The People Management Story Developing an Appropriate HR Scorecard
ASK QUESTIONS 1. Newton asked a different question… 2. Create a story framework – cause and effect Metrics 3. Develop 3. Underlying it is the value chain for HR Objectives SET OBJECTIVES 1. Objectives need to answer the 2. Set1. Ask questions question for your organization 2. It takes into account the maturity and peculiarities of your function 3. Benchmark it to see where you are and want to be DEVELOP METRICS 1. The metrics must be able to help you to create the desired “story” for people management 2. It however, if used correctly, tell you the current “story” of HR in your organization
People Management– The StoryFINANCIALS Do we all contribute Do we generate profit in a Do we invest intelligently in Is there a Return on our effectively to profit safe, healthy and our people? people investment? generation? constructive environment?STAKEHOLDERS Are we happy we have Are our support systems for Does our performance Are we bound by a common enough? And don’t loose people working well? climate contribute to optimal code and does it show? Opportunities? goal achievement?INTERNAL BUSINESS How many at what Level do How do we attract and How do we manage and How do we provide for the we need? source them? reward them? future (people wise)?SYSTEMSPEOPLE AND Who is our talent? What is What competence do they have? In what climate do they their character? perform optimally?INNOVATION
The People Management Story – Key Strategic QuestionsFINANCIALS 14. Does the cost 15. Does the human 16. Is there Economic 17. Do we optimize risk equation reflect cost reflect a caring, Value Add for the mitigation and optimal people safe and healthy way we manage opportunity management ? work climate? people? utilization in the way we manage people?STAKEHOLDERS 10. Are the internal 11. Are internal 12. Do employees have 13. As a collective do customers satisfied customers satisfied an acceptable level we act and advocate that they have the that they receive the of emotional and the values and ethos right people, at the right advice, support rational of the business? right time to deliver and administrative commitment to on business goals? efficiency to deal deliver optimally? with people issues.INTERNAL BUSINESS 6. How many people 7. How will we 8. What is the 9. How do we managePROCESSES &SYSTEMS do we need, at attract, select, reciprocal value succession risk for what level, and induct and retain proposition : the future? which competency them? a. Performance mgt. threshold? b. Recognition and reward c. Learning and growthPEOPLE AND 1. Who are our 3. Which critical 4. What are the core 5. What is theINNOVATION talent? business competencies of leadership and 2. What do they look processes / areas the critical talent performance like in terms of do they service? pools we have ? climate we need core to sustain to characteristics? optimise people (talented) contribution?
The People Management Story – The Generic ObjectivesFINANCIALS 16. Benchmark and improve 17. Benchmark and improve 18. Benchmark and improve 19. Benchmark and improve cost equation of cost cost equation of: cost equation of Human Return on Human per hire operating profit a. H&S Expense per FTE Investment Ratio Investment Ratio and expense per FTE b. Industrial Dispute Absence Days per FTESTAKEHOLDERS 12. Target Customer 13. Target Customer 14. Stretch Target 15. Align priorities in action satisfaction with quality satisfaction with quality Employee engagement with the espoused of the workforce and of HR support, advice and correlate with values of the business – availability of right and efficiency - set retention and implement interventions competencies – set targets for improvement productivity measures – for change – include targets for improvement set targets to improve corp citizenship and BEEINTERNAL BUSINESS 6. Institute/Review/Upd 7. Develop/review 9. Develop/review and 11. Develop/review andPROCESSES &SYSTEMS ate the Workforce employment brand implement implement succession Planning System, strategy, recruitment performance management that: based on: and selection system management & a. Identifies succession a. Clear job profiles (incl and processes and learning and risks and bench competencies) train all role players in development system strengths b. Supply and demand this – create structure and b. Readiness thresholds c. Link to succession and 8. Develop and process to support c. Development paths talent management implement retention 10. Implement EVP d. EVP per position strategyPEOPLE AND INNOVATION 1. Define talent 3. & 4. 5. Define the desired populations – answers Review the organization design, and structure and define: leadership and the question who is a. Talent pipeline performance climate our talent b. The competencies (competency models) for the pipeline - answers the question 2. Define What Would It c. The assessment instruments to identify and develop related to optimizing Take To Succeed Here people in the pipeline performance and Model – answers the contribution question of what characteristics talent have
