SHRM-CP / SHRM-SCP Certification Exam: People - HR Strategic Planning

The HR expertise domain of People Knowledge counts toward 17 percent for both exams. This domain covers the essential HR knowledge needed for relating to people. The following are the functional areas that fall within the People Knowledge domain:

- Functional Area 1—HR Strategic Planning
- Functional Area 2—Talent Acquisition
- Functional Area 3—Employee Engagement & Retention
- Functional Area 4—Learning & Development
- Functional Area 5—Total Rewards

HR professionals are expected to know how to perform the following Body of Competency and Knowledge (BoCK) statements for the People Knowledge domain:
- 01 Creating and setting the strategic direction of the HR function
- 02 Acquiring or developing the talent necessary for pursuing organizational goals
- 03 Maintaining a satisfied and engaged workforce while minimizing unwanted employee turnover
- 04 Developing a total rewards program that maximizes the effectiveness of the organization’s compensation and benefits

Functional Area 1—HR Strategic Planning
Here is SHRM’s BoCK definition: “HR Strategic Planning involves the activities necessary for developing, implementing, and managing the strategic direction required to achieve organizational success and to create value for stakeholders.”1
All career levels of HR are expected to support and contribute to the strategic direction and role of HR. HR professionals must be able to identify and understand the organization’s strategic initiatives, plans, and direction for decision-making, as well as contribute to the organization’s overall strategy. All of that involves understanding the internal and external environments and utilizing the organization’s mission and vision as a focus for determining where HR can support goals and sustain a competitive advantage.

Key Concepts
- Approaches to project management (e.g., traditional, lean, Six Sigma, agile, critical chain) and processes (e.g., initiating, planning and design, launching/executing, monitoring and controlling, closing)
- Concepts of systems thinking (e.g., related parts, input-processes-output) and components of an organizational system (e.g., interdependence, necessity of feedback, differentiation of units)
- Organizational mission, vision and values, and their relation to strategic management and planning
- Project planning, monitoring and reporting methods and tools (e.g., critical path analysis, Gantt charts, variance analysis, outcome monitoring)
- Project leadership, governance, and structures (e.g., team roles, team management, work breakdown structures)
- Role of strategic management and planning in creating and sustaining competitive advantage
- Strategic planning analysis frameworks (e.g., PESTLE analysis, SWOT analysis, industry analysis, scenario planning, growth-share matrix)
- Strategic planning process (e.g., formulation, goal-setting, implementation, evaluation)
- Systems theory and input-process-output models

The following are the proficiency indicators that SHRM has identified as key concepts:


The Role of Strategy
The role of strategy is one that aligns all functions in an organization to “row together” toward defining the organization’s goals and direction. The creation of strategic goals requires a vision of growth that is associated with the organization’s mission, and, of course, includes the result of value for stakeholders. The development of goals, initiatives, and objectives is a necessary part of strategy to make sure everyone is on the same page, leading in the direction of attaining the defined strategy.

What Is Strategy?
Strategy is the planning of long-range goals and actions to attain those goals. Initiatives, objectives, and tactics are outlined in detail for each specific function in the organization and coordinated over a defined period of time. Strategy will look within the walls of the organization at its strengths, weaknesses, and vulnerabilities, along with looking outward at competition, opportunities, and external issues and influences.
Some theorists believe that strategy emerges in response to environmental threats and opportunities and cannot be planned rationally—because no one person can foresee everything about the future. Theorist Henry Mintzberg2 is associated with this strategy approach. Others believe that the gathering of data is its core source for setting and choosing direction—much like a control system that would have targets. Michael Porter’s perspective of the five forces in planning is aligned with this process.3 Both concepts and processes have value. Strategic planning is necessary to set the direction and path for an organization, and the management of strategy (strategic management) is required in leadership of the organization to ensure that functions in the organization are aligning their activities to help move the organization toward its goals and strategic plans.
Requirements for Strategic Planning and Management   Several strategic-planning processes begin with the extension of the annual operating budget into a typical five-year projection. This can be a valuable exercise, particularly for organizations that have operated on a yearly or even monthly planning cycle. Most organizations soon discover that five-year operational and financial forecasts, in and of themselves, are ineffective as strategic-planning tools because they are predicated on the assumption of no significant change in environmental, economic, and competitive conditions.

There are certain concepts for the creation of strategy and the management of it.
- Aligning effort It’s important to ensure that all functions are aligned with the organization’s mission and goals. This is where a 10,000-foot helicopter ride is of benefit to have a broader view, ensuring that policies and practices are aligned with the strategy and intention.
- Controlling drift This is important to ensure that an organization is not coasting along doing what it’s always done and missing the boat or, at worse, becoming blindsided because of disruption in its marketplace or industry with substitution.
- Focusing on core competencies This means knowing what the organization is good at for its customer base and being sure to focus efforts on those competencies.
- Systems thinking Keep in mind the inter-relations of both internal and external factors, such as stakeholders, industry forces, and the other influences on an organization. This includes looking at both the opportunities and the risks or conflicts and to what degree the risks are acceptable to the organization.
- Using structure as a strategic level Does the structure of the organization support the strategy, or does it hamper it because of current policies and expectations within the organization?
- Using culture as a strategic level Does the culture align itself with the intended strategy? As an example, if the strategy is to have front-line employees make return decisions on the spot with a customer, is the organization’s orientation program providing training and demonstrated shadowing for new front-line hires to develop the desired behaviors?
Benefits of Strategy   The benefits of strategy are helping everyone in the organization focus on the future with a written plan that contains goals to further the organization’s existence. From top to rank and file, strategy provides a map that gives direction and intention on where the organization plans to use and spend its resources. It helps keep decision-making and activities aligned to ensure that they support the attainment of the planned strategy. It provides a spotlight on what resources are needed, such as talent and development, to progress with the strategy. It also helps determine both positive and negative outcomes for suggested strategies.
Mistakes to Avoid   Organizations can fail to obtain the benefits of strategic planning through their process and/or the management of strategy. They can avoid failing by remembering not to take shortcuts with the process of strategic planning. Analysis such as SWOT (discussed later in this guide) and an honest look inward, along with valid research externally, are absolutely necessary. Being too comfortable with the status quo and not challenging or assessing the potential risks is another mistake to avoid. Lacking follow-through and alignment of the plan throughout the organization is one of the most common mistakes—creating “the plan” and putting it in a binder on the shelf to just dust it off at next year’s planning retreat is a waste of time, effort, and execution. Insufficient involvement or commitment from management will sideline a good strategic plan in its tracks. Lastly, lack of communication throughout the organization on what the strategic plan is, and what it means to each employee and function in the organization, will thwart efforts and should be avoided.
 

Levels of Strategy   There are three levels of strategy.
- Organizational level This level involves a general vision of the future, typically what the organization plans to grow into, as an umbrella over the entire organization.
- Business unit level This level focuses on the “how” and “where” the organization will focus to create value for its shareholders. The focus is on the business units such as sectors, divisions, regions, and product units.
- Operational level This level focuses on the activities and actions the functions within the organization will take to progress it toward its vision. Finance, manufacturing, R&D, marketing, HR, and so on are operational-level examples.
Role of HR in Strategy   With HR, the operational level is going to be the main focus. HR’s policies, programs, and processes will need to correlate, collaborate, and align with the organization’s business units. HR’s resources will need to be spent on the activities that add value and assist in the business units in fulfilling their work toward the strategic plans. It may be with workforce planning, talent development, or incentive compensation programs.

HR professionals need to develop strategic planning skills—which are discussed in the following sections—such as scanning the environment, formulating strategy, assessing risks, and setting SMART goals and objectives. This role that HR fulfills is the biggest growing role that organizations demand today, which is why the HR job title of HR business partner was created.
HR’s role includes building bridges with both internal and external stakeholders, where they exist. HR needs to view issues from differing perspectives and seek resolutions to help “bridge” the differing functions in a collaborative effort. There may be a policy within the payroll function of finance that conflicts with a new compensation incentive plan that is being developed with the sales unit to help account management personnel achieve goals that fit the strategic plan. The HR professional will need to view the two conflicting issues and seek resolution for the best of the organization and its strategy.

Role of Value in Strategy
The basic premise with strategic planning and management is to lead activities that yield a great value. Understanding how an organization creates value with its mission is the first step. By value we are not talking cultural values; we are referencing the value it brings to its end customer or stakeholder. What causes the organization to be successful to its customers/stakeholders—that is its value. How well is it achieving its mission, and does its mission still serve its customers/stakeholders?
Value Chain   The value chain is another model by Michael Porter,4 which describes the process by which a business receives materials and then adds value to the materials through processes that create their finished product or service, which is then sold to customers. Organizations will conduct their value-chain analysis through looking at the steps in their production that are employed to create their product or service and then identifying the way to increase the efficiency of the production chain. The end goal is to create maximum value for the least possible cost, which creates the organization’s competitive advantage. Figure 4-1 illustrates Porter’s concept of the value chain with primary and secondary activities. It demonstrates the interconnections of various functions in delivering value to the end customer or the organization.

Figure 4-1     Porter value chain concept
Primary activities, which will vary according to the type of organization’s activities, contribute directly to the value that is created for the customer. An example is a food manufacturer that uses distributors and retailers for its product. The value of the primary activities depends on the secondary activities that provide services to the primary functions. HR administration of most HR functions will fall within this area, as will finance and IT.

NOTE    Not all businesses will find this value chain concept realistic because their business does not control the entire chain of production and distribution.
A strategist, be it an HR professional or an internal or outside consult, needs to understand the flow in creating value. They need to know which activities in the organization are considered central to its mission, reflecting its core activities, and which ones are the most profitable activities or could be profitably outsourced.
Stakeholder Concept   R. Edward Freeman offered the stakeholder concept in the mid-1980s5 as another perspective to the shareholder view of a corporation (which was to create wealth for the shareholders). Freeman’s stakeholder concept recognizes the different types of value an organization creates. Yes, there may be monetary value as viewed by investors, but there is also value that a community may perceive via the employment taxes or corporate social responsibility contributions it makes.

