Strategic Human Resource Planning Applications

243 Pages·1987·13.968 MB·English

by  Richard J. Niehaus (auth.), Richard J. Niehaus B.S. (Physics), M.S. (Industial Administration), D.B.A. (eds.)

STRATEGIC HUMAN
RESOURCE PLANNING
APPLICATIONS
STRATEGIC HUMAN
RESOURCE PLANNING
APPLICATIONS
Edited by
Richard J. Niehaus
Assistant for Human Resources Analysis
Office of the Chief of Naval Operations
Washington, D.C.
PLENUM PRESS • NEW YORK AND LONDON
Library of Congress Cataloging in Publication Data
Symposium on Strategic Human Resource Planning Applications (1985:
University of Pennsylvania, Philadelphia, Pa.)
Strategic human resource planning applications.
"Proceedings of the Symposium on Strategic Human Resource Planning
Applications sponsored by the Human Resource Planning Society, held
December 4-6, 1985, at the University of Pennsylvania, Philadelphia,
Pennsylvania" -T.p. verso.
Includes bibliographies and index.
1. Manpower planning-Congresses. I. Niehaus, Richard J. II. Title.
HF5549.5.M3S95 1985 331.11 87-11141
ISBN-l3: 978-1-4612-9045-2 e-ISBN-l3: 978-1-46l3-1875-0
DOl: 10.10071 978-1-46l3-1875-0
Proceedings of the Symposium on Strategic Human Resource Planning
Applications sponsored by the Human Resource Planning Society,
held December 4-6, 1985, at the University of Pennsylvania,
Philadelphia, Pennsylvania
© 1987 Plenum Press, New York
Softcover reprint of the hardcover 1st edition 1987
A Division of Plenum Publishing Corporation
233 Spring Street, New York, N.Y. 10013
All rights reserved
No part of this book may be reproduced, stored in a retrieval system, or transmitted
in any form or by any means, electronic, mechanical, photocopying, microfilming,
recording, or otherwise, without written permission from the Publisher
PREFACE
This volume is the proceedings of a symposium entitled, "Strategic
Human Resource Planning Applications" which was held at the University of
Pennsylvania in Philadelphia on December 4-6, 1985. The meeting was
sponsored by the Research Committee of the Human Resource Planning Society.
In developing the symposi~m, the Research Committee built upon a study
which resulted in a broad research agenda for the Society. The thrust of
that research agenda was emphasis on linking the state-of- practice with the
state-of-the-art. In the case of the symposium emphasiS was on the
presentation of forward looking applications which could help member
organizations link current practice with the research frontier.
The meeting had sessions on (1) Description of Issues, (2) Human
Resource Costs and Strategy, (3) Case Studies of Strategic Planning, (4)
Computer Technology and Office Automation, (4) Large Scale Forecasting and
Compensation Issues, (5) Models for Policy Analysis, (6) Work Force
Optimization, (7) Implementation of Information Processing Activities, (8)
Productivity Analysis, and (9) Relationship of Strategy to Practice. Thirty
papers were presented with discussion sessions at appropriate points in the
m~eting. This volume contains 18 of these papers along with an introductory
paper. A short summary is also provided at the beginning of each major
subdivision into which the papers are arraigned.
Thanks are in order for all who contributed to the success of the
meeting. First acknowledgement should be given to the current and former
members of the Research Committee who provided assistance in preparing the
agenda and reviewing and refereeing the papers which appear in this volume.
These current and former res~arch committee members include: William Chew,
Lee Dyer, Normand Green, Walter Griggs, Michael Hawkins, Richard Niehaus,
J. Jennings Partin, Karl Price, Carol Schreiber, James Sheridan, and Jo Ann
Verdin. Credit should also be given to the former Human Resource Planning
Society Executive Director, Kathryn Cason, and the current Executive
Director, Joy Ann Buss, as well as their able assistant, Dona La Scala.
Particular thanks should be given to the Chairman of the Research
Committee, Jay Partin, who guided the success of th~ meeting through its
many wickets. A special debt is also owed to John Eldred and Ross Weber The
Wharton School at the University of Pennsylvania who not only provided on
site assistance but also made important contributions to the meeting
program. Important secretarial assistance was provided by Patricia Bryson
of the Office of the Chief of Naval Operations. Finally, thanks are due my
wife, Mary Regina, who has given me encouragement in all phases of this
endeavor.
