What an important topic! To say that is an understatement!Setting goals….effective training at appropriate times, at appropriate levels, that translates into improved performance that is measurable, quantifiable….adjusting what isn’t working, adjusting for shifts in the business and/or competitive climate, along the way as appropriate to do so…establishing what worksfor sustaining a healthy organizational structure, shedding what doesn’t work, or what doesn’t work in the here and now…and keeping this cycle going in acontinuous motion is what this presentation today is about.The setting throughout is HR, but it doesn’t have to be. It really can be just any of the business units so you might want to keep that in mind.I want your active involvement today! Don’t hesitate to comment, to ask questions, to disagree. I invite and encourage your involvement andengagement today!
Who has this book?The authors say, and I agree after reading it, that the book provides the tools and systems required for leadinga “measurement management” HR architecture, the book heralds the emergence of human resources as a strategic powerhouse intoday’s organizations. HR must be embedded in the business.HR Scorecard: Linking People, Strategy and Performance almost set the stage for my presentation today. The authors are passionate aboutthe role that HR plays as a prime source of sustainable competitive advantage and a key driver of value creation. I have to say that I sharetheir passion!In fact, I could have devoted our entire time together to describing its components without being able to tell you everything I would like to.Instead, I’m going to select a few of the high points and encourage you to dig deep into The HR Scorecard as you link people, strategy & performance.
Why is it important to implement HR’s strategic role? Because if we are not an asset, we are a liability?To demonstrate strategic value in their role in the firm’s success? To talk the language of others who speak in strategic language?If people are our greatest asset, HR ought to have a major part in making that vision a reality?We have to move from a bottom-up perspective (emphasizing compliance & traditional HR) to a top-down perspective(emphasizing implementation of strategy)?We must be able to demonstrate / showcase influence on measures that matter to CEO’s such as profitability and shareholder value?All great reasons!This 7 step model provides steps for formalizing that strategic role. This table illustrates how HR can link its deliverables to thefirm’s strategy implementation process.First, when I say HR architecture, what do I mean? We have to get to common ground of what the architecture includesbefore we can set about transforming it into a strategic asset.Architecture is the sum of the HR function, the broader HR system & resulting employee behaviors.So the 7 steps are as you see on the screen….I should read them here. These are nonlinear; rather it is circuitous, reiterative.Let’s look closely at 4 key steps for strategy implementation and the transformation of HR’s role to that of being “at the table rather than on the table.”
It is vital that my organization understands how we fit into the overall strategy of the business. We must be able to articulatewith actionable and specific goals how we contribute to the overall strategic success through involvement and support of operationaldepartments. Do we know what is needed? Is it improved year/year safety performance? Do we want superior customer serviceat the lowest cost among competitors?Focus on “implementing” and “communicating” specific actionable goals rather than generalities to avoid misunderstandingand inconsistencies.Be specific. Take vague out of your vocabulary. Ambiguity, wipe it out, too! Individual and group discussions all have their necessary place in strategy implementation. Test for understanding, and then test forunderstanding again to achieve consistency. Testing for understanding of the organizational strategy, what it specifically means tome and my workplace, how it is implemented, how I will know success, stating firm goals so that employees understand their roleand the organization knows how to measure that success in achieving them.Thrust (or performance drivers) high level may be talent, leadership, customer service & support, organizational integration & HR capability.Questions translate to, for instance:Do we have the talent we need to be successful in the future?How is HR helping organization position itself to meet the needs of the external customers?Is HR viewed as an enable to attract & retain top talent?Are we managing cost of turnover/churn?Are we managing financial risk?What is our return on investment in people?