This figure depicts Freeman’s stakeholder concept. Understanding the various perceptions from the view of each stakeholder is especially challenging for a global organization. The customer’s expectations alone will greatly vary. Employees in other countries will have differing perspectives based on their cultural norms.

Figure :  Freeman stakeholder concept
 

HR’s Role in Defining and Creating Value   The biggest role HR has in defining and creating value for its organization is knowing the workforce. Knowing core competencies of talent, the marketplace for talent that is needed, and the legal environment in which the organization employs its workforce—these are critical value-producing activities for HR.

The Strategic Planning Process
As we’ve explained, the strategic creation planning process is about designing the organization for the future. Whether that is a plan that is for 1 year, 5 years, or longer, it will always involve the four basic stages and will be continually dynamic and changing as conditions change for an organization.
- Formulation of the strategy, which is gathering the critical and necessary data.
- Development of the strategy, which is considering the competitive advantage and the markets it competes in.
- Implementation stage, which is creating the specific objectives and initiatives that produce outcomes associated with the goals.
- Ealuation stage, which is the final stage where metrics and achievements are accessed and reported upon to stakeholders.

Strategy Formulation
Strategy formulation is the process by which an organization chooses the most appropriate courses of action to achieve its defined goals.

Information Gathering and Analysis
A major part in strategic planning is the process of gathering data. It should be done prior to and during the creation of the strategic plan and continue on through the implementation and to the monitoring process of the strategic plan. Data can be secondary or primary data and gathered through internal or external means.
Improving Your Business and Organizational “Radar”   Information is the key to business success. When something is “on the radar,” it is being tracked. That means someone believes the information is important to the organization’s success. So, the question becomes, “What should we be tracking or monitoring?” Get this right and you will be able to keep your eye on all the critical elements surrounding your organization, sort the critical from the mundane, and decide on the future movements of your group with accuracy.

Environmental Scanning
Seeing what is happening in the environment around you is important. Identifying the important information among the plethora of unimportant stuff becomes a challenge.
 

PESTEL Analysis   One technique for sorting out the important from the unimportant is PESTEL analysis.
PESTEL stands for:
P—Political
E—Economic
S—Social
T—Technological
E—Environmental
L—Legal

Develop ways that you can gather information in each of these categories, and you will be well out front of your competitors in your ability to make well-informed decisions. According to the Professional Academy, these are the elements and what to look for when gathering information:
- Political factors These are all about how and to what degree a government intervenes in the economy. This can include government policy, political stability or instability in overseas markets, foreign trade policy, tax policy, labor law, environmental law, trade restrictions, and so on.
It is clear from the earlier list that political factors often have an impact on organizations and how they do business. Organizations need to be able to respond to the current and anticipated future legislation and adjust their marketing policy accordingly.
- Economic factors Economic factors have a significant impact on how organizations do business and how profitable they are. Factors include economic growth, interest rates, exchange rates, inflation, disposable income of consumers and businesses, and so on.
These factors can be further broken down into macro-economics and micro-economics factors. Macro-economic factors deal with the management of demand in any given economy. Governments use interest rate control, taxation policy, and government expenditure as their main mechanisms to influence these demand factors.
Micro-economic factors are all about the way people spend their incomes. This has a large impact on business-to-consumer organizations in particular.
- Social factors Also known as sociocultural factors, these are the areas that involve the shared belief and attitudes of the population. These factors include population growth, age distribution, health consciousness, career attitudes, and so on. These factors are of particular interest as they have a direct effect on how marketers understand customers and what drives them.
- Technological factors We all know how fast the technological landscape changes and how this impacts the way we market our products. Technological factors affect marketing of our products and our HR services in three distinct ways.
- New ways of producing goods and services—using remote access for employee updates directly to the human resource information system (HRIS)
- New ways of distributing goods and services—providing employee online access to their employee records so they can request changes to correct errors
- New ways of communicating with target markets—using e-mail, text messages, and a company emergency messaging system to notify employees of critical changes in the work environment
- Environmental factors These factors have only really come to the forefront in the last 15 years or so. They have become important because of the increasing scarcity of raw materials, pollution targets, doing business as an ethical and sustainable company, and carbon footprint targets set by governments. If HR were to reduce or eliminate paper records, that could have an impact on the environment (less paper used, fewer trees cut) and cost to the organization (a higher profit, however small a contribution). More and more consumers are demanding that the products they buy are sourced ethically and, if possible, from a sustainable source. HR can make a contribution to that effort and be cited by corporate as an example of how the organization is reducing its impact on the environment.
- Legal factors Legal factors include health and safety, equal opportunity, advertising standards, consumer rights and laws, product labeling, and product safety. It is clear that HR professionals need to know what is and what is not legal to avoid embarrassment and bad PR or worse.
After you have completed a PESTEL analysis, you should be able to use this to help you identify the strengths and weaknesses for a SWOT analysis.

SWOT Analysis
SWOT stands for the following:
- Strengths What are the strengths of your HR organization? What do you do really well? What do you want to continue doing into the future? It could be HRIS, sexual harassment prevention, or onboarding.
- Weaknesses These are the areas you know need improvement. Maybe it is the amount and quality of employee training, recruiting for diversity, or benefit program analysis.
- Opportunities A merger or acquisition offers opportunities to examine all HR systems in both organizations and determine which will serve the new employer group best in the future. New reporting requirements imposed by government entities or customer groups give us the chance to determine how they will be met and the information used for improvement in our HR department.
- Threats These are the challenges we face as HR professionals. For example, an outside vendor may propose to deliver benefit program management more cheaply than we can do it in-house. Initially, new government requirements can be perceived as threats. Properly managed, they can sometimes be converted into opportunities.

Industry Analysis
Industry analysis is a tool that facilitates a company’s understanding of its position relative to other companies that produce similar products or services. Understanding the forces at work in the overall industry is an important component of effective strategic planning. Industry analysis enables HR professionals to identify the threats and opportunities facing their businesses and to focus their resources on developing unique capabilities that could lead to a competitive advantage.7 How are HR professionals throughout our industry conducting their business? What are they doing that can be applied within our organization?
Industry Lifecycle   There are four generally recognized phases to the lifecycle of a business or industry.
- Introduction This is the beginning of the organization. It’s the entrepreneurial phase where everything is new. Policies and systems are being created as they are needed.
- Growth After the new organization has gotten a foothold in its marketplace, it begins to grow. Growth is influenced by all the factors we have explored in SWOT and PESTEL analyses.
- Maturity This is the time when the organization is comfortable with its size, its influence, and its income.
- Decline The phase when systems have gotten surpassed by technological advances and products and services have become passé. Without updates to its core reasons for existing, the organization will ultimately cease to exist.
 

Porter’s Five Forces   Each employer organization has pressures from both internal and external sources. Those pressures impact the competitiveness the organization will be able to apply to the world in which it operates. Porter first published his suggestion that these five forces are what influence competitiveness. The Harvard Business Review article appeared in 1979.8 These pressures consist of forces close to a company that affect its ability to serve its customers and make a profit.

The five forces are as follows:
- Threat of new entrants When a company does so well that their success attracts new competitors who want to get in on that success, the competition can drive down profits.
- Threat of substitutes In modern terms, these are the “knock off” products that may even be legal if the original product patents have expired. Other people use different products or services to address the same need that the original product or service solved. Examples are digital watches versus analog watches and cell phones versus land lines.
- Bargaining power of customers When customer orders are large, they can force the lowering of price. Consider the big-box stores and how their orders influence suppliers.
- Bargaining power of suppliers If there are few options for sourcing component parts, raw materials, or other supplies, the supplier can have a strong influence on the cost of end products.
- Industry rivalry Industry competitors greatly influence our ability to succeed in the marketplace. They can often drive our price to end users and force us to clearly differentiate how our products and services are superior to the other industry players.
Strategic Investment Decisions   In evaluating capital expenditure decisions, we should consider three techniques to see how investment decisions are evaluated: accounting rate of return, payback, and discounted cash flow techniques. In HR terms, investments should be evaluated based on the period of time it takes to reclaim the investment (using a new applicant tracking software system), what the payback amount will be (savings in HR payroll expense from new software application), and what impact there will be on cash flow (reduction in HR budget that can put cash back into the organizational P&L statement).
Growth Share Matrix   Sometimes called the Boston box or Boston matrix, the growth share matrix can be created with plotting on two axes. The x-axis is the relative market share. The y-axis is market growth. Those two axes create four quadrants. When market share increases and market growth does too, the companies are “stars.” When market growth is high but market share is low, companies are questionable for investment. When market share is high but growth is low, companies can be good cash cows. Finally, when both market growth and market share are low, companies can be described as investment dogs.

This is an example of a growth share matrix.

Figure 4:    Growth share matrix
 

The GE-McKinsey Nine-Box Matrix   The nine-box matrix, shown in Figure 4-4, offers a systematic approach for the decentralized corporation to determine where best to invest its cash. Rather than rely on each business unit’s projections of its future prospects, the company can judge a unit by two factors that will determine whether it’s going to do well in the future: the attractiveness of the relevant industry and the unit’s competitive strength within that industry.

Figure:      The GE-McKinsey nine-box matrix chart

Defining Mission, Vision, and Values
According to SHRM, mission, vision, and values can be defined as follows:
- Mission Mission is a concise explanation of the organization’s reason for existence. It describes the organization’s purpose and its overall intention. The mission statement supports the vision and serves to communicate purpose and direction to employees, customers, vendors, and other stakeholders.
- Vision Vision looks forward and creates a mental image of the ideal state that the organization wants to achieve. It is inspirational and aspirational and should challenge employees.
- Values Values are the core principles that guide and direct the organization and its culture. In a values-led organization, the values create a moral compass for the organization and its employees.
Mission and Vision Statements   A mission statement answers these questions: What is our organization’s purpose? Why does our organization exist? A vision statement answers these questions: What problem are we seeking to solve? Where are we headed? If we achieved all strategic goals, what would we look like 10 years from now?
Organizational Values   Organizational values will answer these questions: What values are unique to our organization? What values should guide the operations of our company? What conduct should our employees uphold?
Articulating the HR Mission, Vision, and Values   HR professionals are accountable for creating the HR mission, vision, and values statements. Beyond that, they are responsible for communicating them to senior executives and to the general employee body in terms that can be well understood. When creating a presentation about the HR role and its place in the overall organization, consider these questions: What will be the impact on me [the executive or employee]? Why should I care about the role of HR in the organization? How will this make my job easier?

