SHRM CP- Business
Improving Environmental Awareness
- Regularly reading the business press—including more international publications such as The Economist—and following key social networking sites to monitor the latest business philosophies and trends. - Staying current with the latest academic HR research. Use relationships with local academics and visit the websites of institutions known for their HR research publications. -Analyzing the organization's performance. Review the organization's financial reports and strategic goals and understand the stories they are telling—for example, patterns of performance across a corporation's divisions or products, trends in indebtedness, and levels of available cash. -Monitoring the performance of other organizations, including competitors and major employers in your communities of operation. This can affect employer branding, compensation, engagement, and diversity strategies. -Becoming regular users of third-party information from government agencies (e.g., labor and trade departments), international bodies like the World Bank and United Nations agencies, nonprofits, and professional associations, such as the Society for Human Resource Management. -Scanning annual reports from businesses or groups with comparable markets and workforces. Annual reports can provide insight into the issues other organizations are wrestling with and the solutions they have tried.
Advanced Analytics
-Advanced analytics use historical and current data to get a better sense of the future and even to shape the future. These analytic approaches apply formulas and algorithms to data warehouses in order to predict outcomes. -Advanced analytics can also take advantage of machine learning, the ability of an information system to make its own decisions based on the data it is receiving. For HR professionals, this type of capability can improve the self-service experience for managers and employees
Budgeting Process: Zero-based
-All objectives and operations are given a priority ranking. -Each unit or goal is ranked, and then available funds are given in order. -All expenditures must be justified for each new period, and budgets start at zero. EX: A department would need to justify its entire budget and show how its funding helps the organization meet its goals.
Budgeting Process: Incremental
-Also known as line-item budgeting. -Traditional form of budgeting. -The prior budget is the basis for the next budget. The prior budget is simply increased (or decreased) by a set percentage. Additional funds must be requested based on need and objectives. EX: Installing new computer equipment or providing training requires a separate budget request, on top of the usual budget.
Business Intelligence Portals
-Can be customized to the needs of specific users so that they view only the data and applications they commonly use. This simplifies navigation and avoids overwhelming users with visual options and requiring layers of actions. This is an important factor for HR when selecting or designing self-service portals for managers and employees. -Presents information logically. A well-designed screen uses visual cues (e.g., color, size, screen location, adjacency) to denote logical relationships. -Supports easy navigation from the home page to and within desired files. -Uses automated tools such as "click to open" and "drag and drop." -Can be scaled to different media. Screens and information should be readable on monitors, handheld devices, and mobile phones. -Provides security by restricting access to authorized users and limiting actions according to users' privileges
The SHRM Body of Competency and Knowledge includes the following in the Critical Evaluation competency:
-Data advocacy—developing an inquiring mindset, learning what data drives the business and where it can be found, developing partnerships across the organization to promote EBDM, and modeling the skill of EBDM to the entire organization through the decisions HR makes and the plans of action it undertakes -Data gathering—knowing what constitutes sufficient, credible, and objective evidence and being able to find it -Data analysis—being able to organize data so that it reveals patterns and to analyze it to detect logical relationships -EBDM—being able to apply the results of data gathering and analysis to make better business decisions
Budgeting Process: Formula-based
-Different units or operations receive varying percentages of the budget. General funding is changed by a specific amount, and the unit budgets are adjusted accordingly. EX: A government agency could experience a system-wide 5% budget decrease, which would be spread among its units according to different percentages.
HR Budget
-Ongoing operational costs related to HR's essential services, such as recruitment and selection, employee relations activities, and talent management. -One-time project costs planned to support HR strategy and objectives (e.g., an executive salary review).
The operational side of the HR budget includes resources that are directly related to staffing and expenses required to provide HR services to internal customers. This budget ordinarily includes resources related to
-Talent acquisition. -Training and development. -Compensation and benefits. -Employee and labor relations. -Health, safety, and security. -Information technology. -Planning. -Philanthropy.
Regression analysis
-refers to a statistical method used to determine whether a relationship exists between variables and the strength of the relationship. Data points can be plotted on a diagram called a scattergram. The shape of the line formed by the data suggests if there is a likely correlation, whether that correlation is positive or negative, and how strong or weak the correlation is. Analyses can use multiple variables. -A regression analysis might help determine the most significant indicators of success in a given job, testing variables such as recruitment source, education, job experience, personality type, and so on against job performance ratings.
