Why You Need to Create a Strategic Plan for Your HR Function

So why have an HR Strategic Plan?

In today’s highly competitive business environment, success is often determined by how well an organization and Human Resources can manage change.  Organizations have to constantly monitor their place in the external business environment as well as evaluate and improve their organizational capabilities, or intangible assets, in order to effectively compete in the marketplace.

The strategic planning process is the most effective way for organizations to identify and address all of the various external and internal forces that have an impact their business. This process moves the organization from their current place to their desired future.  And more importantly, brings value to all of the stakeholders of the organization.  

But what value is the strategic plan without the people within the organization being ready, willing, and able to execute the plan? None. The organization’s employees must understand and be fully engaged in and willing to follow the strategic plan in order for it to be of any value to the organization.

This is where HR comes in.  

HR’s value lies in being able to build and maintain the organizational foundation and infrastructure to help drive the necessary changes that will accomplish the organization’s strategic goals.  

Regrettably, HR is still thought by many business leaders as pretty much an administrative function that operates separately from the rest of the other functions in the organization.  Sadly, this reinforces the opinion that HR isn’t that important to the success of the organization. HR is also not typically held accountable for business results, as the other functions are, and because of this, HR considerations are typically ignored and viewed as a cost center rather than a profit line contributor.

There are some leaders, however, who recognize that an organization’s human capital is a key strategic resource for increasing organizational capability and achieving a competitive advantage over competitors.  Being able to attract, retain, motivate, and develop the best employees in the organization’s industry are critical to its success in the marketplace.

The ability of an organization to execute it’s strategic plan rests solely on its effective utilization of its human capital.  

Smart business leaders are recognizing this and have turned to HR to help them positively impact their business results.

In order for HR to have a positive impact on an organization’s business results, we must focus on and engage in both the long-term strategic and the short-term administrative and operational planning.

There are three roles that HR has in an organization that need defining before we go any further:

First is the administrative role. This is the traditional role most people think about HR. It’s things like regulatory compliance, policy & procedure interpretation, record keeping, HRIS management, benefits administration, onboarding & offboarding activities, etc.

Second is the operational role. These are the HR activities that relate to the day to day operations of the organization.  These are the tactical activities such as recruiting, filling job reqs, handling employee relations issues, employee communication, compensation program management, etc.

These two HR roles aren’t the high-level exciting things many of us in the upper levels of HR like doing any more but they are absolutely essential to the organization and the reputation of the HR function. HR must be 100% technically competent in the administrative and operational roles and execute their HR services flawlessly.  

HR’s reputation is built on the employee’s perceptions of competence and has to be flawless in these two roles in order for to build a solid foundation of building on the higher level strategic role.

Third is the strategic role. This is the role where HR can really make a difference.  It requires HR participating in the strategic planning process, improving the organization’s performance, ensuring effective leadership, redesigning organizational processes, and ensuring financial accountability for HR results.  

Business literacy is required in order for HR to be effective in the strategic role. HR must know and fully understand who the organization’s stakeholders are as well as the organization’s markets, products, customers, and competitors.  Fully understanding financial terminology, speaking the language of business, and knowing how to read and interpret the organization’s financial statements – income statement, balance sheet, cash flow statement, etc.- are absolutely necessary.

I believe that the most effective strategic HR professionals are those who have real-life business experience outside of HR. (Self-promotion alert) I’m, of course, biased having successfully led and operated, with full P&L accountability, an award winning full line Macys department store for 13 years.

By having a solid business background and experience, HR can develop effective value-added strategies of staffing, performance management, total rewards, employee relations, and employee development. This puts the organization’s employees in the best possible position to execute it’s strategic plan and contribute to its financial success in the marketplace.

Strategic HR is my favorite topic and the role I enjoy most as an HR professional. I’ve touched on it a bit in my Metrics and Analytics series but I’ve been focusing on writing/podcasting mostly on the operational side of HR.  I had to build a foundation first, you know!

Now I can start exploring more strategic HR topics here at HHHR!  

Next week, I’m going to continue with strategic HR and explain exactly what a strategic plan is.  

Steps to Help Your Employees Understand the Details of Their Benefits

Tell them real-life stories

This week I’m going to cover a small but very important tactical element of HR. Although it’s a small thing, it leads to a much larger strategic element of building a high-performing workplace culture

I’m a strong believer in delivering an amazing onboarding experience for employees. I built one at one employer from the ground up and I had the pleasure of  inheriting an outstanding one at another employer.

Today’s post is going to deal with one portion of the onboarding process – the Benefits discussion.  This is often the most confusing and boring part because HR typically comes in and goes through the insurance benefits using HR and insurance industry jargon. As a result, most employees don’t understand most of what is being said and just tune out and start looking at their phones. This is unfortunate because an organization’s benefits are an important and  critical piece of the total rewards program and employees need to fully be comfortable with understanding them.

