STRATEGIC ORIENTED EMPLOYEE DEVELOPMENT AND COMPENSATION

SYSTEMS;

STRATEGIC EMPLOYEE DEVELOPMENT IN HUMAN RESOURCE MANAGEMENT

Strategic employee development in human resource management is essential for every organization.
Strategic employee development involves a future-oriented process of developing and implementing
HR programs. Moreover, it solves business problems and directly contributes to major long-term
business objectives. However, HR management is changing dramatically in recent decades. Besides, it
was once largely an administrative function focusing on day to day responsibilities, including human
resource management. Therefore, changing labor market conditions and new business thinking call
for HR business strategies. Furthermore, these include recruiting and retaining the right people, as
well as providing ethical and cultural leadership. Ultimately, having human resource professionals in
an organization is critical for driving towards the company’s employee goals.

BENEFITS OF STRATEGIC EMPLOYEE DEVELOPMENT

Strategic training and development activities are essential for your workforce at the staff level.
Besides, strategic employee development is the main function of human resource management.
Therefore, employee development requires strategic training for work personnel. Besides, the purpose
of strategic training is to prepare your managers and employees with the skills they need to complete
their work tasks. However, this training usually first happens when an employee or manager begins to
step into a role. Moreover, human resource management focuses not only on improving work quality
but also on making the workforce more competitive. Furthermore, strategic development’s purpose is
to enhance those skills your employees and managers already possess. Additionally, human resource
professionals also undergo strategic training before assuming a role.

IMPORTANCE OF HUMAN RESOURCE MANAGEMENT

An organization cannot build a good team of working professionals without good human resource
Strategic employee development contributes to industrial harmony and healthy employee-employee
relations. Moreover, it motivates workers so that they can accomplish the goals of the organization.
Besides, HR establishes a mechanism for the administration of personnel services. Also, it ensures
that the firm has enough workers through proper recruitment and selection process. additionally,
human resource management helps in motivation and encouraging good employee relations.
Nevertheless, through innovation and experimentation in the fields of personnel, HRM aids in
reducing costs and increasing productivity. Consequently, hiring effective human resource
professionals is vital for blending a thorough workforce.

Steps

1. Conduct a Skill Gap Analysis

According to Lorri Freifield in Training Mag, “solving a skill gap is like solving a puzzle — not only
do you have to make the pieces fit, you have to make sure you have all the necessary pieces from the
get-go.”

What Is a Skill Gap Analysis?

A skill gap exists when the talents of your workforce do not match their job requirements — this can
be costly.

Companies can use skill gap analysis to catalog the skills and competencies of their current
workforce, compare that with the needs of the company and then create an employee development
strategic plan. This can be extended to future planning as well.
Why Is Skill Gap Analysis Important?

Skill gap analysis is important because you need to ensure your workforce has the skills to succeed as
job roles change over time.

Skill gap analysis helps organizations and their employees continue to grow and learn in today’s fast-
paced world. Organizations that choose not to engage in professional development are often left in the
dust by more innovative competitors. But skill gap analysis doesn’t have to be difficult, costly or
time-consuming. We’ll go through a step-by-step process to gather information and make the most of
your findings.

How Do You Perform a Skill Gap Analysis?

Describe Roles in Your Organization

First, take a look at the members of your organization: What teams and departments exist? What
different kinds of roles exist?

Describe Skills and Priorities

What skills are a priority for your organization going forward? Do you plan to take on new
responsibilities or projects in the near future? This is also a good time to consider your company’s
missions, goals and values.

Come up with a list of the most important skills your team needs, and how important those skills are.
Your list might look something like this:

Database management

Customer support

Web development

Digital marketing

Leadership

Perform an Assessment

There are a couple of different ways you can go about performing a skill gap assessment, including
feedback from reviews, surveys and interviews. The method you choose will depend on your
company’s size, resources and goals.

Compile and Analyze Results

Once you have data from your assessments, interviews or feedback, what do you do with it?

First, you want to get it into a form that is easily manageable and ready to analyze. Using the list of
skills we created earlier, you can compare the reported skill levels for each position with your
requirements. Any discrepancies are your new skill gaps.

