hr strategy 12
TRANSCRIPT
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UK Presidency of the EU
EPAN Human Resources Working Group
Innovative HR strategies project
Contents
Part One About the study 3
1. Introduction 3
2. Background to the survey 3
3. Aim of the project 3
4. The importance of context 4
5. Methodology 4
Part Two The changing world of HR 5
1. The importance of HR 5
2. What is innovative HR? 6
3. Evolving perspectives on HR 6
4. Models for the future 7
5. Implications 10
Part Three Findings 11
1. Overview 11
2. Questionnaire section one The HR Manager 11
3. Questionnaire section two How HR is organised 12
4. Questionnaire section three Internal and external drivers for change 15
5. Questionnaire section four changes made to the HR function over
the last 18 months 15
6. Key changes in HR function (question 4.1) 16
7. Summary of key findings 19
Part Four Illustrative case studies 20
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Appendix One Summary of questionnaire responses 23
Appendix Two References 342 INNOVATIVE HUMAN RESOURCES STRATEGIESPart
One About the study
1. Introduction
This report, prepared specifically for the UK Presidency of the European Union,
presents the results
of a survey into innovative HR strategies conducted across all Member States of the
European Union.
The National School of Government worked closely with the UK Cabinet Office to
design the questionnaire
for the Human Resources Working Group of the European Public Administration
Network. The National
School carried out the analysis of the returned questionnaires and prepared this
report.
Grateful thanks are due to all those who contributed to this study through completing
the questionnaire.
2. Background to the survey
The UK Presidency, within the framework of the current Mid-Term Programme
2004/2005, has focused on
the theme of Innovative HR. The examination of Innovative HR finalises the list of
activities undertaken by the
Human Resources Working Group over the past two years. Studies developed under
previous Presidencies
have included reports into Civil Service pensions and ethics.
Earlier this year, a report of HR management strategies to support organisational
changes was prepared
during the Luxembourg Presidency of the European Union. This report found that, HRstrategies are generally
aligned with governmental strategies, supporting to a certain extent the
organisational changes, but these
were not automatically developed at a local level. It also concluded that HR is not yet
a generator of
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changes. The report concluded that HR is in constant balance between;
Strategy and daily operations
Being proactive and less reactive
Implementing tailored HR solutions for specificities (where off the shelf solutions arenot applicable)
Combining specialist and generalist skills to cover all HR aspects and dimensions.
The findings were that government strategies such as cost reduction, service
improvement and structural
issues were becoming more important and that in the majority of Member States HR
strategies were being
designed to support this wave of change and modernisation.
This survey into innovative HR strategies seeks to explore some of the HR responses
in more detail.
3. Aim of the project
The main aim of this project is to draw out interesting ideas, encourage discussion
and share learning
about HR amongst the HR community of the EU Member States.
It is not the intention to try to dictate what should be done, but to ask what is being
done, why,
how successful it has been and what lessons can be learnt.4. The importance of
context
It is recognised that each Member State is unique with its own history, culture,
legislative base and style
of administration. The roles and services that are included under the term public
service vary and national
public employment systems are different. The Government of each Member State hasits own priorities
and the citizens their own expectations of the state and public services.
There are, however, some global themes that impact on all public administrations and
key academic
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research that challenges the way in which HR has been organised in the past. These
challenges are causing
HR professionals, in all sectors and all countries to rethink their approach and find
better ways of supporting
their organisations.
The extent to which HR organisation has been decentralised in the Member States
varies, but the most
common arrangement is a combination of a central body and local administrations.
This enables governments
to exercise control and achieve consistency whilst also encouraging responsiveness
and flexibility in service
delivery. There is also a variation in the extent and speed of delegation of HRmanagement because of the
difference between position based systems, that allow for individualised approaches,
and career based
systems, that regulate public servants through administrative law.
5. Methodology
The questionnaire was developed by the National School of Government and the UK
Cabinet Office for the
Human Resources Working Group of the European Public Administration Network. A
copy of the questionnaire
is available on CIRCA.
The questionnaire focused on the following:
the selection and development of HR staff
how HR is organised
internal and external factors driving changes in HR and choice of response
changes to the HR function in the last 18 months.
The questions were framed to encourage discussion and illustration, the choices
offered were intended
to clarify the issues rather than constrain the answers.
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It is very clear from the way in which the questionnaires have been completed that
there is no universal
language for HR, and that many of the issues are too complex to be explained
thoroughly in such a simple
format. There are, however, general themes and trends that emerge. Short case-
studies on specific approaches
have been included with web-links where appropriate.
The project team comprised Jean Meyrick from the National School of Government
who authored the report,
Paul Roberts from the Cabinet Office who co-ordinated the project and Malcolm
Gregory from the National
School of Government who developed the questionnaire.
4 INNOVATIVE HUMAN RESOURCES STRATEGIESPart Two The changing world of HR
1. The importance of HR
In all organisations, Human Resource Management is making a transition from
providing an administrative
service dealing with the people towards becoming an integrated partner in the
business. For HR to become
a source of competitive advantage it must be able to provide leadership in theorganisational and
people dimension.
Public administrations are not exempt from this change. Indeed with increased
competition for talented staff,
the role of HR in making sure that public sector organisations can attract and retain
excellent employees,
is even more important.
In most public services, the existing processes of delivery are being challenged by
unstoppable global influences.
Rising customer expectations and new ways of providing services through the use of
new technology impact
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on organisations internally and externally, requiring staff to develop new attitudes
and skills and also to acquire
new knowledge. HR strategies are key to making this happen.
Figure 1 illustrates the journey people management systems have made, and are
making, from personnel
administration towards the provision of Strategic HRM.
Figure 1 HR Maturity Scale
Personnel
Administration
Personnel
Management
Human Resource
Management
Strategic HRM
Level 6
(Nirvana)
All activities link to
strategy that is owned
by all employees
Level 5
Transition from
operational to
strategic focus
Level 4
HRM becomes
integral to
business operations
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Level 3
Performance
measures linked
to reward.
Professional practices
Level 2
Performance
records,
recruitment
criteria
Level 1
Basic records
& compliance
with lawAt level 1, there is control and compliance. At level 2, there is a movement
towards more professional
personnel management systems such as job evaluation and grading systems. At level
3, appraisal systems
linked with performance and reward are introduced to enable performance to be
managed and staff to be
motivated. At level 4, personal accountability rises as there are clear links between
individuals work and
organisational goals and measures. Underperformance is not tolerated and tailored
solutions replace generic
solutions. At level 5, team and project accountabilities become important and the
core work processes are
focused on customers requirements. At level 6, everything, including individual
performance, is aligned
to the strategic objectives.
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This model seeks to describe the different phases or stages that HRM systems are
likely to go through
to make the journey towards true strategic alignment. Very few organisations reach
level 6. This report does
not presume to analyse where individual public administrations are on this scale of
development, but this
question might form the basis for an interesting and challenging conversation
between HR and senior
management within all Member States.
2. What is innovative HR?
We are not advocating that any particular shift on the HR maturity scale is more or
less innovative than
another. Each public administration will need to respond to their own drivers and
contexts. At its simplest,
innovative HR is about the introduction of new practices in the management of
Human Resources that
improve the performance of the people so that they deliver the goals of the
organisation. The more
radical innovations, where the whole system is involved, are about moving into level
4 and upwards.
