Envisioning Programme on the Best Practice Manual

Third session: Human Resource Management

K.T. Lai

4 January 2016

Human Resource Management Defined

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Performance- based Reward /

Recognition

• Performance assessment.

• Potential assessment.

Succession Planning

Learning & Development

Plans

• Corporate Vision • Mission • Values

• Build or buy strategy.

Reward Management

• Work ability development.

• Core and flexible workforce planning. • Job design and evaluation.

• Strategic organization structure design and change management.

• Reward strategy and policy. • Reward system and structure. • Staff cost management.

• Merges and acquisition • HR due diligence. • Employment contract management. • Service contract management.

• Career coaching.

• Leadership development.

Business Objectives

Knowledge & Skills

Enhancement

Capability & Competency Development

Sourcing and Staffing

Performance Management

Organizational Design &

Development

High Potential Database

Manpower Planning

legal compliance, diversity, risk , crisis management

culture building, corporate social responsibilities

Source : K.T. Lai, 2015 2

• Performance objectives setting. • Competency assessment. HRIS, business mindedness, employee engagement

Strategic HR Management Processes

‘Competitive edge depends on an organisation having superior, rare, valuable, non-substitutable resources which are not easily imitated by competitors’

Source: Porter, M. Exploring Corporate Strategy

Competitive Edge and HR Management

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• WHY ARE PEOPLE IMPORTANT?

competitive advantage is about differentiation and that can only

come from fully deploying all the human resources available, and organisations can achieve this in a variety of different strategies.

this requires HR to move strongly away from its traditional personnel ‘cost centre’ approach and towards a HR strategy that sees people as a long-term investment.

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Competitive Edge and HR Management

• NGOs having designated unit responsible for Human Resources Management function

36.8%

63.2%

With Designated Unit

Without Designated Unit

Number of Respondents : 95

Source : HKCSS, NGO Salary Survey, 2014 5

Competitive Edge and HR Management

• Trend of devolving the roles of HR management to line managers ‘……..the importance of active management of people matters become

more clearly an integral part of every line manager’s job. Line managers must combine their commitment to the technical aspects of task completion with attention to people aspects and recognise the symbiotic nature of these two elements of the managerial role’

Source: Foot and Hook, (2008) , p9

Devolving HR Management Roles

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Organization Vision & Mission

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8

• Jobs exist to achieve the organization’s vision and mission

existence of organization (vision)

organizational business goals (mission)

focus (strategic priority areas)

targets (strategic objectives)

Jobs (performance)

Roles of Job in Achieving Organization’s V&M

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Roles of Job in Achieving Organization’s V&M

• How does each job contributes to the successful achievement of the business goals? (Principal Accountabilities)

• What are the key things that must be accomplished to be successful in achieving the business goals? (Critical Success Factors)

• What resources does the position control or influence? (Dimension)

• What important business decision does the job make or influence? (Decision-making)

• Who does the position interact with to accomplish these goals? (Internal/External Relationships)

Short Listing Interviewing

Hiring Engaging New Recruits

• From recruitment to engagement

• advertisement • receiving

applications • short-listing

applicants • setting up selection

tests Recruitment

•Interview •assessment •test

Selection

•orientation •placement on job Engagement

• offering the position • confirming

acceptance • reference and

background check Employment

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Sourcing and Staffing

Purpose Possible Dimensions of Achieving Purpose

Person - Job Fit • Job-related skills and competencies

• Job knowledge

• Previous experience

• Personality

Person - Organization Fit • Teamwork skills

• Expertise relative to other team members

• Preference for team-based work

• Communication skills

• Personal motivation / goals aligned with organization / department / functional unit purpose / values / goals

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Sourcing and Staffing

Source: Career Times

Person-job fit

Sourcing and Staffing

12

Source: Career Times

Person-organization fit

Sourcing and Staffing

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Perfect Prediction

Graphology, Astrology, Random Prediction

Educational Qualification

One-to-one Interview / Single Personality Scale

Competence-based Interviews Group Interviews / Composite Personality Scale

Ability Tests / Job Tests

Assessment Centers

• Psychometric Tests • Group Discussion • In-tray Exercises • Competence-based

Interviews

0

0.10

0.15

0.35

0.40 0.45

0.65

1.0

*

Validity of Assessment Tools (The degree of accuracy on predicting performance)

