HR as a strategic partner
This chapter examines the strategic role that the HR function is being increasingly asked to fulfil. A case study of how this approach operates at Price Waterhouse Management Consulting illustrates how the integration of HR and business strategy might be achieved.
KEY POINTS
Business strategy can be defined as a guide to action to enable the organisation to achieve both its immediate objectives, including its financial goals and the maximisation of shareholder value, and its longer-term aims. It is likely to consist of broad elements, such as the creation of a strong corporate culture based on shared values, or the attaining of market penetration through mergers, joint ventures and acquisitions. And it may also include particular elements designed to achieve specific results - for example, such as a human resource objective to reduce costly labour turnover, as part of an overall business plan to reduce costs.1 Strategy is susceptible to internal pressures and external threats and so is constantly changing, incorporating past experience and responding to unforeseen circumstances.2
The emergence of HRM in the 1980s firmly linked people management with business strategy. Whereas, in the past, personnel was considered "an operational and not a strategic management function", HRM places the emphasis firmly on its strategic nature.3 Storey has suggested that this is one of the key features distinguishing HRM from traditional personnel management.4 In practice, it has meant a shift away from traditional personnel management beliefs and assumptions according to which HR initiatives were typically reactive and piecemeal. While the strategic involvement of the HR function was previously perceived as marginal, it is now considered central and as constructively contributing to the organisation's development.
The HR function has traditionally been seen as low-status, and the HR professional has historically suffered from a lack of credibility.5 The headline of a recent Harvard Business Review case study, "Why doesn't this HR department get any respect?",6 perfectly reflects the low esteem typically afforded the HR function - hardly surprising, given the dominance of the finance function and a business culture that measures its performance against short-term financial objectives.7 As a result, HR has always had to justify its existence and demonstrate its contribution to the business. However, HRM's integration of the HR function into the business, and the more strategic role being played by the HR professional has increased the opportunity for HR to raise its profile and status substantially.
INTEGRATING HR AND BUSINESS STRATEGY
As was noted in The evolving HR function and above, HR integration with business strategy transforms the people management role from one that is almost exclusively operational into one that is considered central to the strategic planning process. Integration implies that "the formulation of business strategy and HR strategy are considered at the same level in the organisation and are 'owned' by the same people - and ideally by the board."8 As a result, there is an acceptance across the business that people management issues are of primary importance, and this understanding informs corporate strategy and managerial decisions from board level to front-line management. One commentator has remarked that it has been recognised that "HR is too important to be left to personnel managers but is instead a key strategic issue demanding the attention of all managers."9
However, the level of HR's strategic involvement and the degree of influence it can command depends upon the form that this integration takes. There are two main ways in which HR can be integrated with business strategy and each confers a wholly different role. The first approach holds that HR activities should be integrated with organisational strategy through the development and implementation of policies and practices that "fit" or "match" business objectives.10 This form of integration has two elements - external and internal (see below). The second notion sees HR as involved in strategy in a proactive, rather than reactive, manner, and at the decision-making stage, not just through implementation. In short, in this approach, HR has a significant input into strategy rather than simply reacting to, and implementing, the decisions of others.
Internal fit
Internal HR integration - one of the two types of "reactive" involvement - calls for an HR strategy whose various elements, from people resourcing to reward systems and training and development, are coordinated and mutually reinforcing, in order to provide the maximum support for the organisation in the achievement of its wider objectives. Misaligned HR systems can create considerable problems. For example, an HR strategy to develop greater teamworking is likely to be severely undermined if accompanied by, or introduced against a backdrop of, individual performance-related pay.