Richard J. Niehaus
v
CONTENTS
SECTION1: Introduction
Implementation of Strategic Human Resource Planning
Applications . . . . . . . . . . . . . . . . . . . . . . . . 3
R.J. Niehaus
SECTION 2: General Issues of Strategic Human Resource Planning
Human Resource Management and Strategic Change:
Challenges in Two Deregulated Industries •••••••••• 17
B.S. Chakravarthy
Formulating Human Resource Strategies in a Professional
Service Firm: A Systemic Approach • • • • • • • • • • • • •• 29
L. D,yer and R.A. Shafer
Pay Policy, Organization Strategy and Structure:
A Question of "Fit". • • •• ••••••••••••••• 43
R.F. Broderick
Human Resource Costs and Business Strategy: Striving for
Competitive Advantage in the Pharmaceutical Industry. • • • • 59
r.T. Kay and M. Leshner
SECTION 3: Employee Responses to Organizational Strategies
What Motivates Technical Professionals to Contribute Their
Best Effort and Maintain Their Commitment to
Their Organization? • • • • • • • • • • • • • • • • • • • • • 71
W.H. Griggs and S.L. Manring
Employee Responses to Organizational Strategies: The Forgotten
Variable in Human Resource Forecasting • • • • • • • • •
85
J.D. Portwood and K.F. Price
Executive Career Patterns and Organizational Adaptation
to Change~ •••••••••••••••••••••••• '. • 97
K.N. Gaertner
vii
SECTION 4: Strategies for Productiv~ty Improvement
Strategies for Managing Productivity Improvement 113
R.V. Mactaggart
Forecasting the Cost-Benefits of Job Training • • • • • • • • • .• 127
R.A. Bolda
Individual Proc!!lctivity: A Sourcing Analysis 135
R.A. Bolda
SECTION 5: For~~asting and Turnover Control
Manpower Requir$ments Forecasting: A Case Example • • • • • • • •• 145
D.N. Bulla and P.M. Scott
Use of Personnel Flow Models for Analysis of Large Scale
. . . . . . . . . . .
Work Force Changes 157
~
E.S. Bres III, R.J. Niehaus, F,J. Sharkey, and C.L. Weber
New Technology for Controlling Turnover • 169
M.D. Hawkins, University of Wa§hington
SECTION 6: Work Force Dynamics and Compensation Poli~¥
A Model to Simulate the Effects of Work Force Dynamic§
on Compensation Policy 185
M.O. Quigley and T.J. Henshaw
Decision Information Support for a Comprehensive Retirement
System Conversion • • • • 195
D.M. Atwater, E.S. Bres III, L.S. Ceoil, J.A. Nelson,
R.J. Niehaus, and E. Rosasoo
Analyzing the Link Between Compensation and Quit Decisions
of Civil Service Employees • • • • • • • • 207
L.W. Lacy
SECTION 7: Impact of Information Processing on Human
Resource Planning
Current Trends in the Use of Computer Technology
by Human Resource Managers • • • • • • 221
J.A. Verdin and A.M. Pagano
Deployment of a Micro-based HRHS as a Distributed Information
System: H.R. Policy Management Implications and Impact • 231
R.L. Wilson
About the Editor and Contributors 251
Index 253
viii
SECTION 1:
INTRODUCTION
IMPLEMENTATION OF STRATEGIC HUMAN RESOURCE PLANNING APPLICATIONS
Richard J. Niehaus
Assistant for Human Resources Analysis
Office of the Chief of Naval Operations (OP-16H)
Navy Department
Washington, DC 20370
INTRODUCTION
On December 4-6, 1985 the Human Research Planning Society research
committee sponsored a symposium held at the University of Pennsylvania in
Philadelphia. This symposium on "Strategic Human Resource Planning
Applications" consisted of 30 papers with discussion sessions at
appropriate points in the meeting. This paper provides an overview of the
symposium and an introduction to individual papers included in this book.
Perhaps the overriding idea which came out of the meeting was the fact
that practical implementable methods are emerging which allow managers to
learn more about the basic issues of strategic human resource planning.
Methods were presented on ways to view human resources strategies as they
relate to global organizational structures. A number of systems based in
the main on microcomputer applications were presented. They allow human
resource managers to have more control over the preparation of analyses and
to participate more directly in larger issues involving the viability of the
organization. The issues of turnover and career life cycles were topics of a
number of papers. Practical real life applications of flow models to
strength planning were presented.
The final papers concentrated on ways to relate planning strategies to
organizational practice. Particular emphasis was on employee responses to
organizational strategies including new ways to measure the motivation of
professionals from an adult human development perspective. It became clear
that traditional personnel research methods can now be supplemented and in
fact for many applications replaced by the more powerful tools emerging on
the scene.
As the title implies, this introductory paper follows the theme of the
symposium which emphasizes research applications which are near or in
implementation. The book is organized to flow from the general to the
specific. It also is designed to run from a general overview to specific
management and technical issues. Overall, there are many case studies
which should be of interest to those concerned with strategic human resource
planning. The next sections will follow the subdivisions under which the
individual papers are organized in this volume. There was some
reorganization of the flow of presentation from the order they were given at
the symposium so that the more management oriented papers would precede the
3
more technically oriented papers. The short summaries of the papers given
below for the most part were taken from abstracts provided by the authors.
The final summary section emphasizes the opportunities for implementation of
the technology in the next few years.
GENERAL ISSUES OF STRATEGIC HUMAN RESOURCE PLANNING
This first section discusses the issues of human resource planning from
the standpoint of general strategic business planning. There were a number
of papers which provided studies to illustrate different theories of
strategic human resource planning. The usefulness of these papers is that
they are based on actual comparative studies which were matched against a
particular theoretical approach. Since the theoretical underpinnings of
strategic human resource planning are still in the formative stage, the
papers provide a baseline for developing an organized body of knowledge in
this area.