Addressing Skill Gaps

If there are large gaps and one or a few people can fulfill the need, consider hiring externally. Of
course, you will still need to develop your organization’s talents over time. The feasibility of a new
hire will depend on your staffing constraints and budget.
If you can’t hire new employees, it’s time to make the best of the ones you have. Over time, your
team will continue to develop new talents to meet the needs of a changing workplace. Here are a few
employee training options you can consider:

Online courses/eLearning

Individual training

Private training company

Mentorship programs

Offering a stipend to employees to attend conferences, take courses, etc.

2. Use the Right Corporate Training Tools

From onboarding to continual development, many modern systems can help create better business
models and informed employees.

The following are some of the common elements that businesses use to create vibrant training models
for workers on all levels of staff.

Learning Management Systems

As we’ll discuss more below, one of the biggest and most fundamental tools for corporate training is
a learning management system. These comprehensive platforms produce a wide range of training on
workplace safety, individual business processes and much more.

While providing a fully functional interface for workers to self-train, the best learning management
systems also offer in-depth data on training sessions. By aggregating information about results,
learning management systems can evaluate the success of training.

OSHA Resources

The U.S. Department of Occupational Safety and Health Administration (OSHA) provides companies
with various learning tools. Specific certifications and training promote safety in many different
industries. Those involved in heavy manual labor can get specific safety information tailored to their
roles. OSHA resources are commonly used for trade workers in areas like electrical, plumbing and
construction.

MOOCs

Another great resource for corporate digital training is massive open online courses (MOOCs). Many
of these courses include video-based components that provide a hands-on training strategy for
employees. MOOCs are becoming part of the U.S. educational system, but they can also be vital in an
enterprise training context. Companies can find these resources on open platforms and integrate them
into their eLearning processes.

Workforce Management Systems

Another type of enterprise software that can be helpful with training is workforce management
software. Workforce management software provides resources for evaluating the activities of workers.
It can integrate training functionality along with payroll, tax, scheduling and performance features.
Workforce management systems can be particularly effective in evaluating the performance and
learning of an employee over time. For example, aspects of workforce management software may
document continuing education and professional development.

360-Degree Feedback Tools

360-degree feedback is a software tool in which employees can self-evaluate, and are also evaluated
by others. The versatility of 360-degree feedback means that these evaluations may be done by
supervisors but also by peers or people outside the company.

By looking in depth at actionable feedback on employee performance, company leaders can chart a
course forward for the business, focusing on the important areas in which improvement is needed.

Digital Employee Assessments

Assessment tools are also critically relevant to ongoing training. To put it simply, companies want to
see results. Businesses want to make sure training strategies work and employees have broadened
their knowledge as a result. Assessment tools will show how processes are working over time, and
whether the business needs to put key changes in place to drive a better-educated workforce.

3. Build a Learning Management Program

A learning management system is often the biggest step many businesses take as they develop their
staff development strategies. However, many companies are unhappy with their LMS due to outdated
interfaces, lack of customization or incomplete reporting. Doing thorough research and identifying
your team’s main objectives before installing an LMS can save your company time and money.

Learning management programs help businesses and educational institutions track, administer and
report on educational courses or training programs. These programs are often used when onboarding
new employees, but they can also be used in more general people development strategy, such as
external customer-facing training sessions.

Choosing the right software for your company is no easy task, and there’s a lot of research to sift
through before making a decision. We’ve provided some of the most important considerations for you
and your key stakeholders when evaluating an LMS solution:

Determine Use Cases

The first thing to consider when looking for a learning management program is the use cases and the
staff development strategy you hope to provide. To do so, ask yourself these questions and share them
with stakeholders:

Who is our audience for the curriculum?

Will we have one curriculum or multiple courses on different topics?

Will the courses be instructor-led, video-based or text-based?

What will the delivery method for the courseware look like? Will employees engage with training
software online?

What platforms will the content be hosted on?

Do we need an LMS, or just an LCMS (Learning Content Management System)?