• Objective • Vigorous but • Costly and • Requires huge investment of

participants and assessors’ time

• Comparatively less objective and comprehensive but • Require less investment of time,

money and effort

• Less effective but • Commonly used approach

Source: A guide to validity coefficients from Meta Analysis, M Smith, UMIST, 1986 14

Sourcing and Staffing

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• Conversion of Staff on Time-limited Contract to Non-time-limited Contract

Sourcing and Staffing

60.8%

39.2%

Yes

No

Number of Respondents : 97

Policy to Convert Staff on Time-limited Contract to Non-time-limited Contract

Source : HKCSS, NGO Salary Survey, 2014

• Succession planning

− focuses on human resources quality and availabilities

− construct internal talent pipeline to ensure steady and known flows of qualified employees to higher levels of responsibility and impact

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Sourcing and Staffing

• Succession planning

− performance

− proven abilities demonstrated in the past achievement

− potential

− assessed abilities to be demonstrated in future achievement

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Sourcing and Staffing

1. Market alignment

− to gain a better view of the organization’s pay position in the market place by using a systematic process of collecting, evaluating and making judgments on information collected, to assist in policy formulation, budget and reward planning

− to provide data for

• setting pay levels to attract and retain employees

• developing equitable and competitive pay structures

Reward Management Philosophy

Source: Milkovich, G.T., Newman, J.M., Compensation, 9th Edition, 2008, McGraw Hill 18

2. Pay for performance − a movement away from fixed entitlements

− it is a combination of demonstration of performance and competency

− employees are rewarded for both their input (knowledge, skills and

abilities) and outcomes (deliverables)

− reward is awarded not only for what is done (targets) but how it is done (competencies), and is in proportion to results achieved

Source: Milkovich, G.T., Newman, J.M., Compensation, 9th Edition, 2008, McGraw Hill

Reward Management Philosophy

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• Personal Effectiveness

• Taking People with You

• Results Orientation

Customer Orientation

Business Mindedness

Personal Drive

Continuous Improvement

Innovation

Networking Communication for Impact

Developing Self & Others

Teamwork & Cooperation

Teamwork Leadership

Performance Driven

Critical Thinking

Expertise Organizational Commitment

Risk & Crisis Management

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Reward Management Philosophy

• Core competencies

ALIGNMENT

COMPETITIVENESS

CONTRIBUTIONS

MANAGEMENT

Reward Management

Source: Milkovich, G.T., Newman, J.M., Compensation, 9th Edition, 2008, McGraw Hill 21

• Base pay structure should

− align with the culture, characteristics and needs of the organization and its employees

− enable the organization to exercise control over the implementation of pay policies and budgets

− be equitable, fair, consistent and transparent in managing grading and pay

− be able to adapt pressures coming from market rate changes and skill shortages

− be flexible in operation and in continuous development

− provide scope for rewarding performance, contribution and increases in skill and competence

− be logical and clear which can be communicated to employees easily

Reward Management – Base Pay Structure

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3.5

33.5

12.7

17.2

13.5

19.5

0.0 20.0 40.0 60.0

Staff Covered

(%)

14.7

51.6

24.2

31.6

23.2

54.7

60.0 40.0 20.0 0.0

Adoption of Salary Structure

(%)

Strictly Following MPS as One of the Salary Structures

Modeled MPS Structure with Slight Fine-tuning of the Amount of Each Pay Point

Modeled MPS Structure, taking MPS Pay Midpoint for Particular Jobs as Maximum Point, WITH Fixed

Incremental Points, each Approximately Equivalent to 4.1 %

Self-Developed Graded Salary Scale WITH Fixed Incremental Points, each Approximately

Equivalent to 4.2%

Self-Developed Graded Salary Scale WITHOUT Fixed Incremental Points

Others

Number of Respondents : 95

Notes : 1. Respondents can choose multiple responses. 2. Percentages under adoption of salary structure may not add up to 100% as Respondents may have more than one salary structure. 3. “Others” includes - self-developed (MPS Referenced) grade salary structure with fixed incremental points; - no fixed salary structure; - salary structure modeled from the MPS structure, with a system in place to award incremental point that exceeds the midpoint, etc. for outstanding performance.

