, meaning for every position there is someone ready to take over once the position is open. Otherwise the only way of filling such a post is by recruiting externally but this option is generally expensive. And the candidate will take time to adapt to the organisation culture. Even if the company has followed a recruitment process of identify Hipo it may still not deliver. According to the recent industry report by Corporate Research Forum indicate that 53% of organisation are not happy with their Hipo programs. Having said that, the same industry report has identified that some top companies have achieved about 73% from the program. But the ratings were subjective as they were done by single people like managers only.
Study by Tomas Chamorro-Premuzic, suggest that there are four mistakes that the organisation do when implementing Hipo programs. Performance is not potential, potential employees should not be judged on their performance. The study indicates that the performance is not measured correctly by most organizations. Even when the performance is measured correctly it does not necessarily mean the employee will also perform on the next role/level. Some people perform at best when they deal with individual task of solving problem perhaps in their teams but once they get the opportunity to lead they fail. Potential should not be judged on your current performance of the job but rather on what you could do.
Emergence is not effectiveness; the study shows that 90% of HIPO programs focus on potential leadership. Most people easily emerge as a leader but are never effective as a leader. That means when people come as confident and as charismatic leaders, that does not mean they will be good in decision making and in making good judgement. Sometime people can make sense and emerge strong in solving a problem but when given a responsibility to lead they fail.
Development is not universal, organisation sometimes rely too much on training and development. This cost a lot of money and not everyone can be developed. Selection needs to be done correctly to minimize the costs of training and development. Training and development investment can be realized mostly on HIPO’s and on ordinary employees the ROI may not be seen
Every HIPO has a dark side, the study says the same 20% who are responsible for 80% performance and output is the same 20% that is responsible for the 80% of the troubles. Because they know their worth within the company they sometimes have ridiculous expectations that create problems.
There are three key characteristics that the HIPO share and these are,
Aspiration, high potential employees will show willingness and desire to tackle challenges and opportunities associated with leadership role. They demonstrate leadership qualities by being involved in decision making and looking for more responsibilities and independence. They proactively look for new challenges and are never satisfied in doing the same thing over and over.
Ability, this is the combination of the qualities that the HIPO possess, the combination of one’s qualities and the learned skills. HIPO are not only able to do their job well but they are very fast learners, and this is separates them from the rest. They can learn new techniques faster and are able to use them. They show a lot of interest in advancing their knowledge to do their job better. They also acknowledge the necessity of acquiring new skills and see this as the opportunity.
Engagement, HIPOs are exceptionally engaged employees, they demonstrate a significant commitment to the success of the company that extends beyond their individual performance. HIPOs do not only care about their own success but the success of the company. They display a great deal of team work to make sure the company succeeds. They are also seen as the people who holds the flag high in term of practicing the culture and the company values.
Fig.1 shows the three qualities a HIPO must have, all three must be present.
HIPOs represent the future of the company, they play a vital role in company success. The ways the company supports them will determine how bright is that future. They must be correctly selected and identified through robust selection processes. This will ensure that right people in which the company can invest on are identified. The companies must not only consider academical capabilities when looking to employ staff. The traditional way has been selecting the “A” students but this is not the only requirement in the present day.
Having balanced team with all the different qualities result in desired productivity. It is very important that when you hire an employee one must be sure that the person will deliver on the role and not hope that the person will deliver and does not deliver. And the only way to get this is what you really look at when recruiting. Certain recruitment strategies do exist, and companies must make use of them to get the recruitment phase correct. This will help not to be reactive but proactive. HR needs to play an active role in recruiting staff and not merely a role of bringing and the managers choose who they want to work with, it must make sure the person will fit towards the company strategy.
2.2 Talent Management Strategy
To achieve business success depends in a lot of things and one of those things is how the organisation can use its talent to gain competitive advantage. According to Anja van Beek the HR director at Sage VIP, the best way to achieve competitive advantage and sustainability in your organisation is to invest in Human Resources. Companies will soon be competing for talent acquisition and management. Talent management involves getting the right skilled employees by using strategic selection processes and paying the employees to make sure they do not leave the company. The company with the best strategy to on talent management will see their ROI. This prepares the company to capitalize quickly on new opportunities on the market better than their competitors. Hence a need to properly manage the talent is good for the business. This is done through improved recruitment processes called Talent management strategy. Effective talent management helps to drive benefits for the organisation.
