HR Operating Plans: Steps For Success

A list of best practices

Leaders need to be aware of the context of the workplace in which they are working and devise both strategies and supporting metrics that support the desired organizational capabilities consistent with the operating plan. Strategic HR planning enables leaders to predict the future HR needs of the organization based on the organization's current needs, the external labour market, and the future environment to support the acquisition of the right people at the right time. This article is a summary of best practices from the current literature on HR operating plans as well as personal insights.

Overall Flowchart

 

Create

Conduct an Environmental Assessment 

Understanding the context of the work environment is an essential step to successfully drafting an HR operating plan. Everything HR initiates should link with a business outcome. HR operating plans should be consistent with and supportive of corporate business plans, especially with regards to strategy and company performance. A SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis can be a useful tool to help you understand and assess the environment.  A gap analysis is comparing the current state to the desired future state to identify gaps and contributing factors. 

SWOT Analysis

Gap Analysis

Organizational Structure Action Steps

When implementing a strategy, consider the following action steps. 
 

1. A paper-based design of an alternative organizational structure that is devoid of names. It should include the identification of roles and responsibilities, as well as requisite skills for each position. 
2. Conduct a gap analysis of the future leadership team and the current leadership team's capabilities. Prepare to place any executives who possess the requisite knowledge and skills into the new model and prepare to re-assign or release those who do not. The focus on innovation should transcend every aspect of a business, and this includes HR practices and organizational design.
3. Conduct an expression of interest amongst existing employees to seek potential leaders for innovation-based projects. The recruitment and selection of management in a knowledge-based organization requires careful planning. Promoting an essential contributor to management can have disastrous results. Selection processes should include individual employee desires and interests and constructively assess a wide-range of skills.  
4. Recruit externally for any remaining requirements. 
5. Announce the changes in leadership to the organization. Communicate the benefits to the organization of aligning with the organization’s mandate. Detailed planning and effective communications can positively impact employee morale and work performance.
6. Conduct a review and augment the current corporate plan as well as supporting policies such as the management system framework and levels of authority to ensure the focus of the business and governance is on priorities and related outputs. A well-drafted operating plan for the desired end state is the most critical step towards implementing a productive change management endeavor.
7. Ensure each member of the executive team has the HR support required to align their departments with this model. This step overlaps with the talent management strategy outlined below.

Talent Management

A change in operational focus results in a shift in the prioritization of talent. Understanding what resources currently exist and what skills and knowledge will be required to implement an effective talent management strategy.

Talent management action steps
 

1. A partnership between HR resources and management to facilitate conversations with employees about their current skills and knowledge as well as future interests. Ideally, the recording of formal education and experience data can occur through a self-serve component of an HRIS.  Qualitative data collection requires a centralized collection to produce an organization-wide skills inventory. Decisions require an understanding of financial, environmental, and governance considerations.
2. Identify any surplus talent. Assess if these people can redeploy within the organization. Consider if layoffs are required. The impact on employee morale is a primary concern when conducting an organizational re-sizing initiative. Leaders in the organization should consider what skills are needed, both now and in the future, and what capabilities exist in surplus within the organization. Using a lens of expertise no longer required by the organization can make downsizing easier to accept for remaining employees and ease survivor's guilt.
3. Undertake a rejuvenation in succession planning to incorporate new business objectives and organizational structure. The data collected in step one will be included.
4. There is a need for HR to create value for both internal and external stakeholders of a company. Identifying, selecting, and developing the requisite skills the organization will require in the future is one strategic approach to creating value.
5. Formalize learning plans to promote growth and cement career paths within the organization. Consideration of the impact of the socio-cultural environment of the workplace now and in the future requires attention. There is a  positive correlation between knowledge management, career growth, and employee performance.
6. Develop a targeted recruitment strategy to address talent gaps. An effective recruitment strategy recognizes the different tactics required for each job family. The success of a knowledge-based organization is dependent on the caliber of talent within the organization. The acquisition of these resources requires an HR branding approach based on excellence.
7. Implement a supportive performance management program to align individual objectives with business objectives. Allowing employees to use their education and skills toward personal achievement and professional success enhances employee engagement. A metrics-based performance assessment tool such as a balanced scorecard can increase objectivity and encourage employees to work towards common goals.
8. Design a compensation framework that recognizes performance, essential skills, and incents the desired behaviors. Compensation levels should recognize the effort and skill required to stop perceived unfair compensation from becoming a distractor from work. Pay for specialized roles will need to be competitive internationally.

Employee Culture Shift

Workplace culture directly links to employee satisfaction, employee retention, and an organization’s level of diversity and inclusivity. Constructive changes can positively impact employee engagement and productivity. 

