SHRM & Leadership Pipeline

(HBR Articles)

Pawan Kumar Mishra Piyush Arora Pradip Kumar Nishant Singh Ankul Anand
Group 5 CGT19015 CGT19016 CGT19019 CGT19014 CGT19007
Evolution of HRM in India

1990-2000 1947-1990

 Traditional industries- mining,

 Privatization, entry of MNCs in India manufacturing, PSUs, PSBs
 Growth of dot.com industry  Prevalence of personal and industrial
 PSUs competed with private players relations
 Education type of Indian talent pool  Job Security
changed  Retirement benefits
 Long-term employment

2000-2010 Post 2010

 Growth of service industry- healthcare,  App based economy

hospitality, airlines & consulting
 Consolidation and mergers &
acquisitions
 Rise of strategic human resource
management
 Era of aggregators, freelancers, millennials
at workplace
 Uberization of jobs
 Assignment based culture
 Emphasis on gender diversity, second
career of women 2
What is Strategic Human Resource Management (SHRM)?

SHRM is a managerial process requiring Strategic HRM Model

human resource policies and practices to be
linked with the strategic objectives of the
organization in order to:

• Develop flexibility, innovation, and

competitive advantage

• Improve business performance

3
Source: Strategic human resource management model by Hilton Management Services
Evolution of SHRM

SHRM Wave I SHRM Wave I

 Focus on cost control and Value  Strategic HR or New HR

intangible assets (knowledge, innovation
and human capital)  Centralizing or Outsourcing tactical HR

 Benchmarking with comparable firms  Leveraging Technology in HR Processes

 Significant investment in talent  Balanced Scorecard

development

4
Strategic HR: New HR Roles

Future/Strategic Focus

Strategic Partner Change Agent  New Roles reflected in new titles

like relationship manager,
solutions consultant and change
Process People consultant
(Hard) (Soft)
 Strategic HR led to new HR
practices like leadership and
Administrative Employee talent development,
Expert Champion organizational learning,
succession planning and
dissemination of knowledge

Day-to-Day/Operational Focus 5
Strategic HR calls for Strategic Deliverables
Talent Management
 Talent sourcing strategies
 Identify development needs of leadership
bench and build future leaders
 Tailored strategies to attract, develop and
retain talent
Strategic HR
Business Leadership
 Linkage of HR strategies to ongoing
business challenges
 HR seen as critical partner in crafting the
strategic direction of the organization
 Line managers own and are accountable for
manager specific HR activities
HR Operations and Organization
Structure
 Allocation of HR resources appropriately
between transactional and strategic work
 Use of technology to provide cost effective
services to employees
Metrics and Measurement
 Staff resources dedicated for creating,
tracking and analyzing HR metrics
 Line managers have the tools to incorporate
HR data into their everyday decision making
6
Centralizing or Outsourcing Tactical HR

Key Criterion: Quality Key Criterion: Quality

and Trust
High
Strategic Importance

Long-term relationship with

vendor or independent Internal (core employees)
contractor

Key Criterion: Cost and Key Criterion:

Flexibility Trust/Cooperation
Low
“Pure” outsource Outsource to firms with
similar culture/HR policies

Low High
7
Interdependence (Task and Social)
Centralizing or Outsourcing Tactical HR: Framework for Tata Steel

High Quadrant 2 Quadrant 1

Alliances/partnership Knowledge based Own
Specialized Resources
(Collaborative, BOO Based) Employment
Services
(Commitment Based)
e.g- External Sourcing (OPR & NOPR), e.g- Planning & governance of talent
Branding & Event Management, Canteen sourcing, Design & Review of all employee
Uniqueness of human capital

Management etc., pay & benefit policies, Strategy design for

Talent Management & employee
experience, Leadership development, IR &
Legal, Welfare & Statutory Compliances