QUIZ SCENARIO: A large clothing company has a bad reputation because of its hiring practices, its treatment of employees, and its lack of support to the communities it operates in. The CEO and senior managers are known to make decisions based solely on revenue potential, without regard for the impact it may have on society. In fact, the CEO has commented several times that investing money in anything other than operations is a bad business strategy and unethical in terms of the company's obligation to its investors. Recently, major suppliers for the company, located outside the company's home country, were accused of unethical labor practices, unsafe workplace conditions, and possible human rights violations. This has become a public relations nightmare. Several groups have called for boycotts against the company. At the last shareholders' phone conference, several institutional investors expressed their displeasure with management's failure to respond strongly to the problems with suppliers. The CEO expressed his belief that critics were being unrealistic about their expectations for the suppliers. In fact, they were themselves insensitive to business practices and local norms in these countries. Concerned with the negative publicity and lacking confidence in the CEO's response to it, the company's board of directors requests that the CHRO immediately be given the task of formulating a committee to audit the company's operating practices, its employer branding, and its attitude on social issues. This action would at least show that the company has heard the criticisms. 1. The CEO immediately goes to the CHRO's office and angrily says that the CHRO will be showing disloyalty if the CHRO conducts this audit. The CHRO had been one of the CEO's first hires. How should the CHRO respond to this situation? A. Accept the board's assignment, explaining to the CEO the board's power to order this. B. Explain the difficult position and promise to get the board to agree to a third-party audit. C. Tell the board that there is a conflict of interest that prevents the CHRO from complying with the board's request. D. Persuade the CEO to accept the situation by promising the CEO a major role in the audit committee. 2. What would be the most effective tactic in persuading the CEO to accept the audit? A. Give specific examples of the impact that the publicity has had on hiring. B. Assure the CEO that all recommendations will be reviewed by the organization's legal representatives. C. Ask the CEO to remember their joint commitment to doing what is in the organization's best interest. D. Refer to examples of competitors who have met both financial and corporate social responsibility (CSR) objectives. 3. While the company's leadership is struggling with this issue, the CHRO receives an urgent call from the global head of recruiting. Recruiters report that their appearance at job fairs has been met with what seems to be organized demonstrations. The fairs have produced very few prospective candidates. The recruiting head asks what the CHRO wants them to do. How should the CHRO respond? A. Have recruiting directors contact local law authorities and the security directors for the fair venues and demand better protection. B. Hold off on appearances at job fairs for now and focus on using recruiting firms. C. Tell the recruiters to persist and to project a professional demeanor at all times. D. Report this to the CEO as an example of what the company is doing wrong.
1. Accept the board's assignment, explaining to the CEO the board's power to order this. *The CHRO has an ethical obligation to fulfill the appropriate request from the board and to disregard personal ties to the CEO. 2. Refer to examples of competitors who have met both financial and corporate social responsibility (CSR) objectives. *Since he is primarily interested in financial performance, the CEO needs to see evidence that financial objectives can successfully coexist with CSR objectives. 3. Hold off on appearances at job fairs for now and focus on using recruiting firms. *Since this aspect of the recruitment strategy is not producing results and is probably damaging the recruiting team's engagement, it would be best to revise the strategy for now.
Steps in Evidence-Based Decision Making
1. Ask *When faced with a problem, translate the situation into a question that can then be answered through information gathering. For example, an HR manager notes that the discipline system the organization uses is not effective in preventing eventual terminations or resignations. The HR manager asks, "What are we doing now? Does our disciplinary approach reflect what we know about adult behavior and motivation to change?" 2. Acquire. *Gather information from varied sources. For example, the HR manager reviews the organization's policies and processes concerning discipline and retrieves from HR's records data about disciplinary actions and subsequent employee history. The HR manager develops some case studies on specific incidents, gathering information from the supervisors involved. The manager also begins to gather information about current research into these areas and assessments of current practices from journals and HR professional societies and networks. Appraise. Determine whether the evidence gathered is relevant, valid, reliable, accurate, complete, and unbiased. 3. Aggregate. *Combine and organize the data to prepare it for analysis. Determine the priority to be given to different types of information. 4. Apply. *See the logical connections within the data and with the issue. Use the data to draw conclusions, develop possible solutions, win sponsor support for a decision, and take action. 5.Assess. *Monitor the solution that has been implemented and objectively measure the extent to which the objectives have been attained.
A model developed by John Kotter (Leading Change), for example, provides insight into the "how" of the change management process by specifying eight contributors to successful implementation of the change:
1. Create a sense of urgency. 2. Assemble a strong guiding team. 3. Provide a clear vision. 4. Over-communicate. 5. Empower action. 6. Ensure short-term successes. 7. Sustain progress and build on achievements. 8. Institutionalize.
