PIO Guidance Questions

Week7 – 3rd Oct 2018

 AP Moller – Maersk Group:
Evaluating Strategic Talent Management Initiatives
Please used the General Model of Planned Change
to look for and propose your solutions to
evaluate various problems and initiatives.
Moreover you have to use additional
frameworks/models to Diagnose and Design
your solutions.
Prepare group presentation to explain your
approach and solutions.
Send your group work to john.w@sbm-itb.ac.id
latest Wednesday, Oct. 3rd, 2018, 6 a.m.
Maximizing Your Return on People
Please read and try to describe the cause and
effect relationship from the Framework. This
will be for your individual preparation to
understand the construct.
During class Lecturer will facilitate the usage of
this Tool-Kit.
 The Royal Bank of Scotland Group:
The Human Capital Strategy
Use the General Model of Planned Change.
1. Please describe the Human Capital Toolkit.
1. How it works?
2. What are the benefits?
2. If you use the Tool Kit to manage Talent, what
modules you should use? Elaborate.
3. Evaluate the effectiveness of the Tool Kit.
4. Describe your suggestion to improve the
effectiveness.
 General Model of Planned Change

Planning Evaluating
Entering and and
and Diagnosing Implementing Institutionalizing
Contracting Change Change

2-5
AP MOLLER – MAERSK GROUP:
EVALUATING STRATEGIC TALENT
MANAGEMENT INITIATIVES
 Retention Initiative
1. Symptoms
a. The increase in Maersk’s Turn Over and worrying
in some areas
b. E.g. in Energy Business (Drilling) risen from 1%-
2% to 5%
2. Framework to be used Employee
Engagement Model e.g. B = f (M,A,E), OHI
McKinsey Beyond Performance, or Aon
Hewitt Engagement Model, etc.
 Development Initiative
• Historically:
– Hiring inexperienced individuals
– Providing 2 years (rotated through various functional
groups), extensive training (formal training modules + OJT)
– Guaranteed a two-year placement overseas
– Flexibility to move around in the company (move
horizontally)
• 2005-2006: Emerging Leader program (fast track),
Executive Band Development Program (1% of
Employees) --- Above average Turn Over (the
program was Closed down)
 Development Initiative
• 2008: Focus on Leadership Development
Program (focus on 3 competencies:
– Deliver the Results
– A good and Inspiring Leader
– To live the Values of the Organization
• Individual development by using
“Development Shop” open to 2000 individual
employees and 300 top employees for
classroom course.
Conceptual Framework can be integrated with Retention Framework
 Integrating Experienced Hires
Elements Pros Cons
Ideas Fresh Eyes and Energy
Hiring strategy Balanced Hiring Strategy Proponent for the old strategy:
(between Build and Buy) promotion from within
Culture To support the Cultural Take a long time to fit in
Change e.g. towards (Culture)
Innovation Culture
Alignment No training and coaching for
experienced hires

Integrating Experienced Hires by using any Behavioral Frameworks

 The Practice of Re-Hiring
• Re-hiring can be a good source of recruitment,
because:
– Quick adaptation, no cultural integration problems
– Lower risk and less costly (e.g. no training
required)
– Previous track record (credibility)
• Company encourage the development of
Alumni Network
 Building an Inclusive Culture
• Originally Maersk live within the Family Culture
and its position as Denmark’s largest company
with
– Mentality (Danish)
– The way of thinking (Danish)
– Leadership team (Danish)
– Talent programs and training programs only for Danes
• As Maersk go global, corporate culture reflect
more diversity and this will be the pre-requisite
to attract and retain talent all over the globe.
 Behavior = f (M, A. E)
Use this model to collect
Recruitment
information about the
current conditions. Analyze
the collected data and find ABILITY
solutions/designs

Selection Training &

Development

BEHAVIOR/
Organizational
PERFORMANCE
Compensation Design

MOTIVATION ENVIRONMENT

Culture Performance Organizational HR Planning

Management Development/
Change
OHI Related to Leadership
AON HEWITT Employee Engagement Model
2014
 Employee Value Proposition Survey

