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Strategic Human Resource Development

Strategic Human Resource Development. K. Peter Kuchinke Professor, Human Resource Development University of Illinois at Urbana-Champaign Yuan-Ze University, April 2008. Outline. Strategic HRD Context, models, and definition Applications

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Strategic Human Resource Development

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  1. Strategic Human Resource Development K. Peter Kuchinke Professor, Human Resource Development University of Illinois at Urbana-Champaign Yuan-Ze University, April 2008

  2. Outline • Strategic HRD • Context, models, and definition • Applications • Human Capital Formation, Organizational Learning, and Implications for Life-long Learning Policies • Case Examples

  3. The “New” HRD • Employees as org. assets • Driving business strategy • Spanning organizational functions • HRD Deliverables: • Performance • Capacity Building • Problem solving/consulting • Org. change and development

  4. The “New” HRD • Employees as org. assets • Driving business strategy • Spanning organizational functions • HRD Deliverables: • Performance • Capacity Building • Problem solving/consulting • Org. change and development

  5. Strategic HRD • Integration of HRD with strategy formulation and implementation • Long-term view of HR policy • Horizontal integration among HR functions • Vertical integration with corporate strategy • SHR as core competitive advantage

  6. Firm Capitals • Human Capital • Knowledge, skills, abilities of individuals • Social Capital • Relationships in social networks • Structural, cognitive, relational dimensions • Intellectual capital • Knowledge and knowing capability of social collectivities • Procedural/declarative; tacit/explicit; individual/social • Value and Uniqueness of capitals

  7. Multiple Roles for HR (Ulrich, 1997) Future/Strategic Focus Mgmt of Trans- Formation/Change Mgmt of SHR Processes People Mgmt of Employee Contributions Mgmt of Firm Infrastructure Day-to-day/Operational Focus

  8. Definition of HR Roles

  9. Universal/Best Practice Models • TQM • Corporate culture, communications, voice/involvement, job design, training, performance measurement/evaluation, rewards, health/safety, selection/promotion, career development • Peters and Waterman “In search of excellence” • Org. culture, leadership, customer focus, core competency • High involvement management (Lawler) • Developing skills and knowledge, pay for performance, investment in HR, flexible operations, self-designing work systems, autonomous work-teams

  10. Universal HR Models • Pfeffer (1998) • Employment security • Selective hiring • Self-managed teams/decentralization of decision-making • Comparatively high pay linked to firm performance • Extensive training • Reduction of status differentials • Shared information • Quality Awards (M. Baldrige, State Awards, etc.) • HR Focus (work systems, education/training, well-being and satisfaction)

  11. Human Capital Architecture Uniqueness of HC: High Quadrant 1: Empl’t Mode: Internal development Empl’t Rel.: Organization focused HR Configuration: Commitment Quadrant 4: Empl’t Mode: Alliance Empl’t Rel.: Partnership HR Configuration: Collaborative HC Value: Low HC Value: High Quadrant 3: Empl’t Mode: Contracting Empl’t Rel.: Transactional HR Configuration: Compliance Quadrant 2: Empl’t Mode: Acquisition Empl’t Rel.: Symbiotic HR Configuration: Market-based Uniqueness of HC: Low

  12. Architecture of Intellectual Capital Uniqueness of IC: High Core Knowledge Idiosyncratic Knowledge IC Value: Low IC Value: High Ancillary Knowledge Compulsory Knowledge Uniqueness of IC: Low

  13. Contingent HRD (Kuchinke, 2004) • Propositions • HRD Structure and Staffing Industry Specific • HRD Investments conservative (System Maintenance vs. change) • HRD Core Processes Determined based on Perceived Utility

  14. Strategic HRD Roles • Swanson/Toracco (1995): • Helping implement strategy • Helping determine strategy • Setting strategy

  15. Human Capital Formation • Acceleration in changing organizational forms, roles, and processes • External: • Globalization • Technology • Demography • Competition • Internal: • Cycle time • Product innovation and introduction • Process innovation and improvement • Change as constant; ‘permanent white water’ (P. Vaill) • Shortened half-life of knowledge

