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Hr intro
The document discusses the importance of human resources (HR) measurement and reporting, emphasizing the need for executive alignment and understanding of HR's value. It outlines key performance indicators (KPIs) that can help demonstrate HR's contributions to organizational success and performance optimization. Additionally, it highlights various aspects of HR functions, from workforce management to the implementation of effective reporting systems for measuring HR outcomes.
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Hr intro
- 1. Introducing HR Measurementand Reporting Ensuring Executive Alignment and Understanding
- 2. Critical Question Why wouldwe want to measure human resources…what value does it add?
- 3. Re-aligning the HRContribution Enhance CEO/senior executive team understanding Demonstrate the opportunity available Re-align our thinking and contribution Key performance indicators and detailed reporting
- 4. How CEOs andsenior executives often view HR Business partners Change agents Administrative Employee advocates specialists David Ulrich — HR Champions: The Next Agenda for Adding Value & Delivering Results, 1996
- 5. How HR wantsto be viewed Business partners Change agents Administrative Employee advocates specialists David Ulrich — HR Champions: The Next Agenda for Adding Value & Delivering Results, 1996
- 6. How HR wantsto be viewed Business partners Change agents = Missed opportunity! Administrative Employee advocates specialists David Ulrich — HR Champions: The Next Agenda for Adding Value & Delivering Results, 1996
- 7. Stages in HumanResources functional development COMPETITIVE ADVANTAGE Total line manager accountability Internal consultants (Consolidation) Add value Integral to company success BUSINESS Long term vision and strategy PARTNERS Integral contribution to business plan (Integrated) Strong influence on other departments Member of top team Quality systems and processes PROACTIVE Service management Intellectual capital/knowledge management (Rapid growth) Customer/needs focused Workforce empowerment and teams Pro-active/improvement Return on investment Management development Cost/benefit Leadership training analysis INTERNAL Comprehensive database Policies Succession planning and manuals POLICE (Emerging) ControlsWorkforce planning — headcount, hiring, restructuring, travel, relocation Performance management Reporting systems & budgets Workforce productivity Basic measures — turnover, KIND HEARTS (Lending Support) absenteeism Cafeteria Technical and skills training Car IR disputes, grievances park BASIC Security OH&S procedures Recruitment Gymnasium NEEDS Induction Social club Payroll Christmas party Admin/Records Leave
- 8. Human Resources transformation From To industrial enterprise knowledge-based enterprise Service to individual employees stockholders Service to regulatory authorities CEO Creation of workplace policies business performance tools Guardian of workplace stability core competencies Chief workforce administrator finance officer for human capital
- 9. The global marketplace Emphasis on product Squeeze on innovation margins Tighter cost Price control sensitivity Shorter Enhanced lead times customer service Workforce contribution?
- 10. Organisational critical successfactors Product quality Staff capability Competitive price Product innovation Cost of labour Excellence in customer service Workforce contribution?
- 11. CEO/senior executive teamrecognition... To capitalise on workforce potential
- 12. The Human Resourcescontribution... To optimise workforce performance
- 13. Search for the‘Holy Grail’ of HR management Theory X & Y Hygiene and Motivators Emotional Intelligence ? Management by Objectives Matrix Kaizen Empowerment Management Science MBWA Customer Service EVA Work Simplification Self-Directed Teams Hierarchy of Needs Benchmarking Excellence Plan-Organize-Direct-Control Delayering Corporate Culture 7 Habits Managerial Grid Intrapreneuring Diversification Balanced Scorecard Downsizing Human Relations Organization Renewal TQM Work-life Balance Quality Circles Portfolio Management Continuous Improvement Relationship Value Chain Marketing Change Management Reengineering Rightsizing Decision Tree One Minute Managing 0s 0s 60 s 0s 0s 0s 0s w 4 19 5 19 19 7 19 8 19 9 20 0 No 19
- 14.
- 15. HR perspective: organisationalcontribution Productivity Capability Workforce Wellbeing Satisfaction
- 16. HR perspective: organisationalcontribution Productivity Labour costs Labour mix and utilisation Staff rostering and utilisation New technology application Cross-functional project teams Employee participation/teams Workforce forecasting Workforce
- 17. HR perspective: organisationalcontribution Capability Performance feedback Induction programs Technical and skills training Learning centres Tertiary assistance/MBAs Recruitment program Role clarity Workforce
- 18. HR perspective: organisationalcontribution Workforce Wellbeing Leadership training Non-discriminatory workplace Fair treatment process Safe work practices Equipment and physical factors Work–life balance programs
- 19. HR perspective: organisationalcontribution Workforce Satisfaction Career path options Internal communication plan Remuneration and incentives Recognition and reward programs Effective payroll Human resources policy manual
- 20. CEO/senior executive perspective:ownership of workforce issues Employees Senior executive team HR department
- 21. HR perspective: seniorexecutive team accountabilities Senior executive team Budget centres Hiring and firing Organisational charts Pay and promotions
- 22. HR perspective: ownershipof workforce issues Employees Senior executive team HR department
- 23. Human Resources Key PerformanceIndicators
- 24. HR Key performanceindicators Objectives and purpose To highlight to the senior executive team: • areas where the organisation is performing well • areas where intervention is required
- 25. HR key performanceindicators Key principles One page, once per month Measuring organisational performance, not that of the HR Department Must be ‘big ticket items’ (business-linked) Must be user friendly and easy to understand Supported by detailed tables and/or graphs
- 26. HR key performanceindicators Key principles (continued) Contain credible/reliable information (start off slowly...be willing to amend/change) Progressively introduce agreed targets (internal, then external) Must become institutionalised within the senior management team HR team must be fully conversant
- 27. Example KPI report HRKey Performance Indicator Report For Period ended This YTD Criteria Measure Description Associated report Last period Change period (avg) Number of FTEs Changes in w orkforce numbers and Workforce Headcount Report Headcount Total hours utilised hours utilised by employee category Workforce Utilisation Report Workforce turnover % of total w orkforce terminating Turnover performance and cost Workforce Turnover Report (unplanned) Total $ cost of turnover impact upon the organisation Workforce % total hours lost to absenteeism Absenteeism performance and cost absenteeism Workforce Absenteeism Report Total $ cