BSBHRM501 Student Workbookpdf 2001

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Manage human

resources services

BSBHRM501B

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Student Workbook

BSBHRM501B Manage human

resources services

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Acknowledgment

Innovation and Business Industry Skills Council (IBSA) would like to acknowledge Impact Training and Development Solutions for their assistance with the original development of the resource for BSBHRM501A.

Writer: Joanna Hull Industry reviewer: Kristen Miller This resource for BSBHRM501B was developed by IBSA.

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Use of this work for purposes other than those indicated above, requires the prior written permission of IBSA. Requests should be addressed to Product Development Manager, IBSA, Level 11, 176 Wellington Pde, East Melbourne VIC 3002 or email [email protected].

‘Innovation and Business Skills Australia’_{, ‘IBSA}’_{and the IBSA logo are trade marks of IBSA.}

Disclaimer

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Published by: Innovation and Business Industry Skills Council Ltd

Level 11

176 Wellington Parade East Melbourne VIC 3002 Phone: +61 3 9815 7000 Fax: +61 3 9815 7001 Email: [email protected]

www.ibsa.org.au

1st_{edition published: January 2014} 1st_{edition version: 1}

Release date: January 2014

ISBN: 978-1-925123-10-4 Stock code: BSBHRM501B1D

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Introduction

Features of the training program

The key features of this program are:

● Student Workbook – Self-paced learning activities to help you to understand key concepts and terms. The Student Workbook is broken down into several sections.

● Facilitator-led sessions – Challenging and interesting learning activities that can be completed in the classroom or by distance learning that will help you consolidate and apply what you have learned in the Student Workbook.

● Assessment Tasks – Summative assessments where you can apply your new skills and knowledge to solve authentic workplace tasks and problems.

Structure of the training program

This training program introduces you to performance outcomes, skills and knowledge required to plan and oversee and deliver human resources services. Specifically, you will develop the skills and knowledge in the following topic areas:

1. Develop human resources strategy. 2. Deliver human resources services.

3. Evaluate human resources service delivery.

4. Integrate business ethics and human resources practices.

Your facilitator may choose to combine or split sessions. For example, in some cases, this Training Program may be delivered in two or three sessions, or in others, as many as eight sessions.

Section 1 – Develop Human Resources

Delivery Strategies

This section is about the skills and knowledge required to develop a human resources strategy that meets organisational needs.

Scenario: Aligning HR to the business vision at Australian Hardware

Australian Hardware (a simulated business) is a large and expanding hardware and homeware retailer with approximately 140 stores located across Australia. In its vision statement, Australian Hardware outlines that it intends to lead the hardware and home-improvement market in Australia within five years. In order to realise this vision, the organisation will take the following strategic approaches outlined in its business plan:

● increase sales revenue and gross profit

● maintain or increase market share

● control direct and indirect operational costs

● maintain superior product and service quality standards

● establish reputation of Australian Hardware as a socially and environmentally responsible company.

As part of supporting these strategic approaches, Australian Hardware intends to review and revamp human resources (HR) practices to better align the company’s vision and strategy and contribute to the ongoing success of the business.

Connie is newly employed as HR manager at Australian Hardware. Her first order of business will be to review the organisation’s HR requirements in order to develop effective HR delivery strategies.

Australian Hardware simulated business information, including business and

operational plans, financial information, and policies and procedures can be located online at <http://simulations.ibsa.org.au/>.

What skills will you need?

In order to work effectively as a human resources professional, you must be able to:

 analyse business strategy and operational plans to identify human resources requirements

 review the business environment and its impact on the organisation's human resources requirements

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 develop HR options that comply with legislative requirements, organisational policies and business goals

 develop and agree on strategies and action plans for delivery of human resources services

 agree and document roles and responsibilities of human resources team, line managers, and external contractors.

Human resources requirements

Organisations have varying human resources requirements. It is the role of human resources professionals responsible for planning the delivery of HR services to identify these requirements and determine the right strategies for delivering those services. Human resources service requirements include:

● recruitment and selection

● employee development planning

● competency identification

● performance counselling

● training and development programs

● feedback tools and programs

● flexible work arrangements

● orientation and induction

● discrimination and harassment advice and support

● work health and safety (OHS/WHS)

● rehabilitation and return to work

● remuneration and benefits advice

● succession planning

● industrial relations advice

● workers’ compensation.

Depending on the organisation and the HR structure, HR service delivery planning and strategising may be the responsibility of HR professionals in different areas and at different levels of the organisation. For example, HR managers at a senior level may consult with all areas of the business to develop an overall approach to service delivery. HR professionals embedded in business units and reporting to line managers may make more localised decisions on customised service delivery, sometimes mediating services requested by employees and line managers and provided by centralised HR. Human resources professionals may also be specialists in recruitment, policy development or training, for example, and work within HR ‘centres of excellence’ providing services to other business units as they are required.

To determine requirements and ensure that the most appropriate strategies are used for the delivery of human resources services, human resources professionals are required to:

● analyse organisational strategic and operational plans

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Learning activity: Strategies to deliver HR services

Consider your organisational an organisation you would like to research.

● What services does HR deliver?

● How are services delivered?

● Who delivers the services? For example: ○ A centralised HR?

○ HR officers embedded in business units? ○ An HR ‘centre of excellence’?

○ A variety of HR professions who share responsibility and accountability for the delivery of services to the business?

● Does the organisation’s HR employ an overall strategy or strategies to deliver HR services in a coherent way and in accordance with organisational goals?

Use the link below to access the University of Birmingham human resources strategy. This is a good example of what is required when developing a human resources strategy.

● University of Birmingham, HR strategy 2007–2012, viewed January 2014,

<https://anhnguyet.files.wordpress.com/2012/04/university-birmingham_hr_strategy.pdf>.

