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Worcestershire Country Council (Question 2)

In ensuring a company remains competitive and continues to make prudent executive decisions, it must address the economic challenges it faces. Strategic management encompasses this holistic style of leadership in which the companys goals and objectives are all integrated into a cohesive entity. This entity can be likened to the market in which the company operates. Many past successful organizations have felt the impact of changes in demands, cultures, tastes, unemployment, competition, customers and so on in plummeting sales revenue. Reason being, they used a cookie cutter approach to solving the problem. The ability to understand, track, prepare and adapt to changing times makes the difference between a company that barely survives and one that is a successful survivor. The strategic management process involves two key components in ensuring a company remains current and competitive in this dynamic environment; strategy formulation and strategy implementation. The former refers to an examination of a companys mission and goals, internal strengths and weaknesses and external opportunities and threats. This is commonly referred to as SWOT- Strengths, Weaknesses, Opportunities and Threats. After this a strategic review of varying alternatives against the companys ability to achieve them based on its SWOT is conducted and the most attainable is selected. Strategy implementation looks at allocating resources to support the strategy formulation decision made. Management must ensure that any decision taken to move a company forward is backed by structuring the organization to complement the new thrust. For example, the

technological support, raw material acquisition and having the right employees with the right skills, experience and training to ensure plans materialize. Human resource (HR) managers face the challenge of being able to spot the HR related competitive issues facing the organization and develop a plan of action on how best to address them. This type of action results in Strategic Human Resource Management (SHRM). Raymond Noe et al define SHRM as: The pattern of planned human resource deployments and activities intended to enable an organization to achieve its goals1 Furthermore, stemming from this concept, one can appreciate that an organization must consider its workforce and their respective competencies, demographics, residential locations and other pertinent factors when making strategic decisions. The role of HR has shifted over the years and now supports the organizations goals and objectives by working alongside all other lines of business in meeting deliverables. These activities all ties back to the delivery of value services to customers, key stakeholders and employees. It is important to note that this new strategic approach is to be undertaken alongside traditional/ administrative functions of a typical HR unit. Jeffrey A. Mello in his text Strategic Human Resource Management illustrates the outcomes of SHRM. The underlying diagram shows how a company can gain greater performance, customer and employee satisfaction and enhanced shareholder value because of an identification of possible higher human capital contribution to support corporate goals.

Outcomes of Strategic Human Resource2


Customer and Employee Satisfaction Enhanced Shareholder Value

Increased Performance

through

Effective management of staffing, retention, and turnover through selection of employees that fit with both strategy and culture Cost-effective utilization of employees through investment in identified human capital with potential for high retention Integrated HR programs and policies that clearly follow from corporate strategy Facilitation of change and adaptation through a flexible, more dynamic organization Tighter focus on customer needs, key and emerging markets, quality

Noes definition of SHRM includes a key aspect of HR management, human resource planning. This proactive approach to managing a companys workforce ensures the organization can seek out opportunities or reasons for developing the right framework to enhance the workforce to ensure it braces for any internal or external occurrences. As opposed to traditional HR which reacts to changes or pressures, HR planning ensures the company changes in tandem with the external environment. Changes range from economic, legal and industrial to technological. By being proactive, HR teams can now enjoy first mover advantages. These advantages assist not just the HR department, but it impacts on the organization as a whole. They include:

Increase in sales revenue from a prevention of over or understaffing. Planning allows for timely response to changes in customer demands

Matching goals and objectives of the firm the right employees to ensure plans materialize. This also includes workforce analysis, training and development, the design of work systems

Timely response to changes in the environment. Companies cannot control their external environments, however they can prepare for varying possibilities and ready themselves for the unexpected

Provide clear, strategic and coherent direction of all HR activities and systems ensuring there is interrelatedness in the decisions made for compatibility and flow in the varying aspects of employees work and development needs

Garner support and marry the perspectives of line and staff managers

Workforce Analysis
As HR managers appreciate the impact that this proactive approach is having on not only their respective units but also the organization, they realize their tactical functions supports all future planning activities of the wider work environment. HR Planning must be supported by thorough workforce analysis to understand the composition of the current human capital employed by the company, the necessary threshold and differentiating competencies needed to achieve future plans and the possible gap between the two. Workforce analysis may be defined as:

