human resource information system (HRIS)

Implementation Issues

Carrie Brown, hired six months earlier as corporate vice president of human resources, listened to several days of strategy discussion, without participating much. She now felt that it was time to address the HR impli¬cations of these strategies.
While I agree that these are good strategies, Carrie said, I don’t know if we have the right people in the right places to carry them out. A few of our regional and divisional executives are already doing some of the things you’re talking about, but most of them have grown up in the old system and don’t know how to go about cost cutting in a way that doesn’t diminish the quality of our service. Many of our divisions are in rural areas and haven’t kept up with technology. We do have some middle- to upper-level managers who are up to date in cost cutting and technology imple-mentation, but they are scattered throughout the organization.
Mitchell Fields, president and chief executive officer (CEO), suggested, Why don’t we just move those people who can implement our strategies into positions where they have the power to make it happen?
Unfortunately, Carrie said, we have no accurate data about which of our people have the capabilities. It would be a mistake to move forward un¬less we’re sure that we have the knowledge and skills on board to be suc¬cessful. What I’ve discovered in the short time I’ve been here is that we have

grown too large for our human resource information system (HRIS). We’re still doing most of the data collection on paper, and the forms used are differ¬ent in each of the divisions, so we can’t consolidate information across divi¬sions, and even if we could it would take forever to do it by hand. We have different pay scales in different divisions, and you can’t get a VP in Boston to take a CEO position in Iowa because he’d have to take a cut in pay. Basically, what I’m saying is that we don’t have a coherent HR system in place to give us the information we need to put the right people in the right places.
Another issue is that our current structure isn’t conducive to setting up partnerships between the subsidiary corporations and the regions. The corporations developing the technology are seen as pretty distant from the regions and divisions. While the subsidiary corporations will bear the de¬velopmental or acquisition costs, they are going to want to pass those along to the regions and divisions. The divisions will then have to bear the costs of implementing the new technology and working out the bugs. Once all the kinks are worked out, the subsidiaries will be selling the tech¬nology to our competitors at lower prices (due to volume) than they charged the divisions. The corporation and subsidiaries are likely to profit from this arrangement, but the divisions are likely to show losses. As you know, our compensation of division executives is based on profitability. They are likely to resist cooperation with the subsidiaries. Our current sys¬tems don’t let all of our businesses come out winners.
I understand what you’re saying, Mitchell said. Our competitive strat¬egy is for the big picture and the long term. If these HR issues are going to be a problem, we have to fix them right away. We are going to have to work out some way for both the subsidiaries and the divisions to come out win¬ners in moving new medical technology forward. Assuming we are able to put our HR house in order . . . get the right systems and people in place. . . . Are there any other concerns about adopting our strategies? Hearing no additional objections, he said, Okay, then, let’s get to work on putting an implementation plan together, and first on the list is our HR system.
(The MHC case is continued at the conclusion of the chapter. As you read the chap¬ter, we identify concepts and principles that apply to this case.)

HR Follow-Up to Strategic Planning at MHC
MHC determined that it needed to address the HR implications of the new climate in health care and that some type of planning system was in order, so it hired an outside consulting firm. The consultants agreed that some type of system would likely be ap¬propriate, but they were not ready to stipulate what that system would look like. They conducted some initial diagnostic interviews, lasting one to two hours, with all of the divisional CEOs, the regional executive vice presidents (EVPs), the corporate CEO, and the corporate VPs, including the VP of HR and the VP of OD. The inter¬view format is shown in Exhibit 2-3. The following information was obtained from the interviews.
The current HR activities conducted at the corporate level are as follows:
1. To collect and store resume-type information for all employees. This infor¬
mation includes demographic data, employment history, and performance
evaluations.
2. To select divisional CEOs, regional EVPs, corporate officers, and staff professionals,
and to assist at the regional and divisional levels in the selection of management-
54 Chapter 2 Aligning Training with Strategy

I. What is the purpose of this meeting?
To enhance and develop the objectives of the human resource planning system (HRPS). II. What is HRPS?
HRPS is a business planning system designed to provide quality data to enhance individual and
organizational decision making in all aspects of human resource management. HL III. Why was I asked to participate in this meeting?
Because you are a key decision maker, we want to ensure that HRPS fits the needs of your
organization.
IV. What specific information should I provide?
We want your input regarding the following:
1. Should administrative access to the data in HRPS be local, regional, or only at the corporate
level?
2. Who in your organization would use and benefit most from this system?
3. What, if any, problems are mere with current information used in human resource management
decisions (i.e., recruiting, braining, appraising, etc,)? For example, do you lack information as to
which people are capable successors for certain jobs, and do you know what recruiting sources
produce the best employees?
4. What values of the corporation should be incorporated into HRPS? How might these values be
incorporated?
5. As you see it, ideally, what job responsibilities will change in your organization as a result of HRPS?