3. Evolving perspectives on HR
Traditionally, HR staff focused on administering benefits, payroll and other personnel
functions and not playing
a part in the overall strategy of the organisation. Any proactivity was around the idea
that improvements
in an individual employees performance would automatically enhance organisational
performance. Strategic
HR architecture is more complex. An effective HR system that truly supports the
organisation needs to align
the HR system with the organisations strategy. That is, to move from one perspective
to another.
This evolution is as follows:
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The personnel perspective
The organisation hires and pays people but does not have a way to hire the very best
in changing
circumstances or to develop exceptional employees.
The compensation perspective
Bonuses, incentive pay and meaningful distinctions in pay are used to reward high
and low performers
but the mechanism is not truly linked to the strategic needs of the business. Goes
some way but doesnt
fully exploit the benefits of HR as a strategic asset.
The alignment perspective
Senior management see people as strategic assets but the HR system is not
integrated with the
operational system therefore HR cant be used to leverage the business perspective.
The high performance perspective
HR and other executives view HR as a system embedded within the larger system of
the organisations
strategy implementation. The organisation manages and measures the relationship
between these two
systems and the organisations performance.
(Adapted from: Becker, Huselid and Ulrich 2001)
6 INNOVATIVE HUMAN RESOURCES STRATEGIESThe focus needs to move from inside
to outside the organisation. HR can play a central role in implementing
the organisations strategy and achieving the required outcomes only if they
understand what stakeholders
define as value and build HR architecture to ensure people can create that value.
This concept is central
to improving service delivery.
4. Models for the future
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One of the most influential models of a future for HR has been created by Dave Ulrich
in his seminal work
Human Resource Champions. This work focuses not on what HR professionals do but
on what they deliver.
He identified four generic outcomes for HR:
strategy execution
administrative efficiency
employee contribution
capacity for change.
These four outcomes present four main roles for HR, each described by a metaphor
and illustrated in Figure 2.
Figure 2 Ulrichs definition of HR roles
Role Deliverable/
Outcome
Metaphor Activity
Management
of strategic HR
Implemented strategy Strategic partner Aligning HR and business
strategy
Management
of organisational
infrastructure
Efficient infrastructure Administrative expert Re-engineering processes.
Shared services
Management
of employee
contribution
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Employee commitment
& capability
Employee champion Listening & responding
to employees
Management
of transformation
& change
A renewed
organisation
Change agent Managing changeThe outcomes are described in a matrix along axes offocus and activities as illustrated in Figure 3.
Figure 3 Ulrichs definition of outcomes
8 INNOVATIVE HUMAN RESOURCES STRATEGIESAll four roles are essential parts of an
HR management system, although in many public administrations
they are dispersed across different Ministries or Departments. The challenge for HR is
to understand how
the current HR function performs against this model and identify what changes are
required to attain
a more strategic role. This shift in roles is described in Figure 4.
A private sector example of this shift is Motorola. This global telecom provider
operates in 70 countries and
faced a serious business challenge in the late 90s with the overall economic
slowdown. Their business units
operated in silos with separate HR databases, separate processes, no knowledge
sharing and duplication
of effort. They set out to create One Motorola through the progressive
transformation of their HR system.
This was achieved through the creation of an HR centre of excellence, the
introduction of e-HR with self- service
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and the creation of one single HR database. This centre was eventually outsourced to
an external provider
who works very closely with the HR section in Motorola to ensure that the needs of all
stakeholders are
understood and met. The result has been to considerably reduce the transactional
costs of HR.
This envisaged shift, reinforced by governments drive for better service and reduced
cost, means that HR
sections will need to decide how they can streamline time and effort spent on
transactional tasks and refocus
their efforts to maximise the impact of HR resources. One measure that is used in all
sectors is the ratio of
staff engaged in HR activities to the number of staff they serve. An example of this in
the UK is that recent
benchmarking (by Saratoga) suggests the ratio in central government is 1:42 and the
aim is to improve this
to 1:100+. Figure 5 shows the UK Cabinet Office vision for HR, shifting emphasis and
resources from the
roles of administration and dealing with individuals to becoming a strategic partner
and change agent.
Figure 4 Role shift for HR
From To
HR focus Business focus
Administrative Strategic
Added cost Added value
Problem containment Problem solving
Rules RiskFigure 5 The shift in the balance of HR roles
5. Implications
These models of the HR function provide a structured framework for thinking about
how a more strategic
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agreed regulations and policies.
In Finland, a framework is provided by the States Personnel and Management
Policy and this is carried out
at a decentralised local level in a way which supports local aims and needs.
Other roles that were specifically mentioned included: leading change, improving the
quality of people
management and raising people management capability. These are activities that
implement the strategies
for organisational development and illustrate the shifting roles identified by Ulrich.
Criteria for selecting HR Managers (question 1.2)
Answers to this question illustrate the different approaches that arise from the career
system and position
system of public administration. For example, contrast Luxembourgs response there
exists no specific function
of the HR director with that of Sweden a single agency sets up its criteria and
negotiates them with the
Unions before advertising.
In most administrations, however, there is currently a preference for candidates to
have proven experience
in HR management in the public administration, and/or a public administration
generalist with a professional
qualification in HR.
This preference may need to be challenged if the main role of HR managers is
changing to more strategic
organisational development. This will be a new way of working and different
knowledge and skills will
be required.Specific training and development for HR staff (question 1.3)
There is widespread use of in-house training programmes to develop HR staff. For
example, in Ireland
a foundation level certificate programme is run by the Civil Service Management and
Operations Division, with
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additional professional training from universities or colleges. Slovenia includes HR
content in their
special 14 day programme for senior civil servants.
There is, however, a significant challenge ahead for HR staff if they are to fulfil their
role of providing advice
on strategic organisational development. Although they may be excellent, in-house
programmes may not
be enough to equip HR in their role of transforming public services.
Denmark has a special development programme for personnel managers that focuses
on strengthening their
role as a strategic sparring partner for management and how the value of HR
activities can be documented.
The UK Cabinet Office has developed a framework of professional skills that will
enable staff in all areas
of the Civil Service to develop the skills and experience needed to design and deliver
21st Century services.
As part of this, HR Professional Standards have been developed under four key areas:
knowing the business
demonstrating HR expertise
acting as a change agent
building personal credibility.
Each of these areas is calibrated at three different levels of expertise from middle
management to very senior
civil servants. A self-assessment workbook has been developed that will enable
individuals to assess their own
capability gaps.
The standards can be accessed at http://psg.civilservice.gov.uk/
Use of external HR advisors/specialists (question 1.4)
The majority of external consultants are engaged for specific projects. It would be
interesting to explore
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whether the learning from these projects can be shared more widely across the
Member States.
Six respondents indicated that when advice is needed it is usually provided by
experts from within
the administration, for example on legal issues or financial questions.
3. Questionnaire section two How HR is organised
Management of HR administrative transactions (question 2.1)
This question sought to identify where the transactional functions of HR are currently
being carried out.
Respondents put a very wide interpretation on this and in many cases an element is
the shared responsibility
of many different parts of the administration thus difficult to allocate to a category.
The picture that emerges is that elements of the HR transactional system are
controlled centrally, but the
majority of Member States devolve responsibility for operational aspects of HR
transactions to the Ministries
or Agencies. These Ministries or Agencies may choose to devolve these
responsibilities further to line managers.