An organization's business intelligence system has three basic components
1. Data gathering. -Data is routinely gathered through different computer systems in all parts of the organization (e.g., point-of-sale performance, purchasing and sales transactions, employee and customer records, security terminals). 2. Data warehousing. -Data gathered from different systems is translated into a standard format, cleaned (or "scrubbed") of errors and duplications, and then stored in databases related to specific uses (e.g., operations, finance, sales, HR). -Organizations that have invested in an enterprise resource planning (ERP) system are able to integrate these distinct databases. This allows everyone in the organization access to the same current data. This improves communication and coordination. 3. Query and reporting capabilities. -Users can access the data they need and use stand-alone or integrated (ERP) business application software to sort, describe, and analyze data in myriad ways and to create report graphics, such as bar or pie charts.
QUIZ SCENARIO: A clothing retail company with three locations in a popular beach resort area has been in business for over three years. There are two similar retailers in the same beach town competing for the same customers and labor pool. Recently the company has had extensive growth due to a new clothing design. Despite the growth in sales, their turnover is high. Employees do not stay longer than 90 days, as the competition is enticing sales staff away. Turnover is now affecting their customer satisfaction and increasing the workload on the remaining staff. Most of the management staff started as sales floor employees and received little to no management training. One of the key criteria used in promoting staff is their success on the sales floor, leading to complaints of internal selection unfairness. Recent exit interviews suggest low morale, poor leadership, and lack of work/life balance as the top three reasons for leaving the company. Knowing that there are plans to launch two new product lines in the near future, the CEO has asked the HR director to search and find a new supplier to provide new employee orientation for all new sales staff. Twenty companies have submitted requests for proposals, and the CEO wants a short list to be presented in the next two days. 1. What steps should the HR director take to develop a short list of possible training vendors? A. Conduct an online search of the best training companies and send the resulting list to the CEO. B. Rank the companies in regard to their prices and present the five lowest bids, as cost is an issue. C. Determine, with the CEO, key criteria that should be considered, using this information to narrow the search. D. Ask for input on the short list from another employee who has done this type of training before. 2. What action should the HR director take first to create a robust workforce plan that addresses the expected organizational growth? A. Ensure that all recruiters are well trained in sourcing and selecting qualified applicants for a retail sales organization. B. Review environmental conditions in regard to expected tourists and expected sales growth, and calculate the number of employees needed. C. Review internal turnover, promotions, and transfer data to calculate the number of employees needed to meet future staffing needs. D. Analyze current labor trends along with internal staffing metrics to ensure appropriate staffing levels to meet expected organizational growth. 3. An applicant from a local competitor has offered to give the HR director information on the previous employer's salary and benefits upon hire. What action should the HR director take in response to this offer? A. Use this information to help create a strategy to reduce turnover to other companies. B. Decline the candidate; however, offer compensation in exchange for the information. C. Do not hire the candidate, indicating that the company does not participate in unethical behavior. D. Ask for the information to create a more robust retention strategy once the person is hired. 4. Based on the current turnover and lack of management training, what should the HR director do first as part of a needs analysis? A. Facilitate management focus groups to evaluate the company's compensation, rewards, and incentive programs. B. Conduct a job analysis for all management positions to ensure that job descriptions and specifications are appropriate. C. Analyze exit interviews from managers who have left recently to determine why they are leaving. D. Review customer satisfaction results and use these to guide the development of the training curriculum.
1. Determine, with the CEO, key criteria that should be considered, using this information to narrow the search. *The CEO may, based on hands-on experience in the company, have specific concerns that need to be addressed. Additionally the HR director may have some ideas about how the course should be designed and delivered in the future. Combining both viewpoints can create an informed and well-structured process of short listing. 2. Analyze current labor trends along with internal staffing metrics to ensure appropriate staffing levels to meet expected organizational growth. *The best strategy should consider both internal and external influences for better alignment with organizational growth. 3. Do not hire the candidate, indicating that the company does not participate in unethical behavior. *The applicant is using leverage to get a position. Once hired, this person may use similar tactics in the new workplace. Moreover, hiring the applicant would be unethical. 4. Conduct a job analysis for all management positions to ensure that job descriptions and specifications are appropriate. *This should always be the first step in designing any training. Having a good understanding of the job is a critical piece of training design.
How to Become an HR Data Advocate
1. Develop a questioning mind. *Make it a habit to ask questions such as "Why do we do it this way?" or "Why is X happening?" and "What is the evidence for thinking that?" Questioning minds try not to accept the status quo. They are naturally curious about everything. 2. Build fluency in the scientific literature for HR. *This can include regularly scanning resources to identify new and reliable sources of data and monitoring the topics that are being discussed. Rousseau and Barends recommend undertaking focused research projects to practice critical evaluation skills. For example, an HR practitioner could systematically study available evidence and practitioner opinions on the use of formal performance management review meetings. 3. Gather data on a continuous basis about the efficacy and efficiency of legacy systems (e.g., recruiting) and stakeholder interests (e.g., the perceptions of other functional managers about their current needs and the forces affecting their performance). 4. Use evidence when communicating with stakeholders. *When responding to questions from organizational customers, HR practitioners can recommend solutions and include the data supporting their analysis and recommendations. 5. Institutionalize the competency in the HR function. *Rousseau and Barends refer to establishing journal study groups in the HR function. At regular meetings, designated members research and report on new or important classic articles. HR leaders can also establish task groups to gather evidence whenever significant decisions are planned.
