San Ramon, California-based Chevron Chemical Co. has developed a unique system for HR alignment-a system it has used with much success. The process can be divided into three major stages. The first is identifying the customers' needs for HR products and services, and their current satisfaction with HR's performance of these services. The second is comparing where HR needs to go with where it is. Third, HR must create a prioritized plan that will take it to where it wants to be-a completely aligned function.
Successful alignment demands that HR first know its customer.
How can HR possibly ascertain what its customers want and need? Easy. Ask them in a Customer Needs Assessment (CNA)-an easy process for identifying, measuring, and aligning the HR function with customers' needs and expectations.
A Customer Needs Assessment:
- Identifies the HR products and services that are most and least important to the customer.
- Rates the customer-satisfaction level with HR's performance of each product and service.
- Helps show where HR is falling short in meeting its customers' needs, as well as where it's excelling.
- Establishes watermarks for other HR issues, such as communications, policy deployment, customer balance, etc.
This may seem like a fairly rigorous list of goals, demanding a complex series of initiatives. It's not. Performing a CNA involves seven simple steps (see "The Seven Phases of a CNA," this page).
Before plunging into the process, sit down and define the objectives and magnitude of your CNA. A cross section of the HR department may serve as a CNA team to ensure total involvement in the development stages, as well as buy-in to the results of this process.
Some of the pieces of the puzzle that should be discussed are:
- The direct sponsor of the assessment (typically HR management);
- The benefits of the assessment;
- What the end product of the CNA will look like;
- A CNA team mission statement;
- A deployment flowchart and timeline for completion.
Next, the team must identify which customers and HR products and services to include in the assessment.
This step determines who will be included in the assessment and what will be assessed. The decision is best made by the assessment team with the input of the entire HR organization, to ensure that no customers, products and services are left out.
When creating the list of HR customers, be sure to keep in mind:
- Persons or groups who directly benefit from HR products and services;
- Persons or groups who indirectly benefit from HR products and services;
- Persons or groups who could benefit from your HR products and services; Customers outside your company.
When creating the list of HR products and services, it's not unusual to generate more than 100 products and services. The assessment team may wish to reduce the amount of products and services to a workable number of categories, typically between 15 and 20.
Next, the best means for implementing the assessment must be identified. Options include written surveys, computer-assisted surveys, one-on-one interviews, focus group interviews and phone interviews. For large logistically diverse customer bases, written or computer-based surveys tend to provide best coverage. For smaller, logistically limited groups, interviews can be used.
With these preliminary decisions made, you are ready to design the assessment instrument. Two key areas to address in the survey include:
Customer profile/demographics. This allows HR to address issues particular to certain customer groups. However, it's important to avoid over-identifying to the point of hurting confidentiality and obscuring analysis. A rule of thumb is to exclude any demographic identifiers which may define a group of less than 50 customers.
Assessment of the importance and performance of HR products and services to customers. Assessment of importance identifies how much a customer values an HR product and service in relation to their business goals. Assessment of performance measures the level of customer satisfaction with these same products and services.
Customers' unaddressed needs and desires may be best ascertained using open-ended questions regarding customers' HR priority issues, HR products/services not currently provided but needed, and HR products/services currently being provided but not needed. Questions such as:
- What are the three most significant actions HR can take to help you meet your business goals?
- What should HR be doing that it is not doing now?
- What is HR doing now that it should not be doing?
Perhaps the most important step in the design of your assessment instrument is the pilot. The pilot will save significant time spent on reworking and clarifications associated with survey analyses. Based on the pilot, final revisions should be made, consensus of the assessment team obtained, and the survey finalized. With the survey complete, it's now time to implement the assessment.
For successful alignment, HR must compare where it wants to go with where it is.
Knowing your customers' future needs and wants is only part of the picture-you must also measure current HR resource allocation.
Data gathered in identifying how current resources (manpower, equipment, technology and finance) are being allocated will be used during the analysis phase to define over- and under-utilization issues.
Collection of this data requires an examination of how HR personnel currently spend their time, based on the same products and services evaluated in the CNA. This process should be completed by every HR employee within the scope of the assessment. Total HR costs can then be applied to percentages of time spent on products and services to obtain general costs per HR product and service. With this information gathered, you are now ready to analyze the data. Here are suggestions for interpretation of the CNA survey and HR resource allocation data:
- Review response demographics to ensure that representative samples of customer populations exist in the data.
- Compare importance and performance ratings for HR's products and services. This will provide two important data points. The first will provide a general prioritization of the HR products and services. The second will identify products and services important to customers yet falling below satisfaction expectation levels.
- Compare customer importance and performance ratings (gathered by the CNA) to current allocation of HR resources (gathered by the HR resource allocation process). This may identify under- and over-utilization of current resources in areas that customers find of high/low importance and high/low performance.
- Customer specification of HR products and services offered but not needed and needed but not offered may lead to conclusions regarding HR resources utilization and emerging issues.
