Measuring the Strategic Impact and Value of Human Resources

Development Practices: A Cross-industry Analysis

CHARLES COTTER

7 SEPTEMBER 2011

PRESENTATION OVERVIEWDefining Strategic Human Resources Management

(SHRD)

The characteristics of SHRD

Research objectives

Research methods and process

Research findings

Research conclusion

Research recommendations

DEFINING SHRDThe process of changing an organization, stakeholders

outside it, groups inside it and people employed by it through planned learning so that they possess the knowledge and skills needed in the future. (Rothwell & Kazanas, 1994:16)

The creation of a learning culture, within which a range of training, development and learning strategies both respond to corporate strategy and also help shape and influence it. (McCracken & Wallace, 2000:427)

The strategic management of training, development, and of management or professional education interventions, so as to achieve the objectives of the organisation while at the same time ensuring the full utilisation of the knowledge and skills of individual employees. (Garavan, 1991:19)

THE CHARACTERISTICS OF SHRDIntegration with and shaping of organizational

missions and goals

Top management support and leadership

Environmental scanning

HRD strategies, plans and policies

Line manager commitment and involvement (strategic partnerships)

THE CHARACTERISTICS OF SHRDExistence of complementary HRM activities (strategic

partnerships with HRM)

Expanded trainers’ role acting as change consultants

Recognition of and influencing of organizational culture

Emphasis on cost effectiveness evaluation

Strategic value proposition of HRD

RESEARCH OBJECTIVESTo measure the current strategic value and

impact of HRD practices

To determine whether a perceptual gap exists between training and business/line managers regarding the strategic value and impact of HRD interventions

 To determine whether the HRD function has

adopted a performance-based culture with regard to implementing the characteristics of SHRD

RESEARCH METHODS AND PROCESSQuestionnaire (46 closed-ended questions using a 4-

point rating scale)

Cross-industry analysis (private and public sectors)

268 respondents

HRD and Training Managers; SDF’s; Line/Business Managers and Academics/SME’s

Various descriptive and inferential statistical measures

RESEARCH FINDINGSThe overall mean score for the measurement

of the strategic value and impact of HRD for the group of respondents is 2.69

The four (4) highest recording industries were:

Chemical, pharmaceutical and related: 3.03Others: 2.91Food, beverage and hospitality: 2.83Banking and insurance: 2.78

RESEARCH FINDINGSThe three lowest recording industries were:

Education, training and development: 2.54Government: 2.62IT, telecommunications and related: 2.68

That HRM/D managers (2.84) and training administrators (2.72) ratings are considerably higher than line managers (2.61) and academics/SME’s (2.45)

RESEARCH FINDINGSThat small (2.76) to medium-sized organizations

(2.73) ratings are slightly higher than larger/national (2.71) and larger/multi-national organizations (2.64).

That those employees with tenure of less than one year (2.83); those who have been working for more than 10 years (2.74) and those with 1-3 years (2.73) rated the strategic impact of HRD practices as the highest.

Employees with 7-10 years (2.69) and 3-5 years (2.61) of employment scored the lowest two mean scores.

RESEARCH FINDINGSThat the four highest scoring characteristics were:

Top management support (2.78)HRD plans and policies (2.76)Line management commitment and involvement

(2.75) Integration with organizational mission and goals

(2.75)

That the three lowest scoring characteristics are:

Strategic value proposition (2.56)Expanded trainer roles (2.58)Emphasis on evaluation (2.58)

RESEARCH CONCLUSION - Measuring the current strategic value and impact of HRD practices

That the overall, cross-industry strategic impact of HRD practices is unsatisfactory.

HRD practices are not strategic when measured against the identified characteristics and sub-factors of SHRD.

RESEARCH CONCLUSION - Implementing the characteristics of SHRD

Companies have not adopted a performance-based culture in which SHRD practices are effectively implemented and well managed.

At an administrative and operational level, HRD practices are sound. However, at a strategic level there is an apparent shortcoming.

HRD practices still tend to be more administrative when implementing the characteristics of HRD .

There is also a glaring shortcoming regarding the measurement and evaluation of HRD activities and impact.

RESEARCH CONCLUSION - Perceptual gap between HRD and business/line managers

A definite perceptual gap between HRD managers and business managers regarding the strategic value of HRD practices

RESEARCH RECOMMENDATIONS - The status quo of strategic HRD practices

That all organizations take cognizance of the below-average, perceived strategic impact and value of HRD practices

Multiple stakeholders seriously rethink their current HRD practices

Multiple stakeholders pool their vast resources and intellectual capital to form a pool of expertise on how to re-align, re-position and transform current HRD practices

Multiple stakeholders work together vigilantly and conscientiously to improve the effectiveness and strategic value of HRD practices

RESEARCH RECOMMENDATIONS - Implementing the characteristics of SHRD

That organizations across all industries take cognizance of the below-average perceived shortcomings of the various characteristics of HRD.

Cognizance should be taken of the 3 lowest-rated characteristics.

That companies utilize various interventions as a basis for improving the strategic value and impact of HRD practices.

Companies should pinpoint the other low-scoring characteristics and implement HRD improvement strategies and plans.

RESEARCH RECOMMENDATIONS - Perceptual gap between HRD and business/line managers

Engage in more constructive communication in order to identify the sources of the identified perceptual gaps.

Collaborate and partner to ensure that HRD practices are more strategically relevant.

RESEARCH RECOMMENDATIONS - General

That additional and follow-up research at doctoral level be undertaken

Developing a conceptualized SHRD framework to enable organizations to analyze, measure, monitor, manage, implement and evaluate their HRD practices

Cognizance be taken of the findings of this research project

Use these research findings as a base-line and/or benchmark and as a means of improving the strategic impact of the HRD practices

CONCLUSIONSummary

Questions

Thank you

Contact details: 084 562 9446 or charlescot@polka.co.za