Human Resources Practices Related to a Knowledge-Based Workforce

1. Human Resources Practices Related to a Knowledge-Based Workforce Knowledge Management Workshop Washington, D.C. February 4, 2000 Jennifer Smith The Governance Network

2. Overview • The Changing Face of the Workforce • Challenges of Today’s Organizations • Employment Philosophy • Trends in HR Management • Attracting and Retaining a High Quality Workforce - A Competency Based Approach • Conclusion • Appendix A - Example Competency Models • Appendix B - Related Readings

3. Changes in the Workforce • Move from the age of industry to the age of information and knowledge capital - globalization • Highly educated, skilled and mobile workforce • Shifting demographic trends • Increasing competition between sectors for knowledge workers

4. Challenges Facing Today’s Organization • To shift the focus from financial capital to human capital • To attract and retain the best possible workforce • To motivate, satisfy and challenge the workforce • To define the workforce requirements to support organizational objectives • To improve client or shareholder value

5. Challenges Unique to the Public Sector • Public accountabilities • More educated citizens - leading to higher client expectations and demands • Requirements for broader consultations in the policy-making process - citizen engagement • Increasing move towards partnerships and collaboration in the delivery of programs and services • Limited ability to compete with the private sector based on financial compensation - more flexibility based on a total comp. approach • Organizations are rebuilding following years of downsizing - end of employment security • Aging of the workforce is particularly significant

6. The Ongoing Challenge:How to Create Competitive Advantage Through People Present and Future Past Job-related tasks, responsibilities, knowledge, skills and behaviours Knowledge, skills, and behaviours critical to the success of the organization

7. Employment Philosophy • Long Term Model (Personalization Strategy) • based on a long term retention strategy with extensive investment in the development of employees • emphasis on internal recruitment • generally associated with knowledge based industries • Short Term Model (Codification Strategy) • based on a short term retention strategy with a highly mobile workforce • emphasis on external recruitment • generally associated with service oriented industries

8. Trends in HRM: The New Framework for Creating Value Through People • Repositioning of the HR function • HR integral part of the senior executive team • role elevated to strategic business partner • introduction of HR consultancy or advisory model • Shifting Organizational Culture • integral role of culture, values and principles • model has shifted from employment security to an “employability” model • integrated leadership and accountability The shift from financial to human capital A customer focus will only emerge if first there is a people focus - where employees feel valued and supported in their development.

9. One does not “manage” people. The task is to lead people. And the goal is to make productive the specific strengths and knowledge of each individual. Peter Drucker Management Challenges of the 21st Century, 1999

10. Attracting and Retaining a High Quality Workforce Competency Frameworks Competencies: A combination of skills, knowledge and abilities that are essential for the success of the organization, individual performance and overall enhanced contribution NOTE:Competency-based models work best in organizations where employees are viewed as a contributor and partner rather than an input

11. Competencies ... Definition • Competencies • Knowledge • Power Systems • Distribution • Finance • Skills • Communication • Problem Solving • Analysis • Behaviors • Teamwork • Leadership • Customer Focus Traits The underlying attributes that cause people to behave in certain ways. Role/Task-Related Knowledge and Skills Motives, Personal Style, Traits, Attitudes • Personal Attributes • Energy Level • Ethics • Moral Courage • Self-Confidence • Stress Resistance Critical Behaviors

12. Three Major Components of Competencies Core • Competencies that are essential for strategy achievement. What must be done exceptionally well across the organization to deliver strategy and achieve organizational objectives? Business Knowledge • Competencies that are applied cross-functionally Functional • Required competencies to be successful in a particular function or job family

13. Organizational Competencies Change with Level and Role Strategic & Behavioural Competencies Business Knowledge Organizational Level/Role Functional Competencies

14. Benefits of Competency Models • Powerful tool for communicating new expectations for employees and for establishing a new corporate culture • Valuable tool for geographically disbursed organizations - ensures alignment of objectives throughout the organization • It facilitates broader horizontal linkages throughout the organization • Allows organizations to leverage the highest performance from employees by focusing on development

15. Essential Components of a Competency Model Note:All components are linked to the employment philosophy SuccessionPlanning Rewards Recruitment WorkDesign Competencies Training & Development PerformanceManagement

16. Components of Competency Models • Succession Planning • essential when using a leadership competency model • includes coaching and mentoring mechanisms • use of technology to track demographic shifts and the needs of the organization • Recruitment • hiring based on fit with organizational competencies • identify needs and incentives that are in demand by target population • i.e., what will attract people to your organization? Remuneration, challenge and interesting work, work environment, ability to work in the international arena, mobility, serving the public interest by contributing to the betterment of societies, etc.