HR strategic leaders and strategy focused employees are worth their weight in gold!Demonstrate (to others) positive influence on a firm’s financial performance.For instance, let’s say an organization has strategic plans for significant expansion.HR would most likely play a vital role in all the components of hiring the right number of appropriate levels of employees, the best fit,the most capably qualified, right on time, to reach diversity objectives, and so forth. How many are still with us after the first year, orwithin the “at risk” period and what is their level of satisfaction, how many left voluntarily? Involuntarily?Generations merging in the workplace will continue to be a major point of discussion. Let’s say 80%, 60% of your workforce are composedof Baby Boomers. If an important strategic goal is achievement of anything, a well trained workforce is critical to that achievement.Clearly, Boomers won’t work forever (although no one is completely sure of just how long) so phasing in of their replacementsat various levels of leadership and contribution are critical to successful business continuity. Training and development issuesmaybe not now, but in the short term future.Bench strength. What about succession planning issues?
HR system means rewards, competencies, work organization, etc.Deliverable may be low turnover within a specific work group that enables a key performance driver (cycle time) in a strategy map.Key market to increase sales and revenue. HR working with business leaders to develop the unique competencies needed to implementthat strategy. Strategic is sales competencies. Must understand employee skill gaps. Establish ongoing assessment of targeted employees.Provide target training & services.Implementing / developing a competency model and development program to provide the HR deliverable specifically requiredby the strategy.For internal alignment, how do the components within your HR system fit together. How does the HR system align (support)other elements in the firm’s value chain (external alignment).Must align to changing business climate / strategy.Changing from full time to part time employees to meet industry demands is an example. Perhaps utilizing outsourcingand contracting back select groups of employees. Ultimately facing a shortage of appropriate candidates, training may havebeen dismantled, part time employment could not attract type of talent needed, with cost skyrocketing.
Must understand the causal chain for effective strategy implementation in your particular organization. Must be understoodbroadly to influence firm performance. Do senior managers understand their significance.Choose the correct measures for your deliverables. Clearly define and break down to lowest levels.For instance, senior staff employment stability. What does employment stability mean? Does it include all turnover or justvoluntary? Management?This book is just full of HR performance-driver measures examples. I will make some of these lists available in slideshare.
It begins with the mission then to the strategy of the organization to specific actionable goals. HR is embedded in the business culture.Metrics are how we are doing in terms of outcomes and processes.High level outcome may be to retain certain levels of FT/PT employees , overall, leadership in nurse category. Year/year,how are we doing, what is first year people performance, how are we doing with at risk employees?Go get comparison data from extant sources such as SHRM, American Hospital Association, HR Associations.Process metrics are unique to a particular discipline such as recruiting, benefits, employee relations, training, health.While all support the big outcome to “retain certain levels of employees” all have only a piece toward accomplishment of thegoal and should be measured specifically and accordingly.Metrics are well qualified, timely, lowest cost. So we might look at cost to hire.Look to compare or benchmark in advertisement, use of technology, behavioral assessments, background checks.Employee relations would possibly look at grievances, how quickly resolved, discrimination suits, discipline taken.Benefits might look at health plans and how well we are doing in preventive health care issues. Wellness program initiatives.Health and wellness – injuries & lost time.Compensation – market rate salaries.Compare to yourself but also to like institutions.Methodist is extremely data oriented and driven.Key is to understanding the data, where are your struggle points. What is the story behind the data.Look carefully at the outliers and build a story around them, produce a narrative, or you don’t clearly understand what is happening.Look at training. Activity level – contact hours occurring. Look at ROI – anything worth doing needs measurement,certification of understanding – that they “got it.”Turnover – reduce or understand why not.Increase engagement measurements – do surveys of entire population every two years. High level, random sample in between.Important to define metrics used to avoid bias.Every 3 years definitely complete SWOT analysis, at least every 3.Be sure you clearly understand what it all means and the impact upon the overall organization strategy.2008 Metric List – key may be to look at new indicators used to ensure appropriateness in measurement, benchmarking, etc.