Management Review 8 found that learning strategies such as competency frameworks and Investors in People (IiP) can be effective in supporting broad HR objectives (See From training and learning to development ).11 IiP supports HR by requiring a systematic and consistent approach through which to analyse, assess and agree the performance of individual employees (which, in turn, is increasingly being used to determine staff remuneration). Meanwhile, competency frameworks are typically no longer confined to recruitment and selection, but have spread to other HR activities, such as performance management and reward. Competency programmes are increasingly being used as a "strategic tool to reinforce corporate goals and objectives".12
External fit
External HR integration is more explicitly concerned with the function's fit with predetermined broad corporate objectives. So, for example, an organisation pursuing an innovation strategy which requires a "high degree of creative behaviour, a longer-term focus, a relatively high level of cooperative, interdependent behaviour" will implement an HR strategy in line with these needs. This could take the form of "performance appraisals that are more likely to reflect long-term and group-based achievements" and "compensation systems that emphasise internal equity rather than external market-based equity."13 As a result, the HR function "would become strategic by virtue of its alignment with business strategy and its internal consistency."14
Performance management, a process that integrates organisational and individual objectives to achieve improvements in corporate performance, is a prime example of how an HR strategy can support broader business aims. Performance management is typically linked with corporate goals in the manner outlined in this example from the British Medical Association:
"Business strategy and plans are interpreted into departmental structures which dictate the jobs, competencies and performance required. A review process (appraisal) is used to establish performance standards and identify training and development needs which form part of the learning activity required to achieve specific business goals. These feed back into the overall plan to establish the degree of success."15
Management Review 2 reported that "the clarification and greater understanding of corporate goals is one of the most important benefits associated with performance management".16 Indeed, Edinburgh International Conference Centre said that its performance management systems had led to a greater "focus on business objectives", and Jamont UK claimed that, as a result of implementing a performance management programme, the company was better able to "link individual effort to corporate plans".17
TOWARDS A MORE INFLUENTIAL ROLE
"HRM cannot be conceptualised as a stand-alone corporate issue. Strategically speaking it must flow from and be dependent upon the organisation's (market oriented) corporate strategy."18
The above quotation is a clear statement of the "corporate fit" view of HR's strategic involvement referred to above. Integrating HR with business objectives means that HR strategy must match the organisation's chosen competitive strategy, whether it is cost reduction, innovation, quality enhancement or other aim. HR practices, such as appraisal, employee development, reward and selection, must be "tailored to match the company's growth objectives and product life cycles", irrespective of employee needs.19 The HR emphasis is on the implementation of strategy determined by others, and the personnel professional is afforded only minimal participation in the strategy formation process. The result is that HR is essentially "excluded at the point of decision".20
But if the HR function is not at the heart of the decision-making process, it will be unable to influence the organisation's strategic direction or have an input into key business decisions, such as investment plans and technological change. Yet not only would many HR professionals regard such an involvement as desirable from several points of view: lack of it at this stage could also have possibly undesirable consequences for the organisation itself. For example, workforce considerations often play only a minor part when important business plans are hatched, but they could have far-reaching consequences.
British Airways' decision to make an estimated £42 million savings by, in part, imposing a new pay and conditions package on cabin crews in 1997 provoked a three-day strike, cost the business an estimated £125 million and caused significant disruption to passengers.21 Although a negotiated settlement was finally reached, the strength of feeling among staff evoked by BA's decision to impose the proposed package on all cabin crews after agreement was reached only with the smaller, breakaway union, Cabin Crew 89, suggests that the people management impact of the cost-cutting strategy was not clearly identified at the outset. Colling, in a study of BA, concluded that "severe programmes of cost constraint have been implemented with dramatic consequences for the management of labour within BA."22
Boxall has suggested that "where executives perceive marketing and cost variables as the only strategic concerns [they] run the risk of seriously alienating their employees".23
According to Mintzberg, strategy is formulated rather than formed and should be viewed as a "pattern in a stream of decisions" rather than a rational plan of action.24 Strategy typically emerges through a "complex interplay of social, cultural and political factors" consisting of internal and external organisational influences, and managers are continually required to reassess and readjust their business plans.25 Where the HR function is reacting to, and is marginal to, corporate decision-making, it is extremely difficult for it to play a meaningful part in this process. This situation is exacerbated where an obsession with short-term financial performance precludes any long-term planning and investment in HR. Applying a group-wide HR policy, that has been defined by corporate strategy, in multi-divisional organisations is also extremely difficult.26
Best practice and contingency HRM models therefore advocate that HR should have access to the strategic decision-making process, possibly through direct HR representation at board level or, at the very least, via the chief executive or other senior manager/managers who recognise that the human resource is a significant potential source of competitive advantage (see figure 2.4 in The evolving HR function, for details of models). This is the "proactive" HR role referred to above.
