State of Idaho Enhancing the Effectiveness of the HR Function in Today’s Business Environment SEPTEMBER 20, 2011NEVILLE KENNING

State of IdahoEnhancing the Effectiveness of the HR Function in Today’s Business Environment

SEPTEMBER 20, 2011 NEVILLE KENNING

2© 2011 Hay Group. All rights reserved

About Hay Group: The facts and figures

84 Offices in48 countries

2600 Employees worldwide

8000+ clients $470m Revenue


Hay Group experience

Hay Group has extensive experience and has a proven track record in consulting with the Public Sector throughout the USA


Hay Group experience (cont’d)

State of Alabama

State of Arizona

State of Colorado

State of Delaware

State of Florida

State of Idaho

State of Kansas

Commonwealth of Kentucky

State of Louisiana

State of Maine

Commonwealth of Massachusetts

State of Minnesota

State of Mississippi

State of Montana

State of Nevada

State of New Hampshire

State of New Jersey

State of New Mexico

State of North Dakota

State of Oklahoma

State of Oregon

Commonwealth of Pennsylvania

State of South Carolina

State of South Dakota

State of Washington

State of West Virginia

State of Wyoming

Government of Guam

Hay Group has worked with a wide range of State Governments, such as:


Achieving strategy through people

ResultsStrategic

objectives LeadershipManagement

processes andsystems

Organization,team and job

design

Reward and recognition

Work processesand business

systems

Individualand team

competence

Values and culture

Integrated alignment process


Does HR add value?

-“nestling warm and sleepy in your organization, like an asp in Cleopatra’s bosom, is a department whose employees spend 80% of their time on routine administrative tasks. Nearly every function can be performed more expertly by others for less cost. Chances are its leaders are unable to describe their contribution to value added except in trendy, unquantifiable and wannabe terms, yet, like a serpent unaffected by its own venom, the department frequently dispenses to others advice on how to eliminate work that does not add value. I am describing, of course, your HR Department and have a modest proposal: Why not blow the sucker up?”

(Thomas Stewart- The Leading Edge- Fortune Magazine January 15, 1996)


Business Imperatives

Traditional Practice

Strategic Intent

OrganizationalCapability

Human Capital

HR ServiceDelivery

HR processestransactions

HR recruitsfor open jobs

HR for HR professionals

HR responds to

requests

HR isolated in

HR

Leading Edge

Managers ‘own’ people issues

Web-based portals / ‘paperless’

administration

Strategic talent management

Focus on Future Leaders

Precision workforce plans

HR drives strategic

solutions and leads effort

HR focus on OD to drive business results, promote agility & clarity

HR illuminates strategic issues to help drive the

business forwardHR aligns activity

with business strategy

HR proactively sources

talentManpower &

Succession plans

HR delivery streamlined by technology & outsourcing

HR partners on solutions

HR engages the business in

capability debate

ProgressivePractice

The HR journey


Defining the HR operating model

Transformational/Consultative

Transactional/Operational

People/ServiceDelivery

Policy/Process

Development

HR Business Partners “Corporate” HR

Centers of Excellence

HR Administration/Shared Services

HR Discipline LeadershipOperational Excellence

Strategic ImpactCustomer Intensive


No universal recipe for HR structure

Ideal design depends on business needs and readiness Role of HR: operations vs. business value Burning platform: cost vs. service Focus of control: centralized vs decentralized Complexity of the organization Key HR processes Nature of employment Technology status Change orientation Investment capacity Implementation capacity Courage


What are the characteristics of high performing HR functions?

This database of the Most Admired Companies has been captured by Fortune/Hay Group over the last 11 years

Organizations were rated by CEO’s, Senior Managers and Analysts against a range of attributes

Top performing clients were then interviewed to understand the precise practices that drove these judgments


Top quartile characteristics: the value chain

HR Planning Attraction & Recruitment

On-Boarding Performance Management

Development Transition

Translate Business strategy into required jobs and people

Move beyond today’s needs to skills of tomorrow

Link internal capability with demand pressure points

‘Walks the Talk’ of mission, value and culture

Creates strong link between the company and employee brand

Takes a rigorous approach to selecting employees for the longer term

Identify key challenges up front

Create 30-60-90 day plan

Ensure a clear commitment to implementing high quality process

Measure a broad range of lead and lag indicators

Clarity is driven deep into the business

Holds people to account

Creates cross-organizational working culture

Makes leadership development a top priority

Invests early in leadership development for mangers

Spots future stars early and supports their progress

Trains the team

Makes leaders accountable for creating leaders

Clear understanding of managerial capability

Create stretch assignments

Support transition through active training & development

Match person to required skills

Match role to personal motivation


Plan resourcing and HR delivery

Typical practices Below Benchmark

React to short-term supply pressures Exclusive focus on today's skills and capabilities Fails to link future demand requirement to quality of current supply

Top Quartile Benchmark Clear translation of business strategy into required jobs and people Move beyond today's skills and capabilities to consider those the organization will

need to survive and compete in the future including how they can be assessed Deep understanding of what capabilities will be more/less important in future and

understanding of current capability against these benchmarks


Attract and recruit people


Hire people for jobs not careers to meet short-term needs without considering longer- term requirements of the business