Select Important Features

Learning management programs can have a wide variety of features ranging from critical to “nice-to-
have.” You should speak with your key stakeholders and figure out which features are most
important. Once you have your list of features, you can refer to it when demoing different vendors.

Demo Your Options

You wouldn’t buy a car before test driving it, would you? The same principle applies to building a
learning management program.
During a demo period, be sure to have your list of prioritized features at hand and ask questions like:

What level of support and maintenance is available?

What is the pricing model?

Does the vendor have similar customers?

Does the vendor have compelling reviews from similar customers?

Will the system be user-friendly for both the administrators and learners?

Get Buy-In

Remember that a significant software purchase like an LMS affects people across the company.
You’ll want to get feedback from IT, administrators and learners (your employees or students). Since
these are three completely different audiences with different goals, be prepared to answer different
types of questions for each group.

IT Professionals

IT professionals are most often interested in the technical requirements for integration and the support
required to maintain the system. You can ask these questions to evaluate the technical feasibility of
the learning management program:

How does this program integrate with our existing processes?

What are the technical requirements for support and maintenance?

What customization is needed?

Will the LMS be cloud-based or on-premise? What are the pros and cons of each strategy for our
business?

Administrators

Administrators want a system that is easy to maintain and has robust reporting capabilities for
measuring progress. When speaking to administrators, ask them these questions to get a feel for how
the LMS will suit their needs:

How easy is it to add a new course?

How do I see which students have completed each course?

Which formats are supported?

What kind of data can I access about my learners, and how do I access it?

Learners

For your learners, you’ll want to focus on user-friendliness and experience. If possible, include some
of your target users in the demo and get their feedback.

Many companies end up cycling through multiple learning management programs before finding the
one that suits them best, so doing your research and getting buy-in upfront can save a lot of money.

Ask these questions to evaluate the user-friendliness of the product:

What is the level of technical skill needed to use the product?

How can I find out about new courses or information?

How do I search for information, and how long does it take to find what I’m looking for?

How do I see my courses and track what I’ve completed?

Implement Your Solution

Once you’ve settled on a solution, work with IT and management to ensure it rolls out smoothly. The
right LMS can help you track employee engagement, learning progress and other metrics, and ensure
the success of your learning management program for years to come.

A strategic compensation system

A strategic compensation system guides an organization’s approach to managing total employee
compensation. In the past, compensation may have been just a paycheck, but today it’s much more.
Employees seek employers that not only pay them a competitive wage, but also provide benefits and
programs which help them address other financial costs, such as healthcare and retirement plans.

“Given strong economic performance across many U.S. industries in 2018, employees hold much
higher expectations for greater increases in wages and bonuses going into 2019,” a vice president
from Gartner told the Society for Human Resource Management (SHRM). “Executives will need to
factor in these employee expectations to remain competitive and to attract and retain talent; otherwise,
they risk losing their best workers to competitors.” 

Organizations that have a strategic approach to compensation should use it to not only manage
employee pay and benefits, but also to attract and retain talent. To reap the benefits of a strategic
compensation strategy, it’s essential that companies proactively communicate total compensation to
their workforce. When done well, strategic compensation becomes a way of building trust in the
workplace.

Steps to Create a Strategic Compensation Strategy

It’s essential to have a strategic compensation approach, as the costs are a significant expense for
businesses. In June 2019, the Bureau of Labor Statistics reported that “costs for employee
compensation averaged $36.61 per hour worked.” Wages and salaries accounted for 68.6 percent of
these costs, and benefits were 31.4 percent.

Here’s what you need to consider when creating your strategy:

1. Ask for Employee Input

Of course, employees aren’t going to be part of the team that determines salaries; however, you can
ask for their input about total compensation. Find out what benefits matter most to your workforce.
Younger employees may be interested in a daycare subsidy, while older employees might be more
focused on retirement plans. By asking for input, you can create an informed strategic compensation
approach that fits with your talent management strategy and will satisfy most employees.

2. Benchmark against Competitors

As mentioned above, your compensation plan and employee benefits are a way to attract talent. To
remain competitive in your industry and the locations where you conduct operations, take time to
benchmark what your competitors offer their employees. You may not be able to match them item for
item, but with this information you’ll be able to address gaps during interviews. And, you may be able
to get creative about other, lower-cost options you can include in your total compensation package.