12 INNOVATIVE HUMAN RESOURCES STRATEGIESOne example is Germany where theframework laws and payroll administration are centrally controlled. Each
Ministry has its own personnel administration, but line managers are responsible for
the performance of their
own staff through objective setting, training and development and bonus payments.
Little transactional work is currently outsourced except provision of IT.
Responsibilities (question 2.2)
This question aimed to identify where other elements of the HR system (other thanadministrative
transactions) were being carried out. Again, the responses often indicated that
responsibilities were shared
across the administration with legislation and policy being the responsibility of one
central Ministry, but
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the implementation being devolved to all Ministries and agencies. Collective
agreements and organisational
frameworks also influence how things are carried out.
Where a responsibility is centralised it might be in the Ministry for Public
Administration or the Finance
Ministry. The majority of expert advice is obtained from other appropriate Ministries,
for example labour
code advice from the Ministry of Economic Affairs and Labour.
A useful illustration is Cyprus. The Ministry of Finance (PAPD specifically, the Public
Administration and
Personnel Department) is responsible for aligning business and HR strategy, advice,
performance management
for some categories of staff, approval of Ministry/Departmental workforce plans,
organisational design, pay
and grading systems, incentives and commissioning training. The Public Service
Commission recruits staff.
The Ministries/Departments are responsible for performance management and
submitting workforce plans.
In Finland, only expert advice is centralised although there are central frameworks
and policies. All other
responsibilities are carried out by individual organisations and Ministries.
How HR policies support improved services to the citizen (question 2.3)
All governments are keen to improve the services delivered to the public. The way in
which HR policies
will support the improved services fall into two categories:
good service from staff
excellent processes to deliver services.
In Greece, legislation has been passed that introduces a 50 day deadline to respond
to a citizens request
with the provision for compensation to be paid if this is not met.
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administration, into a human resource management more geared towards services
and competences.
It is a common criticism of HR specialists that they only talk to other HR specialists.
Do the HR staff really
know what senior managers think about the services being provided? Partnering the
business through the
provision of strategic HRM requires a strong relationship with senior managers. This
may be a fruitful area
for HR to explore further.
How staff view HR (question 2.4 part two)
Only eight Member States responded to this question and two of those responses
were not known.
This would emphasise the point raised above, that HR really needs to develop a close
relationship with
its customers to understand what their needs are and develop HR services
accordingly.
This raises an interesting question about who the customer is for HR services. In their
latest work, Ulrich and
Brockbank deal with the concept of HR value. They consider that HR professionals
add value when their work
helps someone reach their goals (assuming these are synonymous with
organisational goals). Thus HR specialists
and HR practices must produce positive outcomes for key stakeholders if they want to
add value.
Methods to find out about the needs and opinions of staff
(question 2.4 part three)
There were a large number of methods identified in answer to this question, the mostcommon being;
The Common Assessment Framework, EFQM or benchmarking, discussion and
employee participation.
This makes the lack of response to the previous two questions rather puzzling and
may be a function
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of the questionnaire design.
It does, however, raise interesting questions. If HR sections have such a wealth of
data available to them
what happens to it? How can this be used to inform the development of HR
interventions that will help
to transform the public services?
14 INNOVATIVE HUMAN RESOURCES STRATEGIES4. Questionnaire section three
Internal and external
drivers for change
Main factors driving change (question 3.1)
The majority of responses identified the following as the main factors driving change
in their administrations:
demography of populations (including both an ageing population and increased
mobility of the workforce)
political initiatives (mainly the need to improve service delivery)
changes to budgetary requirements.
HR responses (question 3.2)
The most common response can be summarised as changing the structure of the HR
system and thus the role
of HR staff. This includes becoming more strategic, dealing with transactional HR
processes and delegation
to Ministries. It also involves reducing the number of HR staff and acquiring HR staff
with different skills.
The Commission is putting a strong emphasis on results and performance by;
empowering line managers,
making better use of and giving professional skills to existing staff, planning toincrease managers strategic
role and has plans to recruit new HR staff.
There are, however, a number of Member States whose starting point when
responding to the major
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drivers has been to change or implement new legislation. The Czech Republic is
looking forward to the
implementation of the Civil Service Act in 2007. The view is that it will definitely
improve the efficiency
of the state administration (unifying HR affairs). It will reduce the administration staff
while maintaining
and fostering capable staff. It will also reorganise structures in the Ministries.
Faced with stiff competition from the private sector, Malta has taken action to
enhance the attractiveness
and image of the public service in order to recruit highly skilled and adequately
qualified staff.
Timescales for these responses vary from the end of next year to fiveten years.
5. Questionnaire section four Changes made to the HR
function over the last 18 months
It would have been interesting to take an example of changes to the HR function from
each of the Members
States as a case study. Unfortunately neither time nor the amount of detail on the
questionnaire would allow
for this. It has been possible, however, to describe an example from each of thecategories below, generally
following the structure of the questions in section four. These mini case-studies are in
Part Four. The exception
to this is diversity which has been the subject of a separate UK Presidency report.
Two responses that highlight forthcoming changes might be useful for further study.
One is the Netherlands
where plans are in place to introduce one shared transactional HR service centre for
the whole central
government administration. Another is France, where greater responsibility for HRM is
being devolved
to line managers.6. Key changes in HR function (question 4.1)
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The following table identifies the issues chosen in response to this question. It is clear
from the answers
throughout the questionnaires that there are many more initiatives that could have
been discussed. Responses
to this question often referred to a number of initiatives and they have been
categorised by what seemed
to be the main changes to HR.
Outcomes sought (question 4.2)
Two respondents who went on to complete this part of the questionnaire indicated
that all four suggested
outcomes were sought. These were greater efficiency/less cost, greater
effectiveness/less errors, faster
service to the citizen, more effective workforce planning and deployment.
Additional outcomes were also identified and are listed in Appendix One.
Were the outcomes achieved? (question 4.3)
Most respondents made the point that it is far too early to measure the success of
changes initiated
within the last 18 months.
There are, however, some indications that change is taking effect. In Cyprus, for
example, the recruitment
of new highly qualified staff is seen as influencing a change in attitude.
In another example, feedback from Poland is that the new Civil Service Code of Ethics
is very helpful.
Slovenia considers that fewer enquiries are an indication that new legislation has
been successful.
16 INNOVATIVE HUMAN RESOURCES STRATEGIES
Restructuring HR to separate out transactional
HR services from the provision of strategic HR,
or delegating to line managers
Netherlands
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Austria
Finland
UK
France
Passing legislation or changing conditions of service that will
change the nature of the public service and HR management
in the future
Ireland
Czech Republic
The Commission
Cyprus
Italy
Malta
Poland
Slovenia
Spain
Greece
Action to increase diversity in government administration
Sweden
Denmark
Initiatives to improve performance or productivity of HR staff
Hungary
Germany
Belgium
Lithuania
CommissionDifficulties and solutions (question 4.4 and 4.5)
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Difficulty Overcome by
Size and diversity of organisation Working with networks of representative teams
and also the Trade Unions
Limited budgets Prioritisation of budgets
Culture/attitudes Development of competences
New legislation
Convincing key stakeholders
Training
Staff scepticism/reticence Greater participation
More transparency
Top-down support
Trade Unions Negotiation
Poor senior management engagement Early engagement
Getting basic HR things right
Poor line management engagement Partnership working
Getting basic HR things right
Capability gaps Development of competences training
Political resistance Dialogue
Reaching consensus Subject of a review
Inconsistency in legislation Redefinition
Delays Prioritisation
Managing the quantity of work involved in the
changes
Cooperation between HR and line managers
Integration of new technology Training and developmentLessons learnt in
implementing change (question 4.6)
These can be classified as:
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There needs to be clear communication about why change is needed and what it
will entail.