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● What is the university trying to achieve through the human resources strategy?

● How is the strategy linked to the organisation’s goals and objectives?

● What areas of human resources service delivery does the strategy cover?

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Strategic and operational plans

Strategic and operational plans are the road map for an organisation and its employees to follow in order to achieve the organisation’s goals. These plans incorporate the values, vision and mission of the organisation and detail the strategies and specific actions or tactics required to achieve the organisation’s goals. They typically look ahead three to five years.

An organisation’s strategic and operational plans provide the following information.

Who are we? The organisation’s vision and values.

Where are we now? The organisation’s current strengths, weaknesses, opportunities and threats.

Where do we want to be? The organisation’s long-term mission and goals.

How will we get there? The strategies and actions that will be implemented to achieve organisational goals.

Learning activity: Accessing strategic and operational plans

Consider your organisation or an organisation you would like to research. If possible, access the organisation’s business, strategic or operational plans.

● Describe the organisation’s mission and values.

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● What is the organisation’s vision for the future?

● What are the organisation’s goals?

● What approach will the organisation take to achieving its vision and strategic goals?

If no plans are available to you, you may wish to study examples of simulated business documentation for:

● Australian Hardware

● CoffeeVille.

Simulated business information can be located online at

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Aligning the human resources strategy

A human resources strategy must be aligned with an organisation’s strategic and operational plans to ensure it actively supports the successful achievement of the organisation’s goals. The specific deliverables of a human resources strategy depend on the goals of the organisation’s strategic and operational plans. This can be very different from one organisation to another.

These differences are best demonstrated in the table below. The table describes some corporate strategies of different organisations and the human resources strategies implemented to achieve those goals. This is a good example of how human resources strategies can support organisations to achieve their corporate strategy. Organisations may cycle through different corporate strategies at different times based on their performance, the health of the economy and a range of other factors.

Corporate strategy Human resources strategies

Retrenchment (cost reduction)

Redundancies, wage reduction, productivity increases, job redesign, renegotiated agreements.

Growth Aggressive recruiting and hiring, rapid wage rises, job creation, expanding training and development.

Renewal

Managed turnover, selective redundancies, organisational development, transfer/replacement, productivity increases, and employee involvement.

Niche focus Specialised job creation, elimination of other jobs, specialised training and development.

Acquisition

Selective redundancies, transfers/replacement/job combinations, orientation and training, managing cultural transitions. 1

1_{Anthony, W., Kacmar, M. and Perrewe, P., 2002, ‘Strategic compensation systems’, Human}

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Learning activity: Strategic and operational plans

Research a copy of an organisation’s strategic plan and complete the table below. You can either access one from your current organisation or visit

<http://simulations.ibsa.org.au/>.

Strategic goal

Detail the strategic goals from the strategic plan you have accessed.

HR Strategy

Detail the human resources strategies that you could implement to assist in the achievement of these goals.

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Analysis of strategic and operational plans

Human resources professionals must obtain copies of an organisation’s strategic and operational plans for analysis to determine the human resources requirements of the business.

Analysis of an organisation’s strategic and operational plans involves:

● identifying the vision, values and mission of the organisation to understand, from a strategic perspective, what is important to the organisation (values), what the organisation is trying to achieve (vision) and what the organisation is doing to achieve its vision and mission

● identifying the organisation’s current state – including its strengths, weaknesses, opportunities and threats – to understand the successes and challenges the organisation is currently facing

● identifying the organisation’s goals to understand how the organisation will

measure its success and following from there, the success of the human resources strategy

● identifying the strategies and actions that will be implemented to achieve

organisational goals to determine how human resources can specifically support the achievement of those strategies, actions and goals.

Reviewing diversity-related goals

Organisations may have particular goals relating to fostering the diversity of its workforce. Such goals may or may not be articulated as part of the organisation’s vision, values or strategic objectives. Nevertheless, policies and procedures may state the organisation’s commitment to diversity and eliminating discrimination. Such policies may also express the organisation’s legal obligations with regard to ensuring workplace equity.

As part of developing your approach to delivering HR services, you will therefore need to consider how to deliver HR services to support diversity-related goals and integrate your activities with other diversity-related programs.

Learning activity: Interpreting strategic and operational plans

Using the same strategic plan example you used for the previous activity identify the following.

Vision, values and mission of the organisation

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Organisation’s: ● Strengths ● Weaknesses ● Opportunities ● Threats. Organisational goals Strategies and actions to be implemented to achieve organisational goals Strategies and actions to be implemented to achieve organisational goals related to diversity and equity

Human resources professionals must have a good understanding of the organisation’s strategic and operational plans to ensure that they determine the most appropriate strategies for delivering the human resources services.

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Review external business environment

In order to ensure your approach to HR service delivery is realistic and achievable, you will need to consider the external business environment. One useful model for analysing the types of external forces acting upon an organisation, determining challenges and creating opportunities for the business is the PEST model. PEST stands for:

P

Political (includes legislation)

E

Economic

S

Social

T

Technological

As you develop strategies to deliver HR services, you will need to consider all four aspects of the external environment. Let’s look at these in more detail.

Political environment

The political environment includes legislation and government legislative direction that could affect what HR services are necessary and how they are delivered.

When determining the most appropriate model for the delivery of human resources services it is important that human resources professionals consider the relevant legislative requirements and organisational policies that may be impacted by the model chosen.

Legislative requirements can include:

● award and enterprise agreements, and relevant industrial instruments

● mandatory compliance with industry codes of practice

● legislation that affects business operations such as: ○ the Fair Work Act 2009

○ work health and safety (OHS/WHS) ○ equal opportunity

○ anti-discrimination legislation.