Setting Goals
Setting HR goals within the construct of articulated mission, vision, and values statements is the next step. What do we want to accomplish in the coming period of time? The time period could be a month or a year. What contributions can be made by HR to the overall organization’s efforts? HR can make a financial impact, for example.
Using the SMART method will ensure that the goals created stand a chance of actually being achieved. Here’s an example of an achievable goal:
Implement a new telecommunicating policy that complies with new ERGO standards for the IT department by end of second quarter.
SMART goal setting stands for the following:
- Specific Know exactly what you want to accomplish. Goals must be well defined. They must be clear and unambiguous.
- Measurable Have a yardstick to measure the specific intention.
- Attainable Make the goal achievable.
- Realistic Make the goal realistic to achieve in the time frame and relevant to align with the organization’s strategic plan.
- Timed Specify whether this goal has an implementation date.
Composing goals with the SMART outline and using action verbs such as identify, describe, create, implement, and define will guide the objective of the goal’s direction.
A word of caution when goal setting: be careful of the smorgasbord effect, which means getting so excited about creating SMART goals for the HR plan that too many are selected, which can cause a dilution of focus and resources.
Aligning HR Goals and Objectives   Once HR goals are set, it is necessary for a final step in the process. That is to check that HR goals are aligned with organizational goals and objectives. If HR isn’t going to be supporting the overall goals of the employer organization, then adjustments should be made. There is no room for “grandstanding” or building personal “kingdoms.” HR must be a team player with the other executives in the leadership group. HR’s contributions must be clear to the executive team.

Developing Strategy
A strategy is a statement of how we are going to get things done. It is less specific than an action plan. Once the mission, vision, and values have been established, the logical next step is to ask “How will we accomplish these things?” It is a broad statement about what approach we will take to implement the mission at each point. Then, later, will come the action plan that answers the questions of who, when, and what.

Developing Strategies That Fit
This is according to Community Tool Box: “A good strategy will take into account existing barriers and resources (people, money, power, materials, etc.). It will also stay with the overall vision, mission, and objectives of the initiative. Often, an initiative will use many different strategies—providing information, enhancing support, removing barriers, providing resources, etc.—to achieve its goals.
“Objectives [goals] outline the aims of an initiative—what success would look like in achieving the vision and mission. By contrast, strategies suggest paths to take (and how to move along) on the road to success. That is, strategies help you determine how you will realize your vision and objectives through the nitty-gritty world of action.”10
It wouldn’t make much sense to plan how to do something that isn’t part of the mission, vision, or values of the organization. Follow the mission and stay within the boundaries of the vision and values. Strategy will allow you to determine how to implement your mission. If you discover a strategy that isn’t speaking to the mission, get rid of it. It will be a distraction at best and a waste of resources at worst.

Business Strategy: How We Will Compete
Each enterprise must assess for itself the missions and strategies that it needs to accomplish its goals. Competing in an open market requires that assessment be updated periodically. After all, world conditions will change with time. Employer organizations need to be flexible to accommodate those shifts.
In HR terms, should the HR functions be performed by in-house staff or by hiring a consultant from the outside? Perhaps contracting with a large vendor would be the more cost-effective approach. Payroll is the obvious example. Oftentimes, vendors can perform the payroll function more cheaply than can internal staff. Other examples are HRIS management or benefit management (employee assistance programs). If you want to compete for rights to deliver any given HR function to your employees, it will be necessary for you to develop a business plan explaining how you will be able to do it better than the external vendors.
 

Creating Competitive Advantage   Delivering HR services using people on the payroll gives you flexibility because they can often spend a portion of their time working on projects that are not the primary focus of their other work. If you have HR professionals assigned to compensation analysis, they may have some time while waiting for compensation data input that could be used to review policies as part of a two-year review cycle. That efficiency wouldn’t be available to you if you hired an outsider to do the compensation analysis.

According to the Priority Metrics Group,11 there are six ways to differentiate your organization within a competitive marketplace, regardless of where in the world you are located (see Table ).

Table:      Six Ways to Differentiate Your Product or Service
 

Porter’s Competitive Strategies   What forces drive competition in an industry? What moves will competitors make? How will one’s industry evolve? How do strategic planners respond to competitive actions? How can a firm be best positioned to compete in the long run?
In 1985, Porter suggested that there are four primary competitive strategies that organizations can rely on when plotting their future business course.12 Porter called the generic strategies cost leadership (no frills), differentiation (creating uniquely desirable products and services), and focus (offering a specialized service in a niche market). He then subdivided the focus strategy into two parts: cost focus and differentiation focus (See Table).

Table:      Porter’s Competitive Strategies
 

Cost Leadership   Within the cost leadership strategy, profits can be increased by reducing costs while maintaining prices at industry average. Market share can be increased by both reducing costs and lowering prices, taking sales away from competitors. The no-frills retailers have opted to cut costs to a minimum and pass their savings on to customers in lower prices. This helps them grab market share and ensure their stores are as full as possible, further driving down cost. Think of Costco, Home Depot, and Lowes. This same thinking can be applied to the HR department if being the lowest-cost HR department in the industry is a mission of the group.
Differentiation   Differentiation involves making your products or services different from and more attractive than those of your competitors. How will you set yourself apart from your competition? Your competition in the HR world are the HR managers in other companies within your industry. Are they running a group that delivers HR services to their employees with a 1:150 HR professional to employee ratio? What if, at the same time, your HR professional to employee ratio was running 2:150? You are spending twice as much for HR professionals as your competitors. If you can differentiate your services based on cost, you should be able to do so based on quality. Being a full-service HR department means you “hold the hand of employees” as they ask for help with benefits enrollment, discrimination complaint processing, and training enrollment. Unless you can be better in either cost or quality, you will lose out to the competition. Important to this approach is that you can actually deliver the differentiated product or service, in high quality and in the time promised. The marketplace will long remember the broken promises made to customers, so beware of making promises you cannot keep.
Focus   When you focus on niche markets, it is possible to use focus as a strategy. Making something that no one else does that serves a specific requirement is one way. Examples are making dog collars using all natural materials or creating a sea-shell shop that imports sea shells from all over the world so customers can have a one-stop shopping experience. It costs customers less time and money to search the world for what they want when you have it all conveniently located in your offerings.
Companies that use focus strategies concentrate on particular niche markets and, by understanding the dynamics of that market and the unique needs of customers within it, develop uniquely low-cost or well-specified products for the market. Because they serve customers in their market uniquely well, they tend to build strong brand loyalty among their customers. This makes their particular market segment less attractive to competitors.14
Impact of Business Strategies on HR Strategy   Business strategy is paramount. HR strategy must support that business strategy. So, begin with questions like these: What is the business mission? What strategies will be used to accomplish that mission? How can HR support those business strategies? HR is one component of the organization, as is finance, accounting, marketing, production, and research. If all of these components are not supporting the business strategy, there is little likelihood that business goals will be accomplished.
Your HR organization and its strategies can have an impact on the overall business strategies if you follow these ten steps to make it happen:15
1.   Understand your organization’s business. Spend time every day talking with sales, production, quality, and accounting. Make sure that you know what is going on in that bigger world.
2.   Share responsibility for business goals and plans. The overall business goals are your goals, too. When you make plans for your department, they should be directed to achieving overall business objectives as well as human resource goals. Developing a performance culture is a goal you’ll likely own.
3.   Know the human resource business thoroughly. Your customers rely on you for correct and insightful information and advice. What more is there to say? You are reliable, credible, trustworthy, and knowledgeable, and you have deep integrity.
4.   Run your department like a business. Your goals must contribute to the accomplishment of the overall business objectives. Your action plans to achieve the goals need to translate into daily “to-do” lists for your staff. Every significant activity requires a feedback loop or audit so you know that it is being accomplished.
5.   Measure outcomes and goal achievement, not work processes. Employee and executive surveys are often used to identify how these people see HR performance.
6.   Remember the people in human resources. Is your office a magnet for people who need help, advice, or a sounding board? Are some of your visitors your senior managers? Even the CEO? If so, you remember that you are there to serve your organization’s people so that they can meet your business goals.
7.   Express thoughtful opinions backed by data and study. You have to understand the numbers. How else can you offer a substantial, intelligent opinion about business direction? Learn everything you can so that you have opinions and so your opinions are backed up with data. You need to understand the effect of decisions that your office makes on the work of the rest of the company. (For example, don’t schedule meetings with plant personnel on the last day of their shipping month.)
8.   Harness the benefits of technology. You’ll provide better customer service and free your time for dreaming up new value-added strategies. You cannot overestimate the impact of an effective HRIS. Need reports about attendance? How about salary reports for your whole organization? Interested in turnover and retention figures?
9.   Recommend programs for people who continually improve the business. When you propose new programs or problem-solve people issues, suggest solutions that support the accomplishment of business goals. You have reasons for suggesting a new variable pay system such as encouraging managers to accomplish business objectives. What’s better—the “thank you” card system that appears to help employee motivation and productivity or the attendance system that has reduced absenteeism by 4 percent?
10.   Learn and grow every day through every possible method. Use your knowledge of how people develop to do what is necessary to continue your growth curve.
- Seek out a more experienced mentor or sounding board. You need someone you can confide in and learn from.
- Attend professional HR conferences, meetings, and events.
- Attend executive leadership and management meetings in addition to your HR professional associations. You seek knowledge that goes beyond the bounds of your discipline and department.
- Attend at least 40 hours of training and education every year. Make sure your staff members attend, too. Cover all aspects of the business and running a business.
- Seek out people who will ask you questions and challenge your beliefs so you can continue to grow. For example, a woman works with a CEO, who asks her questions. She may not always like them, but the questions challenge her to think things through and to follow issues to their logical conclusion. He repeatedly asks, “How will you know if that is working? Happening? Bringing the results you want?” You need to be able to respond.
Corporate Strategy: Where We Will Compete   Whatever the corporate strategy, we need to be able to support it from the HR department. Remember, strategy is how we will meet our goals and objectives. Once we identify how we will get there (what strategies we will use), we can begin developing the action plan that will assign individual responsibilities for each element of the strategy.
Determining which markets to address is a question business strategy must address. If the answer is that expansion into international locations is appropriate, then HR strategic planning will need to address those requirements.
Growth Strategy Options   Growth can happen through market penetration (capturing a greater portion of the existing market with current products/services), market expansion (selling current products in a new market), diversification (selling new products to new markets), and acquisition (purchasing another company to gain broader product or service offerings).16 Growth requires financial support. HR can contribute by controlling expenses. These are some ways that growth strategy can be a viable option.
- Market penetration Increasing market share through options such as lowering prices
- Market expansion Developing new markets where current products and services can be sold
- Product expansion Increasing the number of products or product features
- Diversification strategies Selling new products to new markets
- Acquisition strategies Purchasing another organization in an effort to expand product line or markets
Managing Growth Options   The key to a long, healthy corporate life is steady growth. According to a 1998 survey, of the companies that enjoyed greater than 10 percent sales growth per year, about 78 percent were still around 6 years after starting. Of the companies with flat or decreasing sales, only 27.5 percent survived for 6 years.17
Managing growth requires substantial market intelligence. Researching the needs of the target market, receptivity to product names or applications, and financial requirements of the expansion effort are all concerns that need to be addressed. HR can contribute to those research efforts through identification of employee benefit packages and their costs, specification of employee recruiting techniques and costs, and cultural challenges that will be faced because of the expansion.
Mergers and Acquisitions   Mergers and acquisitions (M&As) are transactions in which the ownership of companies, other business organizations, or their operating units are transferred or combined. As an aspect of strategic management, M&As can allow enterprises to grow, shrink, and change the nature of their business or competitive position. From a legal point of view, a merger is a legal consolidation of two entities into one entity, whereas an acquisition occurs when one entity takes ownership of another entity’s stock, equity interests, or assets. Mergers and acquisitions are means to new markets, new products or services, or a new management team. All could figure strategically into your future plans.
Sometimes it makes good business sense to purchase another organization or merge with another organization. When markets are different and a combined organization can offer both entities a broader sales base, there is synergy. When product lines can be added through mergers and acquisitions, there is synergy. Then HR interventions are needed that will address cultural blending and employee support systems.
- HR’s role in the mergers and acquisitions strategy HR is almost always called upon to do due diligence in the investigative phase prior to finalizing a merger or acquisition. What union agreements does the new company have? How will those provisions fit into our organization? What policies does the new company have, and how will they blend with our policies? (Examples are holiday and vacation computations, sick leave policies, and parental leave policies.)
- Planning the HR integration strategy An estimated 70 percent to 90 percent of all M&As fail to achieve their anticipated strategic and financial objectives.18 This rate of failure is often attributed to various HR-related factors, such as incompatible cultures, management styles, poor motivation, loss of key talent, lack of communication, diminished trust, and uncertainty of long-term goals.
Both mergers and acquisitions present significant challenges to HR professionals. The M&A process requires management of both organizations to consider all implications of a proposed merger or acquisition before agreeing to one—which necessarily involves consideration of the “people issues” created by a proposed merger or acquisition. HR professionals are often involved in the process by advising management on human resource matters, including using surveys and other metrics to gather relevant data, identifying potential conflicts or HR challenges between the two companies, integrating HR practices and company cultures after an M&A, and managing talent decisions such as layoffs, to name a few.19
Developing integration strategy is like developing any other strategy. It requires asking who the stakeholders are (our company, their company, customers, stockholders, employees) and what benefits can be achieved by successfully completing the merger or acquisition (expanding markets, expanding product line, reducing expenses/costs, gaining customers/market share, and improving customer perception of our business).

