The Strategic Impact of the HR Function on the Core Business of the Organisation

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It is an honour and privilege for me to be part of the KZN Province’s HR Conference.  I thank you for the invite and I congratulate you on this excellent initiative in positioning strategic HR as a key imperative for running an effective provincial government.

I will provide a brief overview of the Strategic HR Management standard element developed by SABPP.  The strategic HR Standards specifies exactly what an HR function should do to have strategic impact.  It was developed by 468 HR Managers from all nine provinces and four other SADC countries developed the HR Application Standard with specific guidelines on how to apply the standard element in the workplace.

Today I am proud to say that KZN was the best participating province outside Gauteng.  I want to thank the KZN HR community for their inputs and support.  The Durban Chamber of Commerce and Industry, as well as the Ilembe Business Chamber, in addition to the Zululand Chamber of Commerce and Industry were the leading business chambers participating in awareness around the National HR Standards. Likewise, Ethekweni Municipality was the first municipality to embrace the HR Standards and for aligning their HR practices to the standards, well done to Ethekweni.  It was great working with you.  Furthermore, the standard was also accepted by 21 universities as a framework for their new curriculum, locally Mangosuthu University of Technology and the University of KZN and University of Zululand were very supportive of the HR standards.   We also want to thank Durban University of Technology for inviting our COO, Xolani Mawande to their Pietermaritzburg campus recently.

Interestingly, now that companies are audited against the National HR Standards, I am also proud to announce that KZN is leading the non-Gauteng provinces.  Three organisations in KZN have been audited:

  • Umgeni Water – and well done to the HR team with a sterling performance;
  • Mondi – congratulations to their HR team;
  • A rural municipality (they will remain nameless until the City Manager provides us with permission to mention their name).

I essence, we are now faced with an opportunity of getting HR right in the province.  We have trained HR auditors in the province, as well as a SABPP Provincial Committee who are ready to support the province in positioning HR Standards and Strategic HR in particular as drivers for improving organisational performance.

The 13 standard elements of the South African National HR Standards are covered in the following model:
2.2

The SABPP Strategic HR Management Standard is as follows:
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1.2  OBJECTIVES

1.2.1 To ensure the HR strategy is derived from and aligned to the organisation’s objectives in consultation with key organisational stakeholders.

1.2.2 To analyse the internal and external socio-economic, political and technological environment and provide proactive people-related business solutions.

1.2.3 To provide strategic direction and measurements for strategic innovation and sustainable people practices.

1.2.4 To provide a foundation for the employment value proposition of the organisation.

1.2.5 To establish a framework for the HR element of the organisation’s governance, risk and compliance policies, practices and procedures which balance the needs of all stakeholders.

1.2.6 To determine an appropriate HR structure, allocate tasks and monitor the development of HR competence to deliver HR strategic objectives.

STRATEGIC HRM NOTES
This standard element should be read and applied by taking cognisance of all the other standard elements, but with a particular focus on talent management, HR risk management, workforce planning, HR service delivery and HR measurement.

HR Competency Model:  HR practitioners must be able to play an appropriate role in the following outputs:

  • Participation in the formulation of business strategy
  • Leadership in the formulation of people strategy
  • HR Business Plan

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1.3.1  Translate the overall strategic intent of the organisation into HR strategy.

  • HR strategies should not be the same for all organisations. A specific strategy is needed for each organisation, because each organisation’s business strategy is unique – the strategy represents a choice between valid alternatives and sets out priorities. HR strategy cannot be formulated in the absence of a clear, openly communicated organisation strategy. Therefore, the starting point is to clearly understand the business strategy – what are the key drivers behind it and what are the main priorities of the strategy.
  • Scan the internal and external environment for people and social factors which affect the organisation now and into the future. Seek to understand the trends and how these trends will impact the organisation in implementing its strategy. (See also HRM Standard Element #3 HR Risk Management.)
  • Prepare different scenarios and generate alternatives for HR strategies which address the HR related risk and opportunity factors of each business priority. Ensure that each part of the HR value chain is considered in how it can contribute to meeting each business priority.
  • Prepare a simple (preferably one page) document setting out exactly what HR will do to support the achievement of each part of the organisation’s strategy. From there, detail the various programmes, initiatives, systems and methods that will be involved.
  • Ensure that this is updated as and when the organisation strategy is amended.

1.3.2  Position the strategic HR agenda as an integral part of strategic decision making, goals and operational plans.

  • The HR contribution to business strategy should not be reactive, but interactive – the analysis conducted under point 1.3.1 above may indicate some HR related constraints and problems, or unforeseen opportunities, that will impact achievement of the organisation’s objectives positively or negatively. Therefore there should be a process in place that enables any such points to be considered by the strategy-formulating body(ies) and the business strategy amended if necessary.
  • Operational plans for all parts of the organisation, including all functions, should be reviewed for alignment with the overall HR strategy, and operation executives should be held accountable for implementation as appropriate.
  • The strategic HR agenda needs senior representation on top level decision-making structures in order to be effective.