Top management commitment is essential from the outset.
Involve stakeholders, consult and take into account diversity.
A good plan is needed but no one size fits all and it is important to get the simple
things right.
Use quick wins to keep momentum.
Good project management/coordination is essential.
Managers need support in implementing change.
Government priorities (question 4.7)
The responses identified a number of different priorities which are listed in AppendixOne.
The main ones identified were:
Competences/better training for managers and senior staff.
Improved recruitment, diversity and mobility.
Better service management and delivery (quality).
Evaluation system.
Improved strategic HR management and planning.
Plans to continue to respond (question 4.8)
Not all responses completed this question and those that were received cover a
variety of approaches and
illustrate the breadth of HR interventions. The link between government priorities and
HR plans is very clear
in some cases. For example, Ireland refer to a new national partnership agreement
that will address the four
government priorities previously identified.
18 INNOVATIVE HUMAN RESOURCES STRATEGIES7. Summary of key findings
Part three of this report aimed to identify themes from the questionnaires and
illustrate them. The following
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are the key themes that emerged in the answers to various questions:
All governments are looking for an improvement in the quality of services delivered
to the public,
greater efficiency and a reduction in cost.
Governments also recognise that the public service need more, or different skills, in
the future and training,
development and competences are one of the main HR interventions.
The way in which HRM is carried out across the various public administrations may
vary, but most are
aiming to make efficiency savings through the use of IT to support HR transactions.
Many administrations based on the career system are re-examining the legislative
framework governing
the status of public servants, introducing some flexibility into their people
management systems so that
they can respond to the drivers of change.
In many countries the way in which public servants are recruited is being reviewed
to include performance
competence not just academic qualifications.
The influence of thought leaders such as Dave Ulrich is very clear in the changes
either made or being
sought for HR staff to have a more strategic role.
There is recognition that the role of both senior and line managers is essential for
any HR transformation
to be successful. What is less clear is the nature of the relationship that HR specialists
have with them.
The division of responsibilities for performance management between HR and linemanagers is a key issue.
Many of the changes that are being introduced cannot be evaluated in the short-
term.
From the responses provided to the survey, there was very little direct or
coincidental evidence to suggest
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that the Lisbon Strategy has exerted a major influence on the role of HR strategies
within public administration.Part Four Illustrative case studies
Case study Austria
Austria has developed a central HR Information System (HRIS) which provides
services for 160 personnel
offices in 18 Ministries. The services include personnel services i.e.starting and
ending a career in the federal
administration, all events during the career, payroll, data transfer to social insurance
and tax authorities
and also structure of organisation and responsibilities.
This system will be administered by 4,000 people and provide services for 170,000
active staff and 80,000
pensioners. Maintenance of the IT service has been outsourced to the Federal
computer centre.
One of the main drivers for change in Austria is a move to e-Government and the
government priorities are IT,
improved efficiency and reducing headcount whilst improving quality.
The outcome sought from the introduction of HRIS is less costly public administration
with enhanced service.
These outcomes have been achieved. The same or more tasks are being carried out
at a constantly high
quality with a constantly decreasing number of employees. The full effects of HRIS
have yet to be felt
but it should lead to a reduction of at least ten per cent of HR staff with an annual
monetary benefit
of ten million Euros.
The main difficulties encountered were the fear of change, particularly by olderemployees, and the
adaptation of standard software to the needs of public administration.
To overcome these difficulties one-to-one coaching and special training was
developed to help employees
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overcome their fears and financial incentives can also be used. The HRIS software
was re-programmed
or regulations changed.
Case study Slovenia
Major structural and regulatory changes are being introduced in Slovenia as a result
of gaining membership
of the EU. These include the setting up of a new Ministry of Public Administration,
changes to the CSA
(Civil Service Act), implementation of the Freedom of Public Information Act,
introducing the Decree
on Administrative Operation and changing the Decree of Organisation and Post.
These changes focus on making the processes of government more transparent,
reduce the entitlements of
civil servants bringing conditions of service more in line with those of the private
sector, clarify civil servants
duties and standardise and simplify HRM processes. These initiatives have the full
support of the government.
The outcomes expected are a more efficient, less costly public administration with a
one per cent reduction
in employees each year. Faster service and more flexibility in HRM is also sought.
The change methods started with changes in legislation and regulations and these
were implemented through
regular meetings between HR staff and managers in the Ministries and other bodies.
Special training was
developed for new procedures.
Evaluation measures are not yet in place, but informal feedback is that Ministries and
departments are
receiving fewer questions about how to apply the regulations.
20 INNOVATIVE HUMAN RESOURCES STRATEGIESThe main problem encountered was
that the implementation of the regulations needed to be more consistent
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with better definition of processes. Problems were also caused by changes in
regulations and the issues raised
by Slovenia having different types of civil servants.
In order to overcome these difficulties the regulations had to be improved and the
procedures clarified.
The problems were solved by working together with HR colleagues in Ministries and
other bodies.
The main lesson learnt was that a systematic, attentive approach to change is
needed.
Case study UK
Whitehall HR shared services
Three Government Departments (HM Treasury, the Cabinet Office and the Office of
the Deputy Prime Minister
(ODPM)) decided in 2004 that they would seek to transform the way that HR services
had been traditionally
delivered in the three Departments. Responding to Government initiatives, they
decided to examine the
feasibility of creating one HR shared services facility to provide comprehensive
administrative and some advisory
services to all staff in the three Departments and, in accordance with the
recommendations of the Lyons report,
to locate that facility outside the South-East of England.
The principal objectives of the project are to:
modernise and improve the delivery of HR services
achieve savings in the annual running costs of the three HR functions
demonstrate the viability of cross-Department cooperation and thereby contributeto the three Departments
response to the Gershon report
provide a demonstration project from which other parts of the Government and the
wider public sector
can learn.
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The project scope encompasses the following high-level activities:
build an HR shared services facility which will provide a comprehensive HR
administration and level 1
advisory service to all staff of the three Departments. The facility will initially support
the 5,800 staff
of the three Departments, but it is intended that it will be able to support other
Government departments
and agencies in future
install a modern HR information system to underpin the work of the shared services
facility and also
the retained HR functions of the three Departments
provide self-service facilities to employees and managers of the three Departments
introduce standardised and streamlined HR processes
support the use of online tools in routine HR processes, including recruitment and
staffing, absence
reporting and training administration.
The project completed its definition stage at the end of March 2005, and is now part
way through design,
which includes the development of a procurement strategy and the definition of
detailed requirements
in the form of an invitation to tender.Case study Germany
Germany is focusing on enhancing performance related pay and career mobility.
Initially this required
a draft structure reform law but later involved Ministries in:
organisational restructuring
development schemes focusing on communication skills, management competency
and international experience
changes in recruitment strategy with a view to improving skill and demographic mix
improved methods to deal with conflict of interest.
