ALIGNING HUMAN RESOURCE WITH BUSINESS STRATEGIES Dr.

Rajen Mehrotra*
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There are many authors who have written on how business strategies are formulated in organizations. In this article I have shared my own experiences of aligning the human resource with business strategies, as well as experiences of some of my professional colleagues in other organizations, as narrated to me by them. The classical approach has been for the organization to undertake an exercise in developing a Vision, Mission statement, scanning the external environment by carrying out a Political, Economic, Social, Technological and Industrial Relations (PEST & IR) analysis, then assessing stake holders expectations, and undertaking a Strength, Weakness, Opportunities and Threats (SWOT) analysis. This is then followed by working out long term & short term goals / objectives coupled with a feasibility analysis based on existing and likely future resources. These are then followed by developing business strategies for achievement of each goal / objective and having a mechanism in place for taking suitable corrective actions on the business strategies to achieve the goals / objectives. Most organizations develop an action plan wherein individuals are responsible for implementing the business strategies, so as to achieve the planned goals / objectives. Many organizations are presently also using the Balanced Scorecard to help track each component of their business strategies. In certain organizations the business strategies are at times slightly fuzzy and dependent on many variables; hence, in those cases accountability becomes tough. This process involves participation by a large group of

personnel working in each function, including persons working in Human Resource (HR) / Personnel department, who in some organizations also drive the process along with the CEO of the organization. Prof. Richard Whittington, a strategy specialist and a Professor at the Business School of University of Oxford , has identified certain approaches, such that when there are rising trade union actions in some countries, wide-scale regional conflicts, rising oil prices, etc., the strategy development by the businesses will have to consider the objections of other stake holders, for the success of the business strategy. The present situation in India is similar to that stated by Whittington, as most enterprises have been hit by the global and domestic economic slowdown and also most enterprises are finding it tough to achieve their planned top and bottom line. Also most manufacturing enterprises in India for their work presently also heavily depend upon the workforce provided by contractors / service providers / temping companies and in certain cases ancillaries who supply components and sub assemblies. Enterprises in India are realizing that the operations in India are not insulated from the economic uncertainty created by the actions of the economies like USA, Europe and China; hence there is a need for enterprises to be prepared to face these challenges and have a dynamic approach.

The business strategy adopted by the top and senior management of most organizations is to achieve its desired goals / objectives within specified cost and time frame, keeping in mind organizations existing and likely future resources and the impact of the external environment. The existing business strategies are reevaluated and modified quarterly, half yearly, annually depending upon the existing performance, at the same time trying to ensure some consistency in the strategy. The current financial year 2012-13 in India has been tough for most organizations both in manufacturing and service sector,

as the growth in demand for goods and services has been lower compared to the increase in the input costs, because of inflation and an unfavorable exchange rate, which has resulted in a high devaluation of the Indian Rupee. Enterprises are under pressure to retain and induct the right talent which can perform well, not only in good times, but also in bad times and this is a major challenge for most enterprises.

The Human Resource (HR) / Personnel department in every organization is expected to play its role in facilitating the success of the business strategy for which the HR / Personnel department along with the concerned department needs to not only carry out a gap analysis which involves the following steps, but also ensure that the organization has the requisite present and future capabilities of personnel to successfully execute its business strategies. Determine gaps between desired goals / objectives and the actual results. Analyze the reasons for the gaps. Actions to be taken for bridging the gaps. Which of the actions are on the Human Resource of the organization

Having carried out the gap analysis, the HR / Personnel department needs to do the following which is both an interactive exercise with the concerned department and an active exercise with the individuals :- An exercise along with the concerned department to determine which individuals and teams have not been able to meet the specified business goals and why.

 Meet these individuals and teams along with the concerned department to understand the support needed for achieving the goals. Also assess the competency of the individuals and the team, so as to identify, if the competencies match the role requirements and wherever there are gaps, undertake an exercise of repositioning, replacing of individuals depending upon the role requirement. At the same time, continue to maintain the morale of the individuals by counseling, as in any downturn the better performers have an easy options of leaving and joining another organization.

In the year 2012-13 , the Chief People Officer and the Chief Executive Officer of a leading Chemical Company, who are known to me , in anticipation of poor economical status in the company operations, identified their high performing associates , undertook a timely gap analysis of the action plan , which partly helped the organisations to address the issue of meltdown as these identified associates took up " Key Leadership Roll " to reduce the existing cost by systematic introduction of a Profit Protection Plan ( PPP) across the organisation. Companies need to be dynamic by undertake timely corrective actions to ensure meeting their business goals.

Apart from the above mentioned actions of the HR / Personnel department, aligning of the HR function in any organization involves an effective handling of the following systems, which need to be in tune with the business strategy not only for the company employees but also for employees engaged through contractors / service providers/temping companies.

 Assessing personnel requirement with requisite skills and competencies. (NB There is acute shortage of young skilled personnel at artisan level). Recruitment of freshers & laterals through a proper employee selection plan. In boarding and induction of the new personnel. Mentoring programme. An objective Performance Management System (PMS). Competency mapping of existing personnel. Effective learning & development. Competitive remuneration. Attractive reward system. Succession planning. Career development plan. Effective internal communication plan to employees and their families. Building positive work climate. Programmes facilitating involvement of the family. Development of key people and leadership. Positioning for key jobs. An effective grievance handling system. Effective handling of industrial relations.

Business today is competitive and also dynamic, and hence, business strategies keep changing fast. HR / Personnel

department persons not only need to understand the business, but also keep pace with the changes taking place to meet business requirements. In India, there is an abundance of people, but there is need to recruit people who meet the specific needs of the organization and this quite often is in short supply. Every organization will have to meet its business needs by not only recruiting, but also developing and retaining the talented employees at all levels. The problem which organizations face is when individuals who are competent and talented also have high expectations / aspirations of growth compared to what the organization can offer. In such cases the HR / Personnel department in the organization needs to find solutions in the interest of both the organization and the individual and there are quite a few companies that have handled such situations.
* President, Industrial Relations Institute of India (IRII), Former Sr. Specialist on Employers Activities for South Asia with International Labour Organization (ILO) and Former Corporate Head of HR of Novartis India Ltd. and ACC Ltd. E-mail: rajenmehrotra@gmail.com