1.3.3  Allocate HR resources and build capability to implement the HR mandate.

  • Using the HR strategy and detailed plan prepared under 1.3.1, review the HR organisation structure and balance between in-house and outsourced resources to ensure it is suited to delivery of the strategy and plan.
  • Prepare and submit for Board approval the HR budget required to implement the HR mandate.
  • Review the current skills of existing HR staff against the requirements of the strategy and plan. Identify gaps, prepare and implement plans to up-skill existing staff or bring in new staff.
  • Ensure each member of the HR staff has a performance agreement and a development plan aligned to the HR strategy and plan.

1.3.4  Provide the contextual foundation for the development of the policies, plans, practices and procedures.

  • HR policies are important pillars of organizational culture and performance. They should serve to bring consistency to management decisions which affect employees and must be aligned, within the organisation’s business context, to laws, regulations and other compliance requirements.
  • A defined process should be in place to deal with exceptions to policies so that consistency is not undermined.
  • HR policies, plans, practices and procedures should be developed for each organisation, not purchased or copied from other organisations. They should align to the strategy. This means that they may need to change as the strategy changes, and they should be tailored if required to the different requirements of the strategy in different parts of the organisation.
  • Therefore all policies, plans, practices and procedures should be reviewed regularly to check alignment. This should be done formally and in appropriate consultation with line managers and affected employees and their representatives.
  • A defined process should be in place to prepare policy drafts (using outside expertise if required), consult managers, affected employees, and all relevant stakeholders, to incorporate the results of consultations and formally to approve the final policy. Those policies which most directly impact on the achievement of the organisation’s strategy should be approved by the executive team and, if appropriate, by the Board. Other policies may be approved by lower levels of management.

1.3.5  Allocate accountability and responsibilities for the execution of HR strategy.

  • Implementation of the HR strategy happens through different levels and functions within the organisation. A major part of the implementation belongs clearly to the HR function, but other parts will lie with other role-players such as line managers, executives, corporate communications managers, corporate social investment managers and so on, depending on how the organisation structures related functions.
  • The HR strategy and plan prepared in 1.3.1 should set out clearly who is responsible for what. Performance agreements throughout the organisation should be aligned with the agreed HR strategy and plan.

1.3.6  Ensure the execution of the HR strategy is measured and monitored within the governance framework of the organisation.

  • Each organisation has its own processes for following up on implementation of strategy and business plans. The process for monitoring the HR business plan should be included in those same processes.
  • Appropriate measures for tracking the effectiveness of the HR strategy should be agreed at the time of approval of the strategy. These can be outcome related or input related measures, whatever is considered appropriate. (See also HRM Standard Element #13 HR Measurement.)
  • Effective governance should include oversight over:
    • the management of HR related risk (see also HRM Standard Element #3);
    • the effectiveness of the organisation’s structure and allocation of accountabilities;
    • the alignment of employees with the organisation’s strategy and plans;
    • the improvement of performance at individual, team and organisational level;
    • the health of the organisation’s culture;
    • the quality and efficiency of HR service delivery.

1.3.7  Drive continuous improvement and sustainability of the HR strategy through planned reviews and integrated reporting.

  • The executive strategic review processes of the organisation (such as quarterly or annual reviews) should include a review of the effectiveness of the HR strategy. This should include both quantitative reporting (using measures derived as described in 1.3.6) and qualitative reporting which can complement the metrics.
  • Whatever formal and public reporting is required of the organisation must include topics of strategic HR importance. This is a requirement of the integrated reporting framework introduced under the King III corporate governance framework. (Guidance on good practice in HR related components of integrated reporting will be issued by the SABPP.)

CONCLUSION
A sound approach to Strategic HR Management is key to the success of the KZN province, not only as a provincial government, but also as a good province for all its people.  If you get strategic HR right, you will get the province right.   Once again, I thank you all for your participation today and I look forward to continue engaging with the HR community of KZN province.  Now that HR, including strategic HR is auditable against a national standard agreed nationally, it is time to get our house in order with a good framework for Strategic HR Management.  There is a great opportunity of accelerating the impact of strategic HR on the success of the KZN province and all its stakeholders. It will be wonderful if KZN can continue to be a leading province in this regard.  I thank you.

Staff-Marius

Marius Meyer is CEO of the SABPP.  For more information about the SABPP HR Management System Standard or the auditing framework for the standards, please contact SABPP on (011) 045 5400  or executiveoffice@sabpp.co.za.  You can also receive regular updates via twitter @SABPP1 on hashtag #hrstandards, the website www.sabpp.co.za and the special blog for the HR Standards www.hrtoday.me

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