Managing Key Human Resources:Setting Objectives for Teams and Delivering Results

Dr. Roger DarbyCentre for Defence Management & LeadershipCranfield University, UKDefence Academy of the United Kingdom

Minister’s Vision 2013-14“….sets the defence priorities for the Ministry of Defence (MoD) for 2013-14. The document provides a clear vision for further development for the GAF to improve its capabilities to protect the independence, territorial integrity and sovereignty of Georgia, to participate in international operations and assist civil authorities during natural and man-made disasters. Our goal is to create a highly-capable, mobile, modern, fully-professional armed forces that is fully interoperable with NATO. The reforms that are planned to achieve this goal will be in line with the recommendations of the SDR 2013 that defines main directions to shape the armed force development and its final structure – Objective Force 2016.”

Guiding principles:• Using personnel and external expertise effectively• Exploiting institutional memory and experience• Encouraging innovative approaches• Decentralizing the decision-making process• Promoting teamwork across military and civilian structures• Ensuring a consistency of purpose

Vision = organisation’s desired situationIts purpose is to guide, control and challenge the entire organisation toward realising a shared concept of the organisation in the future.

Managing the Defence ‘Spaces’: The Battle Space the Business Space & Civil Military Relations…

Business spacePreparation of defence capability

Protracted timeResource constrainedAssembling people, equipment, training etc

• Civil Military Relations

* Cyberspace ?

BattlespaceOperational area

Short time for decisionsLess resource constrainedUsing people and equipment, within the constraints of the preparations made

)

Managing Resources to meet Strategic Needs

RESOURCES - tangible & intangible

Finance – PEOPLE - Plant/M/c - Technology

CAPABILITIES – to deploy resources to meet objectives

CAPACITY – sufficient social capital to meet requirements

- COMPETENCIES (CORE)- Capacity Building…

THE HUMAN RESOURCE CYCLE

Selection Performance Appraisal

Training

Rewards

‘CONTRACTS’ – and the Employment Relationship

Employee and employer perspectives matter – because managers’ & employees’

behaviour is influenced by their beliefs………..

HRM & CONTRACTS2 MAIN TYPES:

1. EMPLOYMENT CONTRACT – Legally binding – WRITTEN

2. PSYCHOLOGICAL CONTRACT - UNWRITTEN - (Military Covenant?)

“an implicit exchange between an individual and his organisation which specifies what each expects to give and receive from each other in the relationship.”

“the perceptions of both parties to the employment relationship, organisation and individual, of the obligations of implied in the relationship. Psychological contracting is the process whereby these perceptions are arrived at.”

- Development of the ‘individualism of the employment relationship’

The concept of negotiated exchange at the individual level offers distinct parallels with the traditional pluralist exchange of collective bargaining

Decisive - The Military Covenant

Valued By The Nation

Just Reward

Valuing Our People

Valued by the Nation

FairTreatment

Terms and Conditions of Service

Fighting Spirit

Valued by the Service

The Soldier

Fighting Spirit

The Military Covenant

“Do my job and be valued”

“Being able to enjoy my life”

“Look after my family – whatever happens to me”

Reward Management

“What gets rewarded, gets done…..” is the key that REWARDS reflect what the organisation see as important..

Important determinants:

Question of ‘QUANTITY’ (i.e. reward must relate to number of items produced)

V

‘QUALITY’ (i.e. reward may reflect reject rates or customer satisfaction rate)

‘PAY +’ = KEY HRM ISSUE…!

Ministry of Defence

Minister of DefenceVarious state departmentsLands; retired personnel;Finance; acquisition

Support organisations:inspectorate; analytic support;

intelligence; press services

1st Deputyminister

Deputyminister

Deputyminister

Deputyminister

Deputyminister

General Staff

Armed Forces

Militarypolicy &strategicplanningInternationalcooperationPersonnelEducation &Science

HumanitarianHealthcareCitizens’petition

SportsOversightLabour

Economic & administrativeConstruction

MunitionsArmamentsMaterials

TechnicalIndustrialEnvironment

AdministrationLegal

SupervisionInformationAccounts

Armed Forces

General Staff (MoD)Main Command Centre Support Forces Command

Joint OperationalCommand

Land ForcesCommand

Air ForcesCommand

Naval ForcesCommand

Western Southern North

Army Corps Directorate Air ForcesCommandDirectorate

NavalOperations

Centre

CoastalDefenceTroops

FormationsArmed Forces

PeacekeepersFormations

Land

FormationsAir Forces

FormationsNaval

Stand-byForces

(Supply Functions)

So, where does money fit in?

