Managing Key Human Resources: Setting Objectives for Teams and Delivering Results

1. Managing Key Human Resources:Setting Objectives for Teams and Delivering Results Dr. Roger Darby Centre for Defence Management & Leadership Cranfield University, UK Defence Academy of the United Kingdom

2. Minister’s Vision 2013-14 “….sets the defence priorities for the Ministry of Defence (MoD) for 2013-14. The document provides a clear vision for further development for the GAF to improve its capabilities to protect the independence, territorial integrity and sovereignty of Georgia, to participate in international operations and assist civil authorities during natural and man-made disasters. Our goal is to create a highly-capable, mobile, modern, fully-professional armed forces that is fully interoperable with NATO. The reforms that are planned to achieve this goal will be in line with the recommendations of the SDR 2013 that defines main directions to shape the armed force development and its final structure – Objective Force 2016.” Guiding principles: • Using personnel and external expertise effectively • Exploiting institutional memory and experience • Encouraging innovative approaches • Decentralizing the decision-making process • Promoting teamwork across military and civilian structures • Ensuring a consistency of purpose • Vision = organisation’s desired situation • Its purpose is to guide, control and challenge the entire organisation toward realising a shared concept of the organisation in the future.

3. Business space Preparation of defence capability Protracted time Resource constrained Assembling people, equipment, training etc Civil Military Relations * Cyberspace ? Battlespace Operational area Short time for decisions Less resource constrained Using people and equipment, within the constraints of the preparations made Managing the Defence ‘Spaces’: The Battle Space the Business Space & Civil Military Relations… )

4. Managing Resources to meet Strategic Needs RESOURCES - tangible & intangible Finance – PEOPLE - Plant/M/c - Technology CAPABILITIES – to deploy resources to meet objectives CAPACITY – sufficient social capital to meet requirements - COMPETENCIES(CORE) - Capacity Building…

5. THE HUMAN RESOURCE CYCLE Rewards Selection Performance Appraisal Training

6. ‘CONTRACTS’ – and the Employment Relationship Employee and employer perspectives matter – because managers’ & employees’ behaviour is influenced by their beliefs……….. HRM & CONTRACTS 2 MAIN TYPES: EMPLOYMENT CONTRACT – Legally binding – WRITTEN 2. PSYCHOLOGICAL CONTRACT - UNWRITTEN - (Military Covenant?) “an implicit exchange between an individual and his organisation which specifies what each expects to give and receive from each other in the relationship.” “the perceptions of both parties to the employment relationship, organisation and individual, of the obligations of implied in the relationship. Psychological contracting is the process whereby these perceptions are arrived at.” Development of the ‘individualism of the employment relationship’ The concept of negotiated exchangeat the individual level offers distinct parallels with the traditional pluralist exchange of collective bargaining

7. Decisive - The Military Covenant Terms and Conditions of Service Fair Treatment Just Reward The Soldier Valuing Our Valued by the Service Valued By Valued by People The Nation the Nation Fighting Spirit

8. The Military Covenant “Look after my family – whatever happens to me” “Being able to enjoy my life” “Do my job and be valued” Fighting Spirit

9. Reward Management “What gets rewarded, gets done…..” is the key that REWARDS reflect what the organisation see as important.. Important determinants: Question of ‘QUANTITY’ (i.e. reward must relate to number of items produced) V ‘QUALITY’ (i.e. reward may reflect reject rates or customer satisfaction rate) ‘PAY +’ = KEY HRM ISSUE…!

10. Ministry of Defence Minister of Defence Various state departments Lands; retired personnel; Finance; acquisition Support organisations:inspectorate; analytic support;intelligence; press services 1st Deputyminister Deputyminister Deputyminister Deputyminister Deputyminister Munitions Armaments Materials Technical Industrial Environment Administration Legal Supervision Information Accounts Militarypolicy &strategicplanning Internationalcooperation Personnel Education &Science Economic & administrativeConstruction Humanitarian Healthcare Citizens’petitionSports OversightLabour General Staff Armed Forces

11. Armed Forces (Supply Functions) General Staff (MoD) Main Command Centre Support Forces Command Land ForcesCommand Air ForcesCommand Naval ForcesCommand Joint OperationalCommand Western Southern North NavalOperationsCentre CoastalDefenceTroops Air ForcesCommandDirectorate Army Corps Directorate FormationsArmed Forces FormationsAir Forces FormationsNaval FormationsLand Stand-byForces Peacekeepers

12. So, where does money fit in?

13. OBJECTIVES OF A REWARD SYSTEM • ENCOURAGE BEHAVIOUR THAT ENABLES THE ORGANISATION TO ACHIEVE ITS GOALS AND ATTAIN COMPETITIVE ADVANTAGE • ATTRACT SUITABLE CANDIDATES • RETAIN AND MOTIVATE CURRENT EMPLOYEES • ACHIEVE ITS ENDS AT AN ACCEPTABLE COST • ENABLE FLEXIBILITY AND INNOVATION