Failing to consider these requirements could result in:

● employee grievances due to the organisation not complying with terms and conditions set out by their applicable award, enterprise agreement or other industrial instruments

● the organisation having a poor reputation in the marketplace for non-compliance with industry codes of practice affecting its ability build alliances with industry partners

● negative customer perceptions

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● disgruntled employees due to the organisation’s failure to deliver against stated policies and procedures

● negative employment brand in the marketplace impacting on the organisation’s ability to attract and retain high performing team members.

Let’s look at an example political environment:

Example: Australian Hardware political environment

Relevant legislation may include, for example:

● Privacy Act 1988 (Cwlth)

● state-based anti-discrimination Acts

● Australian Securities and Investments Commission Act 2001 (Cwlth)

● Competition and Consumer Act 2010, including the Australian Consumer Law

(ACL).

Of particular interest for human resourcing is anti-discrimination legislation. Australian Hardware needs to ensure HR services are delivered to meet the organisation’s legal obligations with regard to fairness in recruitment practices or rewards and recognition, for example.

Economic environment

The economic environment includes factors which affect the ability of organisations to compete with other organisations and to maintain or improve profitability.

Example: Australian Hardware economic environment

Interestingly, sluggish growth and moderate increase in the Australian unemployment figures may present an opportunity for hardware and home-improvement retailers such as Australian Hardware. This opportunity exists despite other retailers suffering from low consumer confidence, poor sales and overseas competition particularly through e-commerce. Hardware retailers have benefitted from the sense among homeowners that now is the time to choose renovation and home improvements rather than selling and moving to an already renovated house.

According to IBISWorld, the trend towards home improvements is linked to the increase in residential housing prices, which is due to the housing shortage and easier access to finance and government incentives, amongst other factors. If current trends continue, the industry is expected to grow by 23% from 2011 figures to reach $14.2 billion in 2016–17.2

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From a human resourcing perspective, the economic environment is important for the delivery of services. Naturally, Australian Hardware HR needs to ensure costs of

services are kept low enough to contribute to the achievement of profitability goals. HR also needs to consider the changing marketplace in order to take a more strategic approach to helping the organisation meet its need to provide value to customers. For example, HR needs to consider customer needs related to the economic environment. What are they able to or willing to pay? What economic forces might indicate a rise in demand for some products or services? HR will need to consider how it can contribute to helping the organisation meet the needs of customers through more effective and targeted recruiting practices, rewards and recognition to retain the right people, and partnering with the store managers and customer-facing employees to support their needs.

Social environment

The social environment includes all demographic and psychographic factors (customers’ ways of thinking, values and lifestyle) that influence the organisation’s image and success in marketing its products and services. The social environment may also have a more or less direct influence on how an organisation may position itself as an employer and attempt to attract the right people to work for it. Let’s look at another Australian Hardware example.

Example: Australian Hardware social environment

Consumers are increasingly aware of the impact of business activity on the local community. Consumers demand that businesses consider the impact of their activities and work to promote healthy community involvement. Consumers are also becoming more aware of working conditions in other countries want to contribute to better global social and economic outcomes.

Consumers are also concerned about the environment. Australian Hardware will endeavour to promote itself as environmentally and socially responsible and conduct business operations accordingly. In this way, Australian Hardware will offer value to the socially and environmentally aware consumer and position itself as a leader in social and environmental responsibility.

From a human resourcing perspective, Australian Hardware needs to ensure the delivery of HR services lives up to its environmental commitments. Australian Hardware will also need to position itself as a responsible employer in order to attract talented staff and staff who are committed to upholding and promoting values of Australian Hardware.

Technological environment

The technological environment includes the rapidly changing telecommunications environments including the rise of the internet as a business channel and e-commerce. The technological environment also includes business tools to increase efficiency and reduce the cost of delivering HR services to internal clients and gathering performance

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Example: Australian Hardware technological environment

Internet, information, and social networking technologies continue to evolve and provide new challenges and opportunities for marketing. Australian Hardware will continue with its effective use of its website to promote and sell products and social networking to reach its target markets.

From an HR perspective, Australian Hardware will need to ensure its Human Resources Management System (HRMS) is able to effectively manage such things as online payroll and benefits enquiries, and self-management of leave enquiries and requests. The HR management system will need to collect HR information on important metrics such as leave hours, absences, and training requests and approvals, for example. The HRMS will also need to integrate with existing systems for payroll and accounting as well as the organisation’s resource planning (ERP) software system.

To reduce costs and stay competitive in a dynamic and rapidly changing technological environment, Australian Hardware is considering outsourcing some automatic and self-serve HR functions to a specialist organisation. Such a move may have the desired effect of allowing Australian Hardware HR to focus less on routine tasks and take a more strategic role in resource planning.

Learning activity: PEST analysis

Consider your own organisation or an organisation you would like to research. Research the PEST environment and analyse its possible effect of the delivery of HR services. Political

Economic

Social

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Consult with managers

When determining strategies for the delivery of human resources services it is important for human resources professionals to consult with line and senior managers. This consultation will provide information regarding the human resources services needs of the teams and departments that they manage. Senior managers will be able to provide a more strategic perspective on the organisation’s need for services that advance the aims of the business. On the other hand, it is important to gain the perspective and support of line managers, who have a more direct relationship with customer-facing staff and often a more intimate knowledge of operations. If it is your responsibility to propose

recommendations for HR changes, you will need to consult with a wide range of people: those who must agree of have power of veto over your plans; those who must implement your plans; those whose input you need to, for example, understand technical issues or a variety of perspectives; and those who have final say and are responsible and

accountable for the decision to go ahead.

Consultation methods

There are a number of consultation methods that human resources professionals can use to obtain information from managers regarding their human resources service needs. These include the following.