Then follow the same basic steps used in other strategic planning sessions.
1.   Identify the vision. What is the desired future? What is the inspiration? What aspirations will we identify?
2.   Identify the mission. What is the clear and compelling objective for the integration?
3.   Identify the goals. What must be achieved? What needs should be met?
4.   Identify the strategies. What is the plan that will lead us to achieving our mission and goals?
5.   Identify the initiatives. What tactical and operational plans will be necessary to successfully implement the strategy?
 

Implementing   Once established, the HR strategy for a merger or acquisition needs to be implemented. That requires further analysis of the tactics and operational plans that will be needed for our achieving success. All of the basic support programs needed in running a business must be either blended or transitioned to one of the existing systems.

Here are a few of the keys needed to make a merger/acquisition successful based on the principles of the Accelerating Implementation Methodology (AIM):
- Define the changes in terms of human behavior The speed of an integration is determined by how you manage the human elements of the change. Remember to define the changes in terms of what people need to be doing differently. What are we doing? Why are we doing it, and what are the consequences if we don’t succeed?
- Generate sponsorship Sponsorship is the single most important factor in ensuring a fast and successful implementation. Every sponsor, from senior management down to the line managers, must express, model, and reinforce their commitment to the change. You will not get a cultural change with minor changes in sponsor behavior!
- Manage resistance Resistance is inevitable even when people see the merger as positive. Resistance is a function of disruption, and an M&A can be very disruptive. Make sure you have a plan on how to manage it, including responding quickly to concerns, rumors, and questions.
- Tighten up communications Every communication sent must include a feedback loop. This way, when a communication goes out, feedback will come back in. Use a variety of communication channels, with an emphasis on the face-to-face method.
- Manage reinforcements The only way to implement actual culture change is to integrate the behavioral elements of the new culture into the daily business activities and then dramatically change the reinforcements—that is, the positive and negative consequences that managers apply on a daily basis with their direct reports.
Monitoring and Evaluating   It is all well and good to know where we want to go and how we want to get there. However, it is equally important to know if we are actually walking the path we outlined for ourselves in the strategic planning. That is what monitoring and evaluating will tell us. Monitoring is the process of continually measuring the progress achievements of a project. It also assesses results that matter. Evaluation is the process of measuring the success of project achievements and the quality of those achievements. Establishing milestones for an M&A project will help you understand if you are on schedule, and quality measures will provide feedback about the success you have had so far with your implementation.
Measuring our incremental success can be great feedback to help us make adjustments where necessary so we can get back on track when necessary. HR can monitor recruiting and staffing functions, benefit design and implementation functions, employee relocation, policy development and implementation, and legal compliance requirements. Each of those functions should be evaluated for progress toward the goal. How many requisitions were filled within 10 days, 30 days, or longer? How quickly were policies developed when they were needed? What compliance requirements were met or not met (EEO discrimination complaint rate, compliance evaluation closures with “no violation” determination from the Department of Labor)? What was the retention rate of new hires? What was the turnover rate at each compensation level within the organization? All these and more are valid measurements that can be used by HR to monitor the progress toward the goal of completing a merger or acquisition.
Divestiture Strategies   The opposite of merger is divestiture. Divestiture is the removal of assets or processes that are no longer needed and that can be converted into cash. As a strategy, “spinning off” pieces of an organization can leave the remainder of the company in a healthier state financially. Splitting up a company can be equally painful and complicated.
For example, in 1982, Judge Green ordered the bifurcation of the Bell System. It was necessary to create a new enterprise that had the legacy telephone company businesses and a new company that would be unregulated and allowed to compete openly in the business communication marketplace. On January 1, 1983, American Bell was born. It was staffed by 100,000 employees who had been transitioned from the 23 legacy operating companies in the Bell System. And the new company had no revenue. It survived the first year or so on loans from the former telephone operating companies. And it was necessary to pay those 100,000 people from the very beginning. The plan called for employee records to be transferred from the 23 operating companies to the new American Bell accounting center in Lakeland, Florida. Well, unfortunately, there were large differences among record storage systems among the 23 companies. So, data fields and formatting requirements were all different. Blending the imported records was not working on a practical level. It was necessary for HR to create a staff that would scrub the employee records to be sure they were both accurate and properly formatted for the new accounting system in Lakeland. Once that was done, things began to run smoothly. In the beginning, approximately 10 to 25 percent of the American Bell staff was not receiving paychecks. Branch sales managers were writing checks on the branch account to their employees as substitute paychecks. It took almost an entire year to unravel all of the payments that were made and reconcile them with payroll.
Identifying how we will accomplish the divestiture seems like a reasonable step to take, and HR professionals can contribute to that planning process by identifying how they will add value to the end result.
Communicating Strategy   “If you don’t communicate your strategy in a way that your people understand and find compelling, how can you expect them to help you succeed with it? Research suggests only 5 percent of the people in an organization understand its strategy.”22 According to Harvard Business Review, there are eight ways to effectively communicate your strategy.23
- Keep the message simple but deep in meaning. Most organizations have a deeper meaning as to why they exist. This tends to influence strategy, decision-making, and behaviors at executive levels but often isn’t well articulated for employees. What you call it doesn’t matter—your purpose, your why, your core belief, your center. What does matter is that you establish its relevance with employees in a way that makes them care more about the company and about the job they do.
- Build behavior based on market and customer insights. For employees to fully understand how your strategy is different and better than the competition, they need to be in touch with market realities. The challenge is in how to effectively convey those realities so that your people can act on them. By building internal campaigns based on market and customer insights, you bring your strategy to life for your employees through this important lens. Package your content so that it can be shared broadly with all departments in your organization but in a hands-on way.
- Use the discipline of a framework. Inspire, educate, reinforce.
- Think broader than the typical CEO-delivered message, and don’t disappear. Employees are more likely to believe what leaders say when they hear similar arguments from their peers, and conversations can be more persuasive and engaging than one-way presentations. Designate a team of employees to serve as ambassadors responsible for delivering important messages at all levels.
- Put on your “real person” hat. And take off your “corporate person/executive” hat. The fact is, not many people are deeply inspired by the pieces of communication that their companies put out. Much of it ignores one of the most important truths of communication, especially communication in the early twenty-first century: be real. “Corporate speak” comes off as hollow and lacking in meaning. Authentic messages from you will help employees see the challenges and opportunities as you see them and understand and care about the direction in which you’re trying to take the company.
- Tell a story. Facts and figures won’t be remembered. Stories and experiences will. Use storytelling as much as possible to bring humanity to the company and to help employees understand the relevance of your strategy and real-life examples of progress and shortfalls against it. Ask employees to share stories as well and use these as the foundation for dialogues that foster greater understanding of the behaviors that you want to encourage and enhance versus those that pose risks.
- Use twenty-first-century media and be unexpected. Consider the roles of social media, networking, blogs, and games to get the word out in ways that your employees are used to engaging in. Where your message shows up also says a lot. Aim to catch people somewhere that they would least expect it. Is it in the restroom? In the stairwell? On their mobile phone?
- Make the necessary investment. Most executives recognize how important their employee audience is. They are the largest expense to the company. They often communicate directly with your customers. They single-handedly control most perceptions that consumers have about the brand. So, if this is a given, why are we so reluctant to fund internal communication campaigns?

