FUAD W. AWAD HUMAN RESOURCE INSTITUTE LEBANESE AMERICAN UNIVERSITY REENGINEERING HR FUAD W. AWAD HUMAN RESOURCE INSTITUTE LEBANESE AMERICAN UNIVERSITY

Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D QUESTIONS Why HR is so important? How can an organization move from a traditional personnel management to strategic HRM? What should be the deliverables of HRM? What are HRM future challenges? How to increase employee results ? Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

WHY MANAGING HR IS SO IMPORTANT? Rapid change High levels of uncertainty Technological change Rising costs Attracting and retaining human capital Globalization Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

TRADITIONAL PERSONNEL MANAGEMENT HR planning Recruiting staff Job analysis Performance review Wage + benefits administration Employee training Record Keeping Legislative compliance Labor relations Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

TRADITIONAL PERSONNEL MANAGEMENT The traditional personnel department is often both physically and psychologically separated from the “real work” of the organization. Traditional personnel management involves a limited number of functional tasks, with personnel activities and staff being relatively isolated from the ‘profit-making heart’ of the organization. Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

STRATEGIC HRM - DEFINITION SHRM plays a central role in helping organizations reach their strategic objectives. SHRM interacts fully with other functional areas within the organization. SHRM helps managers maximize the contribution of employees in achieving competitive advantage. SHRM is all about promoting efficiency and profitability. Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

THE CHANGING NATURE OF HRM: A MODEL FOR MULTIPLE ROLES HR professionals must create value and deliver results Four key roles that HR professionals must fulfill: Management of strategic HR Management of transformation and change Management of firm infrastructure Management of employee contribution Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

HR Roles in Building a Competitive Organization Future/Strategic Focus Management of Strategic Human Resources Management of Transformation and Change Processes People Management of Employee Contribution Management of Firm Infrastructure Day to day/Operational Focus Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

BUSINESS PARTNERS PLAY MULTIPLE ROLES Today HR professionals want to be labeled business partners. Narrowly defined this means working with GMs to implement strategy, that is working as a strategic partner. In fact a more dynamic equation should replace the simple concept of business partner: Bus. Partner = St.Part + Ad.Ex. + Emp.Ch + Ch. Ag. Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D FUTURE CHALLENGES SIX challenges for the future will propel the HR community forward: HR Theory HR Tools HR Capabilities HR Value Proposition HR Governance HR Competencies Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

FUTURE CHALLENGES - HR THEORY To make HR practices more than isolated acts, managers and HR professionals must master the theory behind HR: Resource dependence (political science): HR practices help the firm acquire a stable supply of scarce resources that helps the firm to compete. Transaction cost (institutional economics):HR practices reduce costs associated with accomplishing work. Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

FUTURE CHALLENGES - HR THEORY Contingency theory (business strategy):HR practices align with business strategy to provide a fit that leads to results. Institutional theory (sociology):HR practices transfer knowledge and ideas from firm to firm making the best practices of an industry routine. Cognitive psychology (psychology):HR practices help create a shared mindset or culture within the firm. Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

FUTURE CHALLENGES - HR TOOLS Leadership depth: HR professionals must establish systems that create or discover future leaders. In the future, HR professionals may be judged by the extent to which they develop future leaders. Knowledge transfer: Creating systems that transfer knowledge throughout the organization will surely become a critical item in the HR toolkit  HR professionals are already called ‘Chief Learning Officers’. Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

A DIGRESSION - THE LEADER OF THE FUTURE Leadership will reside less at the top; it will, rather, be shared throughout the organization. Charismatic leaders will be less important than the processes the leaders create. Individual leadership will be replaced by team leadership. The new leader will be more likely to ask questions than give answers. Interest in questions and learning will replace focus on solutions and answers Global thinking will replace domestic focus. Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

FUTURE CHALLENGES - HR TOOLS Culture Change: HR professionals must learn to build a case for culture change, must expose gaps between current and desired culture, prepare and implement culture action-plans, coordinate culture-change efforts, and measure results. Customer-focused HR: HR practices will need to focus both on employees and on external customers. The latter group will be involved in staffing decisions, employee evaluations, training sessions etc. Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

