Developing Talent at

Consumer goods conglomerate Procter and Gamble has had a

long, successful history based on hiring at the entry level and
developing and promoting its managers and executives from
within. The key to this success is the organizations Build from
Within program, which tracks the performance of every manager
within the organizations top 50 jobs consistently has three
internal replacement candidates lined up and ready to assume
responsibility. Loyalty of employees is paramount to ensuring
the success of such a program, and P&Gs history of grooming
and training its employees promotes such loyalty.
22
Developing Talent at
Fewer than 5% of the organizations non-entry-level hires come
from outside the organization, and its rigorous and competitive
screening process, in which fewer than 5% of applicants are hire,
ensures that P&G hires those best suited for the organization and
its culture.
P&Gs 138,000 employees are tracked via monthly and annual
performance reviews in which managers discuss business goals,
personal goals, and how theyve trained others to assume
responsibility. The latter is a key factor in the upward mobility of
any manager. P&G prides itself in being able to fill any opening
internally in an hour. All executives are required to teach in
the organizations training programs, and the CEO assumes direct
responsibility for the development of the organizations top 150
employees.
23
Strategic Planning and HR
Planning
0 Strategic Human Resources Management (SHRM)
0 The pattern of human resources deployments and
activities that enable an organization to achieve its
strategic goals
0Strategy formulationproviding input as to what is
possible given the types and numbers of people
available.
0Strategy implementationmaking primary resource
allocation decisions about structure, processes, and
human resources.
24
Linking Strategic Planning and
HRP
0 Strategic Analysis
0 What human resources are needed and what are
available?
0 Strategic Formulation
0 What is required and necessary in support of human
resources?
0 Strategic Implementation
0 How will the human resources be allocated?
25
Human Resources
Planning
Strategic
Planning
26
Linking Strategic Planning and Human Resources
Step One: Mission, Vision, and
Values
0 Mission
0 The basic purpose of the organization as well as its
scope of operations
0 Strategic Vision
0 A statement about where the company is going and
what it can become in the future; clarifies the long-term
direction of the company and its strategic intent
0 Core Values
0 The strong and enduring beliefs and principles that the
company uses as a foundation for its decisions
27
Since Mission, Vision, and
Values influence HRP
0 Small Group Discussion
In groups of 4, discuss the Mission and Vision, of
University of Baguio
Discuss whether or not the university is fulfilling its
obligations according to the stated Mission and
Vision.
To what extent do the employees contribute to
this?
To what extent is the organization committed to
motivate their people to be dedicated in helping
the organization achieve company goals and
objectives?