15. MOTIVATION: PROCESS THEORIES Behaviour depends on the outcomes that an individual values and the expectation that a particular type of behaviour will lead to those outcomes Behaviour is affected by different levels of reward for the same amount of effort Behaviour is affected by goals which are determined by the individual’s values and wants Expectancy Theory: Equity Theories: Goal Theories:

16. REWARD MANAGEMENT Intrinsic Rewards Economic (Extrinsic) Rewards Overlap = Needs and Expectations in the workplace Social Relationships

17. Components of the Reward Package Total Reward Indirect rewards Intrinsic Direct rewards Extrinsic l Recognition pay Base pay Career development Security Personal growth Pay for performance Benefits Job satisfaction Performance Related pay Cultural satisfaction Fixed benefits Flexible benefits Commission Incentive schemes Competence Based pay Skills - based pay

18. TYPES OF REWARD Group-related • Security-driven: • Lifetime jobs • Corporate prestige • Tradition-driven: • Cost of living increases • Perks Money-related Non-Moneyrelated • Contribution-driven: • Performance-related pay • Merit bonus • Employability-driven: • Training and development • Personal career plans Individual-related

19. PAYING PEOPLE RIGHT? PrincipleComments • Create a positive and ‘natural’ reward experience • Align rewards with business goals to create ‘a win-win partnership’ • Extend people’s ‘line of sight’ between effort and outcome, motivating ‘smart’ working over simply expending extra effort • Integrate rewards with strategic aims and kinds of contribution desired • Reward individual ongoing (input) value to the organisation with base pay • Reward results (outputs with variable pay ‘Involve and educate’ the workforce about the reasons and shared benefits for changing reward systems Provide a clear managerial direction that individual employees must continue to ‘add value’, which the company will recognise with rewards Ensure that all members of the workforce are ‘knowledgeable stakeholders’: they are to be shown how their efforts impact on the work team, business unit and company, including the need to adapt to customer needs Use each ‘reward tool’ for what it does best, integrating each element of total reward to offer a customised ‘deal’ This has three elements: employee salary is to reflect increases in competencies the firm finds useful; consistent performance over time; and the individual’s value in the external labour market It is uncritically accepted that the firm ‘must meet shareholders expectations’ (whose reasonableness relative to other stakeholders is not discussed); variable pay is deemed suitable as part of the ‘total reward’ offer to reward these ‘results’, as well as enjoining employees in the corporate project

20. TO BE SUCCESSFUL REWARD SYSTEMS MUST… BE IN LINE WITH ORG. VALUES AND CULTURE FIT WITH ORG. STRATEGY INTEGRATE WITH OTHER HR STRATEGIES REWARD RESULTS AND BEHAVIOUR BE PRACTICABLE AND EASY TO IMPLEMENT EVOLVE THROUGH CONSULTATION BE CONSISTENT WITH MARKET RATES

22. Performance Management & SSM What is your experience of performance management in SSM? What is your knowledge of performance management in SSM? What issues does Georgia’s SSM face introducing performance management?

24. Potential Issues • Definitions • Challenges to instituting sustained SSR • Transparency & accountability – not taken seriously • Two clients/customers – donor & recipient Self assessment – interpretation of question areas Taxonomy – one size fits all?

25. Looking externally Perception data Individual performance Looking forward Looking back Collective performance Hard facts Looking internally • The Measurement Compass: 8 directions : • - Need to take account of: • Look forward as well as looking backwards • Measure of collective as well as individual performance • External measure as well as internal measures • Perception data as well as hard facts

26. Definition • How would you define performance measurement? “Performance measurement is evaluating how well organizations are managed and their value they deliver for customers and other stakeholders.” Max Moulin “The process of quantifying the efficiency and effectiveness of past action” Adams, Kennerley & Neely Why Measure? 3 distinctive roles of measurement: • Comply • Check • Challenge

27. Neely - 4 CPs of Measurement CheckPosition CommunicatePosition Confirm Priorities CompelProgress

28. How Could this be Adapted for General Use?

32. UN, Country & Regional Models Performance Management Tools & Techniques Performance Measurement S S M Balanced Scorecard Theories, Definitions Methodologies Capability Reviews Excellence Models Other Models

33. HUMAN CAPITAL CHECKLIST • Align human capital programmes with overall org. strategy –(HRM linked to Strategic Planning) • Evaluate the current worth of your human resources and the efficiency of your current human capital functions and programmes – (Skills Audit) • Measure the amount of funds and time you are spending to source, develop, and manage these resources – (Useful Metrics) • Assess the return on investment in human capital – (ROI measures) • Manage and minimise the risks associated with the employment of people - the least predictable of all assets – (Risk Mgt.) • Maximise the value of human capital - the most valuable of all assets! – (Recognise Value of HR Services)

35. Setting ObjectivesStrategic Management Process InternalAssessment StrategyFormulation(Planning) StrategyImplementation StrategicControl EnvironmentalAnalysis

36. Strategic Defence Review Internal Assessment Current Capabilities Current organisationof the ArmedForces CapabilityGaps State Capabilities for support of Defence ManagementStrategy Required capability Environmental Aims of military security Definition of priorities Threatassessment Policy Making Analysis