Implementing Strategy Production
Implementation is the process that turns strategies and plans into actions in order to accomplish strategic objectives and goals. Implementing your strategic plan is as important, or even more important, than your strategy.24

Implementation of Strategy
Implementation requires an action plan. It may be called an implementation plan. Regardless of its name, it is a document that assigns responsibility to individuals or specific groups, determines due dates, and sets periodic progress meetings to see whether you are still on track, what unexpected problems have arisen, and what other resources might be needed to fully complete the action plan.
Consider Elon Musk and his SpaceX company. Their mission has been to build and fly a rocket that would launch payloads and then return to a soft landing on a barge in the ocean. Of course, he wanted to reuse the rocket and reduce overall costs in the process. They developed a strategic plan (determining how they would reach their goals) and then assigned responsibilities to specific individuals and groups (to carry out the plan) and had routine meetings to confirm they were still on track with the plan. When the first two rockets landed too hard and blew up as a result, they went back to the drawing board to determine the problem and try again. The third launch got it right, and the company has begun lifting government and private payloads into space ever since.
 

What Organizations Need for Effective Implementation   First there are objectives. Those are the goals we want to accomplish. Then comes strategy. That is a statement of how we will reach each goal. Then comes the implementation plan (action plan) that answers the questions of who, when, and where. Think of it as a spreadsheet or a table that can be expanded as needed.

This table  is an example.

Table: Strategic Action Plan

Allocating Resources
Ultimately, resources come down to budget. But there are many components that can be identified and managed along the way to that bottom-line budget impact. To determine how we will succeed, it is necessary to develop a business case to present to the executive team.
Making a Business Case   A major responsibility falling on the shoulders of HR professionals these days is the development and presentation of a business case for the organizational programs that will solve specific problems. For example, a business case is needed when recommending certain medical insurance programs, particularly if the employer has not provided such benefits in the past.
A business case is a written or oral presentation that identifies a problem, analyzes the various possible solutions, and makes a recommendation for implementing one of them. It will almost always have an analysis of financial impact, personnel impact, and customer impact. It is designed and presented using business terminology. For example, a recommendation for medical insurance would include the current cost plus a forecast of future costs both in total dollars and in dollars per employee. It will have specific information about the way in which the recommendation will solve the problem that has been identified. (For example, the retention of employees is significantly improved if the employer offers medical insurance to workers. Higher retention means less turnover and lower recruiting and training costs.) All of the benefits will have dollar values assigned to them in a business case presentation.
 

Making a business case means assembling business reasons for taking some action. The case will be ultimately presented to the decision-maker, be it an executive or the board of directors.

Project Management Principles and Practices   Projects come and go in the life of HR professionals. There are projects for the implementation of new benefit programs, assessment of new recruiting sources, and all the projects associated with new paths of business that the organization is embarking on. Being able to juggle all those things at the same time while assuring that each gets the proper amount of attention and actually moves toward a conclusion is the mark of a good project manager.
A project consists of a series of activities and tasks that have been identified that need to be performed to accomplish an outcome. Dates are identified, people are assigned to the tasks, and resources such as budget and people are allocated. Overseeing a project is project management.
Project Management Tools   A standard tool used in project management is the Gantt chart, also known as an activity log or milestone chart, and it is widely available as a template or dedicated software programs. A Gantt chart normally identifies in chronological bar graph order what needs to occur first and simultaneously in a step fashion (see Figure).

The benefit of a Gantt chart is the visual monitoring and communication of who is on first base and doing what task, what needs to occur before progression to second base, and where the results have to be before a run is counted at home plate.

Figure: Sample Gantt chart

Managing Change
Suffice it to say that managing change is the largest driving force behind employee relations. Change is a process that people and organizations undergo as a response; it is a transformation toward flexibility. HR is involved in managing the people issues resulting from change, either planned change or a reactive change, such as something occurring from an external source like an employment-related law regulating behavior in the workplace.

Helping both employees and management in an organized process through the roller-coaster ride of change, as identified by Elisabeth Kubler-Ross in her book On Death and Dying, is an emotional intelligent (EQ) competency skill for HR professionals and leaders.

First, shock and denial about the change is awakened within people. Next is the response of anger. Depression eventually sets in about the “loss” of status quo resulting from the change. Then movement toward bargaining and dialogue occurs related to the change. Finally, the roller-coaster ride ends with reaching a level of acceptance about the change. The key knowledge is in understanding the change and the management of the anticipated reactions.

Donald Kirkpatrick’s How to Manage Change Effectively discusses a model with the seven basic steps in the change management process for HR and organizations to prepare with.
- Determining the need or desire for change
- Preparing the tentative plans for change
- Discussing alternative and probable reactions to the change
- Making a final decision about the change
- Establishing a project plan and associated timetable
- Communicating the change
- Implementing the change and evaluation
 

Response to Change   Employees are people, and people react to change differently. Fear of the unknown can bring on some strong emotional responses. Here are some of the possibilities of neutral or negative reactions:27
- “Not me!” This is when somebody else is better suited for the new job assignment, or it’s when there’s denial that they are able to make the changes necessary.
- “What will this do to my job security?” Will my job survive the changes?
- Anger Frustration can build to anger when employees believe they are losing control over their work.
- Gossip Uncertainty and frustration can result in employees gossiping about the change. Sometimes this turns to viciousness and vindictiveness, which are problematic.
- “Who’s in charge here?” Uncertainty of reporting relationships can be frustrating also. One group in the midst of resizing used to say, “If the boss calls, get her name.”
- Panic Emotional upset about the change can cause a severe lack of confidence that can even cause physical illness.
- “I quit!” This is the ultimate response to change by an employee. Unfortunately, the cost to the employee is greater than the cost to the organization.

Here are some examples of positive reactions:
- “This is a challenge.” Open minded about the new work arrangement, some employees are confident that they can gain the necessary knowledge to do the work ahead.
- Enthusiasm Eager to accept new assignments, these workers can’t wait to dig in.
- “Maybe I could adjust to this change.” After a period of observation, they agree to give the change a chance.
- Positive vision These are people who see the bigger picture and have confidence in the organization’s leadership.
Conditions That Make Change Possible   Ken Blanchard and Scott Blanchard have listed six steps to ensuring successful change implementation for any organization.28
- Beat communication breakdown People don’t want to be “sold” by executives on the advantages of the changes to come. They want to be able to understand what will be happening and why.
- Get personal Help employees answer these questions: What’s in it for me to change? Will I win or lose? Will I look good? How will I find the time to implement this change? Will I have to learn new skills? Can I do it?
- Plan your action Leaders need to be able to drive forward with answers to these questions: What do I do first, second, third? How do I manage all the details? What happens if it doesn’t work as planned? Where do I go for help? How long will this take? Is what we are experiencing typical? How will the organizational structure and systems change?
- Sell the change If leaders have done a good job on the previous steps, employees will often sell themselves on the change as a good thing.
- Collaborate smartly People begin turning outward to ask who else should be involved with questions such as these: How can we work with others to get them involved in what we are doing? How do we spread the word?
- Refine for success Refinement questions are a good sign and show that the people in the organization are focused on continuous improvement. How can we improve on our original idea? How do we make the change even better?
 

Models for Managing Change   If the list of conditions that make change possible aren’t enough, you can find more information about managing change in your industry from industry associations and even from your competitors who may already have gone through something similar to your challenge. Specific industry models can be extremely helpful because they are constructed with the language of your industry, not someone else’s. HR associations such as SHRM can be helpful with both written reports available and offerings of live expert help to counsel you through your planning and executing change management.
 

HR’s Role in Change Management   SHRM suggests that there are four roles HR professionals must play in change management. How that is done will vary according to the type of change being addressed.29 Here are the four basic roles HR can play under the circumstances:
- Leader With management establish vision and clear direction and shape culture to minimize obstacles.
- Educator Coach managers to implement and drive change on their teams, provide necessary training and tools to prepare employees for change, and build a communication road map to resonate with different audiences.
- Advisor Create transparency as a liaison between executives and employees.
- Demonstrator Design methods to reinforce the change, create a mind-set of change by modeling, and encourage other executives to do the same.
Put them together, and the acronym is LEAD.

Evaluating Strategic Performance
Performance management is a systematic process that helps improve organizational effectiveness by providing feedback to employees on their performance results and improvement needs. When individual performance is linked to organizational strategic objectives, employees can see how they help impact accomplishments at the organizational level. It is employee accomplishments and contributions that drive the business results of an organization, so a regular feedback system discussing individual performance is at the core of a good performance management system. It ensures that employees are on course for the completion of tasks and goals that are aligned with the organization’s goals and that the resources and support are provided for the employee to perform such functions.