OBJECTIVES OF A REWARD SYSTEM

ENCOURAGE BEHAVIOUR THAT ENABLES THE ORGANISATION TO ACHIEVE ITS GOALS AND ATTAIN COMPETITIVE ADVANTAGE ATTRACT SUITABLE CANDIDATESRETAIN AND MOTIVATE CURRENT EMPLOYEESACHIEVE ITS ENDS AT AN ACCEPTABLE COSTENABLE FLEXIBILITY AND INNOVATION

Seven deadly sins that put reward strategies at risk

The seven reward

risk groups

How the risk arises Potential consequences

Strategic Misalignment of reward strategy

To the organisation’s goals

An inability to attract and retain the employees needed for success

Behavioural Misalignment of reward strategy to the required employee behaviours

The rewarding of inappropriate or unproductive organisational activity or behaviour

Financial Inadequate reward cost management

Poor value for money and, where relevant lower profitability or even loss

Operational Poor execution or failure of reward systems and reward processes

Inefficiency or inaccuracy of the systems or fraud in their operation

Implementation and change management

Poor implementation or change to the reward strategy and/or processes

Reward is managed ineffectively and therefore does not have the required impact

Legal and ethical Non compliance with organisational and societal values and legal and regulatory reward requirements

Employee claims or regulatory action that can affect an organisation’s financial healthy and its reputation

Governance Inadequate oversight and challenge to organisational reward strategy

Organisation pursues inappropriate policies

MOTIVATION: PROCESS THEORIESExpectancy Theory:

Equity Theories:

Goal Theories:

Behaviour depends on the outcomes that an individual values and the expectation that a particular type of behaviour will lead to those outcomes

Behaviour is affected by different levels of reward for the same amount of effort

Behaviour is affected by goals which are determined by the individual’s values and wants

REWARD MANAGEMENT

Economic(Extrinsic) Rewards

Social Relationships

Intrinsic Rewards

Overlap = Needs andExpectations in theworkplace

Components of the Reward Package

l

SecurityBase pay

Pay for performance

PerformanceRelated pay

Commission

Recognitionpay

Benefits

Skills - basedpay

CompetenceBased pay

Fixed benefits

Careerdevelopment

Incentive schemes

Direct rewardsExtrinsic

Job satisfactionCultural

satisfaction

Indirect rewardsIntrinsic

Total Reward

Personalgrowth

Flexible benefits

TYPES OF REWARD

Group-related

Security-driven:

•

Lifetime jobs

• Corporate prestige

Tradition-driven:

•

Cost of living increases

• Perks

Employability-driven:

•

Training and development

• Personal career plans

Contribution-driven:

•

Performance-related pay

• Merit bonus

Individual-related

Money-related

Non-Moneyrelated

PAYING PEOPLE RIGHT?

1. Create a positive and ‘natural’ reward experience

2. Align rewards with business goals to create ‘a win-win partnership’

3. Extend people’s ‘line of sight’ between effort and outcome, motivating ‘smart’ working over simply expending extra effort

4. Integrate rewards with strategic aims and kinds of contribution desired

5. Reward individual ongoing (input) value to the organisation with base pay

6. Reward results (outputs with variable pay

‘Involve and educate’ the workforce about the reasons and shared benefits for changing reward systems

Provide a clear managerial direction that individual employees must continue to ‘add value’, which the company will recognise with rewards

Ensure that all members of the workforce are ‘knowledgeable stakeholders’: they are to be shown how their efforts impact on the work team, business unit and company, including the need to adapt to customer needs

Use each ‘reward tool’ for what it does best, integrating each element of total reward to offer a customised ‘deal’

This has three elements: employee salary is to reflect increases in competencies the firm finds useful; consistent performance over time; and the individual’s value in the external labour market

It is uncritically accepted that the firm ‘must meet shareholders expectations’ (whose reasonableness relative to other stakeholders is not discussed); variable pay is deemed suitable as part of the ‘total reward’ offer to reward these ‘results’, as well as enjoining employees in the corporate project

Principle Comments

TO BE SUCCESSFUL REWARD SYSTEMS MUST…

• BE IN LINE WITH ORG. VALUES AND CULTURE• FIT WITH ORG. STRATEGY• INTEGRATE WITH OTHER HR STRATEGIES• REWARD RESULTS AND BEHAVIOUR• BE PRACTICABLE AND EASY TO IMPLEMENT• EVOLVE THROUGH CONSULTATION• BE CONSISTENT WITH MARKET RATES

Performance Management & SSM

1. What is your experience of performance management in SSM?

2. What is your knowledge of performance management in SSM?

3. What issues does Georgia’s SSM face introducing performance management?

Potential Issues

DefinitionsChallenges to instituting sustained SSR Transparency & accountability – not taken seriously

Two clients/customers – donor & recipient

Self assessment – interpretation of question areas Taxonomy – one size fits all?

