Higher Colleges of Technology

1. Higher Colleges of Technology Strategic Human Resource Management; Tasks, Frameworks and Best Practices (MBA 6303) Week 2 Dr. Petra Turkama Aalto University, Finland

2. Schedule 17:00-18:45 Strategic HR core activities Exercise 1: Job Profiling 18:45-19:15 Break 19:15-20:15 Compensation, Performance Management Excercise 2: Performance Review 20:15-21:00 Career Management Homework: Online Job Profiler

3. Revise: The Role of HR Strategy 1. Build organization: A sense of direction in an often turbulent environment 2. Develop competitive advantage: Actions that differentiate the firm from its competitors 3. Drive change: A coherent approach to the design and management of personnel systems, based on business strategies and employment policy

4. Elements of the HR Strategy 1. Basis‑ The key elements of the business strategy‑ Environmental factors and analysis (SWOT/PESTLE)‑ Cultural factors 2. Content ‑ Details of the proposed HR strategy (recruitment, salaries, bonus, training…)3. Rationale ‑ The business case for the strategy against the background of business needs 4. Implementation plan - Share of responsibilities‑ Resources required‑ Proposals for communication and change management5. Costs and benefits analysis - Assessment of the implications (costs, people and facilities) and the benefits Role: http://www.youtube.com/watch?v=QZQp4s2GNYs

5. Strategic HR Management Core Tasks • Work design and Job profiling • Recruitment • Performance management • Talent management • Succession planning • Learning and development • Knowledge management • Compensation • Incentive setting • Rewards and Recognition • Communications • Collaboration practices • Team building • HR Information systems • Organisational Renewal

6. Strategic Human Resources Management Axis Culture -Thebeliefs, values, norms and style System-The process by which things get done People -The skill levels, staff potential and management capability Organisation -The structure, job roles and reportinglines

7. Culture Sharedvalues, norms, beliefs and behaviors in the organisation

8. ManagingOrganisational Culture • Deeplyrooted, tacitlyheldvalues, assumptions, beliefs, attitudes, norms, rituals and artefacts • Havedirectimpact on organisationalperformance and brand • Sustained and modifiedby the employees and stakeholdersunconciously Canorganisational culture bemanaged?

9. People Rightpeople in the rightplaces at the righttime

10. ManagingDiversity • Managinggenerationgap and expectations • Managingpeoplefromdifferentbackgrounds • Developing for T-shapedprofiles • Leadingteams of specialists • Maintainingmotivation • Fosteringinnovation

11. Management vs. Leadership “Management is responsible for maintaining order; leadership is responsible for producing change or movement.” Kotter, J. P. (1990). What leaders really do. Harvard Business Review, May-June, p. 103-11.

12. Leadership • Bennisprovides the following for managers and leaders: • Managers administer; leaders innovate. • Managers maintain; leaders develop. • Managers control; leaders inspire. • Managers have a short-term view; leaders, a long-term view. • Managers ask “how” and “when”; leaders ask “what” and “why”. • Managers accept the status quo; leaders challenge it. Bennis, W. G. (1989). On becoming a leader. Reading, MA: Addison-Wesley.

13. Need to Renew Management • Management processes refer to an entity of interconnected practices that apply to management • Generic management processes that are independent of the form of ownership, industry or business model. • Specific management processes that are tied to the business model. • Innovation management (e.g. how to enhance the role of employees and their networks in the generation of ideas and innovation. • Knowledge management (e.g. how to develop the individual and communal knowledge and creativity of employees) • Diversity management (e.g. how to utilise the different knowledge and capabilities of various types of people) • Human resource management (e.g. how to create jointly accepted rules that support people’s capabilities to utilise their knowledge and creativity) • Value management (e.g. how to create mutually understood and accepted values and goals that direct, inspire, energise and mobilise people).

14. Challenges • Fastpacedparallelchanges (redundantskills and legacysystems, pastperformance) • Lack of long termorientation in HR management • Competences to prioritize business goals • Reactivity vs. Proactivity • Corporate culture and decisionmaking • Politics, competition and informalnetworks • Difficulty to quantifyaddedvalue • Personal preferences

15. Key Questions • What kinds of people skills, management and leadership is needed to in the future to meet strategic business objectives? • Whatkind of environment the companycanoffer for the employees (branding, culture, decisionmaking)? • Will the organisationdevelopinternalresources to meet the futureneeds, oracquirecompetencesexternally? • Whataspectswill the humanresources Key PerformanceIndicators (KPIs) emphasize?

16. Organisation The way the organisation is structured and workdivided

17. Organisational Design • Organisationdesigned to implementstrategy and driverenewal • Allresourcesimpact the decision: • Hierarchical vs. flatorganisationsdepending on culture, competences, systems and management style • Open and userdriveninnovationchallenge the borders of the organisation-> impacts to HR?