As is indicated in the initial paper by Chakravarthy entitled "Human
Resource Management and Strategic Change: Challenges In Two Deregulated
Industries", human resource issues should be considered during strategy
formulation. He indicates that human resource management is typically
relegated to human resource specialists in an organization. This is due to
the perception that human resource issues need attention only after a firm's
strategies have been formulated. However, such activities like infusing a
firm with new skills, transforming its culture, and modifying its management
style often need longer lead times than that required to reconfigure a
firm's product-market strategy. His paper discussed the consequences of
failing to integrate human resource management with strategy formulation
using examples from the recently deregulated telecommunications and
financial services industries. These examples are discussed using eight
major firms in these industries which have had to reformulate their
strategies due to deregulation.
In a deregulated environment, Chakravarthy indicates that there are
substantial payoffs for both technological and marketing innovations. He
indicates that a firm can respond to this challenge in three ways: domain
defense, domain offense, and domain creation. The longer run strategies of
most of the firms studied was oriented to become a full line domain creative
organization. The keys to this goal appears to be motivating employees
towards a new mission, developing requisite skills, and nurturing an
appropriate climate. The bottleneck in or opportunity for achieving these
goals is the mind set of the current or acquired management staff. In
summary, he indicates that there are at least three areas in which human
resources can facilitate strategic change. These include: (1) nurturing
skills to promote strategic flexibility, (2) encouraging managers to
discover versatility in their management styles, and (3) integrating team
building with contractual incentives.
In the next paper by Dyer and Shafer entitled "Formulating Human
Resource Strategies in a Professional Service Firm: A Systematic Approach",
another concept is discussed. This paper documents the efforts being made
by Touche Ross, a "Big Eight" public accounting firm, to adopt a more
strategic approach to the management of human resources. It begins with
brief descriptions of the firm, the extant concept of strategic human
resource management (SHRM) and the role of human resource planning (HRP) in
fostering SHRM. Three types of planning processes are identified: plan
based, project based, and population based. Dyer and Shafer indicate that
collectively these three planning processes constitutive a comprehensive
approach to HRP discussing the design and implementation of each.
As with the initial paper, Dyer and Shafer indicate that a strategic
4
approach to the management of human resources means the development of a
culture in which human resources are an integral component of the business
equation. In a comprehensive approach, plan based or formal HRP is used at
the corporate level to promulgate firm-wide philosophies and priorities
concerning human resources. At the lower business levels the HRP plan is
used to identify major human resource issues and develop action plans for
dealing with these issues. Project based HRP takes place in the context of
the relatively informal deliberations undertaken by task forces and project
teams that are from time to time constituted to examine strategic business
issues and make appropriate recommendations. This is in recognition of the
fact that in most organizations strategic business planning usually lags
strategic business thinking. The role of population based HRP is to focus
on a particular group of presumably critical employees to assure that they
and their potential replacements receive the care and feeding necessary to
assure an ongoing supply and to meet evolving needs. The main body of the
paper discusses each of these planning processes in relationship to the
management of Touche Ross concluding with a delineation of the key factors
being considered in the introduction of such a system of managing human
resources in the firm.
In the study discussed by Broderick in the paper "Pay Policy,
Organization Strategy and Structure: A Question of "Fit", Broderick
investigated policy decisions on middle management pay and their
relationship to business strategy. Compensation directors at 208
manufacturing firms answered questions on pay structure, level, mix,
incentives and administration, and firm business strategy. This study
examines the notion that the better the "fit" between pay policy and
organization characteristics such as business strategy, the higher the
organization performance. There were two theoretical reasons offered for
the higher organization performance attributable to "fit" relationships
between pay policy and other organizational characteristics. First, if pay
policy is contingent on an organization's business strategy then appropriate
employee behaviors are more likely to be defined and rewarded. Second, the
notion of "fit" includes congruency between pay policy and the
organization's design and administrative style.
The results of the Broderick study suggested that pay decisions
reflect seven broader dimensions of policy including the issues of:
partiCipation, authorization, formalization, standardization, external
competitiveness, membership vs. performance, efficiency vs. growth. The
questionnaire results were also able to be fitted into a behaVioral model
identifying three types of organization: Defenders, Prospectors and
Analysers. The Defender has a narrowly defined, stable product market
strategy. The Prospector emphasizes an innovative, dynamic approach to
product market definition. The Analyzer is characterized by a mixed product
market strategy in which some of its product markets are stable and narrowly
defined, but others are more dynamic and innovative. Using these
definitions, the results supported that pay policy varies systematically
with business strategy. For example, firms with a strategy of maintaining
market share emphasized centralized pay administration and cost performance
criteria. The results of the Broderick study represent a first step in
examining the more fundamental question of "Does pay policy that "fits"
business strategy improve organization performance?".
An important theoretical and practical issue of relating strategiC
human resource planning is how one's organization is dOing in relationship
to the competition. An empirical study relating strategies of staffing
control to practice is given in the paper by Kay and Lesher entitled "Human
Resource Costs and Business Strategy: Striving for Competitive Advantage in
the Pharmaceutical Industry". They approach their study from the point of
view that control over staffing levels and costs is a critical component in
5