Business leaders are failing to align their managers’ personal goals and reward packages with the strategic people management objectives of their organisations, according to research published today (March 24 2004) by IRS Employment Review.
Although senior managers’ goals and reward packages are closely linked to the delivery of organisational strategies and annual budgets, links to HR strategies are notably weaker - suggesting that few organisations really believe their own claims that people are our greatest asset.
This research, conducted in January 2004, is based on a survey of 49 public and private sector organisations. The results are available in the new issue (796) of IRS Employment Review (www.irsemploymentreview.com), published by LexisNexis UK.
Other key findings:
More than a third (36.7%) of respondents revealed that their strategic planning is totally integrated with their annual budgeting, while just over a quarter (28.5%)) suggested that the two are partially linked.
Just over one in five (22.4) respondents felt that their organisationís strategic priorities are very well reflected in the overall annual budget, and that a further four in 10 (42.8%) said that they are quite well reflected.
The majority, (69.3%) of respondents, were evenly split between suggesting that strategic priorities are quite well reflected in the HR budget or only partially so. One in 10 (14.2%) reported that they were not at all reflected.
Although the development of HR strategies is a relatively informal matter, the majority (six in 10) respondents try to ensure that their strategies are based to some extent on the broader organisational plan. Senior managers outside the HR department are often involved in progress chasing.
Less than a quarter of respondents measure human capital, while seven in 10 (71.4%) do not.
Employers may not measure human capital but they have clear views about the human capital elements that are important to the overall strategic direction:
83.6% ranked leadership as very important
67.3% ranked strategic skills (talent and strategy know-how) as very important
57.1% ranked culture and awareness as very important
44.8% ranked strategic alignment is a top priority and
44.8% ranked the ability to share knowledge and staff assets as very important.
IRS Employment Review managing editor, Mark Crail said:
If business and human resource strategies are not properly aligned, competitive advantage may be lost. Unfortunately, there is no uniform framework for reporting HR strategies, and there are no conventions for describing the knowledge, skills and commitment of the workforce that make up the intangible ìhuman capitalî of a company.
Our findings appear to suggest that organisational strategy is a matter largely for the rarefied atmosphere of senior managersí offices. The further from the boardroom door towards the shop floor, the less involvement there is in planning or reviewing strategies - and consequently, the less understanding there is of what the organisation is attempting to do in the first place. While there is greater pressure for line managers to have more responsibility and accountability, the findings undermine the important role that employers usually say line managers play in delivering organisational goals.
The full survey is published in IRS Employment Review available from customer services on 020- 8662 2000, price 30 or can be found on
Aligning business strategy and HR for competitive advantage
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