The research shows that companies are spending fortune on employee salaries and benefits estimated at one-third of their revenues only to maximize success. Talent management strategy helps the company to acquire, hire and retain talented employees called HIPOs in today’s language. Talent management creates a systematic plan to close the talent gaps and integrate them to the strategic company goals and business plan. It identifies skills gap and address them through by enabling the company to perform better. It can help the company in recruiting smart, motivated employees and create a working environment that allows them to innovate, execute partner and lead. Talent management strategy does not only focus on people with right qualifications, but also in developing and retaining people with competencies like agility, cross functional collaboration and interpersonal skills to thrive in the business. Companies using the strategy are more proactive than reactive as they can address all the critical talent gaps and anticipate industry changes. Companies use the strategy to gain competitive advantage.
HIPOs are the kind of employees who can learn new things faster and master them at the same time, this saves the organisation money on training. The strategy helps to connect business goals to individual and team goals and provide a clear expectation. The talent manage strategy helps the organisation to focus on talent development to improve business performance on current roles and prepare for succession planning. This is easily achieved when with high potential employees.
Strategically minded organisation can change ahead of the curve when it comes planning and development of the workforce with right competencies. They understand their employees better and know exactly who to use and where to use them when they need to respond to market changes. These organizations make use their strategically developed talent pools to immediately respond to the threats and opportunities in the market. This on the other hand increases employee job satisfaction as the employee are strategically teamed according to their best competencies. Innovative employees are given complex task to challenge their thinking and satisfy their hunger to tackle difficult tasks. This reduces employee turnover when employees are doing what they love. Placing right people in the right role for current and future business plans.
Talent management strategy must be aligned with the company goals for it to be effective. The strategy also prepares the company for new opportunities that become available. It helps to implement strategies that help to increase productivity. This is done by developing improved processes to attract, retain, motivate highly skilled employees, learning and developing and utilizing people to meet current and future business needs. Talent management strategy seeks to integrate task and people factor to optimize the talent of the employee. Talent strategy seeks to create a culture within the company that portraits the company as the employer of choice. This helps attracting the best employees in the market. This also goes a long way in employee retention.
It helps companies not to chase production targets at the expense of employee’s well-being and needs. People needs are identified and strategies are developed to integrate these needs with organisational goals and strategies. Individual goals are aligned with the organisation goals. This benefit both the company and the employee once both these goals are achieved. This will translate to an increase on the bottom line of the company.
Talent management strategy will help in attracting, deploying, developing, retaining and optimizing the appropriate talent requirements. Talent management will help in identifying employee skill gaps and identify opportunities to improve performance.
Opportunities for career growth, learning and development, performing exciting and challenging work will make employees to be more engaged and committed to their current employer. Employees tend to seek other employment once they feel that their skills are not utilized or there are no prospects for them to move to other positions.
Strategic talent management analyses company’s competitive situation (SWOT analysis) and develops a plan of action to achieve its goal through human resources management systems and this gives the company a competitive advantage. This can be done in two ways, focusing on employees with high and/or critical levels of talent, secondly the human resources management policies and practices that are used to manage employees with high and critical talent. To achieve this there are certain roles that HRM will have to play,
Attracting good quality talent through human resources policies and practices
Developing HR policies and practice that provides opportunities for growth and career-related competencies for talented individuals,
Rewarding, policies that assist in attraction, retention and recognizing excellence and achievement
Retention, policies that prevent the talented individuals to leave the organisation.
Mobilizing, HR policies that facilitate the movement of talented individuals across regions or countries.
Talent management strategy will help the organisation to be well prepared than their competitors to act on global economy and capitalize quickly on the new business opportunities before the rest of the market. Organisation will be more proactive than reactive by filling critical talent management needs and addressing company and industry changes promptly. It will also help to identify essential skills to be developed in all employees and this will minimize training costs by focusing on main development areas. This will also improve your recruiting processes by identifying high quality candidates.
It can bring practices that are effective and practices that are cost effective. Talent management strategy can project the outcomes of changes on employee attitude, behavior and company profits and costs. Once the formulation of strategy is done correctly by carefully looking at company mission and goals, studying the external opportunities, threats, and its internal weaknesses and strengths. The strategy will help greatly into making a choice based on the environment constraints of the industry. The strategy is formulated in such a way that it speaks to the business strategy of the organisation and of the environment in which the company is operating on. It will help the organisation to deploy and allocate resources in the way that gives it a competitive advantage. The HR strategy will at the end have positive influence the company’s bottom line or key stakeholders. Talent strategy will also help not to employ people that might perform poorly or dissatisfied about their job. HR strategy helps and make it possible to identify high potential employees and to retain them. As this will significantly reduce employee turnover as the right people will be selected for the right job. This will also mean whatever investment is made on these employees will yield good results because training such employees will be quicker thus cost effective.