17. Components of Competency Models(Cont’d) • Training and Development • development based on understanding of business • traditional skills training courses offered in tandem with competency develop programs • leadership development focuses increasingly on competencies • Work Design • competencies fit within a flatter, more horizontal work design model, often includes broad banding

18. Components of Competency Models(Cont’d) • Performance Management • Serves as a link between an organization's purpose and its people - essential part of any competency model • Based on personal and organizational goals • Provides essential measures of employee performance as it relates to competencies • Focus is on employee development and has evolved to become a mechanism for incenting key behaviours and attitudes: • Includes compensation, training, career development, multiple-level feedback and programs, including 360 degree feedback mechanisms • Performance increases (incentive pay) based on contribution not equity

19. Strategic Direction Corporate Objectives, Business Imperatives, Challenges Core Competencies & Behaviors Where we want to go What our people need & need to do How we get there Strategic Rewards Strategic Rewards Platform

20. Integration with Rewards Base Pay & Benefits Variable Pay • Core competencies • Roles & accountabilities • Critical performance results • Training and Development Performance Management

21. Is There a Business Case for Developing Competencies in your Organization? • Assumptions About the Future • What are the major forces which will shape your industry over the next few years, i.e., changes and challenges? • What are the most significant components of your organization’s competitive or business strategy, i.e., the short-list of things you must do extremely well to achieve desired results? • What are the most important business capabilities/skills your organization needs to acquire and/or develop to successfully implement business strategies? • Which people practices are the most important to helping you acquire and/or develop these capabilities/skills, i.e., training and development, HR policies, incentives, etc.?

22. Possible Competencies for a Research Based Organization • Core Competencies • Client focus/client satisfaction • Creating business success/managing change • Creativity and initiative/Innovation • Communication and interpersonal relations • Decision making • Leadership • Partnerships and collaboration • Teamwork

23. Possible Competencies for a Research Based Organization (Cont’d) • Business Knowledge Competencies • Conceptual thinking • Organizing and planning • Results orientation • Technical expertise • Functional Competencies • Business development • Entrepreneurial spirit • Resource utilization • Technical knowledge and skills

24. Conclusions Competency Model Implementation: Critical Success Factors • Competency profiles must be linked to the business goals of the organization • Development of the model is not solely an HR process - it involves line managers and employees • Competencies cannot be generically applied • Be patient - this is a long term change process • with this in mind, set deadline for completing competency analysis • recognize that perfection is unattainable - focus on practical competencies that can be modified over time

25. Appendix A Examples of Competency Models

26. Canadian Federal Department/Agency Core Competencies or Leadership Model

27. Fair and consistent in their decision-making, basing decisions on factual information, the collective input of others and sound judgement; Flexible and eager to adopt new ways of doing business that involves changes to the organization, processes or human resource management practices; Motivated by managing resources effectively and meeting Business Plan performance objectives of revenue targets within the context of protecting Canadian heritage; Shows a sound business perspective in identifying opportunities to meet the objectives of the organization more effectively; Driven by finding new and better ways of doing things in the field; and Confident in accepting the accountability for efficient and creative use of resources that goes along with their role. Believes in the guiding principle of ensuring the highest quality visitor experience possible with the resources available while maintaining integrity; Shows the strength of their convictions: upholds and when necessary, defends the image and values of the organization; Instinctively draws on the policies, legislation and plans of the organization to direct the delivery of services to the public; Resilient in their approach to continuous improvement, able to adjust to changing resources and priorities; and Inspires and energizes people in the organization to care about excellent performance and go the extra mile. Achieving the Mandate Strategic Thinking Making Decisions and Managing Resources • Contributes to the development of the organization’s vision, strategic priorities and direction • Makes effective decisions and manages resources to meet the objectives of the organization while ensuring the integrity of the National ______. • Demonstrates a firm commitment to commemorating, protecting and presenting Canada’s systems of National ______. • Has a clear vision for the organization, both on a Field Unit and national basis, and draws others, to this vision through their credibility and enthusiasm; • Recognizes and applies creative and innovative ideas to the development of strategy and plans, whether their own ideas or those of others; • Understands the concepts underlying sound public sector stewardship such as fairness and the public good; • Thinks in terms of the "big picture"- is able to predict future implications of decisions on the overall strategic direction of the organization, as well as on other parts of the organization, its stakeholders and clients; • Conceptual in thinking style, can quickly assimilate and integrate a number of complex issues and different perspectives; and • Reflects a sound knowledge of the organization’s policies, understands and can integrate the operational implications of policy decisions.