- Segmentation of all of the above inquiries by customer demographics may be the most revealing of all analyses. You will be able to quickly identify those customer groups and corresponding issues which warrant preferential attention.
The team should be able to identify numerous opportunities for improvement from analyses above-probably more than the organization can possibly address. To narrow opportunities to a manageable level will demand prioritization of findings. At this stage, you are ready to embark on the HR planning process.
Once the customers identify what they need, alignment is a matter of connecting the dots.
Planning work activities based on customer needs and strategies is the key to alignment. A successful planning process must include phases for assessing customer needs, alignment with the overall business objectives, prioritizing aligned activities, and allocating available resources. This is not, as it may seem, an intricate, scientific planning procedure involving the latest in technology and a cast of thousands. Rather it's a simple process described as funneling, which can be completed with minimal resources in a matter of days. The "Funnel" process is designed to involve the right people, ensure alignment and customer focus, base decision-making on data, and use proven quality tools throughout.
For HR planning and alignment, it's necessary to finish identifying customers' current and prospective needs. In addition to the Customer Needs Assessment, important sources of customer input include:
- Face to face discussions with business partners;
- Long-term strategic business plan reviews;
- Short-term business plan reviews;
- Internal departmental development and improvement needs;
- Focus groups of customers;
- Field HR personnel;
- Pending legislation.
Aside from the CNA, the most important of these sources are discussions with business partners, from senior management to first-line supervisors. It is here that true alignment with prospective business activities begins. While these discussions should center around business needs and events, it is the responsibility of the HR tactician to translate business activities into related human resources issues. For example, a planned plant expansion may translate into HR activities including recruiting, contractor employment, training, succession planning, labor negotiations, etc.
In order to adequately prepare for planning, it's imperative that fundamental data is captured for each prospective HR activity. This data should include:
- A description of upcoming business events and associated HR activities; Source or driver of the business events (Who's the customer?);
- Estimated HR staff time required to satisfy the HR need;
- Other associated HR resource costs;
- Required completion date;
- Whether the need is mandatory;
- The impact that completion of the HR requirement has on the success of the company's business objectives;
This information then becomes the basis for the planning process.
Once customers' current and prospective needs are identified, there are five steps to the HR Funnel planning process.
The first step in planning is to consolidate and clarify customer needs. This requires an examination of the company's upcoming business events. It is important that all planning process participants (typically the HR management team) examine and understand each prospective business event and the resultant HR actions required. Participants must agree on HR activities required, resources required, completion dates and impact before proceeding to subsequent planning steps.
When a consensus is gained, the next step is to align with customers' business objectives. Alignment cannot occur by chance. Alignment only occurs when a conscious evaluation of planned HR initiatives versus the organizations' business objectives is undertaken. You must consider HR initiatives in regard to the business's primary goals. If an HR activity cannot be classified in alignment with a business objective, it should be dropped from immediate consideration.
You are then left with only those HR actions that are fully aligned with business needs-the Funnel has begun to converge items for further consideration, adding focus to those vital to attainment of business objectives.
Once you've weeded out HR actions that don't fuel the business, you can prioritize the remaining issues. In deciding which HR issues are most important, it may help to use such criteria as:
- The action's impact on achieving the business organization's vision/mission;
- Ease in delivery;
- Capacity to deliver;
- Timing requirements.
After you've prioritized the primary issues, you can allocate your resources. We all have limited resources to apply to prospective requirements, whether these resources are manpower, expertise, financial, or otherwise. As an example, consider that manpower is the resource to be allocated: Allocating resources involves calculations to estimate the total manpower required for completing the prioritized HR activities, total manpower currently available, and a comparison of the net manpower available to the manpower required for completing the planned HR activities. The result is an estimate of the surplus or deficit of manpower for completing all remaining planned activities. In order to finalize the HR plan, prioritized items must be deleted from the plan in order of lowest to highest importance until the resources required equals the resources available.
Your HR plan is now complete. The HR department has been aligned. The only action remaining is the actual deployment of the prioritized, resource-distributed plan. Assignment must consider personnel availability, expertise, capability, etc. to ensure completion and quality delivery of activities.
Gathering HR customers' needs and funneling them into a final business plan gets HR where it needs to go. For instance, one problem Chevron HR discovered in its alignment process was the staff's limited availability. To respond to its customers' needs, it assigned a staffer to uncover the root causes of the complaint. They discovered that employees' main problem was that it was difficult to find a live HR person-communication was too often conducted through sticky notes and voicemail. To become more accessible, the HR staff made several changes. To begin with, each staffer posted his or her schedule for all to see, including definite in-office times. HR also adapted its voicemail system to have a "rollover" function: if a phone rings three times in one office unanswered, it will "rollover" to the next office until the caller is connected with a live person. HR at Chevron is now on its way to fulfilling its customers' needs.
By combining customer focus with the company's bottom-line issues, you can continually improve your HR function. Successful HR planning and alignment is really just a matter of following the old business adage: Give the customers what they want.
Personnel Journal, January 1995, Vol. 74, No. 1, pp. 61-64.