INTEGRATION IN PRACTICE
In practice, research has found conflicting evidence of the extent of HR's strategic involvement in either the reactive or proactive roles. A 1989-90 Irish study reported that in only nine (all foreign-owned) out of 97 organisations surveyed were HR issues "integrated into strategic plans" and personnel was represented on the board.27 A 1986-88 UK study of 15 "mainstream" organisations reported similar findings; in only three of the enterprises (Rover, Bradford Council and Smith & Nephew) "was there evidence of [HR's] strategic integration with the corporate plan".28 However, more recent work with the same organisations found that "by 1993-94 the case companies had begun to take a strategic view of HR management."29 In addition, a US study of 115 subsidiaries of Fortune 500 companies reported that the majority had integrated their HR and strategic planning systems.30 Specifically, the study found that in almost 69% of cases a company's strategic plans included an "explicit discussion of HRM issues", and that in nearly 68% of surveyed businesses "HRM executives participated in high level strategic planning meetings".
An IPD report found that over half of 27 organisations studied described their HR function as "fairly well" integrated, although interviewees also expressed the wish that it would become more integrated and "involved earlier in the making of decisions such as mergers and take-overs, and redundancies."31 Gennard and Kelly reported that the personnel directors in 17 organisations, including John Brown Engineering, IBM (Greenock), Pilkington Optronics and Roche - who believed there was little difference between HRM and traditional personnel management - maintained that the HR function had always been involved in formulating business strategy and that its role could best be described in the following terms:
On the other hand, another study reported that although there was evidence of "strong linkages between HR strategy and business strategy", the HR function "was always a second order decision-making process."33 And, while UMIST research found that the "personnel function was involved in strategy to a significant extent", it was also the case that this rarely represented "an integrated HR strategy".34 In fact, only five organisations had "anything like an integrated HR strategy", and this was typically developed in partnership with line management.35 Nonetheless, it was clear that HR's primary role was involvement in the strategic decision-making process rather than simply providing material to inform strategic decisions or their implementation (see figure 3.1).
Figure 3.1: HR's level of strategic involvement
Answers to the question "Which of the following most closely describes the nature of the HR function's involvement at a strategic level in each of the following areas?"
|
Issue |
Develops strategy alone |
Develops strategy with the line |
Provides information to inform strategic decisions |
Implements strategic decisions |
None |
|
HR planning |
9% |
49% |
26% |
6% |
10% |
|
Recruitment and selection |
15% |
49% |
14% |
16% |
5% |
|
Work design |
2% |
25% |
24% |
13% |
35% |
|
Performance management |
7% |
44% |
23% |
10% |
16% |
|
Quality initiatives |
4% |
38% |
17% |
11% |
29% |
|
Training |
10% |
60% |
12% |
7% |
11% |
|
Management development |
10% |
57% |
10% |
7% |
16% |
|
Career planning |
7% |
50% |
16% |
6% |
22% |
|
Communications |
10% |
53% |
17% |
10% |
10% |
|
Employee relations |
16% |
56% |
15% |
7% |
5% |
|
Health and safety |
13% |
38% |
15% |
14% |
21% |
|
Reward |
8% |
45% |
17% |
14% |
17% |
|
Redundancy and dismissal |
11% |
46% |
23% |
14% |
6% |
n = 214. Source: Torrington D (1998), "Crisis and opportunity in HRM", in Sparrow P and Marchington M (eds), Human resource management: the new agenda (Financial Times/Pitman Publishing, London), p.30.