How HR can make a strategic impact on business was key.Strategy is peak performance such as is written about by Conley in his book of like title.Setting goals versus target metrics enables each individual to focus on the right priorities.Must have shared business knowledge.Focus on business needs.Use multiple sources of information.Consider big picture.Begins with business to talent needed to talent development to engagement.Adapt objectives to current circumstances. Align with business objectives.Do not sacrifice long term for short term gain.Food cost, turnover by level category, new store openings, overall customer satisfaction.Budgets, staffing, engagement surveys, turnover, coaching.View holistically – getting the right people, developing them, keeping them.What – manager retention.How – reward, recognition, opportunity, trainingResults – reduced manager turnover, increase overall satisfactionMetrics are the “what” behind the “why”Quantifies return on investment of resources.Adds credibility to plans.Ensures a common language.
Former VP HR Northrup Gruman / Vought. Now consultant in own business.HR must be embedded in the business.How often does the strategic planning occur? Should be annually with quarterly review. Critical to be in alignment.Operations might be monthly review to plan & functional might be quarterly.Know your customer and what is important to them. Are we delivering on time, on budget, internal satisfaction?Translate backwards. May be cost to hire / time to hire / benchmarked appropriately.What are the strategies for the organization? Design measures to report on those.Employee climate survey would be crazy in a merger. Might want to know how successful companies make transitions?Might assess in different phases throughout merger process.Organic growth – align with program managers, growth/performance/cost/schedule of performance & contribution to profitabilityOutsourcing may be key, but you must know first how much you actually are spending internally.How well are you doing in salaries, time spent in benefits, program management, supply chain activities.Who measures supplies? Is it a quality issue? Must use the same measurement, same as internal if goes to outsourcing.On cost / on schedule / on qualityMeasure leaders – how are they doing with the how / what / when questionsMargo went to CEO calendar and got in sync with his so that she went to same meetings to hear first hand what wasbeing said about & to do with HR. Rather than hearing 3rd hand or having others talk for her.Must understand need.
If you don’t own this book….you need to buy it.<br /> (Amazon: $19.25 Kindle, $37.50 Hardcover)<br />
7<br /> Step Model for Implementing HR’s Strategic Role<br />Regularly test measures against strategy map<br />
Step 1: Clearly Define the Business Strategy<br />Focus on how to implement the strategy rather than solely on what the strategy consists of<br />Facilitate a discussion about how to communicate the firm’s goals throughout the organization<br />Clarify organization strategy into precise terms so that employees understand their role and the organization knows how to measure its success in achieving these strategies<br />
Step 2: Build a Case for HR as a Strategic Asset<br /> Build a clear business case for why and how HR can support business strategies<br />Demonstrate that better HR management matters…and it matters outsideHR<br />Strategic implementation, rather than strategic content, differentiates successful from unsuccessful<br />
Step 5: Align the HR Architecture with HR Deliverables<br />Create a value-creation story by aligning the HR system with the larger strategy-implementation system<br />To do this, you need to think about how the components within your HR system fit together (internal alignment) as well as how the HR system aligns with (supports) the other elements in the firm’s value chain (external alignment)<br />
Step 7: Implement Management by Measurement<br /> The HR scorecard is a powerful management tool, and is much more than for just “keeping score”<br />If aligned with the imperatives of the firm’s strategy, HR professionals will have new insight into what it takes to actually manage HR as a strategic asset<br />Theprocess is not a one-time event, HR managers should regularly review the HR deliverables to determine if they are remaining strategically significant, or need to be replaced<br />
Now let’s talk to the executives…<br />(3 partial case studies)<br />
John Lacy<br />Compare yourself<br /><ul><li>Internal and external
Benchmarking sharing consortiums (typically within healthcare)</li></ul>Look at bell curves, “How many employees are in bell curve for performance?”<br />Understand data<br /><ul><li>Look for struggle points
Get the right people, develop them, andkeep them</li></li></ul><li> Margo Parker-Hudson<br />Get HR and organization into a “strategic rhythm”<br /> Define the measurement culture in the organization <br /><ul><li>Internal and external
Tie to strategy based on customer needs</li></ul>Asks yourself, “what are the strategies for the organization (short & long term)”, and the design measures to report on those<br />What is important to “my customer”<br />