Performance Evaluation and Reporting
Creating and communicating the organization’s vision, mission, strategies, specific goals, and values form the foundation that is needed for the performance management system. Then performance standards are agreed upon by both the line management and the employee on what the job requires and what will be measured. At this stage, it is essential that employees clearly understand the standards, including expected behavior standards set forth, for their jobs. Feedback is the next stage and can be both informal and formal. Formal feedback can entail a written performance appraisal.

Defining Performance Objectives
Employees need to know and understand what specific performance is expected of them in performing their jobs and the acceptable behavior. This communication begins with the very first discussion in a job interview and certainly with the job offer and new-hire onboarding orientation. The discussion continues on a consistent basis both with the reinforcement of organizational standards that are outlined in employee handbooks and other written material and with performance appraisal review sessions. The clearer the expectations set for employees, the greater the success in having expectations met.
 

Effective Performance Measurement   Key to successfully using performance management are the following touchstones:
- Focus on results.
- Develop a culture of accountability.
- Align all organizational activities with overall organizational goals.
- Provide a common language for success.
- Make measurements simple to use.

Take a look at this figure and you will likely find these concepts easier to grasp.30

Figure: Effective performance management touchstones
 

Using a Balanced Scorecard to Align Objectives with Strategy   According to Howard Rohm, CEO of the Balanced Scorecard Institute, “The balanced scorecard is a robust organization-wide strategic planning, management and communications system. These are strategy-based systems that align the work people do with organization vision and strategy, communicate strategic intent throughout the organization and to external stakeholders, and provide a basis for better aligning strategic objectives with resources. In strategy-based scorecard systems, strategic and operational performance measures (outcomes, outputs, process and inputs) are only one of several important components, and the measures are used to better inform decision making at all levels in the organization. In strategy-based systems, accomplishments and results are the main focus, based on good strategy executed well. A planning and management scorecard system uses strategic and operational performance information to measure and evaluate how well the organization is performing with financial and customer results, operational efficiency, and organization capacity building.”31
 

Using Benchmarking to Set Performance Objectives   According to the Construction Industries Institute (CII), “Benchmarking is the systematic process of measuring one’s performance against recognized leaders for the purpose of determining best practices that lead to superior performance when adapted and utilized.32
“To be successful, benchmarking should be implemented as a structured, systematic process. It will not be successful if applied in an ad hoc fashion on a random basis. In most cases benchmarking is best-practice-oriented and is part of a continuous improvement program that incorporates a feedback process. Benchmarking requires an understanding of what is important to the organization (sometimes called critical success factors) and then measuring performance for these factors.”
Benchmarking can be internal or external. Strategic objectives usually establish comparisons with external sources. An example is found in compensation. Using salary surveys, employers can determine where they rate on compensation scales for any given job content. If the goal is to be in the second quartile, it is easy to determine whether that objective is being met by looking at the external pay for survey participants and the pay offered for the same job content.
 

SMART Goals/Objectives   SMART is the acronym that you can use to guide your goal setting. Its criteria are commonly attributed to Peter Drucker’s Management by Objectives concept and as discussed in the earlier “Setting Goals” section.
 

How Many and How Often   Examine your organizational goals and strategies for achieving those goals. You should have as many objectives as you need to identify the work you must do to properly contribute to achieving those organizational goals. Your goals should focus on HR issues, and there should be at least one for each of the major HR functions. Without them, you won’t be able to tell how you are really doing in your HR efforts.
 

Common Organizational Metrics   Here are some common ways that organizations measure their own performance:
- Marketing metrics SEO keyword ranking, web traffic sources
- Sales metrics Sales growth, average sale value, average profit margin
- Financial metrics Debt to equity ratio, working capital
- Social media metrics Social followers versus target
- Customer feedback metrics End-of-transaction survey responses, quarterly survey responses
- Employee metrics Cost per hire, retention rate, health care costs
 

Financial Statement and Metrics   Financial metrics reveal characteristics of financial data that might not be apparent from a simple review of the numbers.
- Cash flow metrics Businesspeople evaluate streams of cash flow events, such as investment outcomes or business case cash flow estimates.
- Financial statement metrics Businesspeople use these metrics to evaluate a firm’s financial position and financial performance, such as liquidity, payback period, and return on investment (ROI).
 

Nonfinancial Organizational Performance Metrics   Here are any measurements that do not have a financial component. Consider such things as the following:
- Customer satisfaction trends
- Supplier delivery date accuracy
- Recruiting source candidate submission acceptance
- Workplace security and safety performance

Countless other possibilities exist. The challenge is to identify those things that can contribute strategically to your organizational goal achievement. Measure the things that matter. Measuring things that don’t matter, or that you have no control over, will only bring a sense of failure and lower morale.
 

Using Business Intelligence   Business intelligence (BI) refers to the tools, technologies, applications, and practices used to collect, integrate, analyze, and present an organization’s raw data to create insightful and actionable business information. BI as a discipline and as a technology-driven process is made up of several related activities, including the following:
- Data mining
- Online analytical processing
- Querying
- Reporting

Today’s trend toward using “Big Data” (huge databases with hundreds or even thousands of data elements) makes it essential that employers are able to reach into those databases and extract only those elements that will be useful in monitoring business activities and accomplishments.
 

Data Analysis Methods   Data can come in large or small files. And the large files can be really large files. The “cloud” is home to many examples of exceptionally large databases. Consider the U.S. Bureau of the Census as one such source. Its 2010 Occupational Database has information about individuals with accompanying information about race, gender, work industry, job category (EEO-1, EEO-3, EEO-4, EEO-5), job title, work location, home location (city, state, ZIP code), and more. If you only want to know about people working in a specific county in the HR professionals job category, you would need some method for extracting that information from the database before you could analyze it. Once you have the data in hand, the following are some ways in which you could analyze the smaller components of interest.
 

Variance Analysis   Variance analysis is the quantitative investigation of the difference between actual and planned behavior. This analysis is used to maintain control over a business. For example, if you budget for sales to be $10,000 and actual sales are $8,000, variance analysis yields a difference of $2,000. Variance analysis is especially effective when you review the amount of a variance on a trend line so that sudden changes in the variance level from month to month are more readily apparent.34
 

Regression Analysis   This is a technique for isolating which factors really have an impact on the issue you are studying. Does time in service have an impact on current compensation levels? To know, it is necessary to isolate time in service and take away consideration of other variables such as employee age, race, gender, years of experience in the industry, starting compensation amount, and any other variable that might interfere with the analysis of time in service. Regression analysis is generally accepted as the most accurate analysis tool available for assessing such things as employment discrimination like disparate impact.
 

Trend Analysis   Trend analysis is the process of comparing business data over time to identify any consistent results or trends. You can then develop a strategy to respond to these trends in line with your business goals.
Trend analysis helps you understand how your business has performed and predict where current business operations and practices will take you. Done well, it will give you ideas about how you might change things to move your business in the right direction.35
Let’s say you are experiencing what you believe is unfavorable turnover among your production workforce. To begin the process of determining why that may be happening, it can be helpful to determine whether there actually is a turnover trend. Plotting the turnover rates for each month (or year) can allow you to see graphically what is actually happening. If there is an increasing slope in the results, you can begin the process of identifying causes for the trend. If you determine that the results are more or less consistent with an occasional spike in the turnover rate, you may decide that no action is required beyond what you are already doing to control turnover.
 

Graphic Presentation of Data Analysis   Let’s assume we want to see the trend of our job requisitions during the past year. Table shows the data.

Table Requisition by Month 

These Figures  show a couple of ways you might want to display the data in graph format. The months are represented by the numbers 1 through 12. The number of requisitions is shown on the left y-axis.

Figure:     Requisition by month 2

Figure: Requisition by month 3
 

Communicating Data Analysis   Once you have determined that your data is as accurate as you can get it, then determine what the data says to you. What message is there from the data? Then determine how you will present the data message to your audience. Different audiences sometimes require different presentations. If you are explaining the cost of benefit plans to the general employee body, you may use general cost charts. The same discussion with senior executives or the board of directors may be more detailed. While the subject is the same, the way you convey the message can be different.

Providing Leadership and Strategy
Henry Mintzberg said, “Leaders don’t do most of the things that their organizations get done; they do not even make them get done. Rather, they help to establish the structures, conditions, and attitudes through which things get done. And that requires a collaborative mind-set.” Leaders’ critical focus should be on providing guidance and vision, controlling risks, and providing working environments where employees can contribute their best performance rather than just following directions. Leaders who manage employees should have the key skills of planning, staffing, organizing, controlling yet motivating people, and managing resources and budgets.

The HR professional as a leader will have a dual focus: being a leader for the HR function and being able to assist in identifying and developing the organization’s leaders.

Leadership Characteristics
The key characteristics and skills for leadership have been written about for decades by many well-known and publicized authors. The skill set that began as hierarchical in design where coercion and intimidation were main factors has clearly changed in today’s organizations. The models and opinions of successful leadership characteristics in the twenty-first century that you’ll find associated with the SHRM exam are those of James Kouzes and Barry Posner,36 Erica Fox,37 Daniel Goleman,38 and Marshall Goldsmith.39

In their studies and research, Kouzes and Posner found that the following practices made successful leaders:
- Practice 1: Challenging the process Successful leaders will recognize when there is a need for change.
- Practice 2: Inspiring a shared vision Successful leaders will have a vision and get their employees to be inspired by the same vision.
- Practice 3: Enabling others to act Successful leaders will empower their employees to do their best work, bringing out their full potential and encouraging collaboration in the workforce.
- Practice 4: Modeling the way Successful leaders will walk the talk and lead by example.
- Practice 5: Encouraging the heart Successful leaders will help their work groups celebrate the achievements and yet learn from their disappointments and matters of adversity.