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The outcomes sought were a more efficient, effective and faster public service. The
methods used to introduce
the changes included management rules for senior staff, project management,
focusing of knowledge
management and personnel resources, quality circles and improved feedback.
The results of the change have yet to be evaluated.
The main difficulties encountered were; the scepticism and reticence of staff, the
need to refocus and train
staff, including senior staff, financial constraints. These difficulties were overcome
through participation,
especially of unions, greater transparency, focusing resources, gaining top down
support and flexibility
in resource planning.
The main lesson learnt during the introduction of this change was to involve staff as
early as possible.
22 INNOVATIVE HUMAN RESOURCES STRATEGIESAppendix One Summary of
questionnaire responses
Section One The HR Manager
Three responses, where currently the main role of HR is to manage transactionalfunctions, noted that the aim
is to move towards strategy and advice.
Other roles included; leading change, improving the quality of people management
and raising people
management capability.
Three respondents made the point that the aim is to select the best individual for the
job and this involves
fine judgement on their ability to perform well. All of the above criteria might be used
as indicators in this
selection process.
* Many public administrations include HR as part of structured development
programmes for managers. Others offer seminars on specific
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topics, particularly those who recruit qualified HR staff.
Only two responses indicated no training was provided.
The responses to the question asking which of the staff received training? mainly
indicated HR staff
but it was clear in a number of cases that HR as a topic was included in senior
management programmes.
Q1.3 Specific training and development for HR staff
Training to gain professional qualifications 6
Structured training programme (but see note * below) 13
Training provided by a government agency 9
Training bought through the market 4
Q1.1 The main roles of HR Managers
Supply advice on strategic organisational development 19
Providing expert advice 14
Managing transactional functions 13
Q1.2 Criteria for selecting HR Managers
Proven experience in HR management in the public administration 14
Proven experience in HR management in the private sector 7
Public administration generalist for training 9
Public administration generalist with professional qualification in HR 10Six responses
indicated that when advice is needed it is usually provided by experts from within the
administration.
Section 2 How HR is organised
Respondents put a very wide interpretation on this question and in many cases anelement is the responsibility
of many different parts of the administration thus difficult to allocate to a column. The
above table reflects
the information provided in the questionnaires but should not be seen as an accurate
reflection of the way
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in which HR responsibilities are carried out.
It does, however, show that little transactional work is currently outsourced.
24 INNOVATIVE HUMAN RESOURCES STRATEGIES
Q 2.1 Management of HR administrative transactions
Element Centrally Ministry/Dept
agency
Line manager Outsourced
Regulations 4
Policy 5
Conditions 1
Pay 2 2
Personnel planning 2 2
Pensions 2
Recruitment 4 5 3
Payroll/salaries 4 5 1
Records 2 5 2
Promotion 1 1
Training and
development
2 3 5 1 (some)
Sickness 2
Time management 2 1
Performance
management
1 2
Employee relations 1
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Appraisal 2
IT 1
Q 1.4 Use of external HR advisors/specialists
External consultants for specific projects 16
Fixed term appointments for specific roles within the administration 6
Advisors to own HR managers 4Respondents often indicated that responsibilities were
shared across the administration.
Collective agreements and organisational frameworks also influence how things are
carried out.
Not all questionnaired gave information on all activities.
Q 2.3 How HR Policies support improved services to the citizen
Encourage public sector ethics (& codes of conduct) 5
Recruitment of skilled good quality staff 5
Retention of skilled good quality staff 2
Rewards 2
Policy to support diversity 2
Reduce sick absence 1
Increase staff motivation 1
Employee participation 1
Staff development 7
Training in customer care 2
Professional qualifications 1
Devolved authority to enable responsiveness 4
Simpler procedures 1
Reduced bureaucracy 3
Improved management 4
Introduction of specified deadlines 1
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Improved communications 3
Citizens charters 3
Complaints and suggestions procedures 1
Satisfaction survey introduced 1
Quality approach 4
Efficiency gains 3
e-government 4
Restructuring 3
Q 2.2 Responsibilities
Activity Centralised Ministry/dept
agency
Line managers
Aligning business
& HR strategy
11 6
Expert advice 17 1
Performance
management
8 10
Workforce planning 10 10
Organisational design 6 12
Pay and grading 14 5
Recruitment 4 14 2
Reward (incentives) 7 9 1
Staff commitment 6 7 1Only nine Member States responded to this question.
Only eight Member States responded to this question.
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26 INNOVATIVE HUMAN RESOURCES STRATEGIES
Q 2.4 How senior managers view HR
Quality can be improved 1
HR needs to be more strategic 3
Want direct transactional services 1
Management Information is insufficient 1
Want revised processes current ones too bureaucratic 2
Want quicker devolvement of responsibility to line managers 1
Want to be more connected with the HR agenda 1
Want more support from HR rechanging needs 1
HR should spend more time on HR activities and less on the work of leaders 1
HR should include continuous reform and assessment 1
Regulations too rigid 1
HR needs to solve problems not create obstacles 1
Q 2.4 (part 2) How staff view HR
Not quite satisfied 2
Senior staff are not competent because systems to appraise, develop,
and reward staff are poor
1
HR needs modernising 1
Leaders dont perform essential HR activities 1
Managers want direct transactional services 1
Not known 2Section Three Internal and external drivers for change
Q 2.3 (part 3) Methods to find out about the needs and opinions of staff
Surveys 4
Evaluation 2
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Discussion/feedback 6
Common Assessment framework 8
Employee participation/Trade Unions 5
EFQM/Benchmarking 6
Information sharing sessions 1
Internet chat rooms 1
Complaints 1
Specific projects 2
Diagnostic internet mirrors 1
Q 3.1 Main factors driving change
Workforce mobility due to EU enlargement 4
Political initiatives 15
Changes to budgetary requirements 12
EU employment legislation 7
Demography of populations 16
Sustainable development 3
Environmental issues 2
Corruption 6
Observation of practice in other countries 4
Need to meet international standards 5
New legislation 3
Increasing productivity 1
A new government 1The overriding political initiative is the need to improve service
delivery.
Demographic trends include both the ageing population and also mobility of the
workforce.
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Three of the references to international standards were concerned with e-
government.
Timescales for these responses vary from the end of next year to fiveten years.
28 INNOVATIVE HUMAN RESOURCES STRATEGIES
Q 3.2 HR responses
Delegation to ministries 8
Recruitment of new HR staff 8
Reduction in the number of HR staff 4
Change in role of HR staff to become more strategic or deal with
transactional HR processes
13
Professionalising HR 1
New regulations 3
Restructuring for efficiency 1
Wide ranging review of the public service 3
Training 1Section four Changes made to the HR function over the last 18 months
Responses to this question often referred to a number of initiatives and they have
been categorised
on what seemed to be the main changes impacting on HR.
Q 4.2 Outcomes sought
Respondents who went on to complete this part of the questionnaire indicated that all
four suggested
outcomes were sought. These outcomes were:
greater efficiency/less cost
greater effectiveness/less errors
faster service to the citizen
more effective workforce planning and deployment.