18. HR Systems -Architecture Systems, processes and decisionmakingstructures to support HR strategy and operations

19. Systems • HR inventories and databasesneeded for legalcompliance • Addeffectiveness, rigor and traceability to operations, drivelearning • Enablemeasuring and assessment of valueadd • Area of rapiddevelopmentafter ERP, CRM etc. mainframesystems • Emergence of Social Media! • Examples of commercial HR softwares http://www.thetalentbox.com http://www.halogensoftware.com/products/halogen-eappraisal http://www.lominger.com/pdf/LomingerToolsandServices.pdf

20. Discussion Discuss in groups HR in various management axis in yourcompany: • Culture: • What is the role of HR in building culture? • Is HR promotingroutines and desiredbehaviors? • People: • How HR participates in renewal and surplusassessment? • Aretheretalent management and successionplanningprocesses? • Organisation: • How HR participates in jobprofiling and internaljobmarketcreation? • Does HR participate in team design? • System: • How are the HR systemsdeveloped? • Dotheysufficientlysuppotrbusienssoperations?

21. Job profiling • The process of identifying and documenting the characteristics of a job • Ensures a complete, common understanding of job requirements, performance standards and responsibilities • Clarifies how multiple jobs align to business processes and fit together in a department or organization • Provides an opportunity for business and HR to mutually agree job responsibilities and critical job behaviors • Eliminates “role confusion” • Defines salary for the job

22. Provides Basis for HR Practices • Skill/Competency Assessment • Job procedures and performance standards • Development of specific plans for individual induction training • Recruitment and Selection • Career Pathing and Succession Planning • Behavioral and developmental coaching and feedback • Training and development objectives • Mentoring • Rewards and Recognition processes Train employers in the process of job profiling to retain the competence

23. Process of Job Profiling • Review • Reviewing your current employees and the job duties as well as the amount of their compensation • Compare job descriptions and the actual jobs employees do each day • Interview employees, supervisors and managers to get a clear picture of each job 2. Determine Responsibilities • Create a workflow chart to illustrate company functions and how each employee’s job interacts or adds to the entire the system • Define need for changes and new roles 3. Compare • Compare the pay and responsibilities of each position across unit • Reflect to industry standards 4. Create New Models • Create new models for hiring • Streamline your hiring process and increase your retention rates • Reduce overtime, improve morale and increase productivity

24. Contents of a Job Profile • An inspiring Purpose Statement describing why the job exists • Benefits to the employee (employee offering) • The description of job roles, outputs and Key Performance Indicators (KPIs) • Outline of the job’s location, purpose, responsibilities, authority levels, supervisory relationships • Description of the Inputs of the job (competencies) In Groups, prepare a job profile for a key account manager in a company operating in petro-chemical industry Example:

25. Discussion • Does your organisation have standardised job profiles and workflow charts? • Do the jobs correspond to the formal descriptions? • How regularly are the job profiles assessed?

26. Recruitment • The process of attracting, screening, selecting, and onboarding a qualified person for a job • Process: 1. Job profiling 2. Sourcing of candidates 3. Matching candidates to job requirements 4. Assessment motivations and fit organization 5. Making and finalizing of job offers 6. Induction and onboarding of new employees • Ethical Code of Conduct! https://www.verite.org/helpwanted/toolkit/brands/improving-codes-conduct-company-policies/tool-2

27. Stages of the Recruitment Process Informing the non-selected candidates!

28. Approaches to sourcing Candidates • By In-house or human resources personnel Ensures fit to strategy, internal recruitment, campus hiring • Social Media Recruitment Helps to drive passive candidates and create brand awareness about the company Commonly used tools LinkedIn, Facebook, Twitter, Google+, etc. • Outsourcing of recruitment to an external provider Efficient in case of highly specialized requirements of small organizations • Use of Employment agencies For unskilled workers through to highly skilled managerial or technical staff • Use of Executive search firms For executive and professional positions

29. Candidate Assessment • Short-lists candidates based on their background, qualifications and motivation • Interview with relevant managers • Fill in Candidate Evaluation Form if applicable (form) • Hold a second interview • Arrange psychological evaluation • Start again if no superior candidates available How extensive is the evalluation process in your company? Any best practices to share? Abouthiringstrategy: http://www.linkedin.com/today/post/article/20140123121820-86541065-are-you-the-smartest-person-in-the-room-let-s-hope-not?trk=eml-ced-b-art-M-0&fromEmail=fromEmail&ut=0XNbghrJNrD6c1