28. Building Relationships Through their enthusiasm and credibility, promotes important projects or initiatives in a way that others understand, appreciate and support them; Based on their sound knowledge of the organization’s strategy and plans, recognizes and develops opportunities to work with others, both inside and outside the organization; Confident and persuasive in representing the direction and needs of their Field Unit or the larger organization in negotiations with other groups; Maintains a strong network with individuals and groups both inside and outside the organization which generates information, resources and cooperation; and Has a personal style which allows for trusting, collaborative alliances or partnerships and open dialogue with the public, the industry, Aboriginal groups, local communities, the media, other levels of government and other stakeholders. Leadership and People Management • Communicates the organization’s vision, sets clear performance expectations, ensures that innovative human resources management practices are in place to recruit, renew, and retain a highly capable work force in the organization, and makes every effort to provide a positive work environment. • Contributes to the achievement of the organization’s goals by establishing and nurturing internal and external relationships • Through their strong identification with the organization’s vision as demonstrated by their behaviour and words, makes employees feel that what they are working towards has purpose and meaning; • Is honest, clear and forthright in communicating expectations and coaching others in their performance; effectively gives positive feedback and deals constructively with poor performers; • Has strong sense of their own strengths and weaknesses and knows when to draw on others; • Through sound insight and judgement, can attract and build a strong team, ensuring that a career development framework is in place to allow for growth and succession planning; • Respects and recognizes other people’s views, commitment, strengths and contributions to the organization, and ensures that their team knows when they have achieved success; • Recognizes that balance between work and other commitments is crucial to a healthy productive work life, and encourages others to do the same; • Takes pride in mentoring and developing others, ensuring that they have the support they need to continuously develop their skills and knowledge; and • Demonstrates empathy and understanding with people at all levels; able to intervene in difficult situations that cause conflict between individuals or groups.

29. International Pharmaceutical Company Functional Model

30. Example: Competency Model Sales Representatives Regional Sales Manager Common Competencies Achievement Orientation The ability to make things happen in order to meet or exceed organization goals. Leadership An ability to influence & motivate people, to work with them to develop and accept objectives & to lead through a constantly changing environment. Influence Leads others in generating solutions that represent the groups’ best collective thinking. Is adept at negotiating for shared results Business Development The ability to build and maintain personal relationships with clients, and within sales team, in order to identify clients’ real needs and to respond accordingly. Insight The ability to analyze and evaluate situations and people, developing awareness and making insightful deductions. Coaching & Developing An ability to effectively coach others so that they strive to perform at their optimal level, leveraging individual personal strengths and knowledge. Innovation The ability to constantly improve organization effectiveness and sales performance by taking ideas and concepts and doing new things with positive results Technical Expertise The effective application of knowledge of the business and/or knowledge. Keep abreast of technical/ professional field and possesses working knowledge of core area(s0 and understands how this technical knowledge impacts other areas of the business. Organization and Planning Set overall operational goals; develops plans to translate long term organizational goals into a sound framework to support and guide the development of operational plans Teamwork The ability to work collaboratively with others, regardless of level, as a contributing member of the team; helps build commitment and encourages full participation of all members in a spirit of cooperation and share accountability.

