On October 23rd, 2014, we updated our
By continuing to use LinkedIn’s SlideShare service, you agree to the revised terms, so please take a few minutes to review them.
Future of HR Metrics A Brave New WorldPresentation Transcript
Future of HR Metrics A Brave New World Jay J. Jamrog Executive Director, HRI [email_address]
Add Value & Maximize Upside Limit Liability & Protect Downside Impact/Contribution to the Business Strategic HR Planning Organizational Design HR as Business Partner Compensation Benefits Safety & Workers’ Compensation Compliance Labor/Union Relations Staffing Training & Development Culture & Image EEO/AA Employee Relations Performance Management Survey Action Planning HR Information Systems (HRIS) A Century of Evolution in the Function Labor Employee Personnel Human Organizational Relations Relations Resources Effectiveness HR Continues to Evolve & the model defines our aspirations continue to grow Source: Rich Vosburgh
In 2001, greater proportion of respondents (41.1%) said they were full partners in the development and implementation of business strategy than in 1998 (29.4%).
However, the expected increase in time devoted to this role is not reflected in the data.
Source: HRPS/Center for Effective Organizations
Efficiency and Effectiveness
Three Levels of Metrics Efficiency
What range of resources (financial and non-financial) should be considered?
What is the appropriate level of investments?
How should investable resources be allocated to maximize results?
Source: Boudreau and Ramstead Effectiveness Impact
Three Levels of Metrics Effectiveness
What unique combination of policies and practices would best build the necessary human capital?
What factors link policies and practices to human capital enhancement?
What attributes distinguish effective from ineffective policies and practices?
Source: Boudreau and Ramstead Efficiency Impact
Internal and External Historical Benchmarks
The Role of HR People Processes Future / Strategic Focus Day to Day Operational Focus
Strategic HR Planning
HR as Business Partner
Culture and Image
Survey action planning
Training and development
Employee Relations Expert
Safety & workers’ compensation
Diversity and EEO
HR information systems
Administrative Expert Compensation Payroll as %--total operating costs (benchmarked); compensation targets benchmarked against peer companies; turnover rates; quality of management review and Board material. Benefits Medical cost per participant; dental cost per participant; 401K employee participation rate; $ saved in union negotiations. HRIS Systems Support HRIS implementation on time and within budget; customer satisfaction. Compliance # New EEO Charges; # Old EEO Charges Closed; Progress on AA Goals; Outcomes of Inspections and Audits.
Employee Relations Turnover rates, “Best Place to Work” rankings, legal compliance, efficiency, union activity (or lack thereof). Labor Relations Absence of the extreme negative (strikes, slowdowns, sit-downs, boycotts); $ outcome of new contracts, both immediate & longer term; timeliness & quality of new contracts; productivity per employee; safety & quality measures. Safety and Workers’ Compensation Employee Relations Expert # Incidents & $ value of accidents; # employees trained; % required training & certifications completed; audit results. Diversity & EEO Attitude survey measures of perceived fairness; # people trained in Diversity Awareness and Diversity Leadership programs; perceived tolerance.
Staffing $ to Fill; Days to Fill; # Filled; Quality of Hires; Retention of Hires. Organizational Design Benchmarking headcount; effectiveness of communications & key processes (no bottlenecks); spans and layers; management ratios. Survey Action Planning Employee satisfaction results at the work group level; rolled up to Business Unit level; norms available for Business Unit analysis. Performance Management Performance Reviews: Timeliness and Quality; #/% Positions with written accountabilities and measures; other measures vary with the position. Training & Development # Programs; #Days/Person Training; Impact of Training; effectiveness measures within new groups. Change Agent
Strategic HR Planning Quality of succession management program assessment. Quality of Bench Strength. Quality of Succession Plan Follow-up (% Actions Completed). HR as Business Partner Any business measure of effectiveness. 360-Degree Feedback on the extent to which HR is considered a partner by those they support . Culture and Image Employee Satisfaction data; quality of the description and utilization of culture & image understanding; standing on the Fortune 100 Greatest Places to Work. Strategic Partner
Starting with the Business Strategy
Basic Process for HR Strategy Scan the External Environment Identify Strategic Business Issues Develop HR Strategy Communicate the HR Strategy Identify People Issues
The Common HR Approach HR practices, processes, and systems Articulate how what we do adds value to The business Communicate to the business what a good job we are doing The Inside-Out Approach Source: Patrick Wright
The Better HR Planning Approach Identify the business model components and areas to drive value Develop an HR strategy to execute the business model with relevant metrics Use the metrics to demonstrate or prove how we are driving business performance The Outside-In Approach Source: Patrick Wright
Time to Hire
Cost per Hire
“ At the Table”
Direct Labor Costs
Indirect Labor Costs
% Black Belt Leaders
Cost per Unit
Organization HR People Metrics Model Source: Patrick Wright
Do We Really Measure how HR is Driving Business Performance?