The value of the talent management strategy does not depend on the individual performance, having a HIPO in the organisation will not automatically translate organisation success. HIPO’s can only add value in the organisation if the talent is managed properly and there is strategic ability in the organisation. The implementation of strategic talent management in the organisation brings success. In other words, the value talent management is realized once the organisation can control its workforce to gain competitive advantage. When the chosen strategy does bring the required and planned results then the value will be seen.
HIPOs create value in the organisation by raising the quality in the job they are doing or the service they are giving. Better quality and service comes from strategic use of resources and assets that the organisation has, and these can be properly managed through strategic talent management. So, having a HIPO and use of strategic talent management create value in the organisation. Monetary value is also realized in the long run after all the money spent in training and developing the employees has been recovered. Value is created through better services and good quality work done through talent management.
Talent management strategy is the only way to use your HIPO to bring value in the organisation. It is also the only way of strategically bring the HIPOs and have the way of retaining them. The value is seen by decrease in employee turnover as the employees find the company attractive and want to associate themselves with such a company. All these are brought about by aligning the organisation goals to Human Resources management. Human resources use talent management strategy to align individual goals to organisational goals.
3. QUESTION 2
3.1 Recommendations to acquire HIPOs
The role of the human resources recruitment is to build a supply of new high potential employees that can contribute in achieving the organisation goals. HR must make sure that they recruit the best in the market to apply the for the available positions, have the best selection process. Once those potential employees apply for the job, HR must make sure that the correct candidate gets the job and lastly have a rock-solid strategy to make sure that the chosen candidate stays with the company for many years. Human resources recruitment must help identify and attract these kind of employees as their primary purpose. Recruitment, selection and rewarding of employees must be done correctly or the company will not be able to use its important resource which is employees. And when this is the case it will practically be impossible for the organisation to meet or achieve its goals and mission. On the other hand, when these processes are done correctly, the organisation has an immediate competitive advantage.
There are certain steps that the organisation must follow to be able to acquire and retain these high potential employees. These steps are based on recruiting the correct candidates, selecting the best that will fit with in the organization’s culture well and how to reward those employees to make sure they do not leave the company. The first thing is how the employees are recruited. Recruitment process is about who do you want to apply for the position and if you miss this point you find yourself dealing with hundreds of unqualifying candidates resume which in turn will waste lot of time and money
3.2 Recruiting high potential employees
Organisation must use three areas of recruiting to attract best employees, these areas will be
Personal policies, this affects the kinds of jobs that the company offers
Recruitment sources the company use to solicit the applicants, which affects the kind of people that apply
The characteristics and behaviors of the recruiter
3.2.1 Personal policies,
The company must make sure that the characteristics of the vacancy must be able to speak to the job seekers. Policies must be able to show that there are opportunities for promotion within the organisation. The policies must also show that for high level post the company does recruit from inside. This helps to show the candidates that there are opportunities of advancement within the company.
Companies that “lead-the-market” in terms of wages gives them the distinct advantage in recruiting the best candidates. Pay can also play a role in attracting people for jobs with less desirable features like working shifts.
Company image will also play an important role in attracting candidates, company must advertise itself just to promote themselves as the good place to work. This is important as the candidates look at the image of the company second to the actual nature of the work. High potential employees would like to associate themselves with companies that have a good reputation as that will influence their careers in the long run. Good brand image will influence applicant’s expectations about the nature of specific jobs or careers at the organisation. Applicants will find something in common with themselves and the brand image of the organisation and this will influence the degree to which the person feels attracted to the organisation. Applicants often feel sensitive to the issues of diversity and when these are on the advert they want to be the part of the organisation.
3.2.2 Recruitment Sources
Platforms the company uses for recruiting potential employees are critical aspect of the whole recruitment strategy. Different types of people will respond to different platforms of job advertisements. Others like adverts on the internet and others only respond to the ones on the newspaper classified. When designing a job advert two most important questions that one needs to ask is, what do I need to say and to whom do I need to say it to. Specifics and the requirements of the vacancy should be clearly specified to give the applicant enough information and interest to decide to apply. This will help to avoid dealing with thousands of not qualifying applicants. Based on who do I say it, the organisation must choose the best medium to place the job ad that will attract mostly skilled people. Local news papers can be used but they normally attract unqualified people because of their accessibility to everyone and unfortunately people who are not looking for the job won’t go and read the classified.