31. Federal Agency Positional Models

32. Key Accountabilities - Chief Financial Officer Key Accountability Areas - Chief Financial Officer Accountable to the Director and CEO, and to the Finance and Audit Committees of the Board for the overall financial integrity of the Corporation and all aspects of financial management and control. • Finance • Administration • Information Technology Key Competencies - Chief Financial Officer • FINANCIAL: • Ensures that financial management and control functions are integrated into all the Corporation’s operations and activities, through the development of long-term financial objectives and plans, control systems, policies and procedures for the management of financial and accounting operations, and the provision of financial policy and administration advice to senior management • Ensures that financial decisions, transactions and reports comply with the bylaws and requirements of the Corporation, and its Board of Trustees, the Financial Administration Act and any other applicable Act or central agency requirements • Ensures that the accounting records, the periodic budget, the annual financial statements and any other external reports are prepared in accordance with Generally Accepted Accounting Principles, and in a timely manner • ADMINISTRATIVE: • Ensures the effective functioning of the administrative support functions and departments of the Corporation, including but not limited to Purchasing, Information Technology and Distribution Services • PEOPLE MANAGEMENT: • Creates an environment of high employee satisfaction, motivation and productivity • Coaches people to perform to their potential and provides timely and effective performance feedback • Builds a team capable of providing high-quality financial, administrative and information technology services to the Corporation • Ensures alignment of team results with functional objectives and overall strategic plan • INTEGRATION: • Provides vision and strategic leadership for the corporation as a member of the Senior Management team • Along with other members of the Senior Management team, is involved in setting strategic direction of the Corporation • Crosses team boundaries to ensure consistent approach to financial decision-making and reporting • Key linkages: Director & CEO, Board of Trustees, other members of the Senior Management Team • CUSTOMER FOCUS: • Supports managers by ensuring that they have the common financial management systems and tools to meet the financial management expectations of the Board and to integrate commercial considerations into their decisions and actions in a consistent and timely manner • Ensures the effective use of information vehicles, such as information technology, records management and libraries • Ensures the effective dissemination of financial information • BOARD/GOVERNMENT RELATIONS: • Supports the Director and CEO in ensuring that the Board's financial objectives are integrated into the interpretations of the Corporation's mandate • Informs the Board of the Corporation’s financial position, prospects and results in a timely manner • Recommends to the Board appropriate delegations of authorities for the approvals of financial decisions and transactions • Ensures the integrity of financial performance reports provided to the Board and the Federal Government, including the Annual Report of the Corporation to the Minister • Serves as the Access to Information Officer of the Corporation • OPERATIONAL EXCELLENCE: • Provides advice on financial implications of policy and operational decisions with the goal of optimizing the cost-effective use of resources. • Ensures that managers and supervisors are working with the financial information and IT systems they require to effectively manage their programs, and to optimize the use of their resources RESULTS • FINANCIAL MANAGEMENT • Ensures sound financial management, administrative and information systems that promote maximization of cost efficiencies and operational effectiveness • Provides financial information to the right people in the right format, so that sound financial decisions are made • Communicates financial impact of policy or operational decisions in an effective and understandable manner • CUSTOMER AND QUALITY FOCUS • Listens to internal and external customer and assigns the highest priority to achieving their satisfaction • Strives to fulfill commitment to quality in provision of financial, adminsitrative and information technology services • Inspires and demonstrates a passion for excellence in every aspect of work • Creates a service mindset throughout the Corporation • JUDGMENT AND DECISIVENESS • Makes timely decisions, even when information is scarce or unavailable • Quickly sorts relevant from irrelevant information; grasps essentials of complex issues and initiates action • Makes decisions appropriate to level of responsibility, seeks authorization when necessary, and ensures decisions are implemented by the right people • Exercises good judgment in involving the necessary parties and using appropriate decision-making processes • Supports experimentation and prudent risk-taking (in self and others) to promote effective change PEOPLE • COMMUNICATIONS • Communicates in a candid, clear, complete and consistent manner and invites response • Listens effectively and probes for new ideas • Shares information and ideas across traditional boundaries • Presents financialinformation, ideas and issues with an appropriate level of detail • Effectively represents the Corporation's interests to the Board of Trustees, the media, various levels of government, the community and client groups • INTEGRATOR AND TEAM BUILDER • Encourages/promotes shared ownership for team vision and goals • Trusts others; encourages risk taking and boundaryless behaviour • Actively confronts barriers to team effectiveness • Selects talented people; provides coaching to develop people to full potential • Delegates whole tasks; empowers team to maximize effectiveness; is personally a team player • Fully utilizes diversity of team (strengths, culture, race, gender) to achieve success * Competencies that are not shaded represent core competencies, i.e. the unique capabilities and skills an organization needs to have in sufficient quantities to outperform competitors. Core competencies also represent an organization-wide capability which is based on the combined skills of individuals and teams.