● Meetings: Meetings are most effective for obtaining information regarding the specific needs of a team or department. They are also an excellent opportunity to engage managers in the design of the human resources strategy which will often prove to be beneficial during implementation. Managers that are consulted with during the design phase often feel like a valuable contributor and then are more likely to actively support a successful implementation.

● One-on-one meetings/interviews: A one-on-one meeting is for situations where feedback is obtained by speaking with one person at a time. This is particularly important when trying to obtain very specific feedback or when the subject matter maybe confidential or controversial and feedback where people might be

uncomfortable sharing the information with others or speaking in groups.

● Focus groups: Focus groups are used to consult with groups of people. They are often the most time efficient method for obtaining information from large

departments that have several managers responsible for teams of employees who all do the same thing. For example, a focus group could be used to consult with managers in a call centre where the team members complete the same role under the same work conditions.

● Surveys: Surveys are an excellent tool for obtaining information from large groups of managers regarding their human resources needs. Surveys to obtain information regarding human resources requirements could include the following questions.

○ How many roles have you recruited in the last 12 months?

○ What orientation and induction programs do you currently provide to newly hired employees?

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Learning activity: Consulting with managers

Consider your organisation, or an organisation you would like to research.

● What managers or stakeholders would need to be consulted on HR requirements in order to meet business needs?

Develop a survey that you could provide to managers or other stakeholders to obtain information regarding their human resources service requirements.

Human resources service delivery models and

strategies

Organisations implement various models for the delivery of human resources services depending on the organisation’s needs. It is important that human resources

professionals understand the different options available to allow them to develop customised HR service delivery models that are beneficial to the organisation they support. Let’s first take a look at some general approaches to HR service delivery. These may be described as the traditional approach and the Dave Ulrich Model.

Traditional approaches to HR

In the traditional HR model, HR is a single team, comprised of generalists, specialists and administration.3

The model may be applied in different ways, mainly based on the size of the organisation. HR may be comprised of a single team of HR generalists, as is common in smaller

organisations. In such organisations, an HR generalist may be a ‘jack-of-all-trades’; performing the range of HR functions from administrative tasks to some aspects of business planning. In larger organisations, HR service delivery may be more specialised. HR service delivery may be organised into HR specialists (such as industrial relations experts, recruitment experts or training experts) and administration, or several teams organised by business units or locations in accordance with the corporate strategy. The traditional HR model – in contrast with the Dave Ulrich model discussed below – may be characterised as administration-focused. Principally, HR provides essential services to the business, as decided by the business, which then is enabled to perform the real work and achieve the vision of the organisation.

It is important to note that the traditional, administrative-focussed, less strategically engaged model of HR is still very common in many organisations.

3_{Swift, G., 2012, ‘Human resource service delivery’ in Managing people and organisations, Eds.} Taylor, S, Woodhams, C, CIPD.

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Dave Ulrich’s ‘three-legged stool’ or classic model

The ‘three-legged stool’ model, or classic HR model was developed by David Ulrich and others, and is now generally considered best practice. Although its specific application in organisations that adopt it can vary according to business needs, the main point of contrast between this model and the traditional HR model is the focus on ‘business partnering’.

In the traditional HR model, the focus is on performing administrative tasks or providing expert advice to, and services for, line managers. The focus of the Ulrich model is on partnering with managers at all levels to deliver services in the best way possible to help them meet the needs of the business – to recruit the right people, performance manage staff and meet customer needs. In addition, the Ulrich model entails the engagement of HR in leading the organisation through shaping strategic approaches to, for example service delivery and building organisational capability to achieve the organisation’s goals and vision.

The model is organised into three elements:

● business partners

● shared services

● centres of excellence.

The diagram below summarises the Ulrich model:

Business partner

• Establish relationships with line managers

• Help meet business unit objectives.

Shared services

• Deliver HR services through various channels such as call centres, IT

• May be outsourced • HR shares resources and

costs with various business units.

Centres of excellence • Create HR frameworks • Deliver strategic initiatives • Comprise specialist areas

and expertise: training, recruitment, etc.

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Note that the model retains the functions of traditional HR, but organises them into three main coordinated areas. The main addition within the Ulrich model is the prominence of business partnering, which is given its own element in the Ulrich model.

Note that particular organisations may take their own distinctive approaches to HR service delivery to meet particular needs. For example, they may apply the Ulrich model wholesale; or, they may retain older HR structures, overlaying a more strategic, business partnering approach to service delivery.

Let’s take a closer look at the application of HR models and various strategies that may form components of organisations’ specific models of HR service delivery.

Common service delivery strategies

Human resources services are provided through a variety of approaches. Organisations typically implement a model including a combination of strategies that best suits their business needs. Human resources professionals must be aware of the options available when determining the most suitable strategies or approaches for their organisation. The most common strategies include the following.

Business partner

Human resources professionals are assigned a business unit or department in the organisation for which they are provide human resources support. This support is typically more strategic, that is general and overarching, than tactical.

Generalist A team of human resources professionals provide generalist support across the organisation. Individuals within the team have general human resources skills and rely on external specialists for expert advice in specific areas, e.g. work health and safety or industrial relations.

Call Centre Managers and employees access human resources support and information through a telephone call centre.

e-HR Managers and employees access human resources support and information through an intranet site. This tool provides information and tools for managers and employees to manage their own human

resources needs.

Centre of Excellence

Human resources professionals are organised into teams according to their specialist skills. For example, there may be a learning and development team, employee relations team, and remuneration and benefits team. These teams provide specialist advice across the organisation and managers and employees work with the team they require advice and support from.

Outsource Human resources services and support are outsourced to specialist HR service delivery organisations. Businesses often use a blend of in-house and outsourced services. The most common outsourced HR services are payroll and recruitment and selection.