The People Management Story – The MetricsFINANCIALS 16. Consider: 17. Consider: 18. Consider: 19. Consider: a. Cost per hire a. H&S Expense per FTE Human Investment Ratio Return on Human b. Operating profit per FTE b. Industrial Dispute Investment Ratio Absence Days per FTESTAKEHOLDERS 12 & 15. Survey and set targets to improve: a. Internal Customer Satisfaction b. Employee Engagement c. Values AlignmentINTERNAL BUSINESS 6. % Completion (new); 7. & 8. 9. & 10 11. % Completion (new);PROCESSES &SYSTEMS Level (%) of % Completion (new); Level % Completion (new); Level Level (%) of satisfaction satisfaction with (%) of satisfaction with (%) of satisfaction with with relevance (int relevance (int relevance (int customers) - relevance (int customers) – customers) customers) also consider: Also consider: Also consider: Employment Brand High Performer Growth Bench strength Strength; Time to Fill & Cost Rate; Personal Development Avg. Termination Value – Per Hire Plan Implementation and Potential Successors Termination Rate Offer Acceptance Rate Personal Development Plan Avg. Termination Value Progress Readiness RatioPEOPLE AND INNOVATION 1. % Completion (new); 3.& $. 5. % Completion (new); Level (%) of % Completion (new); Level (%) of satisfaction with relevance Level (%) of satisfaction satisfaction with (int customers) with relevance (int relevance (int % Completion (new); Level (%) of satisfaction with relevance customers) customers) (int customers) Also consider: 2. % Completion (new); Also consider: ENGAGEMENT INDEX Level (%) of a. DISTRIBUTION OF TALENT POOL IDENTIFICATION satisfaction with b. DEMOGRAPHIC MIRRORING OF TALENT POOL(S) relevance (int c. BENCH STRENGHT customers)
Perspective Metric Explanation Formula/Example Look at schedule % Completion Self explanatory performance for intervention/Project Level (%) of satisfaction Based on the scale used in with relevance (int Survey driven the survey customers Numeric, Qualification, Distribution of talent pool performance distribution % of specific variable in identification of employees per talent relation to other variables poolPEOPLE AND INNOVATION Representation of groups, % of specific variable in Demographic mirroring of in relation to total talent relation to other variables talent pool(s) pool – consider gender, BEE, disability etc. Metric used to gauge the Example: there are 14 number of successors are Bench strength qualified successors for possible for any given level 1 executives position(s) Relative measure of Engagement Index employees’ engagement in Survey Results their work.
Perspective Metric Explanation Formula/Example Look at schedule performance for % Completion Self explanatory intervention/Project Level (%) of satisfaction with Based on the scale used in the Survey driven relevance (int customers survey Relative measure of the attractiveness of the Survey Results Employment brand strength organization’s employment value proposition. Average number of days elapsed between requisition date and Average Time To Fill Total Days to Fill / Offers Accepted offer acceptance for internal and external hires. Recruitment expense per hire, Recruitment Cost Per Hire including internal and external Recruitment Expense / HiresINTERNAL BUSINESS PROCESSES hires.&SYSTEMS Voluntary/Involuntary Voluntary/Involuntary Termination Rate terminations as a percentage of Terminations / Average average headcount. Headcount * 100 The average value of each Total Termination Value / Avg. Termination Value termination during the reporting Terminations period. Percentage of performance Performance Appraisal appraisal participants whose Participants Rating High / High Performer Growth Rate rating improved to a “high” Performance Appraisal rating from a previous rating that Participants Previous Rating Non- was less than “high.” High * 100 Personal Development Plan Overall Progress With Number of PDP’s up to Progress Implementation of PDP’s Date/Headcount*100 Offer acceptance reflect the Offers Accepted/Offers Made * Offer Accept Rate relevance of your EVP 100
Perspective Metric Explanation Formula/Example Metric used to gauge the number Example: there are 14 qualified Bench strength of successors are possible for any successors for level 1 executives given position(s) The average value of each Avg. Termination Value – Potential Total Termination Value /INTERNAL BUSINESS PROCESSES termination during the reporting Successors Terminations&SYSTEMS period. Personal Development Plan Overall Progress With Number of PDP’s up to Progress Implementation of PDP’s Date/Headcount*100 Number of Potential Successors who are ready for earmarked Potential Successors/Total Readiness Ratio positions in relation to total Succession Positions *100 positions that require successors
Perspective Metric Explanation Formula/Example 1. Survey internal customer satisfaction with quality of the workforce and availability of right competencies set targets for improvement Survey Results Internal Customer Satisfaction 2. Survey internal customer satisfaction with quality of HR support, advice andSTAKEHOLDERS efficiency - set targets for improvement Survey levels of employee engagement and correlate with Survey Results Employee Engagement retention and productivity measures – set targets to improve Survey values alignment Survey Results Values Alignment behaviour – set targets to improve
Perspective222 Metric Explanation Formula/Example Recruitment expense per hire, Cost Per Hire including internal and external Recruitment Expense / Hires hires. Operating profit per FTE Average profit generated by Operating Profit t / Number ofFINANCIALS employees FTE’s H&S Expense per FTE Total Health and Safety H&S Expense / FTE (Operating Profit + Total Human Investment Ratio Investment in employees as a Compensation Expense) / Total contribution to profit Compensation Expense Return on Human Investment Return on investment in terms Operating Profit t / Total Ratio of human resource Compensation Expense