Scanning the internal and external environments to identify factors that may impact on the workforce. The aim of Workforce Analysis is to develop a good understanding of the key drivers that may affect the future supply and demand for labour for the organization.3 There are three important phases of conducting a workforce analysis, supply analysis, demand analysis and the gap analysis. The first phase of the process, supply analysis, requires an in depth review of the data which currently exists in the workforce. This data already exists in the organization and refers to facts pertaining to employee demographics, employee/supervisor ratio, pay rates, turnover rates, job locations and so. Data that can be extracted from a companys HRIS easily and made available for this purpose. The second stage, demand analysis, evaluates the future needs of the company as it pertains to having the right human capital to support. It is important to note again that this approach underscores the need for HR to work in tandem with the other lines of business to have a proper understanding of what the prospective plans are for different units. Demand analysis focuses on job analysis, anticipated knowledge, skills, competencies and abilities for varying job functions and overall how each process can be made more efficient. In also looking at the future needs of an organization, it is critical for HR managers to be mindful of legislative adherences to balancing their workforce as far as gender, race and disability are concerned. Many governments have become mindful of the need to steer companies in the right direction to ensure equality for all persons. An example of such a piece of legislation can
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be found in The Race Relations (Amendment) Act 2000. The Act gives public authorities a statutory general duty to promote race equality. The general duty states that the authorities must have 'due regard' to the need to eliminate unlawful racial discrimination and promote equality of opportunity and good relations between people of different racial groups. Thus in examining the future needs of an organization, HR must also have a clear understanding of external forces and guide the way accordingly. The gap analysis is the third phase of the workforce analysis process and it compares the current and future workforce to identify gaps and surpluses in staffing and competencies. At this stage the HR practitioner is charged with the responsibility of reviewing both current and future workforce data to inform decision making. In forecasting it is essential to consider the organizations mission and goals, strategic plans, budgets and any possible future restrictions. Having identified the shortfall or gap between the demand and supply analyses, HR now has a more scientific platform built on data driven evidence to support a need for change. Some of the solutions to ensure greater efficiency may call for retrenchment, recruitment, training and development or employee retention strategies. As well it may also demand the organization to place greater emphasis on being more aware of gender and race equality and also ensuring that it has equal opportunities for all including the differently abled. This also assists in promoting the company as a good corporate citizen. It is essential at this stage for HR to obtain management buy in to support all activities as the company sits on the edge of a workforce transformation.

Diversity Management
The management of diversity has been linked to improved productivity and morale, lower employee turnover and other HR related costs. It is a critical aspect of HR today as many minority groups have a louder voice in the corporate sector. Raymond Noe et al define diversity management as: The process of creating an environment that allows all employees to contribute to organizational goals and experience personal growth.4 Regardless of racial, ethnic or religious backgrounds, employees must have fair access to jobs and treatment in the workplace. Managing diversity may require changing company culture to ensure employees understand the issues at hand and support the thrust for equality. Many organizations adhere to diversity management principles simply because of a need to adhere to legislative guidelines, such as The Race Relations (Amendment) Act 2000 aforementioned. This tick in the box approach rarely changes employees values, stereotypes and behaviours that inhibit personal and productivity development. This can also in the medium to long term cost the company a lot of money as women and minority groups can now find satisfaction in industrial courts with supporting legislation to guarantee redress. To ensure a company successfully manages a diverse workforce a proper and thorough diversity training programme should be developed and administered. Diversity training fulfills the purpose of:

Increasing participants' cultural awareness, knowledge, and skills, which is based on the assumption that the training will benefit an organization by protecting against civil rights violations, increasing the inclusion of different identity groups, and promoting better teamwork.6 These programs differ based on whether attitude or behavior-based changes is emphasized. Attitude awareness and change programmes focus on increasing employees awareness of differences in both cultural and ethnic backgrounds, physical characteristics that influence behavior toward each other. The type of training module seeks to highlight stereotypes and beliefs and make employees more conscious of the repercussions so as to avoid future negative references based or opinions or dislikes. It is demonstrates the effects of these stereotypes on the emotional and productivity performance of those in question. Behaviour-based programmes address organizational policies and individual behaviours that negatively affect employees personal growth and productivity. Employees are challenged to identify incidents that discourage employees to work up to their true potential. Through focus group sessions employees can share views regarding their respective work environment and management practices involving employee differences. The approach also considers leadership, by teaching the basic rules of behavior in the workplace. Successful diversity management programmes should include the following: Support from top management: through the allocation of adequate resources to support the training needed, employee time off for workshop/training attendance, and also public advocating of the progammes
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Proper structure of the training Make diversity management a part of business objectives: it now becomes a key performance indicator for all

A built in evaluation component of the process A view that the program is not seen as a tick in the box but more so a part of cultural change

Behaviours and skills needed to successfully interact with others are taught. Thus, the problem is not just highlighted

Managers are rewarded for progress towards meeting diversity goals

Overall diversity management programmes involve a series of training elements all critical to ensuring success and the equal opportunity of staff to be productive. This in return allows for greater rewards for the company.

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