Maintain static competence models HR levers are not aligned to re-enforce the “image” of the organization

Top Quartile Benchmark Create strong links between the organization and employee identity Deliver on its promises of mission, values and culture Take a rigorous approach to selecting employees with an on-going re-assessment on

the competencies for success for the longer-term


On boarding people


Have no clear on-boarding process for supporting leaders but relies on managers ‘picking it up as they go along’

Let managers off the hook in implementing agreed process

Top Quartile Benchmark Formally address key questions about the new role and its implications for

maximizing performance Develop 30-60-90 day plan Culture strongly supports need for high quality process/content and necessary

development for leaders to do this


Developing people


Only provide leadership training for Senior Leaders Place over-reliance on ‘promotion through the ranks’ to enable leadership

development Focus on individual development rather than working more effectively in teams

Top Quartile Benchmark Leadership Development is a key Top Executive priority Invest early in Leadership Development Spot future stars early and support their progress Development linked to improving team performance not just individual performance


Manage people’s performance


Strong focus on lag indicators Lack of courage, consistency or understanding causes a failure to tackle

performance issues Failure to align all HR levers to reinforce consistent messages, (reward, culture,

performance management, succession)

Top Quartile Benchmark Equal focus on lead and lag indicators ‘Line of sight’ between strategy and roles is clear throughout the organization Poor performance is tackled Performance measures support need to work across boundaries


Transition people


Are not good at giving stretch assignments; based on leadership potential vs. technical ability

Do not have a systematic way of planning for moves on a pro-active basis but tend to be driven by events

Top Quartile Benchmark Clear understanding of managerial capability Create stretch assignments Transition supported through active leadership training and development Role matched to peoples skills/competencies and motivation


Do our HR professionals have what it takes to thrive and be effective in today’s business environment?

Can we move from often being perceived as “centralist controllers” to being effective business partners who are effective problem solvers with our internal “clients?”

Successful HR transformation requires our HR professionals to have a necessary blend of HR expertise and consulting skills, together with critical competencies to help our “customers” to identify and solve business issues

Issues for the human resources function


StrategicPartnering

Services Delivery

Administration

Costs Value Added

10%

30%

60%

60%

30%

10%

Value added human resources


Manage work culture, including the integration of different work cultures Attract, develop, and retain the next generation leaders Become a more effective business partner Help the organization reinvent/redesign itself to serve more effectively

Expectations of the HR function


Reduce routine, low value added work Align HR culture with Organizational culture Shift mindset from “HR Professional Expert” to “HR Process Expert/Consultant”

Human resources organizational change


CoachRelationship Manager

Trainer

ProjectManager

Content Expert

Facilitator

DoerHR

Consultant

The HR internal consultant “hats”


Leadership Listening, understanding and responding Analytical thinking Strategic business sense Impact and influence Teamwork and cooperation Achievement motivation Conceptual thinking Developing others Customer-service orientation

Critical HR competencies


Evaluating the Outcomes

Implementing the Solution

Diagnosing the Situation

Contracting/Partnering with Clients

1

2

3

4

5

6

7

8

9

10

The consulting framework


25

Establish credibility and trust Understand client’s business Active listening Strong communication skills; easily understood Analyze and synthesize issues Understand multiple perspectives Good conflict management skills Diagnose and suggest appropriate interventions/solutions to help client meet

their objectives Provide feedback without creating defensive reactions Accept feedback without reacting defensively

Consulting skills needed


Regulate clients Risk adverse Direct persuasion Technical expert HR results focused “Transactions” (e.g., benefits,

compensation, administrative)

Resource to clients Calculated risks Influence Process expert Business results focused “Transformations” (e.g., process

change, strategy, cultivating knowledge, developing talent networks)

Blending HR expertise with consulting skills


Centralized vs. decentralized

It doesn’t need to be an either/or The key is to define “who is accountable for what” and then establish the means by

which these accountabilities will be implemented: Policy Execution Review


What can we learn from other States?

Full range along the spectrum of how HR is organized and does business Example of Centralized – South Dakota Example of Decentralized – Texas The Importance of an HR Business Plan – South Carolina Effective Use of Single Point of Contact – New Mexico Effective Use of Measuring HR Effectiveness – New Mexico Effective Use of Technology for Communication of a Major Initiative – Wyoming


In summary

Manage work culture including the integration of different work cultures and organizations

Attract, develop and retain the next generation of leaders Help the organization to re-invent and re-design itself to do business more effectively Deliver core HR/Administration functions in a timely and efficient manner through the

enhanced use of technology and data The optimal mix of Centre of Excellence specialist advice and Division focused

generalists Provide value-added internal consultancy services - provide HR partners who

understand the human capital implications of business problems and can develop solutions to address them

HR services that are characterized by a focus on internal customer satisfaction A common policy framework and consistent application of policies

Documents

State of Idaho Enhancing the Effectiveness of the HR Function in Today’s Business Environment SEPTEMBER 20, 2011NEVILLE KENNING