Daniel Goleman’s research report about emotional intelligence, focused on psychology and neuroscience, offers insight about our “two minds,” the rational and the emotional. Goleman delineates the five crucial skills of emotional intelligence for leaders and shows how they determine leaders’ success in relationships, work, and physical well-being.

The following are the five key emotional intelligence skills associated with successful leadership characteristics:
- Self-awareness A leader knows how they feel and how their emotions or actions can affect people around them.
- Self-regulation This key skill is about staying in control and regulating your actions and communications so to rarely verbally attack others or make rushed or emotional decisions.
- Motivation A self-motived leader will work consistently toward goals and have high standards for the quality of their own work.
- Empathy A leader who has empathy is essential for managing people and teams in today’s work environment. They have the ability to put themselves in someone else’s shoes. Through empathic skills, they can help develop the people they manage, challenge others who are acting unfairly, give constructive feedback, and also listen deeply for the meaning in conversations.
- Social skills Leaders with emotional intelligence are great communicators. They’re just as open to hearing the bad news as the good news. They are great at inspiring their people to a vision, and they are also good at managing change or resolving conflicts diplomatically.

In Erica Fox’s research, she sees the successful leader as having a multifaceted personality, what she calls an inner team. This inner team draws on the following strengths of characteristics to lead: intuition, reason, emotion, and willpower. As depicted in Figure below, Fox labels these “inner team” members as follows: CEO as the inspirational dreamer, CFO as the analytical thinker, COO as the practical warrior, and the CPO as the emotional lover.

Figure: Fox’s inner team leader model

With Marshall Goldsmith’s work, he identifies the 21 habits of behavior that derail a leader’s effectiveness and holds them back. These behaviors have to change and adapt to the level of leadership a person’s career grows into.

The 21 bad habits are as follows:
1.   Winning too much The need to win at all costs and in all situations.
2.   Adding too much value A desire to add two cents to every discussion.
3.   Passing judgment The need to evaluate others and impose our standards/values on them.
4.   Making destructive comments Sarcasm and cutting remarks.
5.   Starting with “no,” “but,” or “however” The overuse of these negative qualifiers, which conveys “I’m right. You’re wrong.”
6.   Telling the world how smart we are The need to show people we’re smarter than they think we are.
7.   Speaking when angry Using emotional volatility in communications.
8.   Negativity (“Let me explain why that won’t work.”) The need to share our negative thoughts.
9.   Withholding information The refusal to share information for an advantage over others.
10.   Failing to give proper recognition The inability to provide praise, rewards, and compliments.
11.   Claiming credit we do not deserve The overestimate of our contribution to some success.
12.   Making excuses The need to excuse annoying behavior as a permanent fixture so others will excuse us for it.
13.   Clinging to the past The need to deflect blame away from ourselves; this is a subset of blaming everyone else.
14.   Playing favorites Failing to see that we treat someone unfairly.
15.   Refusing to express regret The inability to take responsibility for our actions.
16.   Not listening The most passive-aggressive form of disrespect for others.
17.   Failing to express gratitude The most basic form of bad manners.
18.   Punishing the messenger The misguided need to attack the innocent who are providing information.
19.   Passing the buck Blaming everyone but ourselves.
20.   An excessive need to be “me” Exalting our faults as virtues simply because they embody who we are.
21.   Refusing to accept any responsibility for needing to change “That’s just the way I am. Take it or leave it.”

Theories About Leadership
In this section on leadership theories, we recognize that your formal education most likely went into great depth about each of the theories. What follows is a refresher on the basics of the leadership theories that will help you with your OD and HR initiatives. There are five basic schools of leadership theories: trait theory, behavioral school, contingency or situational school, leaders and followers, and dispersed leadership.
 

Trait Theory   The theory of trait leadership was developed from early leadership research, which focused primarily on finding a group of heritable attributes that differentiated leaders from nonleaders. Basically, it asserted that leaders were born and not made, and the focus was on personal characteristics and attributes that included mental and physical abilities. Although this perspective has been criticized immensely over the past century, scholars still continue to study the effects of personality traits on leader effectiveness. Past research has demonstrated that successful leaders differ from other people and possess certain core personality traits that significantly contribute to their success. It has been called the great person leadership theory with its assumption that leaders are different from the average person.

The five traits identified are as follows:
- Intelligence
- Dominance
- Self-confidence
- High levels of energy and vitality
- Task or technical relevance knowledge

More current research has failed to identify one set of traits that always differentiates a leader.
 

Behavioral School   The behavioral school theory focuses on a leader’s ability to manage the performance and contribution of others, those they manage. Douglas McGregor’s Theory X and Theory Y and Blake-Mouton apply to the behavioral school theory. Behavioral school identifies two dimensions of leadership behavior—focused on the employee and focused on the job to do. Consideration is the employee-centered behavior; initiating structure is the job-oriented behavior.
McGregor’s theory offers two approaches to motivating employees: Theory X, which suggests an authoritative management style because it assumes that employees inherently do not like to work and must be controlled and closely monitored; and Theory Y, which suggests a participative style of management, under the belief that employees dislike controls and inherently want to do their best. It is obvious to see that a Theory Y type of supervisor will provide better leadership and produce greater satisfaction.
Another theory in the behavioral school is the situational leadership model developed originally in 1964 by Robert R. Blake and Jane Mouton41 and later updated by them. It is a managerial grid model that identifies five different leadership styles based on the concern for people and the concern for production.

This Figure illustrates the Blake-Mouton behavioral leadership theory and the resulting leadership styles.

Figure:      Blake-Mouton behavioral leadership theory

NOTE:    The ideal position is a 9 on production and 9 on people.

The types of leaders/managers are as follows:
- Impoverished style (1, 1): evade and elude In this style, managers have low concern for both people and production. Managers use this style to preserve job and job seniority, protecting themselves by avoiding getting into trouble. The main concern for the manager is not to be held responsible for any mistakes, which results in less innovative decisions.
- Country club style (1, 9): yield and comply This style has a high concern for people and a low concern for production. Managers using this style pay much attention to the security and comfort of the employees, in hopes that this will increase performance. The resulting atmosphere is usually friendly but not necessarily very productive.
- Produce or perish style (9, 1): control and dominate With a high concern for production and a low concern for people, managers using this style find employee needs unimportant; they provide their employees with money and expect performance in return. Managers using this style also pressure their employees through rules and punishments to achieve the company goals. This style is often used in cases of crisis management.
- Middle-of-the-road style (5, 5): balance and compromise Managers using this style try to balance between company goals and workers’ needs. By giving some concern to both people and production, managers who use this style hope to achieve suitable performance, but doing so gives away a bit of each concern so that neither production nor people needs are met.
- Team style (9, 9): contribute and commit In this style, high concern is paid both to people and to production. Managers choosing to use this style encourage teamwork and commitment among employees. This method relies heavily on making employees feel like they’re constructive parts of the company.
- The opportunistic style: exploit and manipulate Individuals using this style, which was added to the grid theory before 1999, do not have a fixed location on the grid. They adopt whichever behavior offers the greatest personal benefit.
- The paternalistic style: prescribe and guide This style was added to the grid theory before 1999. Managers using this style praise and support but discourage challenges to their thinking.
 

Contingency or Situational School   The well-known theories for contingency and situational leadership are the ones that accept differing leadership styles and adapt to the situations or people involved.

Widely referred to as the Hersey-Blanchard situational leadership theory, the fundamental underpinning of the situational leadership theory is that there is no single “best” style of leadership. Effective leadership is task-relevant, and the most successful leaders are those who adapt their leadership style to the maturity (“the capacity to set high but attainable goals, willingness and ability to take responsibility for the task, and relevant education and/or experience of an individual or a group for the task”) of the individual or group they are attempting to lead or influence. Effective leadership varies, not only with the person or group that is being influenced but also depends with the task, job, or function that needs to be accomplished. The Hersey-Blanchard situational leadership theory rests on two fundamental concepts: leadership style and the individual or group’s maturity level. 

Figure: Situational leadership model
The Hersey-Blanchard situational leadership theory42 identifies four levels of maturity, M1 through M4.

- M1 Employees still lack the specific skills required for the job at hand and are unable and unwilling to do or to take responsibility for this job or task.
- M2 Employees are unable to take on responsibility for the task being done; however, they are willing to work at the task. They are novice but enthusiastic.
- M3 Employees are experienced and able to do the task but lack the confidence or the willingness to take on responsibility.
- M4 Employees are experienced at the task and comfortable with their own ability to do it well. They are able and willing to not only do the task but to take responsibility for the task.

Leadership has four tasks based on an employee’s maturity.
- Delegating The leader is still involved in decisions; however, the process and responsibility have been passed to the individual or group. The leader stays involved to monitor progress.
- Participating This is where shared decision-making with the work group about how a task is accomplished takes place; the leader is providing less task direction while maintaining high relationship behavior with the group.
- Selling While the leader is still providing the direction, the leader is now using two-way communication and providing the socioemotional support that will allow the individual or group being influenced to buy into the process.
- Telling Characterized by one-way communication in which the leader defines the roles of the individual or group and provides the what, how, why, when, and where to do the task.

The most popular situational contingency theory was developed by Fred Fiedler.43 The Fiedler contingency theory holds that group effectiveness depends on an appropriate match between a leader’s style (essentially a trait measure) and the demands of the situation. Fiedler considers situational control the extent to which a leader can determine what their group is going to do to be the primary contingency factor in determining the effectiveness of leader behavior.
Fiedler’s contingency model is a dynamic model where the personal characteristics and motivation of the leader are said to interact with the current situation that the group faces. Thus, the contingency model marks a shift away from the tendency to attribute leadership effectiveness to personality alone.

Fiedler asserts that there are three factors determining the favorableness of the environment for the leader.
- Leader-member relations The degrees of trust, confidence, and respect that employees have in their leader
- Task structure The extent to which the tasks the employees are engaged in are defined (clear or ambiguous, structured or unstructured)
- Position power The degree of power and influence the leader has over their subordinates
Changing one of the three factors is a more effective route rather than trying to change the leadership’s trait.
 