Quadrant 3 Quadrant 4
Contractual work Job based Employment
Arrangement (Productivity Based)
(Compliance Based) e.g- Offer letter generation, Onboarding
e.g- Query & Grievance Help-desk (for (OPR & NOPR), Separation (OPR & NOPR),
Officers & Non-Officers), Mediclaim Help Admin. of employee benefits, Admin. of
Desk, SAP HR/IRIS Helpdesk etc. rewards & recognition (eg. Shabashi, LSA
etc.) , SAP & IRIS data admin, SWWS
Low administration, etc Transactional
Services
Call Centre /
Helpdesk Strategic Value
Services
Low High

8
Leveraging Technology in HR Processes
Gold Standard
Front-end • Online analytical
capabilities processing capabilities
Software deployed • Online analytical
processing application
• Other supplemental
business applications for
scenario planning, data
mining etc.
Selected back-end Fully automated
features • Large-scale data warehouse
• Real-time data feeds
Prevalence • Less than 5%
Progressive
• Basic online reporting
• Drill-down capability to
access specific data sets
• Standard reports of
mainstream software
vendors
• Workforce analytical tools
Mostly automated
• Possibly integrated HR
systems, but typically
multiple systems
• Sophisticated SQL and data
structures enabling transfer
of information
• 5-15%
State-of-the-Art
• Electronic reporting via email
or online delivery
• Simple viewing functionality
• Basic applications such as
Excel; possible use of pivot
tables
Partially automated
• Data house across multiple
systems
• Simple SQL for disposing data
into reports
• 85-98%
9
Balanced Scorecard

 Developing ground rules for

developing metrics
Strategic Operations
Perspective Perspective
 Cascading the developed metrics
through the layers of the organization

 Intelligence gathering, resulting in

series of HR deliverables
Customer Financial
Perspective Perspective  Mapping the key strategic HR
functions to the four perspectives
with respective trackable measures

10
The SHRM Challenges

 Leadership development and succession planning

 Striking the right balance between strategic and tactical HR

 Use data analytics to improve HR-related decisions

 Manage the changing business needs for talent and skills

 Define a forward looking workforce strategy- impact of changing demography and diverse
workforce

 Foster innovation throughout the organization

11
Succession planning and leadership development

 One of the key challenge and focus area for SHRM is maintain and improve the talent pool at the top of organisation and its
departments

 Succession planning and leadership development together are the comprehensive process for finding and grooming future leaders at
all levels of the organization

 Succession planning and development requires in-depth talent assessment, separating the strong candidates from the week and
putting the promising managers for challenging tasks.

 While developing the leadership pipeline pool is labor intensive, but it is imitable i.e. it can be learned and adopted in any organization

 Based on the study of Cognet & Fulmer (2003), the following guidelines can be used for succession planning and leadership
development
 Focusing on development
 Identifying linchpin positions
 Transparency in the process
 Measuring the progress regularly
 Flexible process throughout
Focus on development

 Succession planning must be centred towards developmental activities and not rigid list of employees trying to fill in slots in the
organisation

 Generally, leadership development focuses on classroom based educational events. However, it is more effective to complement the
classroom education with real-life exposure to a variety of jobs and managers. This can be achieved by using techniques like job
rotation, special assignments.

 This serves a dual purpose:

 Provide developmental experiences for employees - who are forced to look beyond functional silos to solve strategic
problems
 Getting exposed to larger part of organisation canvas and thereby learning the broader general management skills which
become more relevant as a person rises the ladder of hierarchy

 Opportunities like these should be incorporated into individuals’ development plans, with mechanisms to trigger associated
developmental activities as needed.

 While placing the employees through significant transition i.e. taking on important role or assignment with relevant experience, the risk
is mitigated by having people who are already strong contributors in the area or appoint mentors to give hand-on guidance.
Identify the linchpin positions and people

 Position that are crucial for long term health of the organisation are identified as Linchpin position. These are difficult to fill as
these reside in established areas critical for future requiring individual contribution.

 Succession planning focuses on top position, leadership development starts from middle management.