I think employees really need to understand all of their benefits and there should be the appropriate amount of time put into the onboarding schedule to make sure employees really do fully understand them. We owe our employees the extra effort to help them understand their benefits rather than just handing them a packet of papers or just helping them logon to the onboarding site and leaving them with an hour to review and enroll.  

So here’s how I do it.

In my schedule, the benefits discussion occurs immediately after all the required hiring paperwork is completed. This way, they are still pretty fresh and enthusiastic.  I always go into the HR portion which includes the insurance and benefit portion of onboarding telling the new hires that this portion is going to be the most exciting and interesting part of the entire  process. I’m obviously being silly and I purposely exaggerate this because they and everybody else has experienced the opposite so it grabs their attention.

I then like to tell real-life stories about how the different benefits work. These are my stories based on my experiences and I’m certain you have your own story bank you can go to when communicating benefit details to your employee team.

For instance as I’m talking about the medical benefits, most people understand what the deductible means and how the co-pay plays into that but many don’t really understand what the Annual Max Out of Pocket means.

So I tell a real-life story about an employee (this was at a previous employer and whose identity I keep confidential) who had a heart attack while out camping with his family. He was life flighted to the hospital and had open heart surgery.  Well, when everything was said and done and the employee added up all the bills that came, the total was over $1,000,000. Fortunately for him and his family, the company health insurance plan had a maximum out of pocket of $3500.  What does this mean? Simple. The employee only had to pay $3500 total for the episode.. And this all happened in the summer so he had to continue treatment, cardiac rehab, and many other doctor appointments and because he reached his MOP, he paid nothing for the rest of the year. Every time I tell this story, I see clear understanding in the new hires’ eyes because this story always makes it obvious what the max out of pocket is.

Another story I like to tell is when describing the Employee Assistance Program (EAP). This benefit is very often forgotten and rarely used. I believe strongly in it as I’ve used it myself and tell the story of a couple employees I helped through substance abuse problems (again at a previous employer keeping names confidential).  

I had employees come to me asking for help with their substance abuse. They feared they would lose their job but my company believes in helping employees who ask for help. So I gave them all the EAP info and explained to them how the EAP works and strongly encouraged them to call and get the counseling help they need. I also explained that in addition to the free counseling sessions, our medical insurance has programs to help them clean up. They took advantage of these programs, cleaned themselves up, and remained good productive employees.

I love telling this story.

The last story I’m going to share this week is about the Flexible Savings Account (FSA). I tell them I love this benefit because it’s like an interest free, tax free loan to pay for medical related expenses like co-pays and deductibles. I tell them I usually max out the benefit and contribute the full $2600 and at the end of the year, if I have some left over, I treat myself to some very nice eye glasses and/or prescription sunglasses.  I also go back to the story above about the maximum out of pocket and tell them the heart attack employee had about $1600 left in his FSA and applied that to the MOP amount of $3500 he owed. So he only had to come up with $1900 for the entire cost of the episode.

There are, of course, other stories I tell to help our new employees understand the more complicated details of their benefits but I may share those at another time.. I always get positive comments from the new hires who appreciate me taking the time to sit down with them and going through the benefits we offer and explaining, through real-life stories, how they work.

Not only does this help them personally in understanding their benefits package, it sends the strong message that the organization sincerely cares about them and their well-being.  It’s an important element in the strategy of building that all important high-performing culture that we all strive for.  

The Importance of The Morning Greeting

My favorite podcast, Manger Tools, recently released an episode titled The Morning Greeting. I liked the episode because it speaks to an important activity I learned many years ago working as a store manager for the Bon Marche (now Macys).

Basically, it is simply the act of saying good morning to each of your direct reports every day and the positive impact it generates.

Mike and Mark go into quite a bit of detail on the mechanics of how to greet direct reports which I found humorous.  I know there are many managers who find it difficult to circulate and greet their employees so I understand their need to go into detail.  It came naturally to me early in my career as I observed  effective managers I worked with and as I developed my own style.

When I was in retail, I would make the point of circulating through my store every morning and greet each of my employees (direct reports, sales and sales support associates) by name.  Sometimes I would cruise by their department, wave and say “Good morning, Joan!” and sometimes I would  stop and chat a bit – either about business or personal stuff or both, depending on what was going on in the store or in their lives.

I would also make a point of circulating through the store as I left for the day, catching the late shift,  and say “Goodnight!” to each employee by name.

Each time I started in a new store, I would immediately begin my greeting activity and quickly learn every employee’s name along the way.  I was told I was the first store manager who did this and/or even knew their names.

I often startled new employees when I would approach and greet them but they quickly learned I was OK and approachable.  While I did much more than just “the daily greet” to my employees, this simple activity was a significant factor in creating a tremendous amount of trust and loyalty among my teams.

