World-Class HR: A Presentation to NHS in the North West

1. World-Class HR:A Presentation to NHS in theNorth West Peter Reilly

2. Agenda • Our knowledge base • The context • The development of the model • The model and its features • Questions

3. IES research & consultancy • Long standing work: HR audits, HR outsourcing,HR metrics, line manager relationships • 1999 to present: HR shared services • 2003: IES report on e-HR • 2005 to 2007: Reports on HR careers and HR transformation for CIPD • 2007: Report for NHSI on HR’s impact in the health sector • 2007 to 2008: IES report on customer views of HR • 2008: HR development programmes in health and local/central government

4. Context • Justification of ‘support’ services: • existence • resources • HR’s insecurity and search for USP • Internal restructuring • External reorganisations • Continuing efficiency pressures • Quality & customer focus – service delivery • Technological innovation

5. HR’s response: the goals • Cost reduction • Improved service standards • More business focus • Increased customer sensitivity • Greater added value • More self-reliance by managers (& employees) • Repositioning function away from administration towards strategy

6. strategic contribution tactical time orientation long short Repositioning HR strategist/integrator adviser/consultant administrator/controller

7. HR focus & capability Shaping, creating impact Functionallyeffective Processefficient Transaction dominated time A corporate example

8. The means of HR transformation Automation Standardisation Consolidation

9. What’s involved in automation • Integrated records(and payroll) systems • Better MI • Information through intranet • Self service • Stand alone e-systems • Document management & work flow

10. What’s involved in standardisation • Re-engineering processes • To exit, transfer & simplify • Using best practice to ensure quality & consistency • Allowing internal & external benchmarking • To obtain standard: • systems? • processes? • policies?

11. Corporate centre Business partners Centres of expertise Shared services What’s involved in consolidation (and other structural change) • Bringing together dispersed activities into single organisation • Aim is to share services for common good • Focuses on transactional and informational • Can allow business embedded HR to flourish independently & grow specialist expertise

12. Plus… • New relationships with stakeholders: • CEO • Employees • Line Managers • New purpose and role • New content: • CSR • OD • Branding… • Improved HR capability

13. Mixed results • Structures & roles • Automation • Process change

14. Benefits in: investment in IT (basic systems) buying some e-HR applications cost, speed and quality benefits securing funds for investment can be difficult; piggy backing on finance outsourcing Problems with: tail wagging dog accusations of dumping by line self service insufficiently intuitive over automation of processes technology not always working as intended MI not used as intended Automation

15. Benefits in: higher quality faster delivery cost reduction ability to internally & externally benchmark Problems with: cultural insensitivities ignoring customer differences HQ practice rather than best practice applied Process change

16. Benefits in: service quality HR repositioning business focus HR issues more on agenda deeper expertise Problems with: service boundaries service gaps communication work separation role ambiguity over promising, under delivery Structures & roles

17. Mixed results • Structures & roles • Automation • Process change • Transfer of tasks to line

18. No change on task transfer Source: CIPD research 2007

19. 1.4 priorities 1.11 disposition Line manager issues 1.11 training 1.35 time 1.31 skills restrictive HR processes 0.55 lack of role clarity 0.7 HR issues lack of mgt encouragement to devolve 0.8 reluctance to let go 0.48 poor employee self-service capability 1.19 Technology issues poor manager self-service capability 1.15 0 0.5 1 1.5 mean scores0 = not at all 1 = a fair amount 2 = a great deal Inhibitors to devolution Source: CIPD research 2007

20. Mixed results • Structures & roles • Automation • Process change • Transfer of tasks to line • Relationships with CEOs • Relationships with employees • Strategic focus

21. HR function time spent 2004 2007 strategic 12% 23% operational 38% 41% administrative 50% 36% The activity mix Source: CIPD research, 2007, self reported figures

22. Time vs importance (the top 3 activities for HRDs) Source: CIPD research 2007

23. Mixed results • Structures & roles • Automation • Process change • Transfer of tasks to line • Relationships with CEOs • Relationships with employees • Strategic focus • New role

24. HR’s purpose • Delivers services • Facilitates line • Adds value in different ways: • cost efficiency • organisational effectiveness • Manages risk • Acts as organisational: • guardian • conscience • but not policeman!

25. Mixed results • Structures & roles • Automation • Process change • Transfer of tasks to line • Relationships with CEOs • Relationships with employees • Strategic focus • New role • Reskilling the function

26. HR capability needs CIPD research 2007

27. Building the model of world class HR

28. Different perspectives • What HR is trying to achieve: • range of activities

29. partner instrategy changeagent employeechampion administrativeexpert Ulrich’s model of HR’s role Ulrich, 1997

30. Ulrich, updated • Employee advocate (ensuring employer-employee relationships are of reciprocal value) • Functional expert (designing and delivering HR practices) • Human capital developer (building future workforce) • Strategic partner (help line managers reach their goals) • HR leader (credible to own function and others) Ulrich, 2005