 Bringing the two together, enables companies to take a long term view of the process of preparing middle managers for future
senior requirements.

 Once the positions are identified, it is also important that the performance is mapped against the desired behaviour for the
position. Every managers for similar positions must be scrutinised for strength and weakness.
exceeds
Expect.

Leadership
Key talent Key talent
issues
Performance results

# Particulars Action
Expect.

Leadership Leadership 1 Key talent High priority. Accelerate

meets

Key talent
issues issues development
2 Leadership issues Coaching and mentoring
Doesn’t meet
expectations

Grading Grading Grading

opportunities opportunities opportunities
3 Grading opportunities PIP, action plans, prune
Doesn’t meet meets exceed
expectations expectations expectations

Leadership issues
Make it transparent

 Succession planning has been traditionally shrouded in secrecy in order to avoid the adverse impact on others’ motivation. This
is more prominent in organisation where growth is influenced by employee’s loyalty or seniority.

 By shifting from loyalty / seniority based consideration to performance based, people contribute more towards performance if
they know the rules of the same.

 A transparent succession management motivates employees to get into the habit of self assessment and planning, therefore
proactively investing time and efforts towards improvement

 Successful organisations have even provided the employees with their personal data inventory along with the required
information for being considered to next level.

 However, unlimited transparency might create negative impact on few people, as seeing themselves wat behind might result in
their minimising the efforts for improvement. Therefore, level of transparency needs to be carefully designed.

 With the development on IT front, this has become more easy and customised to suit the needs.

 HR managers can now keep the KSAOs inventory of the employees and use the same for consideration.

 Employees can access the parallel and higher career opportunities in the organisation at various location, thereby
actively participating as decision makers in their career progression.
Measuring progress regularly

 The ultimate goal is to ensure a solid slate of candidates for the top job

 No longer is it sufficient to know who could replace the CEO; instead, one must know whether the right people are moving at
the right pace into the right jobs at the right time

 The monitoring system should be a combination of assessment by the managers, but also a level of self-monitoring – knowing
who is where and which jobs they are being groomed for

 One of telling test of a succession management system is the extent to which an organization can fill important positions with
internal candidates – critical for business continuity

 Measuring the attrition rate of an organization’s “future leaders”— making sure that high-potential employees have enough
options that they don’t grow restless—royal heirs can be expected to show patience in waiting for the throne, but corporate
heirs have many other opportunities

 Succession management metrics (overall quantity of talent in the managerial pipelines, number of succession plans, ratio of hi-
pots to reach a certain level to incumbents at that level )company identify gaps more broadly – click of a button – number of
ready-now candidates; triggers a search for internal development opportunities as well as executive recruitment activities

 Measuring progress using a quarterly scorecard: the company tracks progress on goals, positional and pipeline data, diversity
elements (gender, race, ethnicity), job rotations, and turnover rates
Keeping the process flexible

 Fluid & flexible – organizations refine and adjust their systems on the basis of feedback from line executives and participants,
monitor developments in technology, and learn from other leading organizations

 Use of technology in its push for speed and simplicity – many organizations tweak their systems recently to make them easier to
use – Sonoco, Dell

 It’s not unusual for people to move on and off the list of high-potential employees.

 Succession management systems are effective only when they respond to users’ needs and when the tools and processes are
easy to use and provide reliable and current information

 In the early years of a new system, both the people managing the process and the people using it are likely to find any number of
shortcomings, so HR officers and staff must be open to continual improvements—to make the system simpler and easier to use,
and to add functions as needed.
End of Presentation
Six Leadership Passages

Passage 6

Passage 5

Passage 4

Passage 3

Passage 2

Passage 1
Evolution of SHRM

 Human Capital Management & Executive

Training

 Strategic HR or New HR  Increasing HR’s Value

 Centralizing or Outsourcing tactical HR  Effective SHRM

 Leveraging Technology in HR Processes  The SHRM Challenges

 Balanced Scorecard

20