QUIZ SCENARIO: A nonprofit social services organization has experienced rapid growth and is expanding services into new markets. The number of social service professionals in the organization has doubled in two years. At the same time, performance and service quality assessments are showing quality regression as the organization expands. The CEO and the executive committee are worried about the decline in performance and service quality levels. They suspect the issue is due to the quality of new hires and/or a lack of incentive among employees. Until recently, the organization has been managing HR functions with a small team of two employees. However, leadership has approved the hire of an experienced HR manager to improve HR processes in hopes to reverse the downward trend of performance and service quality. The new HR manager begins to tackle the issue by conducting an internal analysis to diagnose the root causes of the service quality decline. The analysis uncovers several critical problem areas to be addressed, including vague job descriptions, a lack of formal orientation, low base pay, an ineffective performance review program, and the lack of a recognition and awards program. The required changes identified by the HR manager will require additional resources and significant financial investment. One of the members of the executive committee proposes that it is best to terminate all current employees and start over with new ones who are better qualified, with the belief that starting from scratch would be cheaper than fixing the problems as they stand now. 1. The HR manager has identified several HR problems that need to be solved. What should the HR manager do first? A. Conduct a job analysis to develop revised job descriptions that outline the work and necessary qualifications. B. Procure training programs specific to social service workers and implement them immediately to ensure that all workers have the needed skills. C. Develop and propose a talent management strategy to hire and train qualified staff, establish performance expectations, and reward high-performing employees. D. In order to be transparent, share the findings with all employees to determine next steps and an immediate action plan. 2. How should the HR manager respond to the executive who proposes to terminate current employees and start over by hiring new employees? A. Demonstrate the projected costs for the proposed solution, including costs related to building a new workforce vs. training the existing workforce. B. Agree with the executive committee member and immediately begin to prepare severance agreements to terminate the impacted employees. C. Explain that the organization will not be able to afford the best-qualified candidates in the marketplace because they are not affordable. D. Respectfully disagree with the executive committee member and ask that a supportive executive have a talk with the member. 3. The HR manager needs to define key metrics to show the return on investment for the proposed HR solutions. Which of the following would be the most critical indicator? A. Quality of service B. Turnover rate C. Ratio of HR to employee D. Training completion rates 4. What action should the HR manager take in order to ensure that employees understand what is expected of them and how the new performance management system will work? A. Host a meeting when the new program is ready to be implemented in order to educate all the supervisors. B. Conduct a communication campaign that includes ongoing communications for all employees and training for supervisors to reinforce with their direct reports. C. Create a web page with details about the performance management program available to employees once the new program is ready to roll out. D. E-mail all employees to inform them to chat with their supervisor about the company changes or to talk to HR about any questions.
1. Develop and propose a talent management strategy to hire and train qualified staff, establish performance expectations, and reward high-performing employees. *It is important for HR to demonstrate its strategic value by developing solutions and an overall approach that will address all identified problem areas and will lead to achieving business objectives. 2. Demonstrate the projected costs for the proposed solution, including costs related to building a new workforce vs. training the existing workforce *It is important to present the HR business case for a change in terms of financial benefits and return on investment (ROI). Part of the ROI analysis should include scenarios of different options or solutions, including the costs of rebuilding the workforce vs. training the current workforce. This response would provide the executive committee member with a hard-data comparison of the options being considered. 3. Quality of service *The HR problems were originally identified by the CEO and the executive committee because of the decline in the quality of service. This has been established as the critical metric to measure the performance and success of the organization. 4. Conduct a communication campaign that includes ongoing communications for all employees and training for supervisors to reinforce with their direct reports *When managing a change, ensuring effective communication throughout the organization is critical for success. A two-pronged approach helps ensure that the right level of detail is being communicated based on the individuals' roles and the degree of impact the new program will have. The centralized messages are generic and relevant to the entire organization. Training the supervisors and managers enables them to deliver specific messages to each of their direct reports individually to help them understand the impact and what the change means to them.