FUTURE CHALLENGES - HR CAPABILITIES Effectiveness of the HR functions was measured in terms of accuracy, and administrative efficiency. Today, new capabilities must be added: Speed: how quickly can HR work be done without sacrificing quality? Implementation: How well can new ideas be turned into actions with visible results? Innovation: How able is the HR community to think creatively about solving old problems and finding solutions to problems not encountered before? Integration: How well does HR integrate with strategic plans, customer goals, and employee needs? Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

FUTURE CHALLENGES: HR VALUE PROPOSTION Every HR professional should be able to pass this one question exam: How does your work add value to your business in economic terms? Employees: How does HR affect commitment, competence? HR practices Customers: How does HR affect retention, satisfaction, Investors: How does HR affect profitability, growth, cost, cash flow? Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

FUTURE CHALLENGES: HR GOVERNANCE - How work is coordinated. New organizational forms are emerging:  away from pyramids toward networks  new thinking about management processes  careers may become more horizontal than vertical  compensation systems may be tied less to position than to competence  cultures will cut across internal boundaries  Learning to join together and produce as teams may become as critical to career success as having clear areas of power or control once was. Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

FUTURE CHALLENGES - HR COMPETENCIES HR competence is conceptualized using a three domain framework: Knowledge of Business Knowledge of HR Practices Management of Change Processes Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

FUTURE CHALLENGES - Knowledge of Business It explains 18% of the performance of HR professionals. It refers to the ability of understanding business functions not doing them. It encompasses: Financial capability Strategic capability Technological capability Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

FUTURE CHALLENGES - Delivery of HR Practices It explains 23% of the overall performance of HR professionals. It refers to the ability of the HR professional delivering sate-of-the-art, innovative HR practices  credibility and respect for HR professionals  It encompasses: Staffing - Development Appraisal - Rewards Communication - Organizational Planning Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

FUTURE CHALLENGES - Management of Change It explains 41% of the overall performance of HR professionals. It refers to the creation of an overall organizational capacity for change. It encompasses: Diagnosing problems Build relationships with clients Articulate visions Set leadership agendas Solve problems Implement goals Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

FUTURE CHALLENGES - Credibility HR professionals must be credible. The behaviors that enhance credibility are: 1- Accuracy: Being accurate in all HR work 2- Consistency: Being predictable 3- Meeting commitments:Doing what you say you will do on time and within budget. 4- Chemistry: Being personally comfortable with peers, subordinates, and supervisors. Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

FUTURE CHALLENGES - Credibility Confronting appropriately: being able to disagree and challenge at the appropriate time, in the appropriate setting, and in the appropriate manner. Integrity: behaving ethically. Thinking outside the box: offering alternative perspectives, having a point of view willing to express it. Confidentiality. Understanding all HR actions in light of the needs of the business. Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D Leaders Matter The HRI, Eckerd College, Fla. “Major Issues Impacting People Management” (1997): found leadership to be the #1 issue for effective people management. Mckinsey consulting firm, “War for Talents” (1998), found that firms with leadership depth were much more profitable that those without it. Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

What is Effective Leadership? Effective Leadership = Attributes  Results Terms of the equation are not cumulative, they multiply each other. Some have predisposition for one side: Focus on ‘results’  leaders do whatever it takes to accomplish short term objectives  leaders care more about what they accomplish than about how it is accomplished  lack the risk of sustainable results. Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

What is Effective Leadership? Focus on ‘attributes’ not paying enough attention to results  development of leadership through attributes. However without appropriate attributes leaders cannot be effective over time. Attributes and Results matter; they are the DNA of leadership.Together they create a road map for improving leaders Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

A Model of Balanced Outcomes Process - Centric Organization Results Investor Results External Focus Internal Focus Employee Results Customer Results People - Centric Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D Balanced Outcomes Balanced does not mean equal. Balance requires constant juggling, the goal being not let any of the four results areas fall from neglect. A consulting firm may focus on customers first, employees second, and investors third. A supermarket favors employees first, customers second and investors third, linear correlation leading from employee satisfaction to customer satisfaction to investor results. Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

Employee Results: Investing in Human Capital How can leaders get more out of their employees? As business becomes increasingly knowledge and service driven, employee results will continue to become more, not less, important. How can leaders build Human Capital? Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