3. Allocate Budget

Compensation planning doesn’t occur in a vacuum. Take a realistic look at your company’s human
resource and operational budgets. Identify the total amount you can spend on any one employee.
Factor in all costs, including taxes, payroll costs, existing benefits, compensation, and bonuses.
Include plans for performance or merit increases that will take place as part of annual reviews.

4. Plan for Rewards

As you make your budget, consider how you can use total compensation as a way to engage
employees, increase performance, and entice them to stay. For example, you might offer a retirement
plan or additional vacation days to employees who have been with the organization for more than a
year. You might offer stock options as a bonus after 90 days. This is a way of protecting your budget
if employees don’t stay with the organization for a minimum amount of time.

5. Determine Pay Grades

One way to establish a framework for compensation is to determine pay grades based on job position
and duties. For example, positions in pay grade one may be for entry-level roles, pay grade two for
technician roles, pay grade three for managers, and pay grade four for executives. Having this
framework allows an organization to define the amount of pay available based on the job’s
requirements and level. Pay grades take the guesswork out of salaries and also provide employees
with a range of what they can expect to make for any given role.

6. Confirm Compliance

Compensation strategy provides the big picture for an organization’s pay; however, the manner in
which you implement and provide compensation must meet regulations. The Fair Labor Standards
Act (FLSA) sets the legal requirements for minimum wage, overtime, equal pay, record-keeping, and
child labor. It also has implications regarding payment practices, record-keeping, taxes, paychecks,
and withholding allowances. Some states have local compensation-related regulations. Organizations
should seek legal counsel to confirm compliance and ensure each compensation strategy meets
requirements.

7. Communicate About Total Compensation

When you communicate about total compensation, you want to make sure all employees have access
to the information they need. You also want to provide accurate, up-to-date information to avoid
issues. The gap between expectations and reality is one of the largest issues between employers and
employees that creates dissatisfaction. When you clearly communicate your total compensation
strategy, employees know what to expect and appreciate all the benefits you’re providing, in addition
to the pay. Be sure that as you communicate about total compensation, you’re using it as an
opportunity to celebrate everything that’s included in the package. Employees want all the
information available about compensation, so do your best to make the communication engaging.
An employee communication software tool can help you deliver timely, engaging, and streamlined
compensation communications.

Remain Realistic with Strategic Compensation

Many organizations want to offer amazing total compensation packages to remain competitive in the
war for talent. But after they crunch the numbers, they realize they can’t afford it. In this situation,
strategic compensation becomes even more important. 
Use an employee benefits communication software to communicate with employees about the
realities of their compensation:

Be transparent about what is and isn’t possible. Let employees know you’re doing all you can to
provide the best compensation package possible.

Be an employer of choice in other ways. You may not be able to offer the top salaries in the industry.
Still, you can offer other employee benefits, such as flexible work hours, access to on-site services, or
subsidized transportation benefits.

Be realistic in your rewards. If you have a great quarter, celebrate those results but be judicious. Once
you set the standard high for compensation strategies, it’s more difficult to drop back if you
experience rough financial times.

Be intentional about how compensation supports your overall human resource  strategy. Look for
ways to tie your compensation plan to tenure, individual performance, team performance, or a
combination.

This realistic approach helps set expectations with current employees, as well as enables you to attract
and retain talent. Organizations are more appealing for candidates when recruiters and hiring
managers have defined pay grades they can provide, as well as information about a robust total
compensation package to share during an interview. Don’t underestimate the impact a strategic
compensation plan can have throughout the entire employee lifecycle.

Finally, compensation planning requires a cross-functional strategic approach. Now that you have all
the steps for an effective compensation strategy, it’s important to gather stakeholders together to
review what’s most important for your organization. Once you have a compensation plan, find a
means to effectively communicate so that employees understand their pay grade, the opportunity for
growth, and career advancement. Having a well-defined approach to compensation will ultimately
encourage a company culture of trust and transparency and create a higher job satisfaction rate among
employees.