Company
Leaders
Job
Rewards
PRICE
MAXIMIZING YOUR RETURN ON
PEOPLE
 Human Capital Management
• A system for assessing human capital, predicting
organizational performance, and guiding
organizational investments in people
• Help to assess the monitoring of the HCM
practices
• Core Set of HCM Drivers
– Leadership Practices
– Employee Engagement
– Knowledge Accessibility
– Workforce Optimization
– Learning Capacity
 HCM Maturity Level
 Level 1
 Organization makes little or no attempt to address he stated HCM
area or factor
 Level 2
 Organization makes cursory, non-systematic attempts to address at
least some component of the stated HCM area or factor
 Level 3
 Organization demonstrates adequate, or baseline, capability that
forms a good foundation for improvement in the stated HCM area
or factor
 Level 4
 Organization is beginning to systematically extend capability in the
stated HCM area or factor
 Level 5
 Organization consistently demonstrates superior capability in
optimizing its human capital management in the stated HCM area
or factor
 HCM Maturity Level
• HCM maturity scores are directly linked to a
range of performance outcomes
• Scores are calculated on each drivers and
totaled
– 90 to 100 -- Superior
– 80 to 89 -- Adequate
– 70 to 79 -- Marginal
– 69 and below is poor
• Total is a benchmark to build upon
THE ROYAL BANK OF SCOTLAND
GROUP: HUMAN CAPITAL STRATEGY
A Strategy Map Represents How the Organization Creates Value

Productivity Strategy Growth Strategy

Long-Term
Financial Shareholder Value
Perspective
Improve Cost Increase Asset Expand Revenue Enhance
Structure Utilization Opportunities Customer Value

Product / Service Attributes Relationship Image

Customer Price Quality Availability Selection Functionality Service Partnership

Perspective Brand

Operational Management Customer Management Innovation Regulatory and Social

Processes Processes Processes Processes
•Supply •Selection •Opportunity ID •Environment
•Production •Acquisition •R&D Portfolio •Safety and Health
Internal •Distribution •Retention •Design/Develop •Employment
Perspective •Risk Management •Growth •Launch •Community

Human Capital: 2000 HR People, OD Practitioners play the Role as Change Partner

IC: Integrated Dbase, Survey, Research, Leadership Excellence Profile, Benchmark, etc.
Learning and
Growth
Perspective Organization Capital
Culture Leadership Alignment Teamwork
HUMAN CAPITAL
 Forms of Human Capital
Value for the Organization Value for Investors

Organizational Leverage Organizational

human capital as human capital as
a resource intangible
capability
Alignment

Initial human Enhanced human

capital available capital available
from employees from employees
Development
Value for Individual Employees

Acquistion
 Intangibles
• Intangibles are the things which are incapable
of being realized or defined
• They are without physical substance, non-
monetary and they cannot be seen or touched
• They behave in a very different way to
tangible assets
 What are the differences?
Tangibles Intangibles
••The
Physical
law ofresources
decreasingcan only
returns • Intangibles
•The Network can be deployed
effects mean
be used
means that for
theone
moreactivity at a
a tangible forthe
that various
more purposes at the
some intangibles
time
asset is used, the lower the aresame
used,time
the higher the
• Depreciate
marginal return. with use and get • Have many multiple
return.
• Therefore,
used throughtangible assets so
production, •Best with an ABUNDANCE
applications without any
need to have
they be controlled and of
limited number MENTALITY
reductionto inmanage these
their value and
managed with a SCARCITY
applications (a mental model thatlike
some intangibles assumes
MENTALITY there are always
knowledge opportunities
even appreciate
forand
adding and creating
develop the morevalue).
they
are used
Largely because of these reasons,
intangibles are becoming more important.
 Resource Based Strategy
• Resources are an organization’s assets and are thus the
basic building blocks of the organization
• They include tangibles (plant, equipment, finances,
location, human assets) and intangibles assets
(patents, copyright, culture and reputation)
• Capabilities refer to a corporation’s ability to exploit it
resources. They consist of business processes and
routines that manage the interaction among resources
to turn inputs into ouputs. E.g. Marketing capability
can be based on the interaction among its marketing
specialists, distribution channels, and sales people.
 Market Value
Once its become scarce
resources, but today no longer

Market Value = f (Financial Capital, Intangible Value)

Tools: Customer Capital

BCG Matrix Human Capital
The role of HR is supporting Porter’s Value Chain Organizational Capital
ROI Social Capital
EVA

