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Best Practices in Workforce Diagnostics Diagnose, Analyze, Act and Measure

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Today’s Presenter Allan Schweyer Chairman, EEA With: Bob Heth, Partner, StratACHIEVE & Carol Stevens, Partner, StratACHIEVE

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The Riskiest Business

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Human Capital Diagnostics Accurate Human Resources (HR) Diagnostic and Assessment tools are vital to organizations in order to prevent expensive mistakes in hiring, training, deploying and managing the performance of talent.

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The Business Case for Human Capital Diagnostics and Assessments The ability to implement diagnostics is not the only challenge ─ analyzing and correctly interpreting the results, and then implementing appropriate HR measures can create a true strategic difference in the business.

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<ul><li>Fully 78 percent of businesses routinely track and report people measures (i.e. turnover, absenteeism, compensation, etc.) </li></ul><ul><li>Only 31 percent of HR departments have anyone on staff who understands the company’s strategic Key Performance Indicators (KPIs). </li></ul><ul><li>Only 25 percent of HR departments have anyone on staff who can both understand the company’s KPIs and link them to people measures. </li></ul><ul><li>Only 19 percent of HR departments deliver people measurement reports to all levels of the management team (business partners). </li></ul><ul><li>Only 12 percent of firms use human capital measures to help the company meet its strategic targets of KPIs. </li></ul>Human Capital Measurement State of Readiness Conference (2005) findings about HC Diagnostics

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Poll In my organization we use: Employee engagement or satisfaction surveys The Balanced Scorecard ROI analysis More than one of the above None of the above

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What the Research Says… According to the Conference Board, only 19 percent of HR departments believe their IT systems are worthy of data gathering and of distributing briefings on people measures to all managers. According to USC professors, John W. Boudreau and Peter M. Ramstad in “Talentship and HR Measurement and Analysis,” the evolution of HR and HR measurement requires a sound “decision science” for human capital that truly informs and enhances decisions about human resources wherever they are made.

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<ul><li>Human Capital diagnostics helps in deciding the extent to which existing practices really aid in employee recruitment, engagement and retention </li></ul><ul><li>Comprehensive review can provide a rational basis for HR strategy and budget </li></ul><ul><li>It helps in deciding what is required, along with the order of priority and the parameters of each. </li></ul>Importance of Human Capital Diagnostic Measurement

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Human Capital Diagnostic Tools

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Predictive Analysis Predictive Analysis is used to gain insight into potential challenges and opportunities in order to prevent potential problems and seize on potential opportunities. The HR function can guide management to the optimum deployment and development of its human capital through the use of assessments and diagnostics in the PA process.

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Talentship at FedEx & Disney FedEx knows that one of the top few critical components of its success are shipping time and efficiency. Disney knows that visitor experience in the park is key.

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Moneyball Avg. cost per win since 1999: $388,000. NY Yankees: $1.23 million 2002 American League West Final Standings Wins Losses Games Behind Payroll Oakland 103 59 --- $42m Anaheim 99 63 4 $63m Seattle 93 69 10 $86m Texas 72 90 31 $107m

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Sourcing Past Success

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Leading Indicators in HR Some lagging indicators have the potential to be leading indicators. Retention or turnover is one, employee engagement is another.

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Poll My organization use data and metrics: Routinely, almost every major decision is data-based, backed by real diagnosis and hard evidence Decisions are data-driven in most parts of the organization but not in HR Few decisions appear to be data-driven or backed by diagnosis No decisions in the organization are made on the basis of data, diagnostics or hard evidence.

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Employee Engagement Survey & Analysis Whatever the tool, employee engagement assessments and diagnostics must be properly implemented, assessed afterward, and most importantly, acted upon and then measured. Organizations should use the tools to classify employees into at least four major groupings: “Fully Engaged”, “Engaged”, “Somewhat Disengaged” and “Fully Disengaged”, are common labels. Web-based strategic engagement assessments, such as the SEGA diagnostic, can highlight areas of strength, challenges, and opportunities that guide the company toward strategic execution. This type of assessment also acts as a check up to determine where the company agrees and disagrees in the key areas that drive the business. “Strategic Engagement Gap Analysis”, Bob Heth and Carol Stevens, www.stratachieve.com

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Formal Structure Social Network Analysis Informal Structure Exploration & Production Zaheer Schultz Mitchell Klimchuck Angelo Keller Smith Geology Dhillon Myers Petrophysical Crossley Exploration Avery Cordoza Sutherland Ramirez Drilling McWatters Waring Production Hassan Reservoir Hopper Production Milavec Senior Vice President Mares

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Deployment Decisions Overloaded Leaders, Experts or Gateway Roles I am working to my limits but still can’t respond to everyone. Solution: Re-allocate information, decision rights and portions of role. Political Players I control the information tightly; my position is secure. Solution: Build connectivity to break stranglehold. Rising Stars/Flight Risks I am rising through the company rapidly and am being solicited at other companies. Solution: Recognize expertise, succession planning. Central Connectors Removed By removing 5% of the people (central connectors), the number of connections drops by a disproportionate 33%.

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<ul><li>Successful leaders and researchers agree that to truly improve and sustain productivity gains, a company must first thoroughly diagnose where breakdowns occur and where opportunities exist </li></ul><ul><li>The execution and measurement of the plan is what leads to initial and continuous improvement. </li></ul>Case Examples – Values to the Organization

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SEGA Diagnostic SEGA Sample Reports

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SEGA Diagnostic

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Gallup: Human Sigma

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Gallup: Human Sigma

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ROI Assessment The ROI Methodology, developed over the past several decades by Jack and Patti Phillips and applied in thousands of organizations worldwide, offers a standard and structured approach to HR ROI measurement

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ROI Assessment

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ROI Assessment

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<ul><li>Research by John Lingle and William Schiemann found that the companies that paid the closest attention to metrics and had the most credible information were the ones identified as industry leaders over the previous three years and reported financial performance in the top one-third of their industry. </li></ul><ul><li>Assessments and diagnostics, properly chosen and implemented, followed by rigorous analysis, disciplined action and measurement, will often be the difference between HR program success and failure . </li></ul>Conclusion

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<ul><li>Thank You! </li></ul>StratACHIEVE is pleased to offer your organization the ability to take a deep introspective and cross sectional look into your success drivers…as a trial and at no cost . The SEGA assessment compares your organization to the best run companies in the world. You will receive an email with this offer and the slides from today’s presentation within 48 hours