Electronic recruiting has become the best way to get the best talent. Site like LinkedIn are now the best way to search for talent for companies. These sites allow the companies access to go through millions of resumes of well qualified people. In this way applicants can be directly approached to apply for the specific job on the company. Company websites can also be used but they must well-structured with intention to create interest to applicants. Applicants must associate themselves with the company through what they get on the websites, like the company goals, mission, values, culture and vision.
Networking is one of the still used methods of recruiting where a company can describe the kind of person they are looking for and then send the word out to business associates for referrals of any person that might meet the required competences and skills. Networking can also be done on business networking sites such LinkedIn, Facebook and Twitter.
3.2.3 The characteristics and behavior of the recruiters
These characteristics are very important as the applicant will need to trust and believe in whoever is trying to sell the job to. This is more like the sales man trying to sell a car, what he says it’s not believed or trusted immediately as the buyer believes he is just trying to get his commission. People will tend to believe more people they know like friends and family about the organisation. There are two things that applicants will respond positively on which the recruiter must display, warmth and being informative. These two things normally attract applicants and make them trust the recruiter.
Recruiters must also be realistic when explaining the positive and negative features of the vacancy. Must be careful not to portray the position too much positive as this may lead in high turnover once the applicant realized that he/she was lied to.
Constant feedback to the applicants is key as well as they may think the organisation is not interested if it takes too long to give feedback.
3.3 Selection and placement.
Recruitment represents an important and indispensable process for any company. Selection becomes the most important part of staffing the organisation, these decisions have a critical impact on the organization’s ability to compete. The organisation must make sure whoever they select is someone who will fit well towards delivering company goals and objectives. When the best team is selected and get them playing together, the organisation has got the best chance of winning that leads to competitive advantage. The widely used method of selection is the well-known interview, but when looking for HIPO interviews are not enough to give the you the whole needed information about the candidate before appointing them. Psychometric assessment is the tool used to select HIPO, it can give information on all crucial areas that the HIPO must have. Those areas are performance, potential, perception, ability, aspiration and engagement. Psychometric assessment can be designed for different roles and is able to indicate if the person will do well for the position or not. Assessments help identify and quantify factors such as preferences, motivators, unexplored strengths, and unique personality traits. This helps HR and business leaders place high-potential employees in the right development opportunities and match them to the appropriate roles.
There is always a risk associated with HIPO programs as sometimes they are ineffective after a lot of investment are made to obtain them. This risk must be eliminated at the selection stage by using appropriate methods of HIPO selection. The question the selection team must ask themselves is “Who are the people called HIPOs”. HIPOs are the individual’s contributors or managers who could perform successfully in the leadership role that are one or two levels above their current roles. HIPO programs should be programs that can address talent issues. When selecting the HIPO there factors must measure for each candidate,
Career drive and aspiration: proactively seek new learning opportunities, open to new experience, poses good self-regard and confident in their abilities, choices and direction.
Agility: strategic ability, interpersonal agility and operational agility
Organizational confidence and work performance: network with right people, demonstrate their abilities in a positive way and have a presence in the organisation.
Several generic standards that need to be met in any selection process, reliability, validity, generalizability, utility and legality. Reliability of performance measure; the degree to which a performance measure is free from random errors. Aptitude test can be used to measure reliability. Validity is the extent to which a performance measure assesses all the relevant and only the relevant aspects of the job performance. Validity refers to the appropriateness, meaningfulness, and usefulness of the inferences made about applicants during the selection process. Generalizability is the degree to which the validity of a selection method established in one context extends to another context. Utility is the degree to which the information provided by selection methods influences the bottom-line effectiveness of the organisation. Legality is meant to make sure all selection methods conform to existing laws and existing legal precedents. This avoids all the cost and reputational damage caused by court cases.
Below is a recommended process for selection, development and deployment of high potential talent.
Common mistakes are sometimes made during the selection process which must be avoided. As stated before high performers are not necessary HIPOs, the research clearly states that. The research says only about 20% or less high performers become HIPOs. Therefore, HIPOs must not be selected based on previous performance only without some validation in the form observational or psychometric assessment. Secondly, once the program has been implemented, some organizations do not have the systems or processes to develop the candidates. This may discourage the newly appointed candidates and lead them to think that there are no prospects of growing their career within the organisation and decide leave. HIPOs must always be kept engaged and busy.