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Additional outcomes were identified and included:
increased motivation
elimination of bureaucracy
greater flexibility
transparency
mobility
streamlining of the organisation
Q 4.1 Key changes in HR function
Restructuring HR to separate out transactional HR services
from the provision of strategic HR
Netherlands
Austria
Cyprus
Finland
UK
Enabling line managers to manage performance through devolved
power and development
France
Passing legislation that will change the nature of the public service
and HR management in the future
Ireland
Czech Republic
Italy
Malta
Poland
Slovenia
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Spain
Greece
Action to Increase diversity in government administration Sweden
Denmark
Initiatives to improve performance or productivity of HR staff Sweden
Hungary
Germany
Belgium
Finland
Improving HR through written instructions or training Lithuania
Commission
Changes to conditions of service to make the public
service more attractive
Malta meeting the challenges posed by accession to the EU
higher quality of HR services and strategic advice.
Methods included:
visits for top management to organisations recognised as having best practice
training/mentoring
project control
extensive discussions (for example with staff or Trade Unions)
legislation/regulations
quality circles/re-engineering
improved communication/feedback
developing competency frameworks
recruiting external talent.
Q 4.3 Were the outcomes achieved?
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in the changes
Cooperation between HR and line managers
Integration of new technology Training and developmentQ 4.6 The lessons learnt are:
Need for transparency.
Staff need to be informed about why the change is needed and what it entails.
Good communication is essential.
Use quick wins to keep momentum.
Get the simple things right.
No one size fits all.
Practical rather than theoretical.
Consult and take into account diversity.
Good project management/coordination is essential.
Get top management commitment from the outset.
Involve and inform stakeholders.
A good system of monitoring and evaluation is important.
Attitude change is difficult to achieve.
HR needs to be closely integrated into the strategic management of the
organisation.
Policy is made of small steps taken gradually.
Managers need support in implementing change.
Involve HR as soon as possible.
There needs to be a systematic, attentive approach to implementing change.32
INNOVATIVE HUMAN RESOURCES STRATEGIES
Q 4.7 Government priorities No of responses
Change priority 1
Review of careers in the Public Service 1
Leadership development 1
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Re-engineering 3
New management culture 4
Better service management and delivery (quality) 11
Competences/better training for managers and senior staff 2
Addressing skill gaps 2
Increased professionalism of HR 2
Improve efficiency 9
Improved recruitment, diversity and mobility 3
New remuneration system 4
Evaluation system 3
New legal framework/better regulation 2
Simplification of procedures 1
Improved job descriptions 1
Better IT 1
Better HR information systems 2
Reinforcing ethics and integrity in the public service 1
Efficient and effective use of EU structural funds 4
Improved strategic HR management and planning 1
Better change management 1
Motivating employees 1
Introducing more flexible structures 1
Pension reform 1
IT support of all HR processes with standard software 1
Deregulation/decentralisation/outsourcing 1
Improved HR services 1Q 4.8 The HR response was:
National Partnership agreement (Ireland).
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Strengthening of decentralised model by cooperation and exchange of experiences
through SAGE (Sweden).
11 initiatives (Austria).
Set up the right structures, processes and systems that will support change
(Cyprus).
Focus on job evaluation and competency framework for top civil service positions
(Estonia).
Programmes of professional training (France).
Human Governance programme to share a new culture in the public administration
(Italy).
Continuation of the federal government programme Modern state/Modern
Administration and assessment
of reform approaches (Germany).
New legislation and more financial resources (Greece).
Ongoing partnership between Civil Service Corporate Management and the HR
community (UK).
Professional Skills for Government Programme (competences) to develop both HR
and Management capability (UK).
Prioritisation and planning of projects (Belgium).
Not all respondents completed this question, but the answers above illustrate the
breadth of HR interventions
and variety of approaches.34 INNOVATIVE HUMAN RESOURCES STRATEGIES
Appendix Two References
Kearns Paul, (2003) HR Strategy: Business focused, individually centred, Butterworth
Heinemann.
Becker Brian E., Huselid Mark A., Ulrich Dave, (2001) The HR Scorecard:
Linking People, Strategy and Performance, Harvard Business School Press.
Ulrich Dave, (1997) Human Resource Champions: the next agenda for adding value
and delivering results,
Harvard Business School Press.
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HR Transformation in the civil service, Cabinet Office MPM team (2004).
Ulrich Dave, Brockbank Wayne, (2005) The HR Value Proposition, Harvard Business
School Press.
Corporate Development Group
Cabinet Office
G14 Admiralty Arch
U.S. Office of Personnel Management
Office of Merit Systems Oversight and Effectiveness
Strategic Human Resources Management:
Aligning with the Mission
September 1999This page intentionally left blank.STRATEGIC HUMAN RESOURCES
MANAGEMENT:
ALIGNING WITH THE MISSION
Contents
Executive
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i
I.
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . 1
What is Alignment? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
Why Align? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
The Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
II. Strategic Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . 5
Agencywide Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
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HRM Integration in Agency Strategic Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7
Agency HRM Strategic Measures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
HR Involvement in Agency Strategic Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9
Agency Annual Performance Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11
HR Strategic Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12
III. Strategic Implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . 15
Strategic HRM Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
HRM Measurement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18
IV. Strategic
Relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Corporate HR and Top Agency Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21
The HR Office and Line Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
Accountability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24
V. Where Do We Go From
Here? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26
Appendix A - Non-Federal Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . A-1
Private Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
Non-Federal Public Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-
2
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Appendix B - HRM Alignment Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . B-1
Internet Sites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-
5This page intentionally left blank.U.S. Office of Personnel Management Page i
EXECUTIVE SUMMARY
Human resources alignment means integrating decisions about people with decisions
about the
results an organization is trying to obtain. By integrating human resources
management (HRM)
into the agency planning process, emphasizing human resources (HR) activities that
support broad
agency mission goals, and building a strong relationship between HR andmanagement, agencies
are able to ensure that the management of human resources contributes to mission
accomplishment and that managers are held accountable for their HRM decisions.
This is
especially important in light of the Government Performance and Results Acts (GPRA)
push to
align all agency activities, including HRM, toward achieving defined agency strategic
goals and
measuring progress toward those goals.
In fiscal year 1999, the U.S. Office of Personnel Management (OPM) embarked on a
special study
to determine how much progress Federal agencies have made toward aligning HRM
with agency
strategic goals in support of HRM accountability and agency mission accomplishment.
Our key
findings and conclusions are summarized as follows.
C Many more agencies than expected include HR representatives in the agency
planning process
and integrate human resources management goals, objectives, and strategies into
agency
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strategic plans. However, most agencies are still struggling in this area. Therefore,
agency
executives and HR leaders need to work together to fully integrate HRM into the
planning
process so that it will become a fundamental, contributing factor to agency planning
and
success.
C Although some agency HR offices have begun focusing on organizational activities
that assist
agency decision-making, most are still emphasizing internal HR office efficiency
efforts. While
internal issues are important to the success of any HR program, HR offices also needto
examine the big picture and find ways to impact the success of the agency as a
whole.
C Most agencies are in some way measuring the efficiency and/or effectiveness of the
HR
function. These measures, however, are generally output-oriented, focus on internal
HR
processes and activities, and are used to make improvements to HR-specific policiesand
procedures. As HR refocuses its activities to broader organizational issues, HRM
measures
also need to be expanded to gauge the impact HRM has on agency goals and mission.