31. Different perspectives • What HR is trying to achieve: • range of activities • different ways of adding value

32. HR providesvalue formoney HR addsvalue formoney HR createsvalue HR deliversvalue Different ways HR adds value Value creation Value added Valueformoney Alex Wilson, BT, 2006 Mike Watts, Cabinet Office, 2005

33. Different perspectives • What HR is trying to achieve: • range of activities • different ways of adding value • strategic contribution

34. HR’s strategic contribution • Operational excellence • Client service • Delivery at lowest cost • Understanding the human capital implications of business problems Becker and Huselid, 1997

35. Another view • Long-term – Is the activity conceptualised to add long-term as opposed to short-term value? • Comprehensive – Does it cover the entire organisation or isolated components? • Planned – is it thought out ahead of time and is it well documented or does it occur on an ad hoc basis? • Integrated – Does it provide a basis for integrating activities that might be fragmented & disconnected? • High value-added – Does it focus on issues critical for business success or does it focus on things that must be done but not critical to financial and market success? Brockbank, 1999

36. An IES summation of strategic HR • Based on a human capital modelhow do employees drive organisational performance • Integratedbrings together multifaceted activities • Comprehensivecovers the entire organisation • High value-addedfocuses on business-critical issues • Builds social capitalhelps knowledge sharing, networking and relationships • Anticipates changethrough horizon scanning & internal sensing, & delivers it

37. Different perspectives • What HR is trying to achieve: • range of activities • different ways of adding value • strategic contribution • The impact of people management: • lots of relevant factors

38. Perceptions of fair treatment Good relationshipswith managers& colleagues Org. flexibility/concern for wellbeing Increased jobperformance Perceptions of org.justice/commitment to employees Work-lifebalance Reducedlateness Trust inemployer Opps for personalgrowth anddevelopment Decreasedturnover/intention to leave Employee’sorganisationalcommitment Feeling of beingvalued & involved Employerconcernfor H&S Reducedabsenteeism Opportunitiesfor promotion Involvement indecision-making Increasedaltruism Jobsatisfaction Job characteristicsesp job scope(enrichment) Increasedconscientiousness NHSI summary on employee commitment factors and consequences Miller, et al 2007, NHSI

39. Different perspectives • What HR is trying to achieve: • range of activities • different ways of adding value • strategic contribution • The impact of people management: • lots of relevant factors • delivering better results (for patients)

40. People > performance link in health • Engaged staff deliver better performance • Conversely disengagement has consequences • Lower patient mortality from: • setting staff objectives & giving feedback • employment security • Investors in People status(West research) • Higher leadership ratings of top management associated with various performance indicators

41. Various positive patient outcomes Performance, people link • Effective team working can reduce employee stress and lead to better patient outcomes • Team pay can release discretionary effort • Staffing levels/mix • Training • Workload stress • Information • Autonomy • Organisational functioning, including trust development

42. Different perspectives • What HR is trying to achieve: • range of activities • different ways of adding value • strategic contribution • The impact of people management: • lots of relevant factors • delivering better results (for patients) • models linking people to performance

43. Organisational leadership and culture HR policies and practices line management employee behaviours superior performance A service driven model

44. Individual capability ability:skills,trainingeducation attitudes:engagementinvolvement Deployment Development access:resourcingrecruitmentsuccession application:job design autonomy Organisational action A broader human capital model Tamkin et al, 2006, IES

45. A summation of these elements • HR’s purpose and role: • a deliverer of services and facilitator of people management • the provider of a policy and practice framework • guardian of organisational values • To do this it has to: • be efficient as well as effective • offer strategic focus and business alignment

46. World class HR

47. Createvalue Addedvalue Valueformoney IMPACT Sustainableinnovation Continuousimprove-ment Customer focus Proactivelyleads thepeople agenda Aligns &integrates withthe business Has a compellingemployeeproposition Achieves desiredresults forthe business Gets thebasicsright Supportspeoplemanagement The model World Class HR Practice

48. World Class HR Practice IMPACT Createvalue Addedvalue Valueformoney Sustainableinnovation Continuousimprove-ment Customer focus Proactivelyleads thepeople agenda Aligns &integrates withthe business Has a compellingemployeeproposition Achieves desiredresults forthe business Gets thebasicsright Supportspeoplemanagement Foundations: factors 1 &2

49. World Class HR Practice IMPACT Createvalue Addedvalue Valueformoney Sustainableinnovation Continuousimprove-ment Customer focus Proactivelyleads thepeople agenda Aligns &integrates withthe business Has a compellingemployeeproposition Achieves desiredresults forthe business Gets thebasicsright Supportspeoplemanagement Building blocks: factors 3 & 4

50. World Class HR Practice IMPACT Createvalue Addedvalue Valueformoney Sustainableinnovation Continuousimprove-ment Customer focus Proactivelyleads thepeople agenda Aligns &integrates withthe business Has a compellingemployeeproposition Achieves desiredresults forthe business Gets thebasicsright Supportspeoplemanagement Pinnacles: factors 5 & 6