Lecture 3

1. Lecture 3 Strategic Human Resource Development

2. Lecture outline • Cite the growing importance of SHRD • Define SHRD • Identify the characteristics of SHRD • Discuss the Benefits of SHRD • Discuss experiences contributing to strategic thinking among HRD Professionals • Cite recent Trends in Australian HRD

3. The growing importance of SHRD • The competitive and volatile environment within which businesses operate is prompting senior management to take greater interest in HRD. • A number of possible triggers • Difficulties in recruiting skilled employees • Need to develop a more flexible and adaptable skill base • The need to align the potential of employees with business objectives • Greater emphasis on performance evaluation • The need for HRP and succession planning

4. Definition of SHRD • HRD is best seen as the strategic management of training, development and of management/professional education interventions, so as to achieve the objectives of the organisation while at the same time ensuring the full utilisation of the knowledge and skills of individual employees. • It is concerned with the management of employee learning for the long term keeping in mind the explicit corporate and business strategies.

5. Characteristics of SHRD • Integration with organisational missions and goals • Top management support • Environmental scanning • HRD plans and Policies • Line management commitment and involvement • Existence of complementary HRM activities

6. Characteristics of SHRD con’t. • Expanded Trainer role • Recognition of Culture • Emphasis on evaluation

7. Integration with organisational missions and goals • Integration of training and development into wider business planning. • Move from activities that are fragmented to a situation where T&D is more systematically linked to such goals or is so systematically integrated with organisational needs that it is seen as a necessity for organisational survival. • Effective HRD must be aware of mission, goals and needs of the organisation.

8. Top management support • SHRD must command the support and participation of top management. • HRD higher profile. • Reality is that in many cases top management is not committed to T&D: • Due to not being systematically trained themselves • Time constraints • HRD seen as long-term investment • Benefits of T&D intangible • HRD must improve quality and market their function • Management training is considered towards the bottom end of the management hierarchy

9. Environmental scanning • SHRD function must have continuous knowledge of its external environment. • Competition if not tackled effectively can reduce profit margins and therefore HRD budget. • SWOT analysis • Major triggers for HRD • Technological • Product market changes

10. HRD plans and policies • Formulation of basic plans and policies. • Hales sets out a number propositions on the development of HRD plans: • HRD plan provides a link between business activities and HRD activities • strategic business plans must exist before SHRD plan can be developed • Top management sanction and involvement • If firm is dominated by short-term considerations HRD plan will also reflect this deprivation • HRD plans are devised from both strategic plans and an analysis of internal and external environment

11. HRD plans and policies con’t • Reasons why a strategic HRD function should engage in policy formulation • Ensures that supervisors, line managers and top managers are all equally aware of their HRD responsibilities and participate in HRD activities. • It provides operational guidelines for management. • Sets out for employees the different types of education, learning/ development that is important for career progression. • Helps to define the relationship that exists between the organisations objectives and its commitment to HRD. • Enhance public relations with new recruits. • Employee career development opportunities. • Provides a guideline against which HRD activities can be evaluated.

12. Line manager commitment and involvement • Line managers conducting training sessions • Consultation with line managers • Line managers becoming involved in coaching and counselling of subordinates. • Line managers learning skills being updated. • Active involvement in HRD policy and planning process. • Line managers being made responsible for the identification of HRD needs within their department.

13. Line manager commitment and involvement con’t. • The competence of the line manager is vital to a successful implementation of SHRD. • Number of problems with the relationship between the HRD function and line manager • Ownership of HRD • Competence • Role definition

14. Existence of complementary HRM activities • Effective HRD must be a coherent package of complementary measures aimed at servicing various aspects of the employment relationship. • Some of these measures are - • HRP • Upgrading the quality of employees being recruited • Forging closer links educational institutions • Greater formalisation of PA and training needs procedures • A range of career development systems both individually and organisationally focused.

15. Expanded trainer role • Number of deficiencies of trainers • Many training specialists don’t view their activities as cutting edge. • HRD function a number of role conflicts. • HRD specialists are poor at marketing their services. • HRD specialists limited perceptions of their role. • SHRD requires a considerable role change • Marketing benefits of HRD • Proactivity • HRD as central to the achievement of organisational objectives • Developing a more strategic role rather than being simply learning specialists

16. Recognition of Culture • The need to match corporate strategy and culture • HRD function has a key role in maintaining and changing corporate culture. • HRD function cannot ignore the prevailing and desired culture. • Culture must be viewed as central to the function of HRD. • The transmission of culture is important part of HRD.