Employee culture shift action steps
 

1. Gather available data on absenteeism, turnover, grievance, and complaints filed, allegations of harassment reported, and any other relevant statistic to build a business case for the importance of monitoring employee culture.
2. Conduct an employee engagement survey. The results will not be favorable, but a baseline assessment allows for future improvements to be measured.
3. Solicit ideas from employees about how the culture of the workplace could be improved. Develop an action plan to address as many suggestions as corporately appropriate.  Create employee working groups to achieve these goals.
4. Develop more flexible work arrangements where possible. Perhaps a 4-10 hour day schedule, or work-from-home options when work is suitable for this. Through the creation of a culture that supports employees both at work and at home, organizations can benefit from increased employee effort, longer tenure, and improved attendance and productivity levels. 
5. Develop supportive employee wellness initiatives. Paid sick leave and other wellness benefits positively impact organizational culture and may also serve as a public service to curtail the spread of disease. Utilize employee assistance programs to assist employees to better cope with demands from life and work.  
6. Communicate good news. Celebrate employee successes, the signing of a big contract, employee milestones, and new hires. Recognize individuals for their work. Remember employee birthdays with a card signed by the CEO or other executives.
7. Explain any organizational right-sizing in terms of the impact on the organization and the opportunities possible because of these changes. Explain the driver to cut jobs is not to save money but to redirect funds towards areas of the business needing an investment to grow potential and away from historical focus areas. 
8. Treat departing employees well. Fair severance packages, respectful termination meetings, and last days of work enhance the perception of the organization to the employees who remain.
9. Create a feedback loop. Determining the culture of an organization is both an organic and deliberate process. Organizations need to first define the culture the leadership wants to cultivate. Next, an assessment should be done to determine the gap between the current culture and the desired culture.
10. Lastly, the organization's leaders should assess the culture to measure progress towards the desired state and to adjust plans as required.

Potential Internal Obstacles

When implementing operating plans, leaders may find internal opposition. Despite the project intending to strengthen the HR function, change can be hard to accept. The operating plan will increase the workload of the HR function. These changes could negatively impact the perception of prestige or could end long-standing client-service provider relationships. HR executives need to view themselves as agents of change for an internal initiative to be successful. The change leaders will need to embrace the proposed change, understand the strategic value of the HR change, and accept that the previous performance standards no longer meet the needs of the organization. This can be hard to accept. The message needs to focus on the new business model versus a concern with previous HR practices. Positioning the HR operating plan as a chance to excel in the field and become a more influential department within the corporation can help staff accept the changes. The initiative should include additional training and development resources and opportunities. 

Potential External Obstacles

Change to talent management practices tends to elicit managerial concerns. An organization modifying the existing talent management approach can expect internal obstacles such as a lack of commitment, support, and belief of the top managers, a lack of understanding about the importance and significance of talent management solutions, and a difference between the desired process and manager's staffing and promotion decisions. The reduction of these obstacles requires communication, solicitation of feedback, demonstration of the positive impact the new strategy can have on the business, and executive support.
 

External threats to implementation also include diffusion and imitation. Diffusion is the loss of talent to other organizations, and imitation is when a competitor or other department attempts to copy the work of a specific organization. Imitation and diffusion can cause turnover and have been identified as a factor negatively impacting job satisfaction and performance. Frequent communication with HR staff and their engagement in the development and execution of the plan can offset these factors.

Contingency Planning

Every plan is a draft until putting it into action. The existence of a contingency plan increases the likelihood of the success of an initiative. In HR, a contingency plan is less precise than an IT or finance plan. Nonetheless, a contingency plan is required. Considerations such as union objections, legal action, illegal strikes, unreliable data from employee engagement surveys, a lack of cooperation from employees, and refusal by management to adopt new practices are all predictable events that could occur.  

HR leaders need to identify the risks, determine how best to monitor if the risk is developing, and have a list of proposed actions in the event it occurs. When dealing with HR issues, the exact environment and nature of the risk need to be assessed at the time of occurrence before selecting a corrective action. The value of qualitative data gathered from clients, employee concerns, meeting with union leaders, and other sources are immeasurably valuable to contingency planning and should be shared with HR leaders. This data should be monitored, and additional data sought to confirm the sentiment. The more informed HR can be of possible risks and available metrics, the more planning can occur in advance, and the better prepared the function will be in the event of an occurrence.

Conclusion

Leaders often need to confirm their relevance to the business. The development of an HR operating plan that incorporates business considerations support the achievement of strategic goals, and maximizes resource use is an effective way to do this. When aligned, an HR operating plan is a crucial component to the success of the business, productivity levels, and employee engagement. Misalignment damage the capabilities of the organization as well as the reputation of the organization and the ability to attract future talent.  

Dr. Sue Haywood is the Business Unit Lead, HR with Business Sherpa Group, and an Adjunct Professor at the Smith School of Business at Queen’s University. Sue’s career includes service with the Canadian Forces and HR roles within healthcare, municipal government, Pepsi, and Atomic Energy of Canada Ltd. Her experience and knowledge of the HR considerations enable her to provide strategic advice to private and public sectors, unionized and non-unionized workplaces, and large and small organizations. She serves on the HRPA board of directors, and volunteers with Great Dane rescue. Visit www.businesssherpagroup.com  Connect Dr. Sue Haywood