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Learning activity: HR service delivery strategies

Access the following article online:

● Sullivan, J., ‘Selecting an HR strategy’, Workinfo.com, viewed January 2014, <http://www.workinfo.com/free/Downloads/138.htm>.

This article provides a summary of ten human resources service delivery strategies including the advantages and disadvantages of each.

After reading the article, summarise each of the ten strategies described including the advantages and disadvantages of each and the situations that each strategy is best suited for.

Model Summary

1. Advantages

Disadvantages

When would you use this model?

2. Advantages

Disadvantages

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Model Summary

3. Advantages

Disadvantages

4. Advantages

Disadvantages

5. Advantages

Disadvantages

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Model Summary

6. Advantages

Disadvantages

7. Advantages

Disadvantages

8. Advantages

Disadvantages

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Model Summary

9. Advantages

Disadvantages

10. Advantages

Disadvantages

The impacts of service delivery models on legislative requirements

You will need to consider options for HR service delivery in light of organisational values, commitments and legal obligations. The model used for the provision of human resources services can impact the organisation’s ability to meets its legislative requirements. Having the right service delivery model means having the right resources with the necessary skills and experience to ensure the organisation meets its legislative requirements. Let’s look at a case study example:

Case study: Tuff Plastics

Tuff Plastics is a manufacturing organisation. It has a highly unionised workforce and experiences a lot of industrial issues. Due to the physical demands of employees working on a processing line, it also has a lot of employee injuries and so requires a significant focus on WHS/OHS issues.

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A generalist model for providing human resources services would not be in the best interests of Tuff Plastics as it would not provide the specialist human resources knowledge and skills required to ensure compliance with industrial relations and work/occupational health and safety legislation. Under a generalist model, the human resources professional supporting Tuff Plastics would need to have expertise in industrial relations, union management, health and safety, injury management as well as all other functions of human resources. This is such a diverse range of skills and focus that important aspects of the legislation may be overlooked.

Tuff Plastics would benefit from an outsourced or centres of excellence model where experts could be engaged to provide the specialist advice and services required. Under these models, the human resources professional would have time to focus on

supporting the organisation to achieve its strategic goals, and experts in industrial relations and occupational health and safety could be engaged to ensure legislative requirements were being met. Under these models the organisation is getting all of the support and focus it needs to achieve all of its goals and meet all of its obligations.

Learning activity: Human resources service delivery strategic options

Consider each of the organisations below and detail the service delivery strategic options that could be appropriate for that organisation and why they are appropriate.

Organisation Strategy Why?

Medium size manufacturing organisation with 1,000 employees across Australia. The organisation relies heavily on performance data to manage the business.

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Organisation Strategy Why? Three-year-old small business with 150 employees and a new HR function. A global organisation with over 10,000 employees that is focused on minimising costs through maximising productivity.

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Develop models

After considering the models and strategies available for structuring the delivery of HR services, HR professionals need to translate those options into customised models that are relevant to their organisation. This involves demonstrating how different strategies can support the provision of human resources services across the business, including the strengths and weaknesses of each. These strengths and weaknesses include consideration of costs, benefits and risks, which will be discussed in more detail in the next topic.

The following is an example of a TAFE’s generalist delivery model. The TAFE is considering the strengths and weaknesses of their current generalist model (below) in comparison with a centres of excellence model.

Regional Human Resources – Service Delivery Model

Teams

Area 1 Area 2 Area 3

Support the following campuses:

● Coonabarabran

● Quirindi

● Tamworth

● Gunnedah.

● Narrabri

● Moree

● Armidale

● Tingha.

● Goondiwindi

● Tenterfield

● Glenn Innes.

Strategy

● people development

● organisational culture and change

● workforce planning

● equity and diversity.

● condition management

● recruitment and employment strategies

● workplace communication.

● employee and industrial relations

● conduct and performance

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Services

● people development

● workforce planning

● organisational culture and change.

● payroll

● recruitment and employment strategies

● workplace communication.

● employee and industrial relations

● safety working and learning strategies.

The table below details the strengths and weakness that the TAFE has identified for each of the models including the cost benefits and risks.

Strengths Weaknesses G ener alist mo del (c urr ent)

● High customer contact with a high level of line manager support provided.

● HR team members build close relationships with the business, which allows them build solutions that fit the unique needs of the business unit.

● Due to close relationship with the business, HR team members respond quickly to business needs.

● High ‘personal’ credibility between HR team members and line managers.

● Difficulty in attracting and recruiting HR team members with knowledge and skills across all HR functions.

● Expensive due to high salaries required to attract and retain broad skill set required for generalist HR team members and the fact that external consultants are required for specialist support.

● HR team members can become too loyal to their business unit leadership and less so to corporate leadership resulting in inconsistent HR strategies and initiatives being implemented across the broader business.

● Generalists can spend too much time ‘hand holding’ and doing tactical work rather than focusing on strategic issues resulting in the organisation’s ability to meet strategic goals being negatively impacted.

● HR team members may have insufficient technical knowledge to solve complex one-of-a-kind problems which can expose the organisation to risk.

● No central HR knowledge base is established because information transfer between HR team members in different business units is often limited and most information is never captured in central HR.

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Strengths Weaknesses Cent re of E xcelle nce M od el

● Issues are identified and solved quickly, as HR team members are focused on specific areas.

● Internal HR team members have a better understanding of the business and its operation than external consultants.

● Less need for use of expensive external specialist consultants. This can significantly reduce costs.

● Expert knowledge held within the

organisation, which builds organisational capability.

● Ability to manage risks proactively as HR team members have the specialist knowledge required to work with the

business in a proactive capacity rather than reactive which is often the case when engaging external consultants.

