Today’s information-based, knowledge intensive, and service-driven economy has forced organizations to make substantial changes to the way they compete. Changing perspective and responsibility of top management amidst rapid Business and Digital Transformation and the shifting role of HR from being an auxiliary function to that of a driver are some of the dynamics of the evolved competition.
This evolution of Competition has been reached by passing through 3 phases:
- Competition for Products & Markets
- Competition for Resources & Competencies
- Competition for Talent & Dreams
Throughout the evolutionary phases of competition, the focus of Growth Strategy, the tools used, and the key strategic resources have been shifting. The strategic objective of front-running organizations is on continuous evolution and Transformation, and motivated Human Capital is their key resource. This realization is now at the forefront of Strategy Development as competition for scarce Talented Human Resources becomes more intense. However, modern-day managers are still using old tools to deal with an emerging reality.
Dexterity in leadership and management is a prerequisite for leaders now. Research suggests that the 3 important changes that the CEOs must make in terms of their strategic perspective are in:
More on this topic in our editable PowerPoint presentation on Strategic Human Resources.
With the fast-changing focus in Strategy, Human Resource Managers are finding themselves leading the strategic charge. However, a large majority is ill prepared for the role. With Human Capital becoming key strategic resource and basis of Competitive Advantage, HR must adopt 3 core processes to evolve into the strategic HR function that has become their new realm:
Let us delve into the first 2 core processes to strategic HR function in a little more detail.
The first core process of Building is all about creating human resource systems, processes, and culture to counter the deep-rooted bias towards financial assets and recognize the value of Human Capital. For instance, Microsoft annually scans the entire pool of 25,000 U.S. computer science graduates for the best 500 to be given offers, of which 400 – top 2% of that year’s graduates – accept. This only fills 20% of the positions. For the rest, Microsoft maintains industry linkages with 300 recruiting experts who scour the industry for the best and the brightest individuals, often wooing them for years.
Developing Knowledge Sharing Networks is core to leveraging Human Capital. Converting individual expertise into embedded intellectual capital is what linking is all about. For example, British Petroleum in the 1990s introduced the Knowledge Management and Organizational Learning program. The main feature of the program was the “Peer Assist” where frontline workers in one location would help solve a problem for workers in another location without the usual hierarchy intervening. Peer Assist was augmented by the “Peer Groups” of business units—i.e. business units engaged in the same assisting activities as frontline individuals. This way managers of decentralized operations compare experiences and share ideas. Once this Information Sharing Network took root it was supported by setting up information-sharing infrastructure – e.g., video conferencing, chat rooms, video clip encoders etc.
Interested in learning more about the details of the 3 Core Processes required to evolve your HR into a strategic HR function and Key Actions needed to implement these? You can download an editable PowerPoint presentation on Strategic Human Resources here on the Flevy documents marketplace.
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The purpose of Human Resources (HR) is to ensure our organization achieves success through our people. Without the right people in place—at all levels of the organization—we will never be able to execute our Strategy effectively.
This begs the question: Does your organization view HR as a support function or a strategic one? Research shows leading organizations leverage HR as a strategic function, one that both supports and drives the organization’s Strategy. In fact, having strong HRM capabilities is a source of Competitive Advantage.
This has never been more true than right now in the Digital Age, as organizations must compete for specialized talent to drive forward their Digital Transformation Strategies. Beyond just hiring and selection, HR also plays the critical role in retaining talent—by keeping people engaged, motivated, and happy.
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A job consists of various critical elements that are essential to achieve enterprise outcomes—i.e., talent and behavioral requirements, role, and responsibilities. Jobs that are configured inadequately bread disputes, negative perceptions, inequality, and frustration. On the other hand, structured jobs, appropriate distribution of work, justified authority levels, and correct estimation of value of individual jobs are the signs of effective Human Capital Management function.