17. Emphasis on evaluation • Criteria of suitability - measure how far HRD activities fit the situation identified in the strategic analysis. • Criteria of feasibility - how feasible HRD plans and policies are in practice? • Criteria of acceptability -whether the consequences of the proceeding strategy are acceptable.

18. Benefits of SHRD • Greater extrinsic and intrinsic job satisfaction • Fewer accidents, lower labour turnover and less absenteeism • Greater customer satisfaction • Improved job performance and enhancement of career opportunities • Shorter learning times and more effective use of resource and less wastage of materials • The creation of a learning organisation that is flexible

19. SHRP • Entrepreneurial strategy • Dynamic growth strategy • Analyser strategy • Defender strategy • Rationalisation, liquidation and turnaround strategies

20. Experiences contributing to strategic thinking among HRD’s, Goldman 2008 • General work experience • Becoming a CEO • Being mentored • Being challenges by a key colleague • Monitoring results • Doing strategic planning • Spearheading a major growth initiative • Dealing with a threat to organisational survival • Networking

21. Recent Australian Trends in HRD:Peretz and McGraw (2011) • This research charts the evolution of Human Resource Development (HRD) in Australian organisations over a critical thirteen year period and analyses the effect of the company size, industry sector and ownership pattern on HRD practices. • The analysis is based on standardised data extracted from 793 responses to the 1996, 1999 and 2008/9 iterations of the CRANET Australia surveys.

22. Research questions • What is the evolution and broad pattern of HRD practice in Australian organisations over the period 1996-2009? • Is there a difference between the HRD practices of public and private sector organisations over the survey period? • Are the HRD practices of SMEs and large organisations in Australia different over the time period of research? • What is the influence of industry sector on HRD practices over time? • Is there evidence of a ‘performance’ versus ‘learning’ dichotomy in the HRD practices of Australian organisations?

23. Evolution and broad pattern of HRD in Australia • HRD in Australia has been described as fragmented and narrowly focused around occupational skills and managerial control (Holland et al., 2007). • Government industry policy and work practices reactive, complacent and inwardly-focused approach. • According to Hutchings and Holland (2007), this approach resulted in T&D systems in Australian organisations that remained largely ad-hoc and crisis-driven. • In the early 1990s Training Guarantee Scheme - stipulated that employers should spend up to 1.5 per cent of gross wages and salaries on approved structured training for their employees.

24. Evolution and broad pattern of HRD in Australia • Radical nature of the changes to the HRD system in the last two decades. • Decline in nation’s competitiveness in the 1980s was the catalyst for Federal government intervention in T&D as a way of increasing productivity at the enterprise level. • ‘New Workplace Culture’, in which HRD has emerged as a potential key source of competitive advantage. • To reinforce micro-economic reforms, major changes were also made to the Australian national vocational education and training (VET) system.

25. National Training Reform Agenda • National Training Reform Agenda: • Changes to all training curricula to a competency-based framework • The breaking of the monopoly on training held by TAFE colleges and the creation of a competitive market for training provision • Giving industry bodies a role in policy-making • Creating a national system overseen by a joint state-federal statutory authority, known as the National Training Authority (Smith, 2003).

26. Methods • The seven sub-indices, which reflected a broad approach to HRD incorporating both ‘learning’ and ‘performance’ oriented items, included: • Training days per year • Training effectiveness assessment • Use of Kirkpatrick evaluation items • Career development • Formal Performance Appraisal (PA), • Inputs to PA process • PA data for decision-making

27. Findings • There was no consistent evidence of a widespread linear increase in the sophistication of HRD practices in Australian organisations over the period 1996-2009. • There was no significant pattern of difference between public and private companies’ HRD practices over time. • The HRD practices of large companies were generally more sophisticated than those of SMEs over the survey period. • The level of sophistication of HRD practices by industry sector has shown relative change, with one sector – Energy, Civil engineering and Mining – increasing in sophistication while all others declined over the 13-year period. The most pronounced declines were in Manufacturing and Services. • There is an overall shift in HRD focus away from learning orientated processes and towards those focused around individual performance.

28. Role of HRM strategic in decision making, Sheehan, Holland &De Cieri (2006) • HRM department provides operational support/processor of employment activities 8% • HRM department reacts to strategic decisions from senior management 7% • HRM department provides input and reacts to strategic decisions of senior management in personnel related issues 36% • HRM department is actively involved in all types of decision making 49%

29. Current HRD policy development areas, Sheehan, Holland &Di Cieri (2006) • Recruitment of talent 76% • Training 54% • Values 48% • Training efforts devoted to skill enhancement 47% • Management development 42% • Career management 39% • Skill development 37%