30. Success Factors for Effective Hire • Anchor yourself to the hiring criteria • Use the hiring criteria as a strict guide throughout the evaluation process. Pitfalls: • The halo effect: Becoming enraptured by one particular aspect of the candidate • The cloning effect: Hiring someone in your image 2. Take your time • Bring in temporary replacement if needed 3. Cross-verify whenever possible • You can never have enough information from enough different sources 4. Get help, but avoid too much help • Get input from others before you make a final choice • Restrict your circle of decision makers to three to five people who understand the job 5. Don’t force the issue • The worst thing that you can do is try to put a good worker in the wrong job. 6. Avoid the “top of mind” syndrome • The candidates that are interviewed later in the hiring process are more likely to be selected

31. Break

32. Job Offer • Basis for contract • Details the tasks, responsibilities and outputs: • Salary and Performance bonus • Any other benefits • Probation period • Salary offer rejected? • Tips on negotiating job offer: • Know your worth • No obligation to share past salary • In the second interview • Be strict Job Offer Negotiation Tips.pdf http://www.forbes.com/sites/lizryan/2014/01/27/how-to-negotiate-a-job-offer/

33. Job Orientation • One of the most critical aspects of the recruiting process • Process of being introduced to coworkers, information on working hours, place of work, performance standards, benefits and facilities, and names of the immediate and other officers. • Start at the point of hire when the offer is first presented • On the first day: • A tour of the facility • Introduce the staff and prepare a list of their names and job functions • Go over the basic operations of the company and department • Pay day schedules , overtime policy, break time policies, parking, telephone and Internet policies, security regulations • Filling necessary forms • Opportunity to explain to the importance of their position and how it works to the support of the goals of the company • Continue over the next 3-months as the new employee learns more about the company and the job • Ask Feedback

34. Compensation System • Has to be aligned to the mission, vision, business strategy and organizational structure • Pay grades compare and rank jobs within the organization • Based on skill, education, experience, and duties, correlates with salary • Ensure external and internal equity • Businesses within the same organization will have different competitive conditions and compensation strategies • A general compensation plan consists of three components: • a base compensation, • rewarding incentives, • indirect compensation in form of benefits • Compensation package: the combination of benefits, like wages, insurance, vacation days, time off, guaranteed raises, and other perks

35. How to set the Right Salary Level? • Ask: How much more valuable will this person make my company? • Market rate set expectations • Set pay scale for the sake of transparency and fairness • Allow for some flexibility • Best Practice tips: • Set your upper salary limit by what a particular job is worth to you. • Match jobs whose value comes with hours to hourly pay. • Match jobs whose value comes in insight or skill to salaried pay. • Match jobs whose value is revenue to commissions. • Use bonuses to align everyone around company or product or division goals. • Customize the deal for experts and upper managers. • Sometimes you can trade cash salary for intangibles or services • Salaries in the UAE (2008 survey): http://www.uaestatistics.gov.ae/EnglishHome/ReportDetailsEnglish/tabid/121/Default.aspx?ItemId=1901&PTID=104&MenuId=1 http://www.iser.ae/files/contents/Working%20Paper%20No%202%20Version%203.pdf

36. Discussion • How is the competitiveness of the salaries ensured in your organisation? • Do you have a clear salary scaling system?

37. Performance Management • Definition: a scientifically based, data-oriented management system consisting of three primary elements-measurement, feedback and positive reinforcement • Focus on an organization, a department, employee, or processes • Recorded in the HR system/ database • Stages: • Work is planned and expectations are set • Performance of work is monitored • Staff ability to perform is developed and enhanced • Performance is rated or measured and the ratings summarized • Top performance is rewarded

38. Performance Management Tasks • Long-cycle Performance Management • Usually done on an annual, every 6 months, or quarterly basis, fairly standard • Short-cycle Performance Management • Usually done on a weekly, bi-weekly, or monthly basis, industry-specific • Micro Performance Management • Micro Performance management is generally done on a by-minute/hour/day basis

39. Benefits of Performance Management • Avoid performance paradox • Operational efficiency benefits and by unlocking the latent potential • Reduce costs in the organization • Stop project overruns • Aligns the organization directly behind the CEO's goals • Decreases the time to deploy changes • Motivates workforce • Optimizes incentive plans • Improves employee engagement • Create transparency in achievement of goals • Create confidence in bonus payment process • Improved management control • Helps audit / comply with legislative requirement • Simplifies communication of strategic goals scenario planning