Intangible Value is the worth of Intangible Capability

 Forms of Organizational Capital
• Is the infrastructure that supports people to do
their work
• Includes elements such as:
– The fitness of the organization structure, operational
and management processes, procedures, routines,
general use of information, IT systems and databases,
existence of a knowledge centre, explicit knowledge
and know-how.
– Some of these
Patents, elementsdesign
copyrights, may berights,
legallytrade
protected and
secrets,
become intellectual property rights, legally owned by
the firm. trademark and service marks
 Forms of Social Capital
• The network of relationships and features of
social life within an organization
• The knowledge tied up and shared in these
relationships
• The ability to work together with other people
in value creation
• The corporate culture, beliefs lived and values
demonstrated by employees
 Attributes of Personnel, HRM and HCM
Personnel HRM = Personnel + HCM = HRM+
People management A separate process An aligned process An integrated process
strategy development focused on activity focused on activity focused on intangible
(e.g. Talent and capability (e.g. capability (e.g. Career
management for Development of talent partnership), that
everyone) pools) to meet provides the potential
business objectives to sustain and
transform the
business
People management Basic practice Best practice Best fit
practices
Outputs of people Value for money Added value Created value
management
Assumptions about Causal chains Dynamic systems Complex processes
business environment
Appropriate form of Data Information Knowledge
information
 The evolving focus of strategy and the role of Human
Resources

Competition for Competition for Competition for

Products and Resources and Talent and Dreams
Markets Competencies
Strategic objectives Defensible product- Sustainable competitive Continuous self-renewal
market positions advantage
Major tools, Industry analysis; Core competencies Vision and values
perspectives competitor analysis Resource-based strategy Flexibility and innovation
Market segmentation and Networked organization Front-line
positioning entrepreneurship and
Strategic planning experimentation
Key strategic resource Financial capital Organizational capability Human and intellectual
capital
Perspective on People viewed as factors People viewed as People viewed as “talent
employees of production valuable resources investors”

HR’s role in strategy Implementation, support Contributory Central

Key HR activity Administering of Aligning resources and Building human capital as

recruitment, training and capabilities to achieve a core source of
benefits strategic intent competitive advantage
 The HCM Value Triangle
Human
•Creating capability for the future
Capital
•Driving and accelerating business strategy
Management
Creating •Taking advantage of exceptional opportunities
value •Producing truly wonderful solutions

Human
Resources •Focusing HR on business strategy
Adding value •Creating capability to perform now
•Ensuring effectiveness and alignment

Personnel
•Administering HR operations
•Ensuring efficiency e.g. through outsourcing
Value for money
COMPLEX PROCESSES
 HCM Value Chain

ACTIVITY
INPUT •Organization OUTPUT
•Organization •Resourcing •Tangible resources
effectiveness •Development •Intangible IMPACT
•Leadership capability •Performance capability: Human •Employer of choice
•Mental models management Capital; •Operations
•Management time •Career Organization •Customers
•HR function capability development Capital; Social •Financial
•Funding •Engagement Capital
•Resources •Talent
management
 The Business Strategy Map and The HCM Value Chain

Business Strategy Map

Business Custo Financi
Learning & Growth
Process mer al

HCM Value Chain

Input Activity Output Impact

People Management Systems Business Management Systems

People Management Systems working in parallel to Business Management Systems

 HCM Strategy Development
Creating value 9 10 11 12
CV
Primary
focus

Adding value 5 6 7 8
AV
Primary
Externally oriented focus
(outside-in),
Forward-looking
Value for 1 2 3 4
money VFM
Internally oriented
Primary
(inside-out),
focus
Current state

Input Activity Output Impact

HCM Value Matrix
Creating value – Integrated Best fit people Intangible Reinventing and
tends to be approach, complex management capability regenerating
expressed as processes practices Engagement
knowledge Leadership team Opportunity to
Management as a whole contribute
Adding value – Aligned approach, Best people Intangible and Reengineering/
tends to be dynamic systems management Tangible Resources continuous
expressed as practices improvement
information

Value for money Separate approach, Basic people Tangible Resources Restructuring and
– expressed as causal chains management downsizing
data practices
# of employees
Budgets Observable behaviours
Management time Assessable knowledge/
Effectiveness HR functions skills

Input Activity Output Impact

(Deliverables)