The majority of organisations surveyed by Management Review report that the central HR function is mostly responsible for HR strategy, with line management jointly or solely responsible in only a small minority of cases for specific issues. Line management at the Manchester site of cereal manufacturer Kellogg Company of Great Britain and Tesco plays a joint role with central HR in developing employee communications policies and practices, and it also performs a joint role with HR in all aspects of training and development in the Prison Service. At Kidderminster-based Tomkinsons Carpets, line managers are solely responsible for developing and setting pay budgets, and at Tibbet & Britten this was the case with regard to employee relations issues, such as handling disputes and union recognition. Figure 3.2 illustrates the level of strategic involvement of central HR, business unit/site HR and line management in developing a range of HR strategies.
Figure 3.2: Strategic involvement in a range of HR strategies
n = 41
HR on board
Sisson has suggested that if the HR function does not have board-level representation then it will have no input into the key decision-making process and its contribution will be limited to "dealing with the implications of implementing such decisions".36 But an in-depth study of eight organisations found that only one company - Citibank - had an HR director at corporate board level, although at both Hewlett-Packard and WH Smith the "HR director was fully involved in formulating corporate strategy."37 In contrast, neither BT's nor Glaxo's HR director played any significant role in formulating strategy. However, this report also found that access to the decision-making process did not necessarily rely on board-level HR representation. At Glaxo, for example, HR issues were an "integral part of the corporate strategy" and this was due to the "close informal relationship" between the HR director and the managing director. In addition, on the basis of HR's role at Hewlett-Packard, the authors concluded that "people management issues were so integrated with business strategy that the formal presence of an HR director on the board would be an irrelevant criterion for assessing access to corporate strategy."38
The UMIST research noted above also found that having no formal HR board presence "did not necessarily impede personnel's influence", with senior HR people finding alternative ways of exerting authority, such as attending board meetings on an ad hoc basis.39 It was also the case in some companies that even where HR was directly represented at board level, the HR director "did not have much say in the decisions but dealt mainly with the implications, implementation and flowdown of the strategic initiatives."
Management Review's own research tends to support the view that HR board-level representation confers a greater strategic decision-making role on the function and concurs with the findings of the second company-level industrial relations survey which argued that the existence of an HR professional on the main board made a "substantial difference".40 Our findings show that almost 53% of surveyed organisations have a board-level HR director, and that in a further 32% of businesses the HR function is represented on the board by another director (see figure 3.3).
Figure 3.3: HR's board-level presence
n = 41
Organisations with full HR director representation on the board include construction group Galliford, insurance companies ANZ Investment Bank and Royal Liver Assurance, brewer Scottish & Newcastle and the public sector enterprises Royal Free Hampstead NHS Trust and the Prison Service.
According to our findings, organisations with an HR director on the board are far more likely to involve HR in the initial decision-making process in determining corporate objectives and business restructuring and in the setting of financial and other targets than those with no HR director on the board (see figure 3.4). In almost 82% of businesses with a board-level HR director, there is direct HR input into the determination of corporate objectives, but there is similar input in only 31% of enterprises where HR is represented by another director and in only 17% of those respondents with no HR board presence. And more than half (54%) of organisations with HR board members involve them in setting financial targets, whereas this occurs in less than 16% of enterprises where there was no direct HR board representation. Moreover, there is no HR input whatsoever into the setting of financial targets in 46% of cases where HR is represented on the board by another director and in 50% of organisations with no HR board presence. In contrast, there is no HR input into financial target-setting in less than 5% of businesses with HR board membership.
Figure 3.4: HR's input into corporate decision-making process
n = 41
Other research has reported similar outcomes. One study found that in the case of events such as mergers and acquisitions, where "really important strategic decisions" are taken, the presence of an HR director "increased the likelihood that personnel issues were taken into account" and that the personnel function was involved in aspects of decision-taking.41 In 75% of cases, HR gave advice on how to improve productivity in acquisitions, a figure that rose to 90% where HR had a direct presence on the board.
INCREASING STATUS?