Organizational and Product Life Cycles
1. Introduction. Revenue (the vertical axis) is low because there is little market awareness (of the new industry, organization, products, services, or processes) and because of the market's resistance to change. Entrants (new industries, organizations, or products) must create an identity with customers and develop a value proposition. This takes imagination, business acumen, and leadership. 2. Growth. As time proceeds (the horizontal axis), revenue begins to increase. The rate of growth (or the steepness of the curve) will vary by industry, enterprise, or product. The focus shifts to creating processes that will increase efficiency without stifling innovation. Maturity. The market is saturated with competitors and growth occurs only through introduction of new products or customer groups (which starts new cycles for those entrants) or through acquisitions. Profit margins become narrower and efficiency becomes more important. This means greater formalization and perhaps bureaucracy. 3. Renewal/no growth/decline. Eventually demand will decrease, either because the need no longer exists or it is satisfied more effectively by something or someone new. Organizations can: -Renew themselves by completely changing their offerings, where they compete, or how they compete. If they succeed, revenues rise. Organizations must return to their innovative roots. -Take no action and accept continued low revenue. As time goes on, organizations and products have few resources to take advantage of opportunities that might deliver growth. -Take no action and experience a decline in revenue that will make it impossible to compete or operate.
Tools for Group Decision Making
1. SWOT analysis *The group can brainstorm strengths, weaknesses, opportunities, and threats and agree on a numerical value for each. 2. Multi-criteria decision analysis (MCDA) *The team determines critical characteristics of a successful decision (e.g., ability to meet project requirements, likelihood of success, least chance of causing secondary risks). A matrix is used to score each alternative and compare results. 3. Cost-benefit analysis (CBA) *Group discussion is critical to identifying all relevant costs and benefits. 4. Force-field analysis *This tool was designed to analyze the forces favoring and opposing a particular change. The group identifies and weights factors that could influence an outcome in either a negative or positive manner according to their possible impact. The group then uses these factors to score different opportunities. They agree to pursue those showing favorability for change and avoid initiatives that face very strong resistance.
Assessing Change Readiness
1. Shared purpose. If people believe in the overall purpose of and reason for the change, they will make a legitimate effort to change themselves. Those leading a change initiative should communicate how proposed changes are necessary to achieve the organization's strategic goals and/or values. 2. Reinforcement systems. Structures, management processes and encouragement, measurement, communication, and other critical support factors must be present and congruent with the desired change initiative. 3. Skills required for change. While this need may seem obvious, it is often overlooked. Training is a much more efficient and effective method than trial and error for equipping people with the knowledge and skills to be successful. 4. Consistent role models. The presence of a role model within an individual employee's sphere of influence makes change real and demonstrates, in real time, that change is possible. Many role models (in addition to managers and executives) need to be present throughout the organization to keep the message of change alive until it becomes part of the way the organization operates.
Porter's Five Forces Analysis
1. Threat of substitution. -How easy is it for a competitor to capture customers by offering a similar product or a product that satisfies the same need but perhaps in a different way? If the threat is high, an organization may be forced into competing on price, and HR will need to develop a strategy that promotes cost efficiency. If the threat is low, the organization will have more capital to invest. HR may focus on developing an entrepreneurial culture. 2. Threat of entry. -How easy is it for a new competitor to enter the industry? How much capital investment is required? How much time does it generally take for a new entry to become a threat to market share? If the threat of entry is high, management and the workforce must be nimble. HR professionals must examine the organization's structure to support rapid decision making and response. 3. Bargaining power of suppliers. -How vulnerable are organizations in this industry to the actions of upstream supply chain partners? Are there few suppliers or many? What would happen if a supplier went out of business or was bought by a competitor? If the bargaining power of suppliers is high, HR must be sure that the job descriptions include skills such as negotiation and managing risk and competencies such as Ethical Practice and Relationship Management. 4. Bargaining power of buyers. -How vulnerable are organizations to actions by customers looking for the lowest price or large customers who can greatly affect sales and revenue? When buyers exert more influence, marketing competencies are key. HR may need to align compensation practices to motivate marketing and sales toward behaviors important to the organization's strategic objectives—e.g., developing long-term or sole-source relationships. 5. Rivalry among existing competitors. -All of the other forces have the potential to increase the intensity of competition within the industry. A concentration of suppliers or buyers will trigger competition, and the insecurity caused by easy entry into the market and substitution can lead to price-cutting wars and product or service design aimed at locking customers in.
QUIZ: What budgeting method is based on how much it costs to perform different enterprise activities and allocates funding according to the strategic significance of the activities? 1. Incremental 2. Formula 3. Zero-based 4. Activity-based
Activity-based *Activity-based budgeting recognizes the interrelationships among various activities required to create value in an organization. It is based on how much it costs to perform different enterprise activities. Funding may be allocated based on the strategic significance of the activities.