  16. Nature of Work • Robert Reich: The work of nations (1991) • Routine production • Personal Service • Symbolic Analyst • Normative and rational models of management (Barley & Kunda, 1992) • Industrial betterment (1870 - 1900) • Scientific management (- 1923) • Welfare capitalism/human relations (- 1955) • Systems rationalism (- 1980) • Organizational culture (- present) • Correlates with economic expansion/contraction, environmental and technical certainty/uncertainty: Kondratieff longwaves)

  17. HR Capitals • Human Capital • Individual level store of knowledge, skills, abilities (e.g., Becker) • Social Capital • Group level, network characteristics, density, centrality, marginality (e.g., Adler and Kwon, 2002) • Intellectual Capital • Firm-level, formal (e.g., patents), informal (e.g., process knowledge (e.g., Nahapiet & Ghoshal, 1999)

  18. Organizational Learning • Information processing perspective • Environmental scanning, information acquisition, interpretation (Daft and Weick, 1984) • Information acquisition, storage, dissemination, interpretation (Huber, 1991) • Tacit -- explicit knowledge (Polyani, 1967) • Org. Knowledge creation spiral (Nonaka, 1995)

  19. Learning Organization • Senge (1991) • Systems thinking • Personal mastery • Mental models • Building shared vision • Team learning • Marsick and Watkins (1998) • Continuous learning at individual, group, and system levels • Knowledge generation, sharing, and evaluation • Systems thinking capacity • Employee participation and accountability • Supportive culture and structure

  20. Human Capital Formation • Firm-level • Corporate classrooms (Eurich, 1984) • US: $65 b/2006 direct cost, $220b total • 45% of firms provide formal training • 90+ hours per year • External training • Corporate universities • Non-US examples • Informal training, on-the-job training, action learning

  21. OECD Human Capital Research • OECD (1999) • Formal education, • Non-formal/enterprise-based training and labor market initiatives • Experiential learning • Learning in informal environments • HC Measurement: • Educational attainment, i. e.: years of schooling etc. • Adult skills (i.e.: reading, math)

  22. OECD Human Capital Research • Measures of investment • Expenditures on education and training • Time investment • Returns on investment • Employment patterns • Earnings • Firm-level outcomes • National level outcomes • Social benefits • Health outcomes • Crime, teen pregnancy

  23. OECD Human Capital Research • Policy issues • Adequate levels of HC investment • Appropriate sharing of investment costs • Optimal allocation of scarce resources • Equitable distribution of investments • Monitoring, measuring, and accounting

  24. Firm-level HC formation • Accountability and measurement • Business/education partnerships • Life-long learning • Burden-sharing • Technology and innovative learning strategies

  25. Johnson Diversey CaseCurrent vs. Future State of HR Strategic Partner Change Agent 35 20 25 40 Employee Advocate Administrative Expert

  26. Current vs. Future State of HR Strategic Partner Change Agent 35 20 25 40 Employee Advocate Administrative Expert

  27. OD Responsibility Level & Process Owner Global - OD Team Regional - Head HRBP Client - HRBP Manager

  28. Organization Development Roles & Responsibilities • The OD COE has a dual responsibility • Global implementation of strategic interventions • Cultural assessment and alignment • Performance Management • Succession Planning • Leadership Bench strength • Support to HRBPs on regional and client interventions • Process improvement tools • Intervention design • Knowledge transfer of OD skills

  29. Leadership Team Business Strategy Measures Of Effectiveness HR/OD Emerging Needs/ Feedback Solutions HR Business Partners Global OD Model

  30. Global OD Services • Program Management of global initiatives - • Core Employee Development • ES&D • Performance Management • Leadership Development • Consultation with senior leaders regarding - • Customized interventions • Assessment tools • Services contracted with HRBPs (based on the capacity of the OD COE) - • Regional OD intervention design

  31. HRD in Practice 3M Company: Industrial Markets Initiative (IMI) • 3M: 75,000 employees in 60 countries • Sales: US$ 15 Billion, 303rd on Fortune 500 list • IMI: Cross-Business Cooperative Strategic Effort with 6 divisions • Gap Analysis