Employee Results: Investing in Human Capital H C = Employee Employee capability X Commitment Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

Human Capital - Principles and Cautions Human Capital is underutilized Human Capital is one of the few assets that can appreciate Human Capital is portable Human Capital requires a different way of thinking about careers Human Capital within a firm correlates with customer perception of the firm Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

Human Capital - Principles and Cautions Human Capital draws everything else together  investments in physical plant, technology, new products, distribution systems, and marketing collectively function thanks to an organization’s Human Capital  Human Capital is the business of the day. Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

What is Employee Capability? Employee capability = Knowledge, skill, ability and motives of each individual employee in his/her position. Two levels of capability: Technical know how  skill needed to get the work done. Social know how  how employees work together  interpersonal skills and sensitivity to how workers work together. Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

What is Employee Capability? A leader’s job is to clarify: what employees need to know and do, then figure out how to make sure employees do what is needed. Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

What is Employee Commitment? Commitment represents how people in an organization will behave rather than how they could behave (their capability) Competitive demands - be more global, more customer responsive, more flexible,more learning oriented, more team driven, more productive - require more committed employees who give their emotional, human, and physical energy to firm success. Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

What is Employee Commitment? The only way firms can recapture commitment is by treating workers in ways that respect their individuality i.e avoid “one-size-fits-all” management practices. They create apathy. To create commitment, a complementary management style,  “mass-customizing the employee deal” must be fostered. Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

How to Measure Employee Commitment Three “large gauges” help leaders measure employee commitment: work force productivity organizational structure employee retention. Productivity = output per unit of input. Firm revenues/direct employee costs (salaries&benefits) Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

How to Measure Employee Commitment Profits/employee costs Total $ spent for sales force compensation/total revenues. $ Volume of units produced /$ costs of manufacturing employees. Cost per hire. Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

How to measure Employee Commitment: Organizational Climate Organizational Climate = Culture Organizational culture includes : Perceived quality of management & supervision Fairness of compensation and benefits Employees’ relationships with coworkers Quality of communication within the organization Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

How to Measure Employee Commitment : Organizational Climate The way decision-making processes used Quality of facilities and equipment provided Mechanisms of feedback to higher management Conduct periodic audits of workforce practices and employee attitudes. Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

How to Measure Employee Commitment: Employee Retention Companies that constantly loose good people in large numbers may have a leadership problem. The ideal number is not zero; some turnover is healthy. Leaders should be aware of turnover trends over time. There is a high positive correlation between productivity and reduced turnover. Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

How to Build Employee Commitment The idea is to customizing employee relationship, so that employee commitment increases. Employee commitment will demand utmost flexibility from every organization. Five dimensions can help organizations move toward productive flexibility: work arrangements rewards work impact community growth opportunities Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

How to Build Employee Commitment : Work Arrangement Flexibility may be built into where, when, and how work is done. “At-Home” call center representatives, flexible hours, changing policies around uniforms, campus like physical settings, on-site child care centers etc…. These arrangements allow for the work/life balance that is crucial to many employees. Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

How to Build Employee Commitment : Work Impact Employees prefer work that requires creativity and welcomes innovative solutions. By creating work settings where employees can see and feel the impact of their work, leaders increase employee commitment. Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

How to Build Employee Commitment: Growth Opportunities Commitment increase when employees do work that they can learn from. These opportunities come when leaders provide employees with skill training, job assignments requiring new skills, feedback on performance etc… Allowing employees to customize their growth opportunities provides them with further opportunities to learn and shifts responsibility for that learning to the employees themselves. Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

How to Build Employee Commitment : Rewards Commitment increases when employees receive public affirmation of a job well done  recognition + compensation & benefits. Giving employees choices about the form of their compensation helps create commitment. Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

How to Build Employee Commitment : Community A worker’s relationship with peers, supervisors, and executives is one of the biggest predictors of commitment. When community replaces hierarchy, employees feel they work for people who care about, respect them as individuals, and they reciprocate with increased commitment. Community can be fostered by : Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D

How to Build Employee Commitment : Community Giving employees the luxury of helping to select their teammates connecting with customers forming relationship of trust with supervisors. Fuad W. Awad - HRI- 8th Annual Meeting of the Arab Network for HRM/D