Individual performance

Looking back

Looking externally

Looking forward

Perception data

Collective performance

Looking internally

Hard facts

The Measurement Compass: 8 directions :

- Need to take account of:- Look forward as well as looking backwards- Measure of collective as well as individual performance- External measure as well as internal measures- Perception data as well as hard facts

Definition

How would you define performance measurement?“Performance measurement is evaluating how well organizations are

managed and their value they deliver for customers and other stakeholders.”

Max Moulin

“The process of quantifying the efficiency and effectiveness of past action”Adams, Kennerley & Neely

Why Measure?

3 distinctive roles of measurement:ComplyCheck

Challenge

Neely - 4 CPs of Measurement

Check Position

Communicate Position

Confirm Priorities

Compel Progress

How Could this be Adapted for General Use?

Objective Top Level Measures

Sub Measures

Reputation Feeling of security by populationTrust in Security Sector Organisations

Trust in Armed GroupsTrust in Judiciary System

Accountability Increased oversight Fighting corruption & nepotismOmbudsman for complaintsIndependent scrutiny

Reform of Security Services

Support for Security Sector Reform

Improve training of police & security forcesTrial of security personnel responsible for violations

BalancedScorecard

Performance Management

Tools & Techniques

CapabilityReviews

UN, Country & Regional Models

Perform

ance Measurem

ent

Theories,Definitions

Methodologies

Excellence Models

SSM

Other Models

HUMAN CAPITAL CHECKLISTAlign human capital programmes with overall org. strategy –(HRM linked to Strategic Planning)

Evaluate the current worth of your human resources and the efficiency of your current human capital functions and programmes – (Skills Audit)

Measure the amount of funds and time you are spending to source, develop, and manage these resources –(Useful Metrics)

Assess the return on investment in human capital – (ROI measures)

Manage and minimise the risks associated with the employment of people - the least predictable of all assets – (Risk Mgt.)

Maximise the value of human capital - the most valuable of all assets! – (Recognise Value of HR Services)

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Setting ObjectivesStrategic Management Process

InternalAssessment

EnvironmentalAnalysis

StrategyFormulation(Planning)

StrategyImplementation

StrategicControl

Strategic Defence Review

Current organisationof the Armed

Forces

Current Capabilities

CapabilityGaps

Internal Assessment

Required capability

Aims of military security

State Capabilities for support of Defence

Threatassessment

Environmental

AnalysisPolicy Making

Definition of priorities

ManagementStrategy

Stage 1: Determine the VisionMinister’s Vision 2013-14

“….sets the defence priorities for the Ministry of Defence (MoD) for 2013-14. The document provides a clear vision for further development for the GAF to improve its capabilities to protect the independence, territorial integrity and sovereignty of Georgia, to participate in international operations and assist civil authorities during natural and man-made disasters. Our goal is to create a highly-capable, mobile, modern, fully-professional armed forces that is fully interoperable with NATO. The reforms that are planned to achieve this goal will be in line with the recommendations of the SDR 2013 that defines main directions to shape the armed force development and its final structure – Objective Force 2016.”

Guiding principles:• Using personnel and external expertise effectively• Exploiting institutional memory and experience• Encouraging innovative approaches• Decentralizing the decision-making process• Promoting teamwork across military and civilian structures• Ensuring a consistency of purpose

Stage 2: analyse vision according to 4 perspectives

BALANCEDSCORECARD

Measures

Targets

Initiatives

Objectives

ResourcesEfficiency/Effectiveness

Role/Purpose

CapacityBuilding

Four Questions to Ask

Requirements as defined by policy

What is our purpose?What do we need to do to achieve our purpose?What do we need in order to do that?What do we need for the future?

RoleEfficiency & effectiveness

Resources

Capacity building

Four Questions to AskMain Defence Forces

What is our purpose?

What do we need to do?

What do we need, to do it?

What do we need for the future?

