Strategizing For HR - human resources departments - management issues

HR Magazine, Feb, 2001 by Kathryn Tyler

For instance, Paychex Inc., a national provider of payroll, benefits and human resources services headquartered in Rochester, N.Y., wanted to improve its employee retention rates. "We recognized we needed a better reward package to retain people," says William G. Kuchta, vice-president of organizational development for Paychex.

The company decided that, in light of its consistently strong stock performance, it made sense to offer the employees stock options. Kuchta and his staff presented the proposal to upper management and the executives were so excited by the idea that they wanted to know how quickly the program could be implemented. The plan was "rolled out within eight days," says Kuchta.

The result? Turnover decreased, though Kuchta admits there are too many variables to claim that the stock options plan was the cause. But, he says, "There was a tremendous employee response and anecdotal evidence from employee comments, such as 'This solidifies my being here' and 'I really appreciate it.'"

Short-range objectives. Every business objective has a human content. Find out what it is and make sure it's addressed in your plan. HR must be seen as a contributor to the business. This will lead to HR practices that match current operational needs. For instance, Debra Schaefer, owner of the HR consulting firm Debra G. Schaefer & Associates LLC in Sylvania, Ohio, worked with Aeroquip-Vickars, a coupling manufacturer that is now part of Eaton Corporation. Aeroquip-Vickars acquired a business in Cincinnati, and Schaefer and her HR team immediately made plans to help the new employees transition into the company. "We prepared benefits and orientation kits for them to take home. We went down there and tried to answer their questions quickly. It was an opportunity to show how HR could be value-added in a business transaction," says Schaefer.

Strategic organization building. This includes the things you do to help build the human capital that will enable the business unit to survive in the future. For example, about four years ago, Paychex discovered that its products--payroll services--were becoming much more complex, as a result of new government regulations and an increasing interest in 401(k) plans. To maintain alignment with the company's growth and marketing strategy, HR's business plan created a "three-pronged approach with regard to operations: a new systematic approach to recruiting, compensation changes and a multi-step training program. We had to train people to deal with a whole different set of products," says Kuchta. Within two years, HR had created dramatically different training and compensation programs and was working on changing the employment practices.

Dwyer gives another example of how to translate a company goal into an HR one: "If a company that makes business applications computer software decides it wants to get into the virtual gaming market, it will need to hire a lot of Visual Basic programmers. You will have to estimate the cost of recruiting and retaining them or of retraining the programmers you already have, as well as providing them with the hardware, software and other resources they need."