Managing in the new millennium: human resources.

Aligning Human Resources to Better Meet Strategic Objectives

Too often organizations craft their strategy in a vacuum. Some organizations don't even include key people as part of the dominant coalition. Critical input is then missing from those very individuals who must implement these

strategies. A past CEO of Sony once said that organizations have access to the same technology and the same information. The difference from one organization to the next is the people. Even more importantly, though is how these people perform and how their contributions are aligned with the organization's objectives.

Successful execution is essential for business success. If the best strategy is formulated, but the execution is flawed, success will certainly be elusive. Planning the implementation of the strategy should be given as much attention as the planning of the actual formulation.

Without an alignment of strategies within the organization, execution is doomed. Only by addressing the hierarchy of strategy and recognizing the need for an alignment of corporate, business, and functional strategies will the probability of success be increased. Furthermore, the execution of each individual's efforts must be aligned with this hierarchy of strategy.

This, then, must include the alignment of functional strategies. One of these critical functional strategies is the human resource strategy. This includes the recruitment, selection, compensation, training, development, and appraisal of the human resources.

Without the proper strategic human resource planning, execution is dubious at best. The HR planning ensures that the organization has the right people in the right place at the right time. All the other human resource strategies can ensure further that these human resources (correctly placed) than contribute effectively to the organization's objectives.

Review Recruitment and Selection Processes

A key element of human resource planning is ensuring that the supply of appropriate employees (with the right skill mix) is on board when needed. This requires a proactive approach whereby the organization anticipates its needs well in advance. It is important to identify the competencies being sought. That is, the criteria upon which selection decisions are to be made should be decided in advance. A firm must identify those skill sets required by employees to be successful.

Charles O'Reilly suggests that companies should hire for attitude (perhaps even more so than technical skills). That is, the fit of the individual with the values of the organization and the culture of the firm should also be considered when selecting employees. This has been referred to as the person-organization-fit. It is no longer enough to simply consider the person's fit (and technical skill set) with the job. Part of the employee's fit with the organization should focus on the core values and beliefs of the organization. This will increase employees' contributions to the overall success of the organization if they already embrace the core values of the organization prior to their selection.

Communicate the Mission and Vision

If employees are expected to contribute to the attainment of the organization's strategic objectives, they must understand what their role is. This can be achieved in part by clearly communicating the mission and vision statements of the firm. The old adage is certainly true. If a person does not know where he or she is going, any road will get him or her there. As the mission and vision statements are articulated, organizational members begin to more closely embrace their very meaning on an individual level. These statements provide a road map leading employees down the road to achieve organizational objectives. Employees then identify how they can contribute their unique talents toward the attainment of these goals.

The mission communicates the identity and purpose of the organization. It provides a statement of who the firm is and what their business is. Only those employees who understand this purpose can contribute to the fullest extent possible. The vision statement provides a picture of the future state of the firm. It should be a stretch to attain. This keeps all the organization's employees pulling in the same direction with a common end point. It is much easier to align human resources with corporate objectives when these employees are familiar with the mission and vision of the firm.

Use Joint Goal Setting

Employees are more likely to buy into goals that they helped create. Management by objectives (known by the acronym MBO) as proposed by Peter Drucker is based upon this joint goal setting. It also involves a nesting of the goals throughout the organization.

When employees have an opportunity to share in the creation of their goals, they better understand what is expected of them. As a result of this joint goal setting, employees are more likely to accept these goals - since they helped develop them.

As these joint goals are set with each individual in the organization, there is a natural nesting. That is, as one individual's goal is achieved, that individual's group goal is achieved. This continues through to each higher level goal until finally the organization's goals are met.

Design an Appropriate Reward System

Organizations get what they reward. A finely crafted reward system that "puts its money where its mouth is" will better align their human resources with their strategic objectives. If a company says that teamwork is a core value and then develops a system whereby rewards are based upon individual performance (that may in reality sabotage the performance of others in a "one-upmanship" game), the organization is acting in a counter-productive way.

When core values are truly embraced by the organization, the effectively designed reward and compensation system will see that those employees who embody these values and live them reap the benefits. Companies will get what they reward. If they reward the behaviors that they truly value, they will increase the probability of seeing more of these behaviors exhibited throughout the firm. If, however, they reward other behaviors, they get more of these other behaviors.

Empower the Workforce

Empowering the workforce is an essential tool in aligning human resources with the achievement of corporate objectives. Just as a prized, talented race horse should be given its head, talented employees should be similarly approached. To hire talent means to also provide them with the opportunity to contribute that talent. This means that management must be comfortable giving up power and giving up control. They must have the courage to allow these talented individuals to try new ways of doing things and management must create an environment in which these individuals are comfortable taking risks.

Empowering employees requires a great deal from managers. They must learn to tolerate failures. To risk trying new things means that there will be successes and there will be failures. To punish failures communicates that it is not worth the employee's risk to attempt new things. Only by tolerating failure is an environment created where employees can take risks.

Managers who are committed to empowering their employees must give up information. Without the necessary information, employees cannot make informed decisions. Then as employees make decisions, managers must ultimately then hold them accountable.

Promote From Within and Invest in Employees

Promoting employees from within sends a powerful message that the organization's employees are valued. Yet a fine line is walked. New blood and fresh ideas often come from newcomers to the organization. To avoid stagnation of the firm, new ideas and approaches are critical. Yet to improve morale, promoting from within is essential. This communicates that the organization values their employees and invests in their human resources.

Furthermore, the stability of the firm depends to some extent on promoting from within. As employees are retained in the company, knowledge, skills, and abilities are likewise retained. Losing employees means losing organizational knowledge. The key, however, is to ensure that employees receive training and development opportunities to continually upgrade their skills. Only by having a workforce that possesses the appropriate skills can the organizational goals be met. Investing in employees and developing these employees is essential to meeting corporate objectives. In addition, cultivating the development of employees already within the organization ensures a certain level of conformity and stability necessary to balance the change efforts.

Use Teams to Achieve Synergy

Synergy can be concisely defined as "two plus two equals five". In other words, the whole is greater than the sum of the parts. So much more can be achieved as people work together. Through the effective use of teams, organizations can often achieve synergy.

Team goals, however, must be aligned with the organization's strategic objectives. Aligning team objectives with overall corporate objectives ensures that people are working toward the same goal.

Furthermore, the selection of team members must be carefully considered. Team composition should be heterogeneous in nature. That is, the team members should complement one another to round out skill sets. Teams that address this heterogeneity are more likely to be able to develop creative solutions and meet their team goals.

It is critical that today's organizations align their human resources to better meet strategic objectives. A failure to do so results in wasted time, energy, and resources. Organizations are more likely to achieve this alignment with their corporate objectives when they review their recruitment and selection processes for fit, communicate the mission and vision statements, use joint goal setting, design an appropriate reward system, empower the workforce, promote and develop from within, and use teams to achieve synergy.