This question tends to spark off lively debates in our strategy classes. I have had people respond to say all employees should be treated equally. Equity is important to everyone - people tend to commit better to a system that is seen as equitable. One that employees can trust to deal with them according to objective rules agreed with, and applied to everyone in the organization.
That would bring one to the question of - does differentiation mean inequity? More importantly, which should drive strategy? Considerations of employee perception or considerations of perceived value to the organization? If we agree that HR strategy and policies should be driven by value to the organization, what or who should determine that value?
A thorough examination of the issue generally (in my experience) leads to an agreement that indeed value - more precisely, value to the customer is and should be the primary driver for business (and HR management strategy). Once established, it isn't difficult to see the case for workforce partitioning. Differentiating talent management strategy for various segments of the workforce makes sense for several reasons:
· Resource Constraints: The resources available to an organization are rarely limitless. This necessitates a 'smart' approach to determining how these resources are deployed.
· Service Delivery: Whilst everyone in an organization is important and makes a contribution, clearly some roles are more 'critical' to customer delivery (and satisfaction) than others. This applies both from the structural perspective (hierarchy) and from the individual perspective (quality of performance).
· Job Specifications: Job roles across the organization are varied; a heterogeneous approach is required– one size rarely fits all. For instance, some roles may require technical competencies, or have age related qualifiers.
Other possible qualifiers include experience, geographical location, attitudinal skills, job conditions (indoor/outdoor, shift work, level of physical activity required, level of decision making skills required, management skills, etc).
That the usual objective of business is identifying a need in the market and then assembling the resources required to meet that need profitably. Competitive advantage comes from identifying the things an organization needs to do better than others to win and keep customers in the market place.
Typically, organizational capabilities required for consistent superior performance would be in more than one area, and at several levels. Therefore the skill sets and other talent attributes differ across roles. The main challenge for the organization would then be – how do we ensure that we have the right people, doing the right jobs at an optimal cost, in a way that competitors will find difficult to replicate?
If competitive advantage is the main objective, how does HR add value? Strategic value here would be HR’s ability to creatively and effectively match the right skill sets and attitudes(people) to available positions in a way that maximizes the workforce, and through the creation of an enabling environment (culture and systems), derive utmost value from the organization’s investment in human capital.
Errors in this process could lead to significant losses in terms of staffing. Under qualified people assigned to highly demanding jobs or overqualified people assigned to less-demanding jobs, and inadequate staffing levels. Where you have under qualified people assigned to jobs, the tendency is for errors and rework to be frequent, leading not only to losses in terms of time and cost, but more importantly to customer satisfaction.
Over qualification would directly impact on staff costs – the organization paying more than it should for underutilized talent as well as employee dissatisfaction. Mismatching could also lead to under or over staffing. Both of these scenarios impact negatively on the bottom line in terms of the organization being unable to meet customer requirements or doing so unprofitably.
In addition to possible losses in revenue, higher costs, customer dissatisfaction, lower profits, workforce mismatches also lead to talent attrition and general inefficiency. Another major possible impact area would be the organization’s ability to effectively attract talent in the market place considering that it is not operating in a vacuum.
You will often find that if an organization doesn’t have a performance management mechanism that identifies rewards and cultivates high performers, they either leave, or become de-motivated as there is no incentive to deliver above average.
Furthermore, there is the issue of succession planning, as well as determining recruitment strategy – what kind of skills, attitudes, experience do we need and where do we need it, training and development planning – what’s the best way to equip and grow our talent to meet the evolving needs of the business?. This also drives reward strategy – what should we pay for the quality of talent required, and how do our reward packages look relative to competitors?.
When closely examined, your workforce partitioning strategy is the basis for ensuring optimal resource allocation throughout the talent management process. A good understanding of this concept and various ways to effectively apply it are requisite for the HR professional and we should discuss the issue to find talent management strategies that work in our environment.
In the next 2 posts, I share expert approaches to workforce partitioning from different perspectives. Your comments and viewpoints will be appreciated.
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