HR's shift from concern for administrative and procedural matters to strategic involvement would suggest a corresponding increase in the function's status. Shipton and McAuley's business manager model, which was examined in chapter two and involves HR professionals contributing to business success by acting as general business managers, describing their role in financial language and treating the rest of the business as customers, claimed that such a role for HR scored highest in terms of power (see figure 2.3, in The evolving HR function). Power within an organisation can take the form of status (a seat on the board) or resource control (command of communications and information systems, for example) among other manifestations. Legge suggests that in the future, HR's power
"will depend on the extent to which it can achieve responsibility for developing, sustaining and reinforcing . . . key corporate values that will serve to integrate and direct organisations."42
It was noted in chapter two that employers surveyed for this issue of Management Review report an increase in the influence of the HR function within their business over the past three years and that closer HR involvement with business strategy and policy-making, and a stronger focus within the business on managing and developing people, are the main reasons given why this had occurred (see figure 3.5).
Figure 3.5: Reasons for increase in HR influence over past three years
n = 27 (respondents could indicate more than one reason). "Other" includes HR director's influence at board level; business and cultural change; reputation for doing a good job and providing good advice.
Surprisingly, however, of the organisations with board-level HR directors, only two thirds (63%) report an increase in HR influence over the past three years. Indeed, two organisations, fax machine and printer manufacturer Brother Industries and Stagecoach subsidiary South West Trains, state the opposite. This was in spite of the fact that at Brother Industries "HR is taking a more facilitating role, supporting line management in functional duties and [adopting] a more strategic role in decision-making and [in the] formulation of corporate issues/policies." The decline in influence of HR at South West Trains is a direct result of devolving activities to line management. This has led to a loss of "respect for central personnel and [line managers] tend not to use us", although HR has an input into determining corporate objectives at the development stage.
CASE
STUDY 1
HR's role in turning strategy into reality at Price Waterhouse Management
Consulting
|
PROFILE |
Price Waterhouse Management Consulting (PW) is the consultancy arm of the chartered accountants and tax advisory business. It employs around 2,500 people across Europe. The consultancy business has grown considerably since 1993 so that it now has a presence in 26 continental countries. In January 1996, the European and US businesses combined to create a global consultancy practice. PW is one of the "Big Six" global consultancies and in the 1997 fiscal year it recorded a turnover of $1.4 billion. It specialises in IT consultancy and the management of change. |
|
INTERVIEWEE |
Mike Okninksi, head of European human resources |
|
FOCUS/ISSUE |
Moving HR from an operational function to a strategic business partner |
A less than spectacular set of operating results in 1993 was the catalyst for a cultural transformation at Price Waterhouse Management Consulting (PW). Like the other "Big Six" management consultancies, PW had weathered the early part of the recession pretty well, so the figures were doubly disappointing. Another major concern was that although the company was designated a Europe-wide business, it was in reality a group of individual, and largely autonomous, national practices operating under the same umbrella. There were no common standards, and partners ran their practice groups as they saw fit, with little sense of sharing or of cooperating with their colleagues in other parts of the business.
The change programme has involved the creation of a truly global business which is underpinned by a common set of values and standards of behaviour to which all staff, from long-established partners to new recruits, are expected to adhere. PW's new people-oriented capability statement has made the HR function central to its cultural shift. HR has developed and implemented not only an integrated programme that supports the company's new cultural direction and which includes revised career paths and new appraisal and reward systems, it has also been at the forefront of the strategic decision-making process itself. As a result, people issues are now a prime consideration in all business decisions.
BECOMING A GLOBAL PLAYER
Annual figures from the UK-based Management Consultancies' Association show that 1993 was a poor year overall for the industry in terms of the fees earned from the principal fields of consultant activity, notably IT, corporate strategy and organisation development, marketing and corporate communication, and facilities management. Hence, PW's lack-lustre operational performance that year was a common phenomenon across the industry and primarily reflected a downturn in public sector projects. Nevertheless, Peter Davis, PW's managing director, believed that the company needed to be transformed and that the best way of securing its position was to turn it into a global business.
Two elements were identified as necessary to the realisation of this objective. First, following discussions with fellow partners, including Mike Okninski, head of European HR and a Price Waterhouse partner for over 10 years, Davis came to the conclusion that a clear set of values should run throughout the business, which would promote the same sorts of desirable behaviour and establish a common way of understanding national cultural differences. In this way, PW customers would know exactly the standards of service to expect of consultants working on an assignment, and the company would be in a better position to understand the particular needs of its clients (an area in which consultants are generally criticised).