40. Performance Appraisal Methods 1. Objective production • Consists of direct measures like sales figures, production numbers, monitoring of data entry • Unambiguous criteria, usually incomplete because of criterion contamination and criterion deficiency 2. Personnel • The recording of withdrawal behaviors (i.e. absenteeism, accidents). • The happy-productive worker hypothesis –> relationship between job satisfaction and job performance 3. Judgmental evaluation • Graphic Rating Scale: typically, the raters use a 5- or 7-point scale • Employee-Comparison Methods: E.g. rank-order method, paired-comparison, forced-distribution, top-grading • The critical incidents method: recording job specific behaviors • Net assessment can include self, and horizontal and vertical (different function) peer evaluation • Peer nomination involves each group member nominating who he/she believes to be the “best” on a certain dimension of performance. • Peer ratings has each group member rate each other on a set of performance dimensions. • Peer ranking requires each group member rank all fellow members from “best” to “worst” on one or more dimensions of performance. • 360-Degree Feedback: multiple evaluations of employees which often include assessments from superior(s), peers, and one’s self • Optimal PA process involves a combination of multiple assessment modalities • Recommended that PA is done in short cycles to avoid high-stakes discussions • Typical errors: leniency errors, central tendency errors, and errors resulting from the halo and horns effect

41. Discussion What are the performance review cycles in your organisation? What performance appraisal methods are used?

42. Performance Management Cont. • Task performance – How well employees perform their formal job duties. • Contextual performance –The extent to which employees perform extra role behaviors (that is, discretionary duties or duties not in one’s job description). • Examples of contextual performance include informally mentoring a new employee or “going the extra mile” to help a customer.

43. OtherAspects of Performance • Organizational citizenship behavior (OCB) –This is closely related to the concept of contextual performance. • OCB has been defined as discretionary individual behavior that is not formally recognized by organizations’ reward systems and that promotes the effective operation of organizations (Organ, Podsakoff & MacKenzie, 2006). • Emotional Labor–These are the emotions that employees must appropriately display to do their jobs effectively (Grandey, 2000).

44. Best PracticeTips To maximize employee performance, the following strategies should be employed: 1. Communicate performance goals at hire. 2. Perform periodic performance appraisals. 3. Allow employees to participate, to the extent possible, in the formulation of their performance goals (Locke & Latham, 1990).

45. Common PerformanceDecifiencies • Absenteeism • Tardiness • Poor attitude/insubordination • Poor task performance • Poor contextual performance • Addressed first by informal verbal counseling • Performance Improvement Plans (PIP): • PIPs are a contract between the employee and employer in which the performance deficiencies of the employee are clearly articulated. The plan should include goals for increased performance and steps to be taken to achieve these goals. PIPs also include timelines for achieving performance goals. • PIPs are typically signed by the employee and at least one representative of the employer.

46. At-Will Versus Due-Process Employees • Most employees have an at-will employment relationship with their employers. This means that an employer may discharge the employee for any reason, except the following: • Discrimination based on a protected class. (gender, race, religion, color or national origin; people with physical or mental handicaps) • A reason that is contrary to public policy • Implied contract (no formal written contracts) • Due-process employees are normally allowed to protest disciplinary action taken against them through internal or external procedures. • Examples of due process employees include most federal workers; most state, city, county or other local government workers; and some private sector workers, particularly union members. • To discipline a due-process employee, there must be just cause for the disciplinary action.

47. Group Exercise In groups of 2-3 students, make a list of threeemployee performance issues that should result in verbal counselingand three employee performance issues that should result in harsher discipline, including termination. For the sake of this exercise, assume that the employee is a cashier at a grocery store.

48. Examples • Examples of conduct that may result in informal verbal counseling: • Absenteeism. • Tardiness. • Low task performance/productivity (including long customer lines, giving incorrect change). • Examples of conduct that might result in harsher discipline: • Stealing. • Fighting or other violence at workplace. • Continued absences, tardiness or poor performance after other less severe forms of discipline have already been utilized.

49. DisciplinaryOptions • Oral warning/reprimand–This is an oral meeting discussing misbehavior or performance deficiencies and necessary steps to improve performance. • Written warning/reprimand–The employee is given a written statement of performance deficiencies and advised in writing that future deficiencies may result in further disciplinary action. • Probation–The employee is placed on probationary status for a period of time. During this probationary period, the employee’s performance is expected to improve. At the end of the probationary period, the employer’s performance is reevaluated.

50. Continued • Suspension–The employee is barred from the worksite for a period of time. Suspensions may be paid or unpaid. • Leave with or without pay–This is similar to a suspension. However, this option is often used prior to a formal disciplinary hearing. • Demotion–The employee is transferred to a position with lower responsibility. Demotion is often accompanied by a decrease in pay and/of benefits. • Termination with right to rehire–The employee is involuntarily discharged. However, he or she may be rehired by the employer at a later date. • Termination with no right to rehire–The employee is involuntarily discharged, and the employer will not rehire the employee in the future.