Managing Key Human Resources:Setting Objectives for Teams and Delivering Results
Dr. Roger DarbyCentre for Defence Management & LeadershipCranfield University, UKDefence Academy of the United Kingdom
Minister’s Vision 2013-14“….sets the defence priorities for the Ministry of Defence (MoD) for 2013-14. The document provides a clear vision for further development for the GAF to improve its capabilities to protect the independence, territorial integrity and sovereignty of Georgia, to participate in international operations and assist civil authorities during natural and man-made disasters. Our goal is to create a highly-capable, mobile, modern, fully-professional armed forces that is fully interoperable with NATO. The reforms that are planned to achieve this goal will be in line with the recommendations of the SDR 2013 that defines main directions to shape the armed force development and its final structure – Objective Force 2016.”
Guiding principles:• Using personnel and external expertise effectively• Exploiting institutional memory and experience• Encouraging innovative approaches• Decentralizing the decision-making process• Promoting teamwork across military and civilian structures• Ensuring a consistency of purpose
Vision = organisation’s desired situationIts purpose is to guide, control and challenge the entire organisation toward realising a shared concept of the organisation in the future.
Managing the Defence ‘Spaces’: The Battle Space the Business Space & Civil Military Relations…
Business spacePreparation of defence capability
Protracted timeResource constrainedAssembling people, equipment, training etc
• Civil Military Relations
* Cyberspace ?
BattlespaceOperational area
Short time for decisionsLess resource constrainedUsing people and equipment, within the constraints of the preparations made
)
Managing Resources to meet Strategic Needs
RESOURCES - tangible & intangible
Finance – PEOPLE - Plant/M/c - Technology
CAPABILITIES – to deploy resources to meet objectives
CAPACITY – sufficient social capital to meet requirements
- COMPETENCIES (CORE)- Capacity Building…
THE HUMAN RESOURCE CYCLE
Selection Performance Appraisal
Training
Rewards
‘CONTRACTS’ – and the Employment Relationship
Employee and employer perspectives matter – because managers’ & employees’
behaviour is influenced by their beliefs………..
HRM & CONTRACTS2 MAIN TYPES:
1. EMPLOYMENT CONTRACT – Legally binding – WRITTEN
2. PSYCHOLOGICAL CONTRACT - UNWRITTEN - (Military Covenant?)
“an implicit exchange between an individual and his organisation which specifies what each expects to give and receive from each other in the relationship.”
“the perceptions of both parties to the employment relationship, organisation and individual, of the obligations of implied in the relationship. Psychological contracting is the process whereby these perceptions are arrived at.”
- Development of the ‘individualism of the employment relationship’
The concept of negotiated exchange at the individual level offers distinct parallels with the traditional pluralist exchange of collective bargaining
Decisive - The Military Covenant
Valued By The Nation
Just Reward
Valuing Our People
Valued by the Nation
FairTreatment
Terms and Conditions of Service
Fighting Spirit
Valued by the Service
The Soldier
Fighting Spirit
The Military Covenant
“Do my job and be valued”
“Being able to enjoy my life”
“Look after my family – whatever happens to me”
Reward Management
“What gets rewarded, gets done…..” is the key that REWARDS reflect what the organisation see as important..
Important determinants:
Question of ‘QUANTITY’ (i.e. reward must relate to number of items produced)
V
‘QUALITY’ (i.e. reward may reflect reject rates or customer satisfaction rate)
‘PAY +’ = KEY HRM ISSUE…!
Ministry of Defence
Minister of DefenceVarious state departmentsLands; retired personnel;Finance; acquisition
Support organisations:inspectorate; analytic support;
intelligence; press services
1st Deputyminister
Deputyminister
Deputyminister
Deputyminister
Deputyminister
General Staff
Armed Forces
Militarypolicy &strategicplanningInternationalcooperationPersonnelEducation &Science
HumanitarianHealthcareCitizens’petition
SportsOversightLabour
Economic & administrativeConstruction
MunitionsArmamentsMaterials
TechnicalIndustrialEnvironment
AdministrationLegal
SupervisionInformationAccounts
Armed Forces
General Staff (MoD)Main Command Centre Support Forces Command
Joint OperationalCommand
Land ForcesCommand
Air ForcesCommand
Naval ForcesCommand
Western Southern North
Army Corps Directorate Air ForcesCommandDirectorate
NavalOperations
Centre
CoastalDefenceTroops
FormationsArmed Forces
PeacekeepersFormations
Land
FormationsAir Forces
FormationsNaval
Stand-byForces
(Supply Functions)
So, where does money fit in?