QUIZ: Which best demonstrates the outcome of zero-based budgeting in regard to HR's budget? 1. Balances for ongoing projects from previous periods will be carried over. 2. All expenditures will need to be justified when building the budget. 3. All new projects will be postponed immediately. 4. The budget will have no growth.
All expenditures will need to be justified when building the budget. *In an organization using zero-based budgeting, each function, including HR, begins with zero funds and must justify the strategic importance of each item in its budget. Funds are not carried over. Budgets are not necessarily frozen or decreased but could increase, especially if new projects are deemed strategically important.
QUIZ: What is a business case? 1. Cost-benefit analysis of a business concept 2. Market research into acceptability of a new service or product 3. Analysis of a problem and possible solutions 4. Scenario-based test of a business plan
Analysis of a problem and possible solutions *A business case is a request for the allocation of resources to implement a solution to a problem or a plan to take advantage of an opportunity. Strong business cases are aligned with the organization's strategy and include a cost-benefit analysis of alternative solutions to the problem or opportunity, including taking no action. The business case usually includes discussion of risks. A cost-benefit analysis is not a business case but is an important part of a business case. Market research may be an input into the business case analysis. A scenario-based test would project the results of a business plan under differents sets of variables (e.g., supply prices, market share).
Online Analytical Processing (OLAP)
Because of the way the data is stored, OLAP applications can analyze the data faster and in more ways than traditional relational databases.
QUIZ: An HR data analyst uses internal and external data and translates it into meaningful information to support an operations decision to relocate a distribution center to another state. What term best describes the data analyst's activity? 1. Business intelligence 2. Regression analysis 3. Delphi technique 4. Root cause analysis
Business intelligence *Business intelligence allows analysts to retrieve timely, accurate, and complete data and transform that into accurate, actionable information to support decision making.
QUIZ: Sales has made an unrealistic commitment to a customer. In order to meet the commitment, the CEO suggests that all salaried employees work ten-hour days, six days a week, for a minimum of one year. How should HR respond? 1. By supporting the CEO's decision but suggesting that sales not promise so much in the future 2. By finding another alternative that will not take advantage of employees but will meet sales and customer needs 3. By implementing the schedule and rewarding those people who go the extra mile 4. By implementing the schedule but disassociating themselves from it
By finding another alternative that will not take advantage of employees but will meet sales and customer needs *While it may be tempting to do the expedient thing and meet the company's promises, this action will have a negative effect on employee morale and retention, and it could invite union-organizing activity. Using the Consultation competency, HR can explore other alternatives that will be more effective and acceptable to employees.
Requirements for Effective Consultation
Consultation requires the ability to diagnose problems or identify opportunities, develop effective solutions, win support for the solutions, and then implement them effectively. Designing plans requires knowledge of organizational policies, processes, and resources as well as local resources, local business practices, and local laws. 1. The Relationship Management competency, including the ability to build trust, emotional intelligence, political awareness, and influencing, negotiation, and conflict management skills 2. The Critical Evaluation competency, including the ability to gather and analyze data 3. The Business Acumen competency, which spans the perspectives within the organization and includes awareness of the organization's environment 4. Personal characteristics, including honesty, openness to differences, objectivity, willingness to take risks, consistency, and imagination 5. Professional skills, such as communicating results orally and in writing 6. Diagnostic and design abilities and the ability to manage organizational effectiveness and development projects 7. Expertise in various interventions, including quality management, team building, coaching and mentoring, restructuring, and business process analysis
The Consulting Model: Define the Problem
Data should be collected from all those affected—decision makers, managers, and staff. Information gathered at this point will help in the design of an effective and efficient initiative. It is important that consultation findings: - Focus on conditions that can realistically be changed, given the organization's environment and resources and given the attitudes of the organization and the receptiveness of its members to change. - Are based on sufficient and specific evidence and are presented neutrally. - Select a few areas for attention, prioritizing data findings by frequency and impact on strategic performance. Too many points of action may lead to client paralysis.
QUIZ: What type of analytical task would be best served by online analytical processing (OLAP)? 1. Identifying how many employees have quit in each functional area 2. Trying to establish a declining trend in the use of a wellness program 3. Proving the cost-effectiveness of purchasing an HR application 4. Exploring the types of variables that may be affecting attendance rates
Exploring the types of variables that may be affecting attendance rates *OLAP allows the analyst to sort data quickly in different ways, according to different and multiple variables. A conventional relational database would be sufficient to identify a trend in one factor or numbers in different departments. A cost-effectiveness analysis could be done on a spreadsheet.