3.4 Rewarding of employees.
Small group of employees called HIPOs need to be kept within the company, and strategies used to do that is by recognizing, rewarding and promoting the employees. All three steps are necessary, but one is more effective than the other for instance rewarding is the best way of the three. Monetary rewards are critical motivator for HIPOs as it makes them feel valued in the organisation. Rewarding the employees reduces the high level of turn over significantly. But unfortunately, it does not a guarantee that employees will stay because of money alone, increasing their responsibilities and promotions with money of course does play a role.
Rewarding of these employees may be done by linking pay incentive with a set performance objective. Position alone does not determine how much the individual is paid, also performance is one of the deciding factors as high performing employees contribute a great deal in the company success. Pay plans can be used to energize, direct, sustain or control the behavior of current employees. High employee performance followed by monetary reward will make future high performances more likely. And this will make the employees want to stay with the organisation and outside applicants want to join the organisation. Performance incentive pay will attract high potential employees and will also contribute in retaining them. Pay system will need to be structured to be aligned with the organisation and human resources strategy. This type of incentive also increases the good relationship between the employee and the manager and increases the number of high performers in the organisation. It increases learning oriented employees because for every high performance displayed there is an incentive that comes with it, employees will strive to do more.
Giving challenging projects and assignments does also play a role in retaining HIPOs, it keeps the employees engaged. Promoting those employees is also a of showing that the organisation is serious of the program and is also keeping all the promises that comes with the program.
High potential employees should not be treated special compared to other employees but should be given the opportunity to demonstrate their skills and be supported at achieve their aspirations. These employees must then be rewarded for the job well done as that puts the organisation in the advantage among its competitors. Most companies have something called gain sharing, but do not have performance bonus. Gain sharing is normally shared equally among employees and this is good but does not recognize the hard workers who really contribute to organisation success. Some organisation does pay performance bonus but it only starts at management level. HIPOs must be recognized at any level of the organisation to motivate them to do more, this will indicate to them that the organisation is aware of the good work they are doing and is willing to compensate for it. This will make them to want to stick with the company for many years to come.
4. QUESTION 3
4.1 Benefits of Strategic Human Resource Development
Strategic human resource management is the process of linking the human resource function with the strategic objectives of the organization to improve performance. It is the process of correctly engaging with people before they join the organisation and through the whole time they are with the company. This process starts from recruiting, selection and developing the employees to become the best in the business. Organizations that implement the strategy correctly benefits form the strategy in many ways. Human resources department oversees the most important asset of the organisation which is people/employees.
Competition among companies has become so intense and if your company is not paying attention on where this competition is, it might find itself falling far behind. Competition now depends a lot on what kind of employees you have as they make a big difference towards the bottom line. Strategic human resources approach is now one of the best ways the company can implement to have competitive advantage. Strategic human resource development strategy will not only help you to have the competitive advantage but will also help to sustain it for long term.
Introduction of Strategic Human Resources is the significant challenge for Human resources department. It brings change to the organization’s way of doing things and sometimes people are reluctant to the changes as sometimes they do not understand the benefits. The strategy brings a lot of benefits for both the organisation and the employees
The main advantages of Strategic Human Resources Management introduction can be divided into six areas:
New ways of the Valuation of Assets and Human Capital Measurement;
Strategic HR Planning;
HR Processes Redesign and Rigor;
HR Outsourcing of non-value-added processes;
Consistent Management of Functions and Skills;
Human Resources Development in the organization;
All companies strongly believe that investing in your employees will contribute towards the organisation success, but if the is not done correctly the return on investment will not be realized. Strategic human resource development must first be recognized as the fundamental part of the whole business planning. It is argued that integrating HR strategy and the business planning is the fundamental in achieving business excellence. Integrated strategic human resource development approach is developed straight from the business plan, its entire existence is to make sure business goals and objectives are achieved.
SHRM combines internal priorities of Human Resources with the requirements and needs of the business. It also considers the ability of employees to accept the change; it demands HR Managers to design a proper communication and change implementation plan. It allows to HR Professionals balance the development of human capital in the organization while focusing on critical business targets. It also creates a solid basis for the development of the HR Strategy and the redesign of core HR Processes
Strategic human resource development will help the organisation in different aspects such as changes in the future world, great technology utilization of the modern world, how does the company strategic goals and mission align with the current work force the company has. Companies sometimes make a crucial mistake of having good and beautiful strategies but fail to have people that can deliver the said strategy. Integrated human resource development strategy helps to connect company with employees that understand the goals and can certainly deliver on them. Strategy will help the company to have a new mindset on how to compete in the current world. The strategy brings together the old people of the company with the new employees with fresh ideas and makes this collaboration work for the benefit of the organisation. This will also help the employees with new ideas and increased innovation to come forth and contribute towards company goals. This approach promotes continuous learning and development amongst the employees which is crucial for individual career growth.