28
Step Two: Environmental
Scanning
0 Environmental Scanning
0 The systematic monitoring of the major external
forces influencing the organization.
1. Economic factors: general, regional, and global
conditions
2. Industry and competitive trends: new processes,
services, and innovations
3. Technological changes: robotics and office automation
4. Government and legislative issues: laws and
administrative rulings
5. Social concerns: child care and educational priorities
6. Demographic and labor market trends: age,
composition, literacy, and immigration
29
The Competitive Environment
0 Assignment (Short bond paper; due: December 7, 2011)
List and discuss the competitive environment of
ABS-CBN
Who are its competitors?
What distinct advantages does ABS-CBN have over its
competitors?
What can the company do to make sure they have the best
pool of manpower considering the nature of competition in
their industry?
210
Step Three: Internal Analysis
211
Culture
Composition
Capabilities
Internal Analysis
Culture: Auditing Values, Beliefs,
and Attitudes
0 Cultural Audits
0 Audits of the culture and quality of work life in an
organization.
0How do employees spend their time?
0How do they interact with each other?
0Are employees empowered?
0What is the predominant leadership style of
managers?
0How do employees advance within the organization?
212
Capabilities: People as a Strategic
Resource
0 Core Capabilities
0 Integrated knowledge sets within an organization that
distinguish it from its competitors and deliver value to
customers.
0 Sustained competitive advantage through people is
achieved if these human resources:
1. Are valuable.
2. Are rare and unavailable to competitors.
Your best competitive assets walk out the door every
night.
3. Are difficult to imitate.
4. Are organized for teamwork and cooperation.
213
Composition: The Human
Capital Architecture
0 Strategic Knowledge Workers
0 Employees who have unique skills that are directly
linked to the companys strategy.
0Example: R&D scientists
0 Core Employees
0 Employees with skills to perform a predefined job
that are quite valuable to a company, but not
particularly unique or difficult to replace.
0Example: salespeople
214
Composition: The Human
Capital Architecture (contd)
0 Supporting Labor
0 Employees whose skills are of less strategic value and
generally available in the labor market.
0Example: clerical workers
0 Alliance Partners
0 Individuals and groups with unique skills, but those
skills are not directly related to a companys core
strategy.
0Example: consultants
215
Forecasting: A Critical
Element of Planning
0 Forecasting involves:
a. forecasting the demand for labor
b. forecasting the supply of labor
c. balancing supply and demand considerations.
216
217
Model of HR Forecasting
Forecasting Demand for
Employees
218
Quantitative Methods
Qualitative Methods
Forecasting Demand
Quantitative Approach: Trend
Analysis
0 Forecasting labor demand based on an organizational
index such as sales:
1. Select a business factor that best predicts human resources
needs.
2. Plot the business factor in relation to the number of
employees to determine the labor productivity ratio.
3. Compute the productivity ratio for the past five years.
4. Calculate human resources demand by multiplying the
business factor by the productivity ratio.
5. Project human resources demand out to the target year(s).
219
Qualitative Approaches
0 Management Forecasts
0 The opinions (judgments) of supervisors, department
managers, experts, or others knowledgeable about the
organizations future employment needs.
0 Delphi Technique
0 An attempt to decrease the subjectivity of forecasts by
soliciting and summarizing the judgments of a
preselected group of individuals.
0 The final forecast represents a composite group
judgment.
220
221
HR Planning and Strategy Questions to Ask
Business Managers
What are your mission, vision, and values?
What are your current pressing business issues?
What are our organizational strengths?
Who are our competitors organizational strengths? How do we compare?
What core capabilities do we need to win in our markets?
What are the required knowledge, skills, and abilities we need to execute the winning strategy?
What are the barriers to optimally achieving the strategy?
What types of skills and positions will be required or no longer required?
Which skills should we have internally versus contract with outside providers?
What actions need to be taken to align our resources with strategy priorities?
What recognition and rewards are needed to attract, motivate, and retain the employees we need?
How will we know if we are effectively executing our workforce plan and staying on track?
Workforce planning requires that HR leaders periodically interview their managers to
gauge future workforce needs. Here are some sample questions to ask.
Forecasting the Supply of
Employees:
Internal Labor Supply
0 Staffing Tables
0 Markov Analysis
0 Skill Inventories
0 Replacement Charts
0 Succession Planning
222
Forecasting Internal Labor
Supply
0 Staffing Tables
0 Graphic representations of all organizational jobs, along
with the numbers of employees currently occupying
those jobs and future (monthly or yearly) employment
requirements.
0 Markov Analysis
0 A method for tracking the pattern of employee
movements through various jobs.
223
224
Hypothetical Markov Analysis for a Retail Company
Internal Demand Forecasting
Tools
0 Skill Inventories
0 Files of personnel education, experience, interests,
skills, etc., that allow managers to quickly match job
openings with employee backgrounds.
0 Replacement Charts
0 Listings of current jobholders and persons who are
potential replacements if an opening occurs.
0 Succession Planning
0 The process of identifying, developing, and tracking key
individuals for executive positions.
225
226
An Executive Replacement Chart
Succession-Planning Checklist
RATE THE SUCCESS OF YOUR
SUCCESSION PLANNING
For each characteristic of a
best-practice succession-
planning and management
program appearing in the left
column below, enter a number
to the right to indicate how well
you believe your organization
manages that characteristic.
Ask other decision makers in
your organization to complete
this form individually, compile
the scores, and compare notes.
228
Assessing a Firms Human Capital
Step Four: Formulating
Strategy
0 Strategy Formulation
0 Moving from simple analysis to devising a coherent
course of action.
0 SWOT analysis
0 A comparison of strengths, weaknesses, opportunities,
and threats for strategy formulation purposes.
0 Use the strengths of the organization to capitalize on
opportunities, counteract threats, and alleviate internal
weaknesses.

229
Corporate Strategy
230
Strategic Alliances
and Joint Ventures
Growth and
Diversification
Mergers and
Acquisitions
Corporate
Strategy
Business Strategy
0 Value Creation
0 What the firm adds to a product or service by virtue
of making it; the amount of benefits provided by
the product or service once the costs of making it
are subtracted (value = benefits costs).
0 Low-cost strategy: competing on productivity and
efficiency
0 Keeping costs low to offer an attractive price to customers
(relative to competitors).
0 Differentiation strategy: compete on added value
0 Involves providing something unique and distinctive to
customers that they value.
231
232
Key HR Activities Associated with Merger or Acquisition Phases
233
Key HR Activities Associated with Merger or Acquisition Phases
(contd)
Business Strategy (contd)
0 Functional Strategy: Ensuring Alignment
0 External Fit/Alignment
0Focuses on the connection between the business
objectives and the major initiatives in HR.
0 Internal Fit/Alignment
0Aligning HR practices with one another to establish a
configuration that is mutually reinforcing.
234
Step Five: Strategy
Implementation
0 Taking Action: Reconciling Supply and Demand
0 Balancing demand and supply considerations
0Forecasting business activities (trends)
0Locating applicants
0 Organizational downsizing, outsourcing, offshoring
0Reducing headcount
0 Making layoff decisions
0Seniority or performance?
0Labor agreements
235
Step Six: Evaluation and
Assessment
0 Evaluation and Assessment Issues
0 Benchmarking: The process of comparing the
organizations processes and practices with those
of other companies
0 Human capital metrics
0Assess aspects of the workforce
0 HR metrics
0Assess the performance of the HR function itself

236
237
Ten Measures of Human Capital
1. Your most important issues
2. Human capital value added
3. Human capital ROI
4. Separation cost
5. Voluntary separation rate
6. Total labor-cost/revenue percentage
7. Total compensation/revenue percentage
8. Training investment factor
9. Time to start
10. Revenue factor