● Inability to attract and recruit HR team members with the specialist knowledge required which could expose the organisation to risk by not having access to the skills and knowledge required to resolve complex issues.

● Significant set-up costs and time to build teams with the skills and knowledge required.

● Unable to use knowledge that external consultants have attained through supporting other organisations with similar issues which could delay the identification of resolutions and impact the organisation’s ability to implement best practice.

● Line managers have more than one contact within the HR team which can lead to frustration as to who to contact for what support and often results in not engaging with HR as it is considered ‘too hard’.

● Managers may continue to use existing relationships with external

consultants and therefore double the cost to the organisation for the same services, for example managers continue to use external recruitment agency instead of in-house functions.

Human resources professionals should use tables like this one when presenting options to management teams. These tables allow

management teams to understand the strengths and weaknesses of each option which allows them to make an informed decision as to which option is most appropriate for their organisation.

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Learning activity: Case study: Identifying options

Read the DuPont scenario provided in the Appendix at the end of this book. DuPont is a large company that required an updated approach to HR.

Once you have read the four options identified by the workgroup outline some possible advantages and disadvantages to for each option in the space provided below.

Decide on an option, then read the case study conclusion provided below.

Advantages Disadvantages

Option 1

Option 2

Option 3

Option 4

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Case study: Conclusion

In the decision process DuPont quickly eliminated Option 1 and Option 2. The changes were not drastic enough and seem to be only steps to reach higher economy of scale. Option 3 and option 4 focus on responding to both challenges identified by Tim Farrell. They allow HR to harmonise processes and reduce the time spent on administrative tasks. The geographic separation of HR tasks and the centralisation of administrative processes further help in implementing a clear definition of roles and responsibilities. In June 2001, DuPont decided to select option 3 and planned to build a shared service centre (SSC) in Asturias, Spain. In April 2002 the centre called ‘CallHR’ went live for the first country. By July 2004 ten countries completed the transition of administrative services to the SSC, and by the end of 2005 DuPont decides to outsource the SSC to Convergys. Convergys is one of the global leaders in providing HR Services.

Assess costs and benefits for delivery options

In determining options and strategies for service delivery, you will need to consider the costs of options and the benefits associated with each. The most commonly used

measure of cost versus benefit is the return on investment (ROI). Another consideration is risk management. Risks may be associated with each option and represent uncertainty for organisations. Let’s look at cost, cost-benefit analysis and risk management in greater detail.

Cost

When presenting options for the delivery of human resources services it is important to include information regarding the costs of each option.

This involves identifying all of the associated costs – both set-up and ongoing costs for each option – and presenting those costs to management teams to allow them to compare cost implications of each model.

Human resources service delivery model costs could include:

● salaries and wages

● on-costs, the additional costs on top of salaries such as superannuation, workers compensation, payroll tax, etc.

● recruitment of resources (set-up cost only)

● technology and systems (set-up and ongoing costs)

● office space and equipment (set-up and ongoing costs)

● external consulting costs (if applicable)

● other costs (stationery, travel, venue hire for training, printing, etc.).

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Item description Cost ($)

Option A: Centre of Excellence Set-up costs

Recruitment $25,000

Technology and systems $45,000

Equipment $30,000

Total set-up costs $100,000

Ongoing costs (annual)

Salaries and wages $250,000

On-costs $35,000

Other costs $15,000

Total ongoing costs $305,000

Option B: Generalist Set-up costs

Recruitment $45,000

Equipment $30,000

Total set-up costs $120,000

Ongoing costs (annual)

Salaries and wages $300,000

On-costs $42,000

External consulting $80,000

Other costs $25,000

Total ongoing costs $452,000

The total costs for each option are presented in the following cost comparison table:

Option Total set-up costs Total ongoing costs (annual)

Total costs (for initial year)

A. Centre of Excellence $100,000 $305,000 $405,000

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Cost-benefit analysis

Costs are not the only consideration for organisations, otherwise the least-cost option would always be chosen. Benefits must also be considered and weighed against the total costs of options.

Cost-benefit analysis involves identifying the costs of an action (such as implementing a HR model) and assessing the benefits to the organisation as a result of taking this action. Essentially, the benefits to the organisation should outweigh the costs associated with implementing and operating the model.

The evaluation of options may be as simple or complex as required. Evaluation may require only a projected income against cost. On the other hand, for actions that will have a longer-term impact, you may need to determine the future value of revenues, future operational costs, depreciation of assets such as HR software systems, for example, to fully account for all costs and benefits associated with the provision of services.

If a cost-benefit analysis is required, at a minimum, you should at least provide a detailed list of costs alongside the associated benefits. This breakdown will assist decision-makers in their determination whether to proceed with the proposed action or to decide on a modified approach to the action.

Return on investment calculation

A key concept in cost-benefit analysis is return on investment (ROI). Calculating ROI allows you to quantify and compare the relative value to organisations of different approaches and options. In order to calculate the ROI of an option, you need to be able to express benefits in terms of dollar values. For example:

● How much extra revenue will sales people be able to generate through time-savings or increased sales skills?

● How much money will the organisation save through increased efficiency or reduced recruitment or delivery costs?

Often such values must be estimated and are subject to a fair amount of uncertainty. The basic formula for ROI is:

ROI is thus presented as a percentage. For example a negative percentage would

represent a loss; 10% may represent a modest gain, comparable to financial investment. Gains of over 100% indicate a strong positive return.

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HR and risk management

A risk assessment should always be completed before implementing a service delivery model. According to the risk management standard, AS/NZS ISO 31000:2009, risk assessment comprises the overall process of:

1. Risk identification.

2. Risk analysis to determine the nature and level of risk.

3. Risk evaluation to determine the acceptability of the risk and the necessity for implementing controls.4

Risk associated with the delivery of HR services

You will need to closely examine options to identify sources of risk. For example, one risk could be that an option for HR service delivery may be seen as incompatible with

organisational practices and rejected by staff. This would be a high risk option that should not be chosen as the best option.