Then,
the measurement data can be used to inform agency-level decisions. Executive
Summary
U.S. Office of Personnel Management Page ii
C The relationship between HR and management is becoming more collaborative. HR
executives
are beginning to earn a seat at the management table. HR offices are becoming
more
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consultative and involved in day-to-day line management activities. Nevertheless,
there is still
a long way to go if HR is to become a strategic partner at all levels. To do so, HR
needs to
build its own internal competencies to deal with organizational issues, educate itself
on agency
and program missions, and find ways to offer creative and innovative solutions to
organizationwide issues.
Although many National Performance Review (now known as the National Partnership
for
Reinventing Government) initiatives, such as downsizing, reorganizing, streamlining,
and
delegating HR authorities, were meant to improve HRs ability to focus on
organizational issues,
they have not taken hold as quickly or thoroughly as hoped. Therefore, HR is still
doing most of
the process work, and its ability to focus on alignment has been limited. However, as
HRs role in
agency planning, activities, and decision-making advances -- and it is advancing -- so
too will the
alignment of human resources management with agency mission accomplishment.
Legal Compliance
Efficient HR Processes
Effective HRM Programs
Alignment
with Strategic
Goals of the
Organization
For consistencys sake, this report uses the term agency when referring to the
broadest form of the Federal
1
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organization. For instance, the Department of Agriculture, along with all its
components, is an agency. When
addressing specific components within an agency, the report will refer to them as
sub-components.
U.S. Office of Personnel Management Page 1
I. INTRODUCTION
Hierarchy of Accountability
A company is known by the people it keeps.
- Unknown
What is Alignment?
Strategic human resources management...strategic alignment...alignment withmission accomplishment. These are just a few of the terms being used to describe
the new, evolving role of
Federal human resources management (HRM). What do these terms really mean? If
you were to
ask agency personnelists, managers, or employees, you would probably get a wide
range of
answers. So, its important to establish from the beginning what we are really talking
about.
Human resources management alignment means to integrate decisions about people
with
decisions about the results an organization is trying to obtain. Our research indicates
that
agencies that successfully align human resources management with agency mission
accomplishment do so by integrating HRM into the agency planning process,
emphasizing HR
activities that support mission goals, and building strong HR/management
relationships.
1
In addition to being a vital contributor to
agency mission accomplishment, HRM
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alignment is the ultimate level of HRM
accountability, as demonstrated in the
Hierarchy of Accountability. While HRM
accountability must begin with basic legal
compliance, it ultimately encompasses all four
levels of the pyramid, including demonstrating
how HRM supports achievement of the
agency strategic goals.
Why Align?
Why the sudden emphasis on aligning HRM activities with agency missionaccomplishment?
Basically, it comes down to demonstrating the value of human resources
management to theIntroduction
Now known as the National Partnership for Reinventing Government.
2
U.S. General Accounting Office. Major Management Challenges and Program Risks: A
Governmentwide
3
Perspective.
U.S. Office of Personnel Management Page 2
agency. In the past, one of HRs primary roles has been to ensure compliance with
laws, rules,
and regulations. Although this is still, and will always be, a necessary function, many
recent
developments have led to a strong emphasis on results.
The National Performance Review (NPR) took on the task of reinventing government
to make it
2
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work better, cost less, and get results. NPR mandated many initiatives that changed
the focus of
HR from just compliance toward results, including downsizing the HR function,
delegating HR
authorities to line managers, calling for HR to demonstrate its business value, and
enhancing
customer service. Through these initiatives, management of human resources would
become
more responsive to mission-related needs because it would take place at the line
level, and the HR
staff would be able to expend more of its energy on broader organizational issues.
The Government Performance and Results Act (GPRA) of 1993 has also played a largepart in
focusing agencies on results. The purpose of GPRA is to improve Federal program
effectiveness, accountability, service delivery, decision-making, and internal
management, thereby
improving confidence in the Federal Government. This is achieved by demonstrating
organizational results through strategic planning and performance measures.
Although the primary focus
of GPRA is on programmatic functions, agencies are also required to describe how
administrative resources, such as HR, are being used to achieve strategic goals.
Further, the General
Accounting Office (GAO) and the Office of Management and Budget (OMB) have
evaluated
many of these efforts, and are calling for agencies to improve their discussions of
HRM alignment
in strategic and annual plans. Therefore, the human resources function is
increasingly being
aligned to the agency strategic plan, which requires HR to show how it is supporting
mission
accomplishment.
Alignment has already occurred in other key administrative functions. When
Congress devel-oped
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a statutory framework to introduce performance-based management into the Federal
Government,
it initiated financial, information technology, and procurement reforms through such
mandates as
the Chief Financial Officer Act and Information Technology Management Reform Act.
Human
resources management is the administrative missing link to this comprehensive
package.
3
The private sector has recognized that it is not just financial and technological capital
that provide
companies with the competitive edge, but people, or human capital. Withoutattracting and
retaining the right people, in the right jobs, with the right skills and training, an
organization
cannot succeed. Therefore, people have been recognized as companies most
important asset. As
the Federal Government moves toward a performance-based management approach,
we, too,
need to realize the importance of our human resources. A huge percentage ofagencies budgetsIntroduction
U.S. Office of Personnel Management Page 3
is spent on human resources -- salaries, benefits, training, work life programs, etc.
Nowhere else
do you make that substantial an investment and not measure the return.
Not only do human resources provide the competitive edge, but several recent
studies have
confirmed that the quality and innovation of HR practices impact business results.
These studies
were able to draw a correlation between increased quality of HR practices and
increased business
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success. Among other benefits, HR alignment with mission accomplishment increases
HRs
ability to anticipate its customers needs, increases the agencys ability to implement
strategic
business goals, and provides decision-makers with critical resource allocation
information.
Finally, HR alignment is a vital process to advance agency accountability. By
defining, maintaining, and assessing HRM goals and measures, communicating them
throughout the agency, and
using the information to make management decisions, agencies are able to ensure
that the
management of human resources contributes to mission accomplishment and that
managers are
held accountable for their HRM decisions in support of mission accomplishment.
The Study
Once we defined what alignment means and why it is important, we wanted to find
out where
agencies currently stand in terms of aligning their human resources management
with agency
mission accomplishment. Therefore, the Office of Personnel Management (OPM)embarked on a
special study designed to explore the following objectives:
< Assess how well human resources management is linked to agency mission
accomplishment;
< Explore the role played by the HR staff in agency strategic planning;
< Determine how the HR service providers work with line managers to carry out
agency
strategic goals; and
< Identify best practices aligning HRM with the agency strategic plan and goals.
In order to obtain information pertaining to these objectives, we did the following:
< Reviewed 31 agency strategic and 28 annual performance plans;
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< Conducted an extensive literature and Internet search;
< Gathered information from agency HR professionals, supervisors, and employees at
17
agencies of various size through the fiscal year 1998 and 1999 OPM Oversight
reviews;Introduction
U.S. Office of Personnel Management Page 4
and
< Interviewed nine additional leading agency HR Directors.GPRA Strategic Planning
Process - Simplified
Performance
Reports
Status report on
achievement of agency
goals
Annual
Performance Plan
Operational level
strategies, measures,
and timeframes to support
strategic goals
Strategic Plan
High level agency goals,
strategies, and needed
resources
resources
U.S. Office of Personnel Management Page 5
II. STRATEGIC PLANNING
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You got to be careful if you don't know where you're going, because you might not
get there.