Strategic Human Resources management helps in building strong teams among the employees. It can identify different skills with in the group and have the plan for those skill to complement each other to produce quality work. HIPOs are the kinds of employees that have the high level of emotional intelligence hence it becomes easy for the HIPO to work with the other HIPO. And the strategy promotes organisational excellence more than individual excellence. This is very important as in most projects different people from different department are grouped together on a project. Strategic Human Resources management can come with plans to make sure this happens as expected. The same strategy has processes to monitor and evaluate the progress of the teams. The formulation of the strategy is based on the SWOT analysis of the company and find way to exploit any opportunities that exist within the environment.
Once the company adopts this strategy, it will help the HR to be repositioned as the strategic partner which is entrusted with the responsibility of improving organisational performance as well as organisational effectiveness. The organisational performance and effectiveness can only be realized if the HR is able to get and retain employees through their HR policies.
As per Fred R David, below are some of the benefits for implementing Strategic HR:
1. Allows identification, prioritization and exploitation of opportunities.
2. Provides an objective view of management problems.
3. Represents a framework for improved co-ordination and control of activities.
4. Minimizes the effects of adverse conditions and changes.
5. Allows major decisions to better support established objectives.
6. Allows more effective allocation of time and resources to identified opportunities.
7. Allows fewer resources and lesser time to be devoted to correcting erroneous or adhoc decisions.
8. Creates a framework for internal communication among personnel.
9. Helps to integrate the behaviors of individuals into a total effort.
10. Provides a basis for the clarification of individual responsibilities.
11. Gives encouragement to forward thinking.
12. Provides a co-operative, integrated and enthusiastic approach to tackling problems and opportunities.
13. Encourages a favorable attitude towards change.
Human resource development will be able to interpret and understand the trends and commensurate practices in corporate strategy formulation. Will align and link HRD practices and processes to the external competitive market place ensuring the creation of short and long- term competitive value. It will also help the organisation to adopt a high value-added agenda which creates and ensures a competitive customer focused culture. Strategy will help to focus on organisational performance issues by designing and developing a range of deliverables which will contribute in improving the organisational capabilities. The strategy will help by developing individual competencies within the organisation staff which will ensure that the staff are not only equipped to perform but to excel, providing a rich source of competitive advantage (intellectual capital). Will define and create learning systems which encourage and sustain change, and which promotes personal as well as organisational learning and growth. It will also provide for the development, deployment and leveraging of business unit level capabilities, enabling the business unit to distinguish itself with in the market place. The strategy will also contribute significantly towards the galvanization of organisational culture to provide high performing employees.
Finally, when the organisation embarks on the strategy, the long term financial prosperity of the organisation will be positively affected. Consumers and customers willingness to pay for the out puts will in the long run show on the bottom line of the company. This advantage comes from the effectiveness of the HIPOs in the company, in any industry once the cost of making a product is not increased by reworks or delays the organisation gets the full profit as planned. But if the employees can’t get the product correct on the first time or the product quality is not right this may lead to down grading of the product which means less money than planned. For instance, if the Gasoline is not as per specification and the company does not have time to correct, if it does not pose any danger to people or the car its self then negotiated less price must be reached. This may mean no profit at all the organisation. But with HIPOs in your organisation this rarely happens as they aim to get things right the first and on time and on expected quality. Customers tend to trust the product and are willing to pay for it as they believe it is of quality. Competitive advantage is gained by making sure the cost of production is kept at minimum, that is the area where you get it right. HIPOs come in and make sure the production cost is kept at minimum always, no reworks of the product and quality is never compromised. No product downgrade or rejects equals to more money in the bank and this can be achieved through strategic human resources strategy of recruiting high potential employees.
Strategic human resources help the organisation by implementing different programs to achieve the organisational goals and objectives. Strategic human resources strategy makes use of people/employees to gain the competitive advantage. The process starts from the kind or type of employees the organization attracts and once it acquires the employees, it goes to the type of programs are used to develop the employees to make sure they deliver as expected. The strategy aligns the organizational goals with people performance, employees must perform according to what the organization wants to achieve. Strategic human resources is able to bring all these processes together with one aim to increase the bottom line through people.
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