To perform an analysis of risk, you will need to identify the consequences of risk and the risk likelihood. In financial terms, the consequence of risk is expressed in dollar terms: how much is at stake? The likelihood of risk is often expressed as a probability

represented by a decimal fraction, for example, 0.10 or 10%. A risk of 10% can be considered also as a likelihood of success of 90%. Multiplying consequence (in dollar terms) by likelihood gives you a value for the risk that can be factored into or cost-benefit analysis to give you the expected value or risk-weighted value of the projected benefit. For example you may wish to determine the risk level associated with reduced

recruitment costs due to implementation of a service delivery option. The anticipated cost saving is $500,000. The estimated likelihood of success is 90%. Therefore the risk-weighted projected benefit is $450,000.

The basic formula for ROI weighted for risk is:

( )

In the example above where the anticipated cost saving is $500,000 and the risk-weighted projected benefit is $450,000, let’s assume that the cost of this option is $375,000. In this case, ROI weighted for risk would be calculated as follows:

( )

4_{Standards Australia, 2009, AS/NZS ISO 31000:2009 Risk management – principles and}

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Once you have performed risk analysis, you will need to determine whether the risk or the expected value of the benefit is acceptable to the organisation. If not, you may need to consider other options in order to offload risk to others. For example, you may consider outsourcing some functions or purchasing insurance. You may also need to consider less risky options or consider ways to implement the option that will more effectively control the risks.

Learning activity: ROI and risk management

Consider the total set-up costs of options A and B for the initial year of each option (provided in the cost analysis on page 32). Now consider the following information:

Option Projected benefit Likelihood of success

A. Centre of Excellence $800,000 0.80

B. Generalist $1,000,000 0.90

Calculate the ROI and the risk weighted ROI for each option.

Develop strategies and action plans

Once the most appropriate delivery model has been identified it is time to develop and agree on the strategies and action plans for the delivery of human resources services.

Service delivery models, strategies and action plans

The simplest way to describe the difference between the human resources service delivery model, strategies and actions plans is as follows.

The HR delivery model

The delivery model is how the human resources team is structured to support the business (some delivery models are listed on page 18). For example, support could be provided through a:

1. self-service model

2. centres of excellence model 3. outsourced model

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The HR strategy

The human resources strategy details how services are managed across the business to support the achievement of the

organisation’s vision and goals. For example, the recruitment and selection strategy defines the organisation’s approach to attracting and retaining the right people to ensure the organisation has the resources it needs to achieve its goals.

Action plans Action plans detail how the strategies are implemented across the business. For example, the recruitment and selection action plan details exactly what activities need to be undertaken and who is responsible for developing and implementing the policies and procedures for recruitment and selection. This includes the policies and procedures for activities such as: managing applications (internal and external), assessing candidates, checking references and making job offers.

Developing strategies

Human resources professionals are responsible for developing the strategies to deliver human resources services that support the business to achieve their vision and goals. The model below describes the process for developing human resources service strategies.

Motivation, maintenance and retention strategies

Hiring strategies Motivation _strategies

Organisation vision and strategic goals

Human resources strategic goals ●Workforce planning ●Recruitment and selection ●Performance management ●Remuneration and benefits ●Learning and development ●Work health and safety ●Employee relations ●Termination ●Resignation ●Redundancy ●Retirement

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Hiring strategies

Hiring strategies need to be in place to ensure that the organisation has the ‘right

resources’ at the ‘right time’. It includes functions such as workforce planning to forecast needs and recruitment and selection to acquire those resources.

Motivation, maintenance and retention strategies

These strategies will set out programs that manage, reward and recognise performance and provide employees with opportunities to grow and develop. These programs are focused on engaging, motivating and retaining employees once they have been hired. It also includes programs that maintain employee relations through ensuring compliance with legislative requirements such as health and safety and industrial relations laws.

Separation strategies

Separation strategies provide policies and procedures for managing both voluntary and involuntary separations.

When developing these strategies, human resources professionals need to consider the vision and goals of the organisation as these will influence the focus areas of these strategies. For example, an organisation that is focused on reducing operations and making employees redundant would not benefit from having strategies focused on hiring. It is far more valuable to the organisation to focus on strategies that motivate the

employees that need to be retained to perform in the reduced operation and manage the separation of those employees impacted by redundancy.

Example: JMH Insurance

JMH Insurance specialise in providing car insurance to its customers across Australia. It has a contact centre based in Melbourne to manage new business and existing

customer enquiries. The organisation currently employs 500 employees including those in management roles. The business has experienced substantial growth in the last 12 months and is looking to expand operations over the next 12 months. It will be opening a new contact centre in Sydney in six months’ time which will increase staffing levels by approximately 200 employees over a two year period.

Human resources services are currently provided through a business partner model with two human resources business partners based at the Melbourne site who support line managers in their resourcing needs. The two human resources business partners provide all human resources services themselves.

After realising the vision and strategic goals of the organisation the human resources manager knew the organisation’s human resources services delivery model and

strategy needed to be reviewed to ensure it supported the achievement of these goals. The human resources manager developed the following service delivery model and strategies for the provision of human resources services for the business.

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JMH Insurance

Human resources services strategic goal

To provide human resources services that support the growth of the organisation through a focus on attracting and retaining key talent, fostering a high performance

culture through rewarding exceptional performance and providing learning and development opportunities.

Service delivery model

Human resources services will be delivered through a human resources business partner model supported by outsourcing some functions to third-party specialist

providers.