level employees, primarily through posting the position and through word-of-mouth about who is competent and available.
3. To sponsor occasional management development programs at the corporate level, although no system is in place to determine whether these are perceived as valuable or necessary. Most management development is done externally with tuition reimbursement, and some is done by individual divisions.
The interviewees expressed varying degrees of dissatisfaction with the following:
1. No system for comparing internal candidates for positions. Performance eval¬-
uation is decentralized.
2. No system for making known the criteria for positions. People do not respond to
posted ings because rejection is a block to future promotion. Recommenda-¬
tion from a higher-up is known to be necessary. A related complaint was that many
CEOs will not recommend their best people either because the CEOs rely on them
heavily or because the bright young people might eventually be competition.
3. No system for evaluating the KSA required of a CEO in one part of the corpora-¬
tion compared to that of another. For example, the CEO in Grand Rapids has
different responsibilities compared with a CEO in Detroit, but no one at the cor¬-
porate level knows what the differences are.
4. No corporate HR philosophy or strategy guides the organization in its HR
activities.
Individuals at the corporate, regional, and divisional levels reported slightly dif¬ferent perceptions of the priority of needs for an HRPS. See Exhibit 2-4.
Although monitoring equal employment and affirmative action is in the com¬pany’s mission statement, it was considered important by only one respondent. The various levels disagreed on what job classifications should be in the HRPS: Corpo¬rate and regional personnel preferred to include only executive-level personnel, and divisional personnel wanted to include data down to the first-level supervisor. As an interviewee stated, The MHC value statement says that we respect the dignity of all individuals. To exclude people below the executive level tells them they are worth less. On the issue of control and administration of the HRPS, corporate and regional executives preferred corporate- or regional-level administration, while divisional
Chapter 2 Aligning Training with Strategy 55

Exhibit 2-4
Rank Order of Top HRPS Objectives by Organizational Level
IMPROVE
SELECTION/ DEVELOP A FORECAST DEVELOP CREATE AND
ORGANIZATIONAL SEARCH SUCCESSION CRITICAL CRITICAL UTILIZE CAREER
LEVEL PROCESS PLAN HR SKILLS HR SKILLS DEVELOPMENT
Corporate 2 4 3 5 1
Regional I 3 4 5 2
Divisional I 5 4 3 2

executives had a strong preference for direct access. Some expressed concern that corporate administration would reduce divisional autonomy in human resource de¬cision making. The degree of centralization had been a sore point for several years. The divisions previously operated individually as profit centers, but corporate head-, quarters was discussing the need for a more integrated approach.
After reviewing the consultants’ report and meeting with the consultants, the executive committee (representing the three levels of management) arrived at a consensus on the following HRPS objectives:
1. Improve the selection/search process for filling vacant positions.
2. Develop a succession plan.
3. Forecast critical skill/knowledge and ability needs.
4. Identify critical skill/knowledge and ability deficiencies.
5. Identify equal employment and affirmative action concerns.
6. Create a career development system that reflects the organizational mission.
The following HR philosophy was developed and approved by the MHC board of directors:
As an employer committed to the value of human life and the dignity of each individual, we seek to foster justice, understanding, and a unity of purpose created by people and organizations working together to achieve a common goal. Therefore, we commit ourselves to the following beliefs:
1. People are our most important resource.
2. The human resource needs of the organization are best met through the develop-¬
ment of employees to their maximum potential.
3. Justice in the workplace is embodied in honest, fair, and equitable employment and
personnel practices with priority given to the correction of past social injustices.
CASE QUESTIONS
1. Describe MHC’s strategy in terms of market position. Also, identify the type of
external environment MHC is operating in and the degree to which the strategy
matches the environment.
2. Identify the type of structure MHC currently uses in its primary businesses. De-¬
scribe the fit between the structure and the competitive strategy. Describe any struc¬-
tural adjustments MHC should make to maximize the effectiveness of the strategy.
3. Identify any areas where current management KSAs are not aligned with effec¬-
tive implementation of the competitive strategy.
4. Describe how MHC should go about addressing the KSA deficiencies you have
identified in the previous question. Your answer should be consistent with the
mission and values of MHC.
5. Assume that you are the HRD manager and the competitive strategy was given
to you prior to its adoption. Using principles and concepts from the chapter,
what recommendations would you give to the strategic planning team?
56 Chapter 2 Aligning Training with Strategy

6. Given the strategy, what tactical activities can the HR unit in general, and HRD specifically, develop to support the strategy (be sure to include the implementa¬tion of the HRIS)? Identify sources of support and sources of resistance to these tactical activities and point out any areas in which collaborating with the OD unit would be advisable.