Second, the increasingly global nature of business meant that the European arm of PW and its US sister organisation needed to forge a closer working relationship. "It is a strategically sound thing to do. Many of our clients are global so the business needs to mirror this," says Okninski. In January 1996, globalisation of the business duly occurred when the US and European operations agreed to function as one global consultancy practice - covering Europe, Japan and the US.
That HR has played a key role in developing PW's strategic direction is in no small part due to the support shown by Davis, who, according to Okninski, is "passionately interested and involved" in HR issues.
SUPPORTING THE GLOBAL STRATEGY
Price Waterhouse boasts that its business is "built on the ability of our people to deliver value-added services to our clients". This lies at the heart of the company's common capability statement, which, according to Okninski, the top management team invested a considerable amount of time and effort developing. Highlighted are the people dimensions of the business, such as the value of caring, which consists of three elements: balance - "we seek to balance work and personal life"; respect - "we value individual and cultural diversity"; and recognition - "we recognise and reward excellence".
Okninski played a key role in devising the statement and, because of its people-centred nature, the HR function has been central in designing the systems to support it and the goal of globalisation.
Establishing the combined consultancy practice was the "easy part" of creating a global business, comments Okninski. Putting the necessary support systems in place to turn the capability statement into reality has proved more challenging. Developing a global deployment strategy, for example, is a logistical nightmare. Okninski says that while the technology exists to implement the same project or system in 10 countries across Europe, getting the teams in place entails navigating a myriad different social and tax regimes. One result is that the value of the allowances and rewards paid to each member of a project team will depend upon their country of origin.
Work permits are another source of potential difficulty. Whereas European Union residents are free to work without a permit in any EU country, the situation for their US-based colleagues is more complex. Americans deployed in Europe will always require a work permit - not just one, but a different one for each country. Moreover, all non-Swiss nationals need a permit to operate in Switzerland. Permits are confined to the region (canton) of issue, so that should a project move, for example, from Zürich to Basle, new permits will be required.
This is just one example of the problems that confronted PW's HR department as it attempted to bring the capability statement to life by implementing a range of integrated HR policies that could be applied anywhere in the world.
Career model that mirrors corporate strategy
PW has adopted a number of other HR policies that are linked directly to the company's globalisation strategy. The career model that has replaced the previous hierarchical "single path to partner" arrangement illustrates how HR policies are clearly aligned with the company's global business strategy. Under the new structure, attaining partnership status is no longer the only career option available to staff. Individuals now have the opportunity to develop their own particular strengths and interests and to follow a more varied career path. So, for example, if someone wants to specialise in a particular sector, that's OK.
Every member of staff has his or her own capability grid which maps their progress in terms of five elements of the new corporate culture - delivering to clients, learning, sharing, caring and leading. The grid is split into six levels, depending on the area of consultancy, and individuals are expected to have "successfully demonstrated repeatable ability to demonstrate all the capabilities listed for that level, at the specified level of supervision", before moving to the next stage. Colour-coding, which reflects each of the five cultural segments, helps people to develop skills and behaviours in particular areas and to identify the training that is required at a certain level.
By way of illustration, a consultant at level III, working in the project management field, will be expected to deliver a number of agreed outputs, including the development of a work plan that satisfies client requirements, and - under the learning element of the "cultural wheel" - completion of team leader training. Also, he or she will ensure that PW staff understand and are sensitive to the client's culture, something that is considered a key feature of the sharing segment.
Resource allocation and investment decisions are determined by the capability grid. Whereas, in the past, the allocation of staff to projects was largely left to partners, now a "bid review process", which is managed by two specialist resource managers, decides the most appropriate individuals to assign to a task. Shifting responsibility for deployment to specialists has resulted in the organisation getting a "phenomenally better insight into employees' work preferences" than was previously the case, says Okninski. Consequently, the company feels it is better able to assign people to projects that meet the individual's, PW's and the client's needs.