The lack of a structured job design—or ill-defined jobs—renders the organizations ineffective and burdened with excessive staffing and payroll costs. This warrants from the leadership to plan and undertake a Job Leveling initiative. Job Leveling is a disciplined approach to gauge the value of work for individual positions across the organization. It entails ascertaining the nature of work done by each position, authority levels, and the effect of each job on business results. The initiative is critical in administering rewards structures.
However, Job Leveling is a concern at most organizations—not many people are satisfied with the value assigned to their roles. The absence of proper—or inadequate—job levels yields grave consequences for the entire organization. Jobs valued higher than their actual value lead to wastage of resources, whereas low valued jobs are perceived as offensive and inculcate demotivation.
Job Design and Job Leveling is essential when organizations consistently encounter these issues:
- Constant employees complaints and demands to reclassify jobs
- Excessive job titles
- Widespread dissatisfaction with remuneration
- Task / processes redundancy
- Financial outflow
- Staffing imbalances and top heavy structure
Workforce planners should use a Job Leveling Framework to methodically benchmark the value of jobs at their organizations. To accomplish this, they need to first analyze all the activities required under each position, the professional competences and demeanor essential to perform those activities, and gauging the effect each position has on business results.
Implementing a Job Leveling Framework simplifies the allocation of jobs in a harmonized job hierarchy, establishes consistency across the HR Initiatives, develops clear paths for growth, and improves decision making.
Human Resources practitioners need to follow these 5 key phases to implement a Job Leveling Framework and structure job levels at their organizations:
- Ensure Readiness of Pre-Implementation Groundwork
- Engage Business Leaders in Implementation
- Set up Clear Governance Structures
- Employ User-friendly Job Evaluation Management Tools
- Establish Clear Communication Mechanisms
Let’s dive deeper into the first 3 phases of the Job Leveling Framework Implementation, for now.
Ensure Readiness of Pre-Implementation Groundwork
Human Resource practitioners should first analyze their existing job architecture, job natures, roles and responsibilities, and Organizational Culture to initiate the Job Leveling process. Specifically, they have to answer these queries to identify the right Job Levelling method:
- What is the key objective to be achieved by implementing the Job Leveling initiative? Is it to improve compensation, shape career paths, or alleviate pay equity concerns?
- Who will be the users of the Job Leveling system? Will it be managed by Human Resources experts or business leaders?
- The Job Leveling exercise will impact which employees? How many roles, their nature of jobs, locations?
- Define the organizational culture and values. Is it hierarchical, centralized, or cost-focused?
Engage Business Leaders in Implementation
Effective Job Levelling Implementation necessitates involvement of business leaders from the onset of the exercise. Engaging business managers and employees can hold back the pace of implementation because of conflicting views and ideas, but this is essential for the success of Job Leveling. The right engagement involves:
- Getting agreement and support from senior business leaders.
- Including business leaders in calibration of key roles for support later during execution phase.
- Coaching key line managers and including them in job evaluation sessions to ensure adequate understanding of the roles and to develop program sponsors during implementation.
- Including key employees during the design phase of Job Leveling to remove any suspicion and win their agreement.
Set up Clear Governance Structures
Establishing effective control mechanisms is essential to avoid any glitches in implementing coherent job levels. Job Leveling initiatives in large multinational corporations fail because of dearth of appropriate governance mechanisms in place. A few organizations adopt centralized controls whereas others employ decentralized, locally-driven governance protocols. To execute clear yet robust governance mechanisms, organizations should follow these key tenets:
- Governance principles should correspond to the organizational culture.
- Stakeholders should be held accountable with clear roles.
- Authorities should be assigned to ensure proper control mechanisms.
- All concerned people should be engaged in the initiative.
- Decision making authorities should be clearly defined.
- Resources should be effectively deployed.
- Promote fairness by applying rules equally, or if not, rationale is clearly explained.
Interested in learning more about the other phases of Job Leveling Implementation and Job Leveling methods? You can download an editable PowerPoint on HR Strategy: Job Leveling Framework Implementation here on the Flevy documents marketplace.