37. Stage 1: Determine the Vision Minister’s Vision 2013-14 “….sets the defence priorities for the Ministry of Defence (MoD) for 2013-14. The document provides a clear vision for further development for the GAF to improve its capabilities to protect the independence, territorial integrity and sovereignty of Georgia, to participate in international operations and assist civil authorities during natural and man-made disasters. Our goal is to create a highly-capable, mobile, modern, fully-professional armed forces that is fully interoperable with NATO. The reforms that are planned to achieve this goal will be in line with the recommendations of the SDR 2013 that defines main directions to shape the armed force development and its final structure – Objective Force 2016.” Guiding principles: • Using personnel and external expertise effectively • Exploiting institutional memory and experience • Encouraging innovative approaches • Decentralizing the decision-making process • Promoting teamwork across military and civilian structures • Ensuring a consistency of purpose

38. Stage 2: analyse vision according to 4 perspectives Objectives Role/Purpose Targets Efficiency/Effectiveness BALANCED SCORECARD Resources Measures Initiatives CapacityBuilding

39. Four Questions to Ask Requirements as defined by policy Role Efficiency & effectiveness Resources Capacity building • What is our purpose? • What do we need to do to achieve our purpose? • What do we need in order to do that? • What do we need for the future?

40. Four Questions to Ask Main Defence Forces Defend against major aggression; Defeat the enemy in a local war;Force … an armistice… Combat & mobilisation readiness (90-120 days)Effective forcesEffective command and control bodies Personnel at 70% of required strengthProvision of weapons & equipment,State support Develop Command & Control systemLogistics supportImprove personnel policyImprove civil-military relations • What is our purpose? • What do we need to do? • What do we need, to do it? • What do we need for the future?

41. Stage 3: express vision as strategic aims Role/Purpose Efficiency/Effectiveness BALANCED SCORECARD Resources Capacity Building

42. e.g. Defence Balanced Scorecard 2008-12> - UK MoD Purpose (Role) Are we fit for today’s challenges and ready for tomorrow’s tasks Defending the United Kingdom and its interests; Strengthening international peace and stability; Acting as a force for good in the world Enabling Processes (Efficiency & effectiveness) Are we a high performing organisation? Resources Are we making best use of our resources? Future (Capability Building) Are we building for the future?

43. UK Defence Scorecard in more detail Purpose (Role) Resources People: Manage our people to provide sufficient, capable and motivated Service and civilian personnel.. Finance and Value for Money: Maximise our outputs within allocated financial resources. Estate: Maintain and develop estate infrastructure of the right capability and quality. • Current Operations: Succeed in Operations and Military Tasks today. • Future Operations: Be ready for the tasks of tomorrow. • Policy: work with allies, other governments and multilateral institutions to provide a security framework that matches new threats and instabilities

44. Enabling Processes (Efficiency & effectiveness) Future (Capability Building) Future Capabilities: Develop the capabilities required to meet the tasks of tomorrow.. Change: Develop flexible and efficient organisations, processes and behaviour to support the Armed Forces. Future Personnel: Deliver the personnel plans to meet the needs of current and future tasks • Military Equipment Procurement: Equip and support our Armed Forces for operations now and in the future. • Infrastructure Procurement: Invest in strategic infrastructure to support defence outputs. • Security & Business Continuity: Enable secure and resilient operational capability.. • Safety: Minimise non-combat fatalities and injuries. • Reputation: Maintain our reputation amongst our own people and externally • Sustainable Development: Work with other government departments to contribute to the Government’s wider agenda, including sustainable development.

45. What are the critical success factors for achieving strategic goals? What are the critical measures that indicate strategic direction? What actionsshould we take? Stage4: Determine … • Helps us to determine our priorities. • What are the standards that we need to achieve? • The beginning of the action plan.

46. A UK Example: Resources • People: Manage our people to provide sufficient, capable and motivated Service and civilian personnel. • Finance and Value for Money: Maximise our outputs within allocated financial resources. • Estate: Maintain and develop estate infrastructure of the right capability and quality. The vision: Defending the United Kingdom and its interests: acting as a force for good in the world…

47. People: Critical success factors • Ensure we have sufficient diverse people, maintaining manning balance and the right profile of skills within each service and the right mix of skills in the civilian workforce despite reducing numbers, • Ensure our people are capable of doing the jobs we need them to do by keeping them healthy and training them well, • Manage our people well, motivating them and offering them worthwhile can satisfying careers.

48. Manning Balance: Critical Measures

49. Step 5: Cascade targets through the chain of command • Achieve full manning balance in each of the 3 services as soon as possible by: • Achieving overall Service manning balance (+1% to -2%) between the trained strength and the trained liability. • Maintain the correct profile of skills and experience within the regular Service manpower structures • Improve longer-term recruiting prospects by increasing the representation of minority ethnic groups within the Armed Forces. Delivery responsibility: Chiefs of Naval, General and Air Staff.

50. Step 6 • Consider your goals as the foundation for a control and reporting process …