Action-Centered Leadership   Action-centered leadership is a model created by John Adair44 and states that effective leaders accomplish goals and tasks through the efforts of the team they lead. To do so, they must do three things in their leadership of groups.
1.   Structure the task and make sure everyone knows what is expected.
2.   Develop each team member, review and evaluate their outcomes, coach/motivate, and support.
3.   Coordinate the team’s workflow, resolve disputes, ensure compliance with rules, and cause collaboration.
 

Leaders and Followers   Jon Katzenback’s and Douglas Smith’s leadership theory “Leaders and Followers” recognizes that the leader is not a hero per se but a team leader and servant to the team. With their leadership theory, leaders ask more questions rather than simply provide answers—a coaching tactic. They share opportunities to lead the team. Working with each other to solve problems is high with this style, along with building a solid foundation of the problems and issues before jumping into work on a resolution. Modern organizations of today generally rely heavily on team leaders and thus this style of leadership.
 

Dispersed Leadership   Sometimes referred to as emergent leadership, with the dispersed leadership theory, leaders will emerge from a working group because of their expertise or experience to lead and influence the group working on a situation or task. This typically is not a person who is given authority by way of title, such as manager or supervisor, within the hierarchy. The leader is someone the group has chosen to follow. This style of leadership has grown in the twenty-first century because of more self-managed teams in flat organizational structures.
 

Transformational and Transactional Leadership   Leadership can be either transformational or transactional in nature. A transformational leadership approach is one that stimulates and inspires people to work together toward achieving a common goal. Transformational leaders are charismatic (which instills pride, respect, and trust in the leader’s sense of mission and vision); inspirational, with the communication skills necessary to gain engagement; stimulating, where the promotion of intelligence and challenge are at play; and attentive to individual needs, giving personal attention in manners of coaching or mentoring.
Transactional leadership has characteristics associated with contingent reward, where effort is rewarded via accomplishment; management by exception, in which corrective action is taken when standards are not met or protocol is broken; and laissez faire, in which responsibility is abdicated and decision-making is delayed or avoided.
Transactional leadership has been widely used and the norm historically for decades; transformational leadership has been proven to improve productivity and morale in the long run. A blend of both transactional and transformational leadership is typically warranted and the most effective.
 

Global Leadership Models   There are key issues to be aware of in global organizations that apply to global leadership models. Things become more complex because of cultural and language barriers along with geographical and time zone differences. Managing the diverse global workplaces becomes complicated with laws, regulations, and practices differing from country to country. In 2004 and 2007, results from the Global Leadership and Organizational Behavior Effectiveness (GLOBE) Research Program found the data to support the shared cultural dimensions that were derived from Geert Hofstede and other cultural researchers.46
 

Cultural Issues   There are two cultural constructs that have a great influence on communication and training/development activities: power distance and high-context/low-context culture. Dr. Geert Hofstede,47 well known for his pioneering research of cross-cultural groups in organizations, conducted a study of how workplace values were influenced by culture. He developed a model that identifies five primary dimensions to differentiate cultures. The five dimensions are as follows: power distance, individualism, uncertainty avoidance, masculinity, and long-term orientation.
Power distance is the extent to which less-powerful members of organizations expect and accept that power is distributed unequally. In high-power distance organizations, the less powerful employee accepts autocratic structures.
Individualism refers to the extent to which people are expected to stand up for themselves. With high individualism, an individual’s rights are most important.
Uncertainty avoidance is the extent to which members of a society cope with anxiety by minimizing uncertainty. High uncertainty avoidance cultures like structure and rules.
Masculinity also includes femininity and refers to the value placed on male or female values from a Western culture perspective. Feminine cultures place more value on relationships and harmony, wherein masculine cultures value competitiveness and assertiveness.
Long-term orientation is the degree to which the society embraces long-term devotion to traditional values. High long-term orientation has a respect for loyalty commitments and work ethic is strong.

The American Management Association (AMA) developed a list of global leadership skills, listed below. This list was developed in 2012 via a survey conducted of more than 1,000 global practitioners and emphasizes the essential need for having fluency in local cultures for global organizations.

Table:  AMA’s Global Leader Competencies
 

Key Leadership Skills   More than just business knowledge and expertise, leaders require a number of skills to manage a workforce. Leadership is an ability to influence others toward a strategy, results, and goals. It entails keeping the organization’s vision and mission in sight associated with its strategy, providing the direction on how that mission and vision will be accomplished, and providing the tools and means to attain them, while motivating or encouraging people to work toward the vision.
Leadership skills that are associated directly with strategy are focused on motivating a work group, making ethical decisions, having communications skills for aligning with stakeholders, and managing conflicts.
 

Ethical Behavior   One of the key leadership competencies is being the role model for ethical decisions and actions. Being consistent and thoughtful with the challenging ethical decisions is at the core of this key leadership skill. To do so, a leader needs to recognize the ethical situations when they arise. They need to dig in to fully establish the facts about a given situation and their various options. Next they need to evaluate the ethical dimensions of possible actions they can take. These might include religious or cultural beliefs/norms. Then the leader would apply the relevant codes of ethics and behavior toward each option that has been presented in the situation. Consulting with others, perhaps inside the organization such as HR and other senior management levels, or perhaps outside such as legal consultants, should be one of the options. The last parameter is owning the decision once it is made and perhaps learning from the mistakes/errors that are made from the issue/situation—all so that future decisions can be made better.
 

Communication   Communication is absolutely essential for effective leadership—sharing the vision, the strategy, the direction in which the organization is headed, at every level of function. It requires a thorough understanding of what is needed for the listeners to “hear the message” and uses various means to communicate matters appropriately.
 

Understanding a Listener’s Needs and Expectations   The leader as a communicator needs to consider the message they want to send, who the “receiver” is intended to be, and in what manner they intend to provide it. A rule of thumb to use in all communications is recalling “MIM,” which stands for Message, Intended Receiver, Medium to Be Used. First the communicator should “be in the shoes” of the intended receiver and consider all the varying perspectives that receiver might have. Consider how the receiver might misunderstand the message and what their perception might be.
 

Planning Communication   What is the best manner for the communication to occur for the intended receiver (e.g., verbal, meeting presentation, written)? If the receiver does not have easy access to the Internet or an intranet, that is going to hamper the timeliness of the communication. In planning the communication of strategy, this question is the first one to consider: What information is needed to be communicated, in what order, on what dates, by whom, and specifically to whom? Next, what medium is to be used? Last, what feedback mechanism is in place to ensure the intended communication was received and understood? This feedback will provide an awareness of what may need altering in the message to improve understanding and impact.
 

Managing Conflict   Conflict is natural, and it is bound to happen in all work settings. In most conflicts, neither party is right or wrong; instead, different opinions collide to create disagreement. Is conflict a bad thing? Not necessarily. Conflict can help lead to new discoveries of methods and improvements in matters such as policies and procedures. Interpersonal conflicts are bound to occur when groups of people are working together. There need to be rules of behavior associated with conflict, such as conflict of culture, personal differences, communication styles, and treatment of others. If there is constant conflict, that will surely erode collaboration and relationships in the workplace. Leaders, including HR professionals, should know how to approach conflict proactively and have the skills to resolve it effectively.
 

Conflict-Resolution Modes   When conflicts need to be resolved, the process of conflict resolution involves techniques to resolve issues and maintain effective working relationships. When a direct supervisor is unable to resolve the conflict, HR is normally brought in as an intervention and mediator. Clear and open communication is the cornerstone of successful conflict resolution, and thus HR professionals must be skilled communicators. This includes creating an open communication environment that encourages the disconnected parties to talk. Listening and probing with nondefensive inquiries will help dissipate the conflict.

Whether it is co-workers who are jockeying for the desk next to the window or the employee who wants the room cooler and the other one who doesn’t, immediate conflict resolution is essential. Steps for conflict resolution by a leader involve the following:
- Acknowledge that an opposing situation exists. Acquaint yourself with what’s happening and be open about the problem.
- Let the individuals express their feelings. Emotions fly and feelings of anger and/or hurt usually accompany conflicts. Before any kind of probing can take place, acknowledge the emotions and feelings.
- Define the problem. What is the issue? What is the negative impact on the work or relationships? Are different personality styles part of the problem? Meet with the opposing parties separately at first and gain their perspective about the situation.
- Determine the underlying need. There is no goal of deciding which person is right or wrong; the goal is to reach a solution that everyone can live with. Looking first for needs, rather than solutions, is a powerful tool for generating win-win options. To discover needs, you must try to find out why people want the solutions they initially propose. Once you understand the advantages their solutions have for them, you have discovered their needs.
- Find common areas of agreement. Agree on the problem; agree on some small change to give a feeling of compromise.
Find solutions to satisfy needs.
- Generate multiple alternatives.
- Determine which actions will be taken.
- Make sure involved parties buy into actions. (Total silence may be a sign of passive resistance.) Be sure you get real agreement from everyone.
- Determine follow-up to monitor actions and sustained agreements. Schedule a follow-up check-in to determine how the solutions are working and how those involved feel about how the solutions are working.

What if the conflict goes unresolved? If the conflict is causing a disruption in the workplace and it remains unresolved, you may need to explore other avenues. An outside consultant such as a mediator may be able to offer other insights on solving the conflict problem. In some cases, the conflict becomes a performance issue and may become a topic for coaching sessions, performance appraisals, or disciplinary action.

Negotiation Methods
Some conflict may be to a level that it requires negotiation for a compromise. The methods used in negotiation methods are similar to some used in conflict resolution. Negotiation involves knowing the needs and wants of both sides of the conflict. There are several different negotiating styles, yet the most common are the three that are known as soft, hard, or principled.
Soft negotiations have a focus that is based on the value of the relationship. Hard negotiations have a focus that is associated with win-lose at all costs to the relationship. Principled negotiations have a focus that is aimed at mutual gain for both sides. Principled negotiations are what most organizations expect from their leadership—collaboration and relationship building.