Caring for staff
A further example of how the capability model has been applied in practice, and one that emanates from the caring segment of the cultural wheel, is the adoption of more flexible work patterns. Staff had made it clear in the annual employee opinion polls (see below) that the long hours expected of them placed a considerable strain on those with families. It also undermined the company's ability to improve its staff retention figures. People are more concerned with lifestyle issues and balancing home and work, says Okninski. "Graduate recruits now ask whether they will be expected to work weekends and do overtime, whereas in the past they wanted to know the quickest route to partnership," he notes.
To combat the "long-hours culture", clients are now encouraged to adopt a different approach to how consultants work. One option offered to clients is the 5-4-3 system, which involves, in any one week, the consultants working four days on site, three nights away from home and one day at home or in the office.
MEASURING EFFECTIVENESS
Recruitment and retention are the key HR metrics. The labour turnover statistics (comparing annual and quarterly churn) are discussed each month at European operating committee level. "They are not just talked about as an agenda item, they are seen as fundamental to the business," says Okninski. "Recruitment and retention are very much part of the business strategy." In addition, first-year turnover is considered a particularly important measure of the quality of the recruitment process, especially in the US.
At present, staff numbers at PW are growing by around 38% annually and the company's objective is to sustain this level of growth in the medium term. HR's role in attaining this goal is one of the main issues occupying Okninski. "Our business will only be successful if we recruit enough of the right people and keep them," he explains. The career model, flexible working arrangements and international deployment, among other policies, have all been developed with this in mind.
Staff opinion polls provide an indication of how well or badly the organisation as a whole is doing vis-a-vis the company's value statements. January 1998 was the fifth year of the staff survey and the poll was conducted in 11 languages across 26 countries. PW has always responded to the results of the surveys. For example, access to laptop PCs was an issue raised in the 1993 poll. Now all staff have access to a laptop from the second day of employment.
Mike Okninski's personal development plan includes improvement goals in various areas, and his performance in achieving these targets is measured by the staff opinion poll.
One such field is staff development, and in 1998 he has the challenge of increasing the number of staff agreeing with the following statement: "This organisation is concerned with my personal development." Okninski and his staff are aware that one way to guarantee the achievement of this objective is to ensure that the career model is functioning well across the organisation and that partners are conscious of their responsibility to develop staff through coaching.
Another measure of whether PW's espoused values are becoming rooted throughout the business is the peer recognition system. This process is principally designed to ensure that the sharing ethos - clients, knowledge and resources, for example - enshrined in the cultural wheel is becoming the norm and that the "national silo" mentality that was evident in the past among partners from different countries is being eliminated. Every six months partners and directors have the opportunity to credit a colleague who has helped them achieve their goals.
Okninski believes that it is preferable to install a few key HR metrics that are obvious and observable in the business rather than evaluate every facet of performance. "You'll only get bogged down in swathes of figures and management reports if not," he suggests.
ONWARDS AND UPWARDS
Okninski believes that by bringing PW's professed values to life the HR function has moved from "something that is quite nice to have at the margin, but not playing a key role business" to a position where its activities have a clear link to the business. He says that the definitions contained in the capability model will alter as the business strategy changes.
Although Okninski admits that PW's HR approach is not flawless, he claims that, in terms of driving the business forward, it is highly successful. As an illustration, he says that "our business has grown beyond belief. Over the past year, revenue has risen around 40%."
1 Tyson S (1995), "Human
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(Institute of Personnel and
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2 Mintzberg H (1987),
"Crafting strategy", Harvard Business Review, July-August, pp.66-75.
3 Gennard J and Kelly J (1994), "Human resource management: the views of personnel directors", Human Resource Management Journal, vol 5 (1), Autumn, p.17.
4 Storey J (1995), "HRM: still marching on, or marching out?", in Storey J (ed), Human resource management: a critical text (Routledge, London), pp.3-32.