Driven to Win
Time to-fill, train, on-board
Client Satisfaction Surveys
Sales per employee
Best practices recognized
The Role of HR
When executives were asked to select which descriptor best described the view of HR held their organizations, only 34% indicated that HR was viewed as a “strategic partner.”
SHRM/Balanced Scorecard Collaborative
A major shortcoming in many companies is “a lack of measurement on the impact of HR.”
Accenture High Performance Workforce Study
Three Levels of Metrics
What is the link between sustainable strategic success and human resource management?
Which talent pools are most critical for competitive advantage?
How could improving human capital increase value?
Impact Source: Boudreau and Ramstead Effectiveness Efficiency
Company Business Environment HR Department Outputs Inputs Internal Feedback: Efficiency Effectiveness External Feedback: Impact
Scope of HR Measurement Approaches Value Time Source: Center for Effective Organizations, USC Ad hoc HR Measures Benchmarks Data Systems and Portals Scorecards and Drill Downs Strategic Impact Organizational Effectiveness Validity and Rigor Causation Leading Indicators
Building an Impact Model
Do you understand your business partner/client’s pain?
are they interested in relieving that pain?
do they see it as value added work?
Can you specify the business requirements?
lengthy boring process
critical to your success
Tough Times for Top Executives
“ Over the past three years, nearly 40 percent of the top 2500 CEOs have been removed from their posts. Nearly all of them, due to a failure to execute the strategy.” Bossidy and Charan
Food for thought
“… it is not the lack of a strategy that causes [Senior Executives] to lose sleep, but rather their organization’s inability to execute against a strategy… ” Booz-Allen & Hamilton
“ Having a great strategy is no longer enough – lots of companies can develop great strategies. To win, companies must be able to turn great strategy into great performance. In short, they must be able to execute.” Marion Associates
“ Execution is a disciplined process or logical set of connected activities that enables an organization to make its strategy work. Execution can itself be a source of competitive advantage.” Hrebiniak, Making Strategy Work, Wharton
Execution Strategy People Processes Alignment = Successful Execution To execute strategy you need to align your strategy, process and people!
How do I know if my company is aligned?
How do I create the alignment I want?
How do I maintain the alignment I want?
The biggest questions facing CEOs today
The Alignment Challenge Strategy People Processes Alignment = Successful Execution Fast - Logical ! Fast - Logical ! Slow . . . And follows a different logic . . . Success and speed of execution depend on people alignment, Yet this is the hardest element to align!
What is the Alignment of People?
Research Team Dr. Albert A. Vicere Pennsylvania State University Dr. Elena Granell Instituto De Empressa, Madrid Dr. Miles H. Overholt Human Resource Institute & Riverton Management Consulting Group Jay J. Jamrog Human Resource Institute The University of Tampa
Research Questions Strategy People Processes Alignment = Successful Execution
Can we identify disconnects between people and strategy?
Can we identify disconnects between people and process?
Can we identify strategy and operational blockages?
Can we identify tensions that create disconnects and blockages
Grounded in Management Theories from key disciplines
Included an analysis of four large data bases
Customer Focused Cultures
The Alignment of People Strategy People Processes Alignment = Successful Execution Five Key Elements
Impact Measurement It’s all about Change
Impact measurement is not about numbers … its about change
Numbers only provide you with a common and specific language
If your clients don’t know you they won’t trust you
Fear of being “found out”
Higher Values for HR
Success for those who:
Provide new thinking on old topics
Balance increased strategic role with employee champion role
Closely align HR strategies to business needs
Navigate hard economic times without damaging higher order or systems mechanisms
Use systems thinking and measurement (efficiency, effectiveness and impact)
Help create systems and process for today’s realities and deleting systems that do not add value
Key Attributes for the 21 st Century HR Professional INTELLIGENCE ACCOUNTABILITY CURIOSITY Source: Steve Miranda
Hit it to me / My team
- Do I HAVE to be?
- CAN I be?
So much to learn
So little time
I wonder what will
Why vs How
Let me show you something
you don’t already know
Faster up the Learning Curve HIGHER PERFORMANCE SOONER WHAT YOU NEED TO KNOW PROCESS
Pushing The HR Curve # People Who Know the Solution Problem Complexity Success = Intelligence + Access Source: Steve Miranda
It’s Not HR’s Productivity We Should Be Concerned About The “Evolving” HR Professional Never Forgets …
Getting Computers To Do the Work Is A Waste of Time The “Evolving” HR Professional Never Forgets…
Because You Can Do It Doesn’t Mean You Should Do It The “Evolving” HR Professional Never Forgets…
“ It is not the strongest of the species that survive, nor the most intelligent, but rather the one most responsive to change.” Charles Darwin, “On the Origin of the Species by Natural Selection”, 1859 Charles Darwin, “On the Origin of the Species by Natural Selection”, 1859