QUIZ: HR meets with team leaders to analyze the pros and cons of a suggested change. As a group, they brainstorm on factors that could influence the outcome of the change in both positive and negative ways. The factors are assigned weights in order to quantify the pros and cons and assist the leaders in their decision making. What type of analysis is the group using in this situation? 1. Force-field analysis 2. SWOT analysis 3. Multi-criteria decision analysis (MCDA) 4. Cost-benefit analysis
Force-field analysis *Based on this force-field analysis, the group can decide to pursue opportunities with scores showing favorability for change or to avoid changes that face very strong resistance. They might also use analysis results in deciding how to allocate resources to mitigate negative risks and enhance opportunities.
QUIZ: In a value chain, which business function is likely to be closest to the customer? 1. Fulfillment 2. Operations 3. Research and development 4. Marketing and sales
Fulfillment *The value chain sequences the activities (inside and outside the organization) that are required to deliver a product/service (value) to a customer. Fulfillment is the last function completed before the product or service reaches the customer.
QUIZ: An organization has moved to larger facilities and doubled its workforce. However, it still experiences problems with back orders, which results in customer dissatisfaction. What phase of the organization/product life cycle is the organization probably in? 1. Maturity 2. Growth 3. Introduction 4. Decline
Growth *The growth phase is characterized by change and expansion in terms of facilities, marketing, and people. These resources are needed to keep up with the demand for products or services. This phase is often accompanied by backlogs and scheduling problems while the organization adjusts to increased demands.
Mind mapping and affinity diagramming.
Mind mapping begins the discussion with core ideas. The group members add related ideas and indicate logical connections, eventually grouping similar ideas. This can be done on paper or a whiteboard or with sticky notes. Affinity diagramming is a way of sorting a large amount of data that has already been collected. The group categorizes and subcategorizes data until relationships are clearly drawn.
QUIZ: Which approach to offsetting a downturn is often used by companies in the decline phase of their life cycle? 1. Building teams 2. Emphasizing training 3. Reducing costs 4. Introducing product extensions
Reducing costs *Decline occurs when an industry, organization, or product begins to experience a sustained drop in demand. When the decline is apparent, leadership often may introduce cost reduction measures.
Business case: Risks and opportunities
Risks should include outcomes that could decrease the project's chance for success, outcomes that could present new opportunities that would require action, and the risks of doing nothing at all. EX: HR foresees the difficulty of obtaining this information in some businesses with poor data records but has included extra time and resources in its reserves for this. There is a currently unresolved legal issue about obtaining access to data in one country. The opportunity is that this information can come at an opportune time for the company's acquisition strategy and make integration much smoother.
The Consulting Model: Sustain the Improvement
The new process is monitored to encourage continued effort. HR provides guidance to leaders about ways in which new values, attitudes, or practices can become institutionalized or applied in different areas.
Business case: Recommended solution
The objectives for an ideal solution are defined (the desirable outcomes of such an initiative), and the proposed action is described in sufficient detail to show how it meets these objectives. In some cases, alternatives may be described as well, and the reasons why they are not being recommended may be discussed. EX: HR proposes conducting a customized salary and benefits survey for the targeted growth areas and the current countries in the portfolio and building a policy and practice "culture" for the existing individually run countries that would make acquiring a partner or growing organically more feasible.
Business case: Estimated costs and time frame.
The project budget should include all foreseeable elements (labor, equipment, fees, travel, and so on) plus a reserve for the unforeseeable based on the project's risk. The time frame should keep in mind not only the project requirements but also the organization's needs. Longer or more complex projects may be structured in phases, with gates or review milestones at which management can decide whether to proceed or not. EX: HR provides a cost estimate but also estimates this amount in terms of the benefits this information could provide in the event of an acquisition or merger.
The Consulting Model: Measure Effectiveness
The solution's effects are measured to determine if the objectives of the consultation have been met and if the consultation has had the desired strategic impact (e.g., faster decision making, better teamwork, better output).
Business case: Statement of need
This is the condition or change impelling the function's action. EX: HR is aware that the organization's strategy includes growing its South American businesses. Until now, these businesses have operated independently from headquarters and from each other. The lack of common policies and processes for compensation and rewards and talent management and the lack of a shared organizational culture would inhibit the strategy.
Nominal group technique (NGT).
This technique proceeds through rounds in which participants each suggest ideas. The rounds continue until no further ideas are proposed. Then the group discusses the items, eliminates redundancies and items considered irrelevant, and agrees on the importance of the remaining items. NGT can be practiced with idea generation by individuals, subgroups, or the entire group. Similarly the initial sorting of ideas can be done in subgroups before returning to the main group to reach consensus.
Delphi technique.
This technique progressively collects information from a group on a preselected issue. The first respondent proposes information, the next respondent adds something different, and so on, until a list can be compiled. The respondents are anonymous. In the second round, the researcher circulates the list and asks each respondent in turn to refine previous ideas, to comment on each idea's strengths and weaknesses for addressing the issue, and to identify new ideas. This technique is designed to facilitate group involvement, problem solving, and individual thinking while avoiding "group think," where participants can be influenced by what others say.