Defend against major aggression;Defeat the enemy in a local war;Force … an armistice…

Combat & mobilisation readiness (90-120 days)Effective forcesEffective command and control bodiesPersonnel at 70% of required strengthProvision of weapons & equipment,State supportDevelop Command & Control systemLogistics supportImprove personnel policyImprove civil-military relations

Stage 3: express vision as strategic aims

BALANCEDSCORECARD

ResourcesEfficiency/

Effectiveness

Role/Purpose

Capacity Building

Future (Capability Building)

Are we building for the future?

e.g. Defence Balanced Scorecard 2008-12> - UK MoD

Purpose (Role)

Are we fit for today’s challenges and ready for tomorrow’s tasks

Resources

Are we making best use of our resources?

Enabling Processes (Efficiency &

effectiveness)

Are we a high performing

organisation?

Defending the United Kingdom and its

interests;

Strengthening international peace and stability;

Acting as a force for good in the world

UK Defence Scorecard in more detail

Purpose (Role)A. Current Operations:

Succeed in Operations and Military Tasks today.

B. Future Operations: Be ready for the tasks of tomorrow.

C. Policy: work with allies, other governments and multilateral institutions to provide a security framework that matches new threats and instabilities

ResourcesD. People: Manage our

people to provide sufficient, capable and motivated Service and civilian personnel..

E. Finance and Value for Money: Maximise our outputs within allocated financial resources.

F. Estate: Maintain and develop estate infrastructure of the right capability and quality.

Enabling Processes (Efficiency & effectiveness)

G. Military Equipment Procurement: Equip and support our Armed Forces for operations now and in the future.

H. Infrastructure Procurement: Invest in strategic infrastructure to support defence outputs.

I. Security & Business Continuity: Enable secure and resilient operational capability..

J. Safety: Minimise non-combat fatalities and injuries.

K. Reputation: Maintain our reputation amongst our own people and externally

L. Sustainable Development: Work with other government departments to contribute to the Government’s wider agenda, including sustainable development.

Future (Capability Building)

M. Future Capabilities: Develop the capabilities required to meet the tasks of tomorrow..

N. Change: Develop flexible and efficient organisations, processes and behaviour to support the Armed Forces.

O. Future Personnel: Deliver the personnel plans to meet the needs of current and future tasks

Stage4: Determine …

What are the critical success factors for achieving strategic goals?What are the critical measures that indicate strategic direction?What actions should we take?

Helps us to determine our priorities.

What are the standards that we need to achieve?

The beginning of the action plan.

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A UK Example: Resources

D.People: Manage our people to provide sufficient, capable and motivated Service and civilian personnel.

E. Finance and Value for Money: Maximise our outputs within allocated financial resources.

F. Estate: Maintain and develop estate infrastructure of the right capability and quality.

The vision:Defending the United Kingdom and its interests: acting as a force for good in the world…

People: Critical success factors

Ensure we have sufficient diverse people, maintaining manning balance and the right profile of skills within each service and the right mix of skills in the civilian workforce despite reducing numbers,Ensure our people are capable of doing the jobs we need them to do by keeping them healthy and training them well,Manage our people well, motivating them and offering them worthwhile can satisfying careers.

Manning Balance: Critical MeasuresEnd of

financial year:

2008/09 2009/10 2010/11 2011/12

Royal Navy/ Royal Marines

35,790 35,410 35,360 35,380

Army 101,660 101,630 100,560 101,510

Royal Air Force

40,830 40,360 40,670 40,170

Step 5: Cascade targets through the chain of command

Achieve full manning balance in each of the 3 services as soon as possible by:

Achieving overall Service manning balance (+1% to -2%) between the trained strength and the trained liability.

Maintain the correct profile of skills and experience within the regular Service manpower structuresImprove longer-term recruiting prospects by increasing the representation of minority ethnic groups within the Armed Forces.

Delivery responsibility: Chiefs of Naval, General and Air Staff.

Step 6

Consider your goals as the foundation for a control and reporting process

…

Resource Management

BudgetManning LevelEstateReputation

Reporting Performance (Example)

Output/Deliverables

OperationsEffectivenessPolicy

Process Improvement

TrainingLogistics Support

AcquisitionOutputs

Learning and Development

Investing in peopleLessons learned

Information

Technology

=satisfactory =minor weakness=serious weakness =critical weakness

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Value & Potential of the Scorecard Approach

A simpler, clearer statement of the strategic intent of the Defence Council & Defence Management BoardA more comprehensive view of performanceA clear focus on outputsAn insight into how the components of performance relate to each other & to the delivery of our key outputs

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Performance Management Benefits

Simplified strategic goalsFewer, more strategic, performance targetsBetter information on performanceIntegration of financial and non-financial reportingSharper focus on results

CONCLUSION.