33. Key Competencies - Chief Financial Officer (cont'd) LEADERSHIP • VISION • Effectively articulates Corporation's vision, mission and goals with team members, peers, customers and other key stakeholders (government, community, public, supporters, sponsors, media) • Supports and communicates a clear, customer-focused vision for both internal and external customers • Is forward-thinking, stretches horizons, challenges imaginations • Inspires and energizes others to commit to vision and strategic direction; captures minds, leads by example • Amends vision and strategic direction to reflect change impacting the Corporation KEY ACCOUNTABILITIES AND COMPETENCIES • INTEGRITY AND ACCOUNTABILITY • Follows through on commitments; assumes responsibility for own and subordinates' mistakes • Acts and behaves consistently with words; is absolutely trusted by others • Demonstrates an awareness of how own values, biases, needs, skills and style impact others • Translates both positive and negative experiences into lessons learned • Takes the initiative to make difficult decisions when necessary • IMPACT AND INFLUENCE • Establishes influential connections with individuals within and outside the Corporation • Persuades key decision-makers using informal networks, experts or third parties • Uses a variety of methods to persuade others • Develops give-and-take relationships that are beneficial to both parties • Demonstrates political astuteness in understanding and incorporating different stakeholder goals and interests into influencing approach • Is able to manage diverse interests in order to focus on a common direction for the Corporation CHIEF FINANCIAL OFFICER KNOWLEDGE • FINANCIAL MANAGEMENT • Understanding of the Financial Administration Act • Appreciation for the specific operating environment of a Crown Financial Institution • Knowledge of financial models and key measures of financial health • Understanding of the Canada Business Corporations Act • Knowledge of Generally Accepted Accounting Principles • INDUSTRY AND COMMUNITY • Understanding of the not-for-profit sector including markets, competition, issues of concern and best practices • Understanding of key stakeholders and their needs and interests : Board of Trustees, federal government, sponsors and supporters, clients, community, media and the general public/tax-payers • The Organization • Understanding of the legislated mandate  • Understanding of and support for the organization’s vision, including artistic vision, mission, goals and objectives as articulated in the Corporate Plan • BUSINESS MANAGEMENT • Understanding of the business and strategic planning process • Fundamental knowledge of how a corporation is run from a business perspective • Sound grasp of general management principles and current practices

34. Appendix B Tracking Related Readings Over Time

35. 1986 Alfred Rappaport “Creating stakeholder Value” At the business unit level, strategy is product-market driven. At the corporate level, it has a portfolio orientation. 1996 Robert S. Kaplan & David P. Norton “The Balanced Scorecard” Strategy implementation is at least as important as formulation and measurement drives effective implementation. 1998 Jeffrey Pfeffer “The Human Equation” The only sustainable advantage is an organization’s culture and capabilities, which derive from how you manage your people. 1980 Michael Porter “Competitive Strategy” Analysis Framework: 5 competitive forces - strategy is a competitive response. 1992 G. Bennett Stewart III “The Quest For Value” Strategy should maximize EVA - the stakeholders are the most important stakeholder. 1994 Nicholas Imparato & Omen Harari “Jumping the Curve” Four Principles: 1. Look a customer ahead 2. Build company around software and software around customers 3. Those who live the company’s values should prosper 4. Offer unconditional customer satisfaction 1997 Thomas A Stewart “Intellectual Capital” Intellectual capital has become the one indispensable asset of the corporation. It is the collaboration - the shared learning between a company and its customers which forges a bond between them that brings the customer back again and again. 1990 C.K. Prahalad & Gary Hamel “The Core Competence of the Corporation” Competition between firms is as much a race for competence mastery as it is for market position and power. 1982 Kenichi Ohmae “The Mind of The Strategist” Strategy must balance the customer, the competition and the company’s field of competence. Emerging Views on Measuring Value & Strategy 1999 1980 1990 2000