Service strategies

Hiring strategies

Workforce planning Human resources business partners to work with business leaders and line managers to forecast required staffing levels to ensure resources are available at the right time.

Recruitment and selections

Human resources business partners to work with third-party recruitment providers and line managers to recruit and select the right people at the right time.

Motivation, maintenance and retention strategies

Performance management

Human resources business partners to support business leaders and line managers to implement performance

management programs to ensure a high performance culture.

Remuneration and benefits

Human resources function to develop and implement a remuneration and benefits program that provides business leaders and line managers with a tool to reward exceptional performance.

Learning and development

Human resources function to develop and implement learning and development programs that provide employees with an opportunity to increase their skills and capabilities.

Work health and safety

Human resources business partners to work with third-party WHS and injury management specialists to support business leaders and line managers to provide a safe working

environment and comply with legislative requirements.

Employee relations Human resources business partners to provide guidance and support to business leaders and line managers to ensure that employee relations are managed in compliance with legislation and organisational policies and procedures whilst at the same time maintaining employee engagement.

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Separation strategies

Termination Human resources business partners to provide guidance and support to business leaders and line managers to manage employee separations according to legislative requirements and organisational policies and procedures.

Resignation Redundancy Retirement

Learning activity: Develop strategies

You are the new human resources manager at either of the following simulated businesses:

● Australian Hardware

● CoffeeVille.

Simulated business information, including business and operational plans, financial information, and policies and procedures (including performance management) can be located online at <http://simulations.ibsa.org.au/>.

The management team has asked you to develop a strategy for the provision of human resources services for the business. They want a model that will support the goals of the organisation.

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What would be the focus areas of your service strategy and why?

Document the service strategies you might deploy for each of the following strategic focus areas;

(For help with completing this activity, refer to the example above for JMH Insurance).

Hiring strategies

Workforce planning

Recruitment and selections

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Motivation, maintenance and retention strategies Performance management Remuneration and benefits Learning and development Workplace health and safety Employee relations Separation strategies Termination Resignation Redundancy Retirement

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Develop action plans

As previously discussed, action plans detail how the strategies are implemented across the business. They detail all the tasks involved in implementing the strategy, who is responsible for completing each task and when it will be completed. Action plans also provide a schedule for tracking who is responsible for what by when.

Roles and responsibilities

When determining strategies for the delivery of human resources services it is critical that you clearly define the roles and responsibilities of:

● human resources team members

● line managers

● third-party providers.

Failing to clearly outline who is responsible for what can result in confusion and a failure to complete tasks in time causing disruptions in the organisation’s performance and lowered productivity.

Roles and responsibilities are best defined when documenting and agreeing the policies and procedures that will be implemented to manage the provision of the service.

Example JMH Insurance

When completing the action plan for the implementation of the recruitment and selection strategy for JMH Insurance the human resources manager included the following tasks:

● recruitment policies to be agreed upon, documented and posted on the employee intranet

● recruitment procedures to be agreed upon, documented and posted on the employee intranet.

It is during the completion of these two tasks that the roles and responsibilities of the human resources team, line managers and third-party providers should be detailed. For example, the procedure for advertising a vacant role was documented at JHM Insurance as follows.

No. Process step Who is responsible

1 Vacancy identified. Line manager

2 Position description completed. Line manager

3 Request for hire completed and sent to third-party

recruitment provider (including copy of position description).

Line manager

4 Draft advertisement completed. Third-party provider

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No. Process step Who is responsible

6 Approved advertisement sent to human resources business partner.

Third-party provider

7 Advertisement posted internally. HR business partner

8 Advertisement posted externally. Third-party provider

Example: JMH Insurance

The human resources manager at JMH Insurance has completed the following action plan to manage the implementation of the organisation’s recruitment and selection strategy.

Action Plan

Strategy Recruitment and selection

Strategy goal Human resources business partners to work with third-party

recruitment providers and line managers to recruit and select the right people at the right time.

Strategy owner Paul Hooper – HR Manager

Action Required By Who By When

Third-party recruitment provider panel to be identified.

Paul Hooper 1 March

Service level agreement with third-party providers developed and signed by all parties.

Paul Hooper 15 March

Recruitment policies to be agreed upon, documented and posted on the employee intranet.

Jeremy Hirst 15 March

Recruitment procedures to be agreed upon, documented and posted on the employee intranet.

Jeremy Hirst 22 March

Training provided to third-party recruitment providers regarding JMH Insurance business and operations and recruitment policies and procedures.

Tania Smith 31 March

Recruitment policies and procedures training provided to all business leaders and line managers.

BSBHRM501 Student Workbookpdf 2001

Manage human

resources services

BSBHRM501B

Student Workbook

BSBHRM501B Manage human

resources services

Table of Contents

Introduction

Features of the training program

Structure of the training program

Recommended reading

Section 1 – Develop Human Resources

Delivery Strategies

What skills will you need?

Human resources requirements

Strategic and operational plans

Aligning the human resources strategy

Analysis of strategic and operational plans

Reviewing diversity-related goals

Review external business environment

P

E

S

T

Political environment

Economic environment

Social environment

Technological environment

Consult with managers

Consultation methods

Human resources service delivery models and

strategies

Traditional approaches to HR

Dave Ulrich’s ‘three-legged stool’ or classic model

Common service delivery strategies

The impacts of service delivery models on legislative requirements

Develop models

Assess costs and benefits for delivery options

Cost

Cost-benefit analysis

Return on investment calculation

HR and risk management

Risk associated with the delivery of HR services

Develop strategies and action plans

Service delivery models, strategies and action plans

Developing strategies

Hiring strategies

Motivation, maintenance and retention strategies

Separation strategies

Develop action plans

Roles and responsibilities