Reward Management – Base Pay Structure

23 Source : HKCSS, NGO Salary Survey, 2014

• Strategies − support reward philosophy

− in line with organization culture & value system

− meet diverse needs of employees

− increase of commitment employees

− help recruit & retain staff

− be cost-effective

− include tangible and non-tangible benefits

Reward Management – Benefits

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• Implementation consideration

− What are being currently offered in the market in general, in a specific sector?

− What benefit costs (if any) will be shared with employees? Is the benefit subject to abuse?

− What benefits are to be included in the organisation’s benefit program?

− What is the need for such benefits? Are they benefits that employees want?

− What is the purpose of the benefits? Do they satisfy the organisation’s strategic business objectives? Will they help attract, motivate and retain the right mix of employees? Will they reinforce the desired organisation culture?

− Which group(s) of employees should receive or be offered benefits?

− Will employees be able to select other criteria?

Reward Management – Benefits

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Total Reward Approach

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Senior Management / Management

Staff

Social Work Staff

Para- Medical

Staff

Corporate Staff

Frontline Staff

Number of

Respond- ents

Life Insuarance (Death Gratuity)

36.6% 31.0% 29.6% 31.0% 31.0% 26

Amount Payable (Average No. of Months Basic Salary)

36 36 36 36 36 12

Fixed Amount $100,000 $100,000 $100,000 $100,000 $100,000 10

Training Subsidy 83.1% 83.1% 80.3% 83.1% 83.1% 59

Amount Per Annum $1,200 $1,500 $1,500 $1,200 $1,200 45

Self-education Subsidy 38.0% 32.4% 32.4% 36.6% 35.2% 27

Amount Per Annum $15,000 $15,000 $15,000 $15,000 $15,000 9

Undertaking Requirement 33.8% 31.0% 31.0% 31.0% 31.0% 24

Years of Undertaking Required (Years)

2 2 2 2 2 18

27 Source : HKCSS, NGO Salary Survey, 2014

Reward Management – Benefits

• Alignment of − annual business planning cycle

− annual financial year cycle

− annual performance management cycle

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Performance Management

• To provide a forum for the exchange of mutual expectations of performance between employees and their supervisor

• To focus employees’ effort on the output of their work and the achievement of objectives that are linked to the relevant parts of the business plan

• To focus on improving short-term performance and also to support the long-term career development of employees

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Performance Management - Objectives

• Translate business objectives into individual’s goals and targets

• Set standards and provide regular feedback on performance to individuals

• Track and measure individual’s and team performance

• Prevent and cure performance problems

• Recognize and reward excellence

• Meet and optimize individual’s development and organization needs

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Performance Management - Processes

31 Source: Stones, R.J., 2008, Human Resource Management, 6th Ed. John, Wiley & Sons, pp 296

Performance Management - Processes

Awarding Discretionary Performance-basedIncentive Payment to Eligible Staff

Adopting Performance-based Approach for AnnualReview & Adjustment

Having Performance Assessment System

yes no

87.6% (N=85)

45.6% (N=26)

54.4% (N=31)

32.9% (N=28)

12.4% (N=12)

67.1% (N=57)

Practicing Performance Management

Source : HKCSS, NGO Salary Survey, 2014 32

• Performance appraisal

− may be viewed as an overall measure of organizational effectiveness: organizational objectives are met through the effort of individual employees.

Source: Stones, R.J., 2008, Human Resource Management, 6th Ed. John, Wiley & Sons, pp 298

Performance Appraisal

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• Objectives – take the lead

• in improving individual and organizational performance

• to support organizational objectives to achieve business

strategies

Learning and Development

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Learning and Development

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1. Human resource development

– individual staff development plan

2. Performance management

– competency-based performance enhancement

3. Talent development

– leadership and management development

Learning and Development

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• Developing a core competency model

– core competencies are effective behavior in meeting the desired and expected outcome of performance

– the knowledge, skills and personal qualities required for driving the business forward, and enabling people to achieve results

– they are common to people within the same level of management

Learning and Development – Competency Model

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• Make skills transfer easy

– maximize the similarity between the learning situation and the work situation

– provide adequate practice

– label or identify each feature of each step in the process

– direct the trainees’ attention to important aspects of the job

– provide advanced preparatory information that lets trainees know they might happen back on the job

Learning and Development – Techniques

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End

Thank you !

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