  32. HRD in Practice East Central Minnesota Human Resource Development Partnership • 5 family-owned businesses/rural MN • Total workforce: 300, range 12 - 123 • Pine Technical College • WorkKeys assessment and training • Problems Solving; Interpersonal Skills, Communication Skills

  33. HRD in Practice Lucent Technologies • Global Fortune 50 Telecommunication Co, 140,000 employees, US$28 Billion Revenue • Leadership and Culture Audit for 2 US and 1 German production sites

  34. HRD in Practice Parkland College, Champaign, Illinois • Publicly funded community college in East Central IL • 17,000 Annual Students, 50% in Occupational programs • Business Training Center • Workforce Preparation Center

  35. HRD in Practice HRD responds to • Global Challenge • Quality Challenge • Social Challenge • High Performance Work Systems Challenge Source: R. A. Noe (1999): Employee Training and Development

  36. HRD Definitions HRD is… “the integrated use of training and development, organization development, and career development to improve individual, group, and organizational effectiveness.” (McLagan, 1989)

  37. HRD Definitions HRD is… “a process of developing and/or unleashing human expertise through organization development and personnel training and development for the purpose of improving performance.” (Swanson, 1995)

  38. HRD Careers • Classic Roles (McLagan, 1996) • HR Strategic Advisor • HR systems designer • Org. Change Consultant • Org. Design Consultant • Learning Program Specialist • Instructor/Facilitator • Individual development and career consultant • Performance Consultant • Researcher

  39. Roles and Job Titles in HRD • Advertised as • Instructional designer • Trainer • Training and development specialist • HR specialist • Learning systems architect • Chief learning officer • Education specialist • …..

  40. Example: HRD Consulting Firm • Process Mgmt International • Focus: Quality Management, ISO 9000, Org. Change • Products: Seminars, consulting, assessments, books • Size: 50 employees • Instructional Design (5), Trainers (10), Consultants (25), Admin (10) • Strategic Alliances in Europe • Revenue (2005): $5,000,000 • Clients: Chevron, IRS, Zytec, Medtech, Graton Beverages

  41. HRD in Practice East Central Minnesota Human Resource Development Partnership • 5 family-owned businesses/rural MN • Total workforce: 300, range 12 - 123 • Pine Technical College • WorkKeys assessment and training • Problems Solving; Interpersonal Skills, Communication Skills

  42. HRD in Practice Lucent Technologies • Global Fortune 50 Telecommunication Co, 140,000 employees, US$28 Billion Revenue • Leadership and Culture Audit for 2 US and 1 German production sites

  43. HRD in Practice Parkland College, Champaign, Illinois • Publicly funded community college in East Central IL • 17,000 Annual Students, 50% in Occupational programs • Business Training Center • Workforce Preparation Center

  44. Example: Multinational Corporation • Abbott Laboratories • 60,000+ employees in 120 countries • Five divisions • Corporate and division level HRD • Director of Training and Organizational Development, Ph.D. HRD • Staff of 15 (instructional designers, trainers, OD consultants) • Performance Management, Leadership Development, Quality Management, Expatriate Training, New employee orientation, regulatory/mandated training • Diversity Initiatives • Clients: Everybody! • Divisional and corporate roles (committees, councils, strategic planning)

  45. HRD in Practice 3M Company: Industrial Markets Initiative (IMI) • 3M: 75,000 employees in 60 countries • Sales: US$ 15 Billion, 303rd on Fortune 500 list • IMI: Cross-Business Cooperative Strategic Effort with 6 divisions • Gap Analysis

  46. Careers in HRD • Faster than average growth (DOL) through 2014 www.bls.gov/oco/ocos021.htm • Over 800,000 people employed in HR/HRD jobs (2005) • About 600,000 people engaged in learning activities, organizational HRD • Trends: • Better preparation of HRD professionals • Focus on Strategic HR • Technology, International, Diversity • Broader career options and career paths • Competition for good jobs • Strong employment opportunities outside of US

  47. Trends in Professional HRD Work • Higher Visibility • Higher Accountability • Greater Cross-Functional Involvement • Higher Performance Demands • Multiple Projects • Greater need for comprehensive business knowledge • Need for solid research and theory know-how

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