Budgeting Process: Activity-based
This type of budget recognizes the interrelationships among the various activities required to create value in an organization. The basis for budgeting is not how to divide a set amount of money but how much it costs to perform different enterprise activities. Funding may be allocated based on the strategic significance of the activities.
QUIZ: How can HR best partner with managers to implement a newly developed performance management tool? 1. Use input from the managers to create a best practices guide and meet with them individually to offer support or answer questions. 2. Require managers to fill out their new evaluation forms and submit them to HR to be checked before reviewing them with employees. 3. Offer to fill out the forms for managers the first time so that they can review HR's work and see how they should be completed. 4. Have the CEO clarify to managers the consequences if they fail to complete employee evaluations in a timely manner.
Use input from the managers to create a best practices guide and meet with them individually to offer support or answer questions. *HR professionals should function as consultants to managers, which would involve getting their input and offering to support them and/or answer questions as needed. It would not involve having their bosses make threats, micromanaging, or overstepping boundaries—particularly not in a way that would suggest that HR would do a better job of evaluating their employees than they would.
QUIZ: What is the best description of an information system portal? 1. Screen area in which data can be entered into the system 2. User-customized search engine 3. Organization's access to the Internet 4. User's point of access to system data and applications
User's point of access to system data and applications *An information system portal is the point of entry for a user into an information system. The system does not need to be web-hosted. It may provide access to the system's search engine, but it is not a search engine. It may be customized to users.
The Consulting Model: Design and Implement the Solution
When teams/stakeholders are involved in a decision, apply a typical problem-solving approach: -Explore the decision to be made fully, so that all influences are understood. -Generate multiple options, define criteria for an effective choice, and analyze each. -Select the best solution and implement it. -Evaluate the decision and the decision-making process when the decision's outcomes are clear. Were there enough quality options? Were the right criteria used? -Were key individuals actively engaged in reaching consensus?
Business case
a presentation to management that establishes that a specific problem exists and argues that the proposed solution is the best way to solve the problem in terms of time, cost efficiency, and probability of success *Once approved and implemented, projects should be revisited periodically to make sure that the business case is still sound
scenario/what-if analysis
an be used to test the possible effects of altering the details of a situation to see how the outcomes will vary under different conditions. The outcome of a particular situation is projected, using different inputs to see what changes have the most profound effects. This analysis is greatly aided with software applications and models. Monte Carlo analyses, for example, use computing capabilities to change scenario variables randomly and thereby generate up to thousands of possible outcomes. This can be helpful when analysts fear that historical patterns may not hold in the future.
Ratio analysis
compares the relative size of two variables and yields a percentage. Net profit margin, for example, is a ratio that compares net revenue with costs. Many commonly used HR metrics are ratios, such as the turnover rate (comparing the number of terminations or resignations in a time period with the average number of employees in that period).
trend analysis
examines data from different points in time to determine if a variance is an isolated event or if it is part of a longer trend. By establishing the direction and degree of change over time, the trend analysis can also be used to forecast future conditions, such as the ability of an initiative to meet its objectives. Both trend analysis and forecasting can be performed within software applications. Trend analyses are important tools in discovering recurring peaks or troughs in an activity. For example, HR can use trend analysis to identify the most appropriate times to conduct campus job fairs by tracking the results from events held at different times over multiple years.
Variance analysis
identifies the degree of difference between planned and actual performance. The term is usually applied to analysis against objective baselines, such as schedules and budgets. Once identified, different analytical tools, such as those described below, can be applied to understand the variance.
focus group
small group (normally six to twelve) invited to actively participate in a structured discussion with a facilitator. Focus groups typically last from one to three hours, depending on the topic and the purpose. Focus groups serve a variety of purposes. They are often used to follow up on a survey, providing a more in-depth look at specific issues raised during the survey. In this respect, focus groups collect qualitative data that enriches quantitative survey results.
Root-cause analysis
starts with a result and then works backward. Each cause is queried to identify a preceding cause—conditions or actions that might have led to this effect. This questioning may proceed backward in rounds until the fundamental or root cause is identified—the point at which no further causes can be identified. This method is sometimes referred to as the "five whys method," which was developed as part of the Toyota Industries quality initiatives.
value chain
the process by which an organization creates the product or service it offers to the customer. This may also be referred to as the organization's business model, every activity required to make a good or service and then sell or deliver it. The process is described as a chain because it represents the sequential and simultaneous contributions of a number of internal and external participants. Each participant adds an element of value, and the total value is more than the sum of its parts.