In my current job as an HR leader, I have five direct reports but  still make a point of greeting all 16 employees, by name, in my office every morning.  I also do the same when I visit the mine or the Wyoming office.  Similar to when I was a store manager, sometimes its just a quick greeting with a wave or a chat for a few minutes.

As a result, I am on friendly terms with everybody in the office and know and understand a lot of what is going on at many different levels.  This allows me to do my job, as the HR leader in my company, more effectively and provide greater value to my company.  More importantly, knowing my co-coworkers as I do helps me enjoy my job more.

I would challenge all HR leaders and managers, even Mike and Mark who said it isn’t realistic or practical to greet 30 people every morning, to take the time to greet all their direct reports and steps even if there are 30+ of them.  I did it in a 60,000 square foot store with nearly 30+ people working during any given shift.  The time you take to do this is nothing compared to the value you derive.

It is a simple and powerful management activity.

What my Five Year Old Son Taught me About Networking

I’m naturally a shy person who used to have a very difficult time in social and public situations.  I still occasionally struggle with it but am much better due to practice, hard work, and putting myself in situations where I have to be more outgoing and sociable.

I know it’s a critical requirement to be successful as an HR leader and in business so I have made a concerted effort throughout my career to be more outgoing and make myself a better networker.

The single best lesson I ever learned about networking was from my son fifteen years ago, when he was five years old.

My family would occasionally visit McDonalds for dinner and the kids would run off to the playland while my wife and I placed our food order.  By the time we sat down in playland to eat, every single kid there knew my son’s name and was playing with him.  Often, some would ask if they could sleep over at our house!

At first we assumed these were kids he knew from school or hockey so we asked him how he knew them.  He simply shrugged and stated that he had just met them there.  Mind you, it was usually only ten minutes from the time we entered McDonalds to the time we sat down to eat.

This went on consistently for a few months until I decided to follow him into playland and observe his behavior while my wife ordered our burgers. What kind of magic did he do to get all these kids to be friends in less than 15 minutes?  It turned out to be ridiculously simple.

He would run into playland with total enthusiasm and run up to each kid there with a big smile and introduce himself by saying “Hi!  My name is Bill! Wanna play with me?”   Of course, almost every kid met his enthusiastic introduction with equal enthusiasm and agreed to play with him.  Of course, he would occasionally meet a kid who would  ignore him but he would simply move on to the next without missing a beat.

Within five minutes he had introduced himself to everybody in playland and was loudly playing tag and crawling through the tubes and jumping in the plastic balls.

Wow, I thought. How easy is that!

In summary, here’s what I learned from my five year old:

  1. Be sincerely enthusiastic about being where you are and meeting new people.
  2. Take the initiative to approach people and introduce yourself.
  3. Ask the people you approach for their name/profession/reason for attending the networking event (you should not ask them if they want to play!).
  4. Make a point to include your new ‘friends’ in discussions with others.
  5. Don’t worry about being rejected.  Quickly move on to another person and introduce yourself.
  6. Remain enthusiastic and positive throughout and have fun making new friends.

Holding Employees Accountable for their Poor Behavior

Have you ever had a direct report who always seems to behave badly or inappropriately?  Yelling  at co-workers? Gossiping about others?  Complaining about everything?  They always seem to be stirring things up to the point where your other employees are at their wits end – forcing them to start looking for another job.

One of the most difficult things for a manager to do is hold their direct reports accountable for their bad behavior – especially those employees who are strong performers.

We see it all the time – employees who are able to deliver but who are also a huge jerk.

We are much more likely to hold employees accountable for their poor performance but we struggle with the behavior side.  This is especially concerning when the behavior is so bad that it negatively affects other employees and their effectiveness which, in turn, affects the effectiveness of the entire organization.

In addition,  most discipline problems in the workplace are about an employee’s poor behavior rather than their performance. So it’s critical that we effectively address those behavior problems right away but, sadly, this is rarely done until the poor behaving employee ends up doing something extreme.  Something that could have been prevented had their behavior been addressed in the early stages.

The reason managers are hesitant to hold their employees accountable for their poor behavior is that its very uncomfortable and difficult to do. To put it bluntly, nobody wants to tell somebody else that they are acting like a jerk!   It requires a subjective evaluation and the ability to have a very difficult conversation with the employee.

There is usually no training for doing this.  I wasn’t taught how to do this in college and I wasn’t trained when I started working.  I was just given forms to “write people up” when they misbehaved.  You know what I mean – Verbal Warning, First Written Warning, Second Written Warning, etc.

Fortunately, I have developed a tool that helps managers accomplish this difficult task.  I started using a version of this tool about ten years ago when I was a General Manager at a large retail department store chain and have refined and perfected it ever since.   I will be introducing the Hard Hat HR version this tool in the following weeks.  I can tell you, if applied correctly, this tool will help managers overcome their hesitance and resistance to hold employees accountable for their bad behavior.