Vlerick HRday 2013: Performance Management. Prof. Koen Dewettinck

1. VLERICK HR DAY!
HR PRACTITIONERS MEET HR ACADEMY
12 JUNE 2013
Welcome in the track
Performance management!

2. HR ANALYTICS:
BREAKING THROUGH THE WALL
HR DAY
JUNE 12 2013
PROF DR KOEN DEWETTINCK

3. HR ANALYTICS: BREAKING THROUGH THE WALL
 WHY
 WHAT
 HOW
 CURRENT STATUS IN BELGIUM

4. © Vlerick Business School
WHy

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TIME FOR CHANGE
 Global Economic Crisis
 Need for justification
 HR ill prepared
 Characteristics of Human Capital
 Important asset
 Large cost
“Organizations have not applied the same rigor to understand this
critical asset. Compared to functions such as finance and supply
chain management, HR has not had a traditional depth of
experience in making fact-based decisions.”

6. © Vlerick Business School
CHARACTERISTICS OF HUMAN CAPITAL
8%
13%
15%
19%
22%
25%
28%
30%
33%
43%
52%
66%
71%
Acces to raw materials
Corporate social responsibility
Assets (physical)
Price/revenu innovation
R&D, intellectual property
Data access, data-driven…
Partnership networks
Technology
Business model innovation
Brand(s)
Products/services innovation
Customer relationships
Human capital
Factors in Maintaining Competitive advantage
Leading Through Connections, IBM 2012 CEO Study

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In God we trust,
all others must bring data.
W. Edwards Demming

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CURRENT MEASURES
80%
77%
66%
56%
56%
51%
37%
34%
20%
HRIS
Benchmark Data
Cost Efficiency
Impact on Workforce
Track Outsourced Activities
Cost of Services
Dash Board/Scorecard
Business Impact
Cost/Benefit
HR Measures Available in Organizations
Centre for Effective Organizations Survey
% Yes on a Yes/No Scale

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WHat

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HR ANALYTICS: BREAKING THROUGH THE WALL
“True strategic value comes from metrics that go beyond the
measurement of typical task-based activities and combine HR data with
other business data.”
Asselman
“Showing the actual cause-effect relationship among what you do and
business outcomes and building a strategy based on that information
makes HR analytics a reality.”
Mondore
“Getting the numbers right is just the beginning. Value is added when
measures and analysis are combined with the logic to know where to
look for the important connections. A story is better than a number!”
Boudreau
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HR ANALYTICS
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Efficiency
Effectiveness
Impact
Resources
Effect on talent
pools
Effect on strategic
success

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?
HITTING THE “WALL” IN HR MEASUREMENT
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Value
Ad hoc HR
measures
Benchmarks
Data
systems
and
portals
Scorecards
and drill-
downs
• Business
Impact
• Causation
• Leading
indicators
• Multiple
data
sources

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HOW

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CURRENT ISSUES
• Excess of data
• Lack of expertise
• Internal view
• Process data
• Everything measured equals reality
• Prediction of a certain future
• Bread spread approach

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LIGHTNING THE LAMP
Beyond HR, Boudreau & Ramstad, 2007
‘The Right Analytics’
Valid Questions and
Results
‘The Right
Measures’
Sufficient Data
‘The Right Process’
Effective Knowledge
Management
‘The Right Logic’
Rational Talent
Strategy
HR Metrics and
Analytics: a force for
strategic change

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LOOK INTO THE MIRROR

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HR ANALYTICS CYCLE
1. Determine
Critical
Outcomes
2. Create
Cross-
functional Data
Team
3. Assess
Outcome
Measures
4. Analyse
Data
5. Build,
Program &
Execute
6. Measure &
Adjust
Beyond HR, Boudreau & Ramstad, 2007

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CASE: GOOGLE
Way to succes
“All people decisions at Google are based on data”
Analytics as separate unit
Points of contact for other units of HR
Take HR seriously!
HR must speak language of data

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CASE GOOGLE: ANALYTICS VALUE CHAIN
Opinion:
Gut feeling
based on
experience
Data:
Structured
information,
but raw
Metrics:
Ratio counts
Analysis:
Draw
correlations
and show
relationships
Insight:
Leads to
action, and
decision
making
Action:
Process or
policy
change
Google figure: google’s analytics value chain

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1. PROJECT OXYGEN: DO MANAGERS MATTER?
• Performance
reviews
• Employee
surveys
Available
data
• One cluster
• Cut data into
bottom and top
• Big differences
Chart
• Great manager
award
• Double blind
interviews
Qualitative
studies

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1. PROJECT OXYGEN: DO MANAGERS MATTER?
3pitfalls
8waystosuccess
- Coach
- Empower
- Express concern
- Be productive
- Communicate
- Develop careers
- Have a vision
- Have technical skills
- Tough Transition
- No consistent approach
- Too little communication

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1. PROJECT OXYGEN: “HITTING THE WALL”
“Managers
don’t impact
googler
performance”
1000’s of
people
managers
Favorable
rating of
managers
Good
managers
have a better
performing
team
8 best
practices
and 3 pitfalls
Upward
feedback
surveys
Google figure: google’s analytics value chain

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CURRENT
STATUS

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2013 STUDY ON USE OF DATA IN HR IN
BELGIUM
 Three focal questions:
 WHAT do organisations measure?
 HOW do they use these measures?
 WHY do organisations measure?
 5 domains
 Recruitment & selection
 Engagement
 Training & development
 Comp & ben
 Turnover
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METHODOLOGY
 15 Belgian companies
 10 members of BEL20
 Large companies of varying sectors (1,750 to
200,000 employees)
 Interviews with HR-professionals
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Sector % organizations
Financial activities 20%
Information & Communication 13%
Industry 27%
Production & Distribution of electricity* 13%
Other commercial services 27%

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EFFICIENCY!!
R&S
T&Dev.
EngagementComp & Ben
Turnover
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Measurement % organizations
# training hours per employee
Training evaluation form
100%
86%
Number of participants 71%
Number of courses
Type of the course
54%
54%
Measurement % organizations
Time to fill 100 %
Number of candidates 66%
Number of starters 66%
Number of vacancies 60%
Recruitment channels 60%
Measurement % organizations
Number of leavers 93%
Exit interview 86%
Reason of resignation 64%
Profile of leaver 43%
Demographical characteristics 29%
• All do engagement surveys
• Often linked to other HR-data
• No systematic action plan implementation
• External and internal benchmarking
• Often linked to other HR-data
• Use of simulation tools

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ONE STEP FURTHER….
R&S
T&Dev.
EngagementComp & Ben
Turnover
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• Link to absenteeism / turnover
• Link to productivity
• Use of “quick scans”
• Simulations for cost of promotion
• Simulations for changed comp-scheme
• Often trigger to analyses in
other domains
• Region specific benchmarking
• Learning penetration linked
to engagement, turnover
• Usefulness of training some
months after programme
• Supervisor rating of
training effectiveness
• Turnover of starters
• Supervisor performance evaluation
• Measure of quality external partners
• Evaluation recruitment channels (inflow not quality)

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DATA IN HR: VALUE & FUTURE
 Overall enthusiasm about the use of data in HR
 But need for alignment with organisational
strategy and targets
 Benefits
 More credibility for HR
 HR is seen as a strategic partner
 Further professionalisation of HR
 Opportunity for HR to be innovative
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DATA IN HR: VALUE & FUTURE
 Problems
 Quality of data cannot be guaranteed
 Too much data
 Lack of integrated system
 HR-professionals often miss competencies to deal
with data and lack of insight in the business
 Expensive and time consuming
 Lack of audience
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30. THANK YOU!