OBJECTIVES OF A REWARD SYSTEM
ENCOURAGE BEHAVIOUR THAT ENABLES THE ORGANISATION TO ACHIEVE ITS GOALS AND ATTAIN COMPETITIVE ADVANTAGE ATTRACT SUITABLE CANDIDATESRETAIN AND MOTIVATE CURRENT EMPLOYEESACHIEVE ITS ENDS AT AN ACCEPTABLE COSTENABLE FLEXIBILITY AND INNOVATION
Seven deadly sins that put reward strategies at risk
The seven reward
risk groups
How the risk arises Potential consequences
Strategic Misalignment of reward strategy
To the organisation’s goals
An inability to attract and retain the employees needed for success
Behavioural Misalignment of reward strategy to the required employee behaviours
The rewarding of inappropriate or unproductive organisational activity or behaviour
Financial Inadequate reward cost management
Poor value for money and, where relevant lower profitability or even loss
Operational Poor execution or failure of reward systems and reward processes
Inefficiency or inaccuracy of the systems or fraud in their operation
Implementation and change management
Poor implementation or change to the reward strategy and/or processes
Reward is managed ineffectively and therefore does not have the required impact
Legal and ethical Non compliance with organisational and societal values and legal and regulatory reward requirements
Employee claims or regulatory action that can affect an organisation’s financial healthy and its reputation
Governance Inadequate oversight and challenge to organisational reward strategy
Organisation pursues inappropriate policies
MOTIVATION: PROCESS THEORIESExpectancy Theory:
Equity Theories:
Goal Theories:
Behaviour depends on the outcomes that an individual values and the expectation that a particular type of behaviour will lead to those outcomes
Behaviour is affected by different levels of reward for the same amount of effort
Behaviour is affected by goals which are determined by the individual’s values and wants
REWARD MANAGEMENT
Economic(Extrinsic) Rewards
Social Relationships
Intrinsic Rewards
Overlap = Needs andExpectations in theworkplace
Components of the Reward Package
l
SecurityBase pay
Pay for performance
PerformanceRelated pay
Commission
Recognitionpay
Benefits
Skills - basedpay
CompetenceBased pay
Fixed benefits
Careerdevelopment
Incentive schemes
Direct rewardsExtrinsic
Job satisfactionCultural
satisfaction
Indirect rewardsIntrinsic
Total Reward
Personalgrowth
Flexible benefits
TYPES OF REWARD
Group-related
Security-driven:
•
Lifetime jobs
• Corporate prestige
Tradition-driven:
•
Cost of living increases
• Perks
Employability-driven:
•
Training and development
• Personal career plans
Contribution-driven:
•
Performance-related pay
• Merit bonus
Individual-related
Money-related
Non-Moneyrelated
PAYING PEOPLE RIGHT?
1. Create a positive and ‘natural’ reward experience
2. Align rewards with business goals to create ‘a win-win partnership’
3. Extend people’s ‘line of sight’ between effort and outcome, motivating ‘smart’ working over simply expending extra effort
4. Integrate rewards with strategic aims and kinds of contribution desired
5. Reward individual ongoing (input) value to the organisation with base pay
6. Reward results (outputs with variable pay
‘Involve and educate’ the workforce about the reasons and shared benefits for changing reward systems
Provide a clear managerial direction that individual employees must continue to ‘add value’, which the company will recognise with rewards
Ensure that all members of the workforce are ‘knowledgeable stakeholders’: they are to be shown how their efforts impact on the work team, business unit and company, including the need to adapt to customer needs
Use each ‘reward tool’ for what it does best, integrating each element of total reward to offer a customised ‘deal’
This has three elements: employee salary is to reflect increases in competencies the firm finds useful; consistent performance over time; and the individual’s value in the external labour market
It is uncritically accepted that the firm ‘must meet shareholders expectations’ (whose reasonableness relative to other stakeholders is not discussed); variable pay is deemed suitable as part of the ‘total reward’ offer to reward these ‘results’, as well as enjoining employees in the corporate project
Principle Comments
TO BE SUCCESSFUL REWARD SYSTEMS MUST…
• BE IN LINE WITH ORG. VALUES AND CULTURE• FIT WITH ORG. STRATEGY• INTEGRATE WITH OTHER HR STRATEGIES• REWARD RESULTS AND BEHAVIOUR• BE PRACTICABLE AND EASY TO IMPLEMENT• EVOLVE THROUGH CONSULTATION• BE CONSISTENT WITH MARKET RATES
Performance Management & SSM
1. What is your experience of performance management in SSM?
2. What is your knowledge of performance management in SSM?
3. What issues does Georgia’s SSM face introducing performance management?
Potential Issues
DefinitionsChallenges to instituting sustained SSR Transparency & accountability – not taken seriously
Two clients/customers – donor & recipient
Self assessment – interpretation of question areas Taxonomy – one size fits all?
Individual performance
Looking back
Looking externally
Looking forward
Perception data
Collective performance
Looking internally
Hard facts
The Measurement Compass: 8 directions :
- Need to take account of:- Look forward as well as looking backwards- Measure of collective as well as individual performance- External measure as well as internal measures- Perception data as well as hard facts
Definition
How would you define performance measurement?“Performance measurement is evaluating how well organizations are
managed and their value they deliver for customers and other stakeholders.”
Max Moulin
“The process of quantifying the efficiency and effectiveness of past action”Adams, Kennerley & Neely
Why Measure?
3 distinctive roles of measurement:ComplyCheck
Challenge
Neely - 4 CPs of Measurement
Check Position
Communicate Position
Confirm Priorities
Compel Progress
How Could this be Adapted for General Use?
Objective Top Level Measures
Sub Measures
Reputation Feeling of security by populationTrust in Security Sector Organisations
Trust in Armed GroupsTrust in Judiciary System
Accountability Increased oversight Fighting corruption & nepotismOmbudsman for complaintsIndependent scrutiny
Reform of Security Services
Support for Security Sector Reform
Improve training of police & security forcesTrial of security personnel responsible for violations
BalancedScorecard
Performance Management
Tools & Techniques
CapabilityReviews
UN, Country & Regional Models
Perform
ance Measurem
ent
Theories,Definitions
Methodologies
Excellence Models
SSM
Other Models
HUMAN CAPITAL CHECKLISTAlign human capital programmes with overall org. strategy –(HRM linked to Strategic Planning)
Evaluate the current worth of your human resources and the efficiency of your current human capital functions and programmes – (Skills Audit)
Measure the amount of funds and time you are spending to source, develop, and manage these resources –(Useful Metrics)
Assess the return on investment in human capital – (ROI measures)
Manage and minimise the risks associated with the employment of people - the least predictable of all assets – (Risk Mgt.)
Maximise the value of human capital - the most valuable of all assets! – (Recognise Value of HR Services)
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Setting ObjectivesStrategic Management Process
InternalAssessment
EnvironmentalAnalysis
StrategyFormulation(Planning)
StrategyImplementation
StrategicControl
Strategic Defence Review
Current organisationof the Armed
Forces
Current Capabilities
CapabilityGaps
Internal Assessment
Required capability
Aims of military security
State Capabilities for support of Defence
Threatassessment
Environmental
AnalysisPolicy Making
Definition of priorities
ManagementStrategy
Stage 1: Determine the VisionMinister’s Vision 2013-14
“….sets the defence priorities for the Ministry of Defence (MoD) for 2013-14. The document provides a clear vision for further development for the GAF to improve its capabilities to protect the independence, territorial integrity and sovereignty of Georgia, to participate in international operations and assist civil authorities during natural and man-made disasters. Our goal is to create a highly-capable, mobile, modern, fully-professional armed forces that is fully interoperable with NATO. The reforms that are planned to achieve this goal will be in line with the recommendations of the SDR 2013 that defines main directions to shape the armed force development and its final structure – Objective Force 2016.”
Guiding principles:• Using personnel and external expertise effectively• Exploiting institutional memory and experience• Encouraging innovative approaches• Decentralizing the decision-making process• Promoting teamwork across military and civilian structures• Ensuring a consistency of purpose
Stage 2: analyse vision according to 4 perspectives
BALANCEDSCORECARD
Measures
Targets
Initiatives
Objectives
ResourcesEfficiency/Effectiveness
Role/Purpose
CapacityBuilding
Four Questions to Ask
Requirements as defined by policy
What is our purpose?What do we need to do to achieve our purpose?What do we need in order to do that?What do we need for the future?
RoleEfficiency & effectiveness
Resources
Capacity building
Four Questions to AskMain Defence Forces
What is our purpose?
What do we need to do?
What do we need, to do it?
What do we need for the future?
Defend against major aggression;Defeat the enemy in a local war;Force … an armistice…
Combat & mobilisation readiness (90-120 days)Effective forcesEffective command and control bodiesPersonnel at 70% of required strengthProvision of weapons & equipment,State supportDevelop Command & Control systemLogistics supportImprove personnel policyImprove civil-military relations
Stage 3: express vision as strategic aims
BALANCEDSCORECARD
ResourcesEfficiency/
Effectiveness
Role/Purpose
Capacity Building
Future (Capability Building)
Are we building for the future?
e.g. Defence Balanced Scorecard 2008-12> - UK MoD
Purpose (Role)
Are we fit for today’s challenges and ready for tomorrow’s tasks
Resources
Are we making best use of our resources?
Enabling Processes (Efficiency &
effectiveness)
Are we a high performing
organisation?
Defending the United Kingdom and its
interests;
Strengthening international peace and stability;
Acting as a force for good in the world
UK Defence Scorecard in more detail
Purpose (Role)A. Current Operations:
Succeed in Operations and Military Tasks today.
B. Future Operations: Be ready for the tasks of tomorrow.
C. Policy: work with allies, other governments and multilateral institutions to provide a security framework that matches new threats and instabilities
ResourcesD. People: Manage our
people to provide sufficient, capable and motivated Service and civilian personnel..
E. Finance and Value for Money: Maximise our outputs within allocated financial resources.
F. Estate: Maintain and develop estate infrastructure of the right capability and quality.
Enabling Processes (Efficiency & effectiveness)
G. Military Equipment Procurement: Equip and support our Armed Forces for operations now and in the future.
H. Infrastructure Procurement: Invest in strategic infrastructure to support defence outputs.
I. Security & Business Continuity: Enable secure and resilient operational capability..
J. Safety: Minimise non-combat fatalities and injuries.
K. Reputation: Maintain our reputation amongst our own people and externally
L. Sustainable Development: Work with other government departments to contribute to the Government’s wider agenda, including sustainable development.
Future (Capability Building)
M. Future Capabilities: Develop the capabilities required to meet the tasks of tomorrow..
N. Change: Develop flexible and efficient organisations, processes and behaviour to support the Armed Forces.
O. Future Personnel: Deliver the personnel plans to meet the needs of current and future tasks
Stage4: Determine …
What are the critical success factors for achieving strategic goals?What are the critical measures that indicate strategic direction?What actions should we take?
Helps us to determine our priorities.
What are the standards that we need to achieve?
The beginning of the action plan.
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A UK Example: Resources
D.People: Manage our people to provide sufficient, capable and motivated Service and civilian personnel.
E. Finance and Value for Money: Maximise our outputs within allocated financial resources.
F. Estate: Maintain and develop estate infrastructure of the right capability and quality.
The vision:Defending the United Kingdom and its interests: acting as a force for good in the world…
People: Critical success factors
Ensure we have sufficient diverse people, maintaining manning balance and the right profile of skills within each service and the right mix of skills in the civilian workforce despite reducing numbers,Ensure our people are capable of doing the jobs we need them to do by keeping them healthy and training them well,Manage our people well, motivating them and offering them worthwhile can satisfying careers.
Manning Balance: Critical MeasuresEnd of
financial year:
2008/09 2009/10 2010/11 2011/12
Royal Navy/ Royal Marines
35,790 35,410 35,360 35,380
Army 101,660 101,630 100,560 101,510
Royal Air Force
40,830 40,360 40,670 40,170
Step 5: Cascade targets through the chain of command
Achieve full manning balance in each of the 3 services as soon as possible by:
Achieving overall Service manning balance (+1% to -2%) between the trained strength and the trained liability.
Maintain the correct profile of skills and experience within the regular Service manpower structuresImprove longer-term recruiting prospects by increasing the representation of minority ethnic groups within the Armed Forces.
Delivery responsibility: Chiefs of Naval, General and Air Staff.
Step 6
Consider your goals as the foundation for a control and reporting process
…
Resource Management
BudgetManning LevelEstateReputation
Reporting Performance (Example)
Output/Deliverables
OperationsEffectivenessPolicy
Process Improvement
TrainingLogistics Support
AcquisitionOutputs
Learning and Development
Investing in peopleLessons learned
Information
Technology
=satisfactory =minor weakness=serious weakness =critical weakness
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Value & Potential of the Scorecard Approach
A simpler, clearer statement of the strategic intent of the Defence Council & Defence Management BoardA more comprehensive view of performanceA clear focus on outputsAn insight into how the components of performance relate to each other & to the delivery of our key outputs
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Performance Management Benefits
Simplified strategic goalsFewer, more strategic, performance targetsBetter information on performanceIntegration of financial and non-financial reportingSharper focus on results
CONCLUSION.