5 Legge K (1978), Power, innovation and problem-solving in personnel management (McGraw-Hill, Maidenhead).
6 Galford R (1998), "Why doesn't this HR department get any respect?", Harvard Business Review, March-April, pp.24-26.
7 Armstrong P (1989), "Limits and possibilities for HRM in an age of management accounting", in Storey J (ed), New perspectives in human resource management (Routledge & Kegan Paul, London).
8 Guest D E and Peccei R (1994), "The nature and causes of effective human resource management", British Journal of Industrial Relations, vol 32 (2), June, p.220.
9 Guest D E (1990), "Human resource management and the American dream", Journal of Management Studies, vol 27 (2), p.378.
10 Porter M E (1985), Competitive advantage (Free Press, New York).
11 IRS (1998), Learning strategies, IRS Management Review 8, January, p.26-27 (See From training and development to learning ).
12 IRS (1996), Annual survey of competency frameworks, supplement to Competency, vol 4 (1), Autumn, p.3.
13 Schuler R S and Jackson S E (1987), "Linking competitive strategies with human resource management practices", Academy of Management Executive, vol 1 (3), pp.207-219.
14 Boxall P (1994), "Placing HR strategy at the heart of business success", Personnel Management, July, p.33.
15 IRS (1996), Performance management, IRS Management Review 2, July, p.36.
16 Ibid., p.30.
17 Ibid., p.31.
18 Miller P (1987), "Strategic industrial relations and human resource management - distinction, definition and recognition", Journal of Management Studies, vol 24 (4), p.348.
19 Golden K A and Ramanujam V (1985), "Between a dream and a nightmare: on integration of the human resource management and strategic business planning processes", Human Resource Management, vol 24 (4), Winter, p.430.
20 Hutchinson S and Wood S (1995), Personnel and the line (Institute of Personnel and Development, London).
21 European Industrial Relations Review 285, October 1997, p.12.
22 Colling T (1995), "Experiencing turbulence: competition, strategic choice and the management of human resources at British Airways", Human Resource Management Journal, vol 5 (5), Autumn, p.29.
23 Boxall, see note 14, above, p.35.
24 Mintzberg, see note 2, above.
25 Whittington R (1992), "Putting Giddens into action: social systems and managerial agency", Journal of Management Studies, vol 29 (6), pp.693-713.
26 Purcell J (1995), "Corporate strategy and its link with human resource management strategy", in Storey, see note 4, above, pp. 63-86.
27 Monks K (1992), "Models of personnel management: a means of understanding the diversity of personnel practice", Human Resource Management Journal, vol 3 (2), Winter, p.34.
28 Storey, see note 4, above, pp. 63-86.
29 Storey J (1995), "Is HRM catching on?", International Journal of Manpower, vol 16 (4), p.10.
30 Martell K and Carroll S J (1995), "How strategic is HRM?", Human Resource Management, vol 34 (2), Summer, p.257.
31 Hutchinson and Wood, see note 20, above, p.11.
32 Gennard and Kelly, see note 3, above, p.19.
33 Hope-Hailey V, Gratton L, McGovern P, Stiles P and Truss C (1997), "A chameleon function? HRM in the '90s", Human Resource Management Journal, vol 7 (3), p.10.
34 Torrington D (1998), "Crisis and opportunity in HRM", in Sparrow P and Marchington M (eds), Human resource management: the new agenda (Financial Times/Pitman Publishing, London), p.29.
35 Ibid., p.31.
36 Sisson K (1995), "Human resource management and the personnel function", in Storey J (ed), Human resource management: a critical text (Routledge, London), p.97.
37 Hope-Hailey et al, see note 33, above, pp.5-18.
38 Ibid., p.10.
39 Torrington, see note 34, above, p.33.
40 Marginson P, Armstrong P, Edwards P, Purcell J and Hubbard N (1993), "The control of industrial relations in large companies", Warwick Papers in Industrial Relations 45 (Industrial Relations Research Unit, University of Warwick).
41 Purcell J (1994), "Personnel earns its place on the board", Personnel Management, February, pp.26-29.
42 Legge K (1987), "Women in personnel management: uphill climb or downhill slide?", in Spencer A and Podmore D (eds), In a man's world (Tavistock, London), pp.51-52.