- Yogi Berra
Agencywide Planning
To some agencies, strategic planning is a way of life. To others, its an exercise. To
almost all,
its a requirement. As part of GPRA, agencies, unless specifically exempted, follow a
continuous,
three step strategic planning process:
Strategic planning allows agencies to map out where they are, where they want to go,
and how
they plan to get there. Some agencies adopted the idea of strategic planning even
before GPRA
was enacted, whereas others are just beginning to understand its potential benefits.
The results of
the fiscal year 1999 Merit System Principles Questionnaire (MSPQ), an OPM
Governmentwide
survey of supervisors and employees, show that agencies are beginning to embracenot only the
concept, but also the practice, of strategic planning.Agency Head
Sets strategic
direction within
defined mission
Planning Office
Coordinates tracking
of agency goals and
measures
Top Management
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Develops top level
goals, strategies,
measures
Line
Develops programmatic
implementation plans
Employees and
Stakeholders
Provide input
Typical Agency Planning Process
Strategic Planning
U.S. Office of Personnel Management Page 6
MSPQ Results
C 62% agree that their agency has a process for developing strategic, long-range
plans
and updating them periodically.
C 65% agree that operational goals and objectives are set to help the agency meet
strategic, long-range plans.
C 54% agree that progress toward goals is measured.
C 61% agree that information is collected for assessing performance.
The strategic planning process varies from agency to agency. On one end of the
spectrum are the
agencies which have very collaborative processes involving senior management, line
supervisors
and employees, and stakeholders throughout the entire process. On the other end
are the agencies which develop plans at the top management level with little input
from the line or stakeholders or that plan functionally, having each program office
submit its own goals and strategies
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with little to no collaboration among offices. The typical strategic planning process is
a mixture
of these:
HRM Integration in Agency Strategic Plans Strategic Planning
U.S. Office of Personnel Management Page 7
The management of agency human resources is an integral part of how an agency is
going to
achieve its mission goals. Without people, there is no one to do the work. Therefore,
integrating
HRM into the agency strategic plan is the first step in aligning it with the mission.
Even though GAO and OMB are pushing for improvement of HRM alignment
discussions in
strategic and annual plans, GPRAs primary focus is still on agency programs, rather
than
corporate functions. Therefore, we assumed at the beginning of this study that not
many agency
strategic plans would have addressed HRMs role in mission accomplishment. We
were
pleasantly surprised. Out of the 31 strategic plans reviewed, 87 percent hadaddressed HRM in
some way. Below is a breakdown of how integration between HRM and the agency
plan is
achieved, a count of how many strategic plans have integrated HRM in a particular
way, and
some examples of actual agency approaches.
How used: # of plans: Examples:
Mission Goals 8
(Listed side-by-side
with program goals)
Social Security Administrations Mission Goal: To be an employer
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that values and invests in each employee.
Air Forces Mission Goal: Ensure a high quality force of dedicated
professionals and provide an enhanced quality of life and strong sense of
community.
Support Goals 8
(Listed in a separate
section from the mission
goals but described as
critical to the mission)
Transportations Corporate Management Strategy that supports
mission goals: Foster a diverse and highly skilled workforce capable of
meeting or exceeding our strategic goals with efficiency, innova-tion,
and a constant focus on better serving our customers now and into the
21st Century.
Objectives and 22
Strategies
(Action items that
support mission and/or
support goals)
Treasurys objective in support of its mission goal to improve
management operations: Improve capacity to recruit, develop, and
retain high caliber employees. This is followed by a list of strategies
aimed at achieving the objective.
Energys HR strategy that supports the mission objective to ensure the
vitality of DOEs national security enterprise: Ensure that sufficient
personnel are available to meet long-term national security
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requirements.
Critical Success Factors 12
(e.g., needed resources,
improvements, etc)
Health and Human Services highlights Quality of Worklife as a crosscutting
management responsibility that can enhance the performance
and accountability of its programs.
Values 9 NASA lists its workforce, or People, as its greatest strength.
The table can be somewhat misleading, however. Although some agencies are
clearly ahead of
the pack, integration of HRM in agency plans is still evolving. When looking at theactual
placement of strategic plan HRM discussions, they are generally segregated from the
program-Strategic Planning
U.S. Office of Personnel Management Page 8
matic goals, objectives, and strategies. Considering that an agencys mission cannot
be achieved
without its people, this is an important point. Could this be an indication that human
resources
management is not yet recognized as a critical contributor to agency mission
accomplishment? In
any case, it is clear that though there are some exceptions -- as evidenced by some
of the
examples above -- full HRM integration into agency strategic plans has not yet been
realized.
The human resources issues addressed in agency plans provide insight into whataspects of human
resources management are most important to agency management. In reviewing the
plans, or
even just by looking at the examples above, it is clear that diversity, recruitment,
retention,
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employee development, and workforce quality are the major areas of interest.
Although these
could be looked at as process or output programs, when they are designed and
implemented well,
they lead to the ultimate result: the right people, with the right skills, in the right
positions to
carry out the agency mission.
Agency HRM Strategic Measures
Defining practical, meaningful measures that assess the effectiveness of agency
human resources
management and its support of mission accomplishment is a topic that agencies have
been
struggling with. It is easy to measure a process -- how long does it take to complete
an action? It
is easy to measure productivity -- how many actions were completed in any given
time frame?
But how do you measure the outcome of human resources management? How does
an agency
know if it has the right people, with the right skills, in the right positions to carry out
the agency
mission? Have any agencies found a way to do this? To help answer these questions,
we looked
to see if agencies are including HRM measures in their strategic plans, and what
types of
measures they have identified.
Not surprisingly, 71 percent of the plans did not identify any HRM measures.
Moreover, the
meaningfulness and practicality of the 29 percent of agency identified measures
could be stronger.
About one-third of the 29 percent contain measures that are not really measures.
They are lists of
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activities or projects that, when completed, will help to reach the goal. In other
words, they are
strategies labeled as measures. The other two-thirds of that 29 percent have fairly
good measures
that are tied to specific mission or support goals and provide seemingly relevant
information.
However, even these fairly good measures tend to focus on HR processes (outputs)
rather than
intended outcomes. For example, some agencies measure the average number of
employee
training hours to measure workforce skill levels, rather than what skills are actually
gained
through the training or what skills the workforce actually possesses. See the
following chart for
some examples of the better HRM measures we saw in agency strategic plans.
Agency Goal Measures
Air Force Recruit and retain the force to execute Air C Percentage of recruits
categorized as high
Force core competencies. quality
C Air Force enlisted reenlistment rateStrategic Planning
U.S. Office of Personnel Management Page 9
Education The Departments employees are highly C By 2000, 75% of Department
managers will
skilled and high-performing. agree that staff knowledge and skills are
adequate to carry out the mission
C By 2000, 75% of employees will demonstrate
the basic computer competencies identified in
the Departments computer competency
standards
Energy Ensure that all DOE employees are C Meet annual DOE technical Qualification
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appropriately trained and technically Program goals
competent commensurate with their C Meet or exceed competency requirements for
environment, safety, and health employees that perform physically hazardous
responsibilities. work
HR Involvement in Agency Strategic Planning
Now that we have seen what types of goals, objectives, strategies, measures, and
other forms of
HRM integration are present in agency strategic plans, we should look briefly at how
these were
developed. The legitimacy and ultimate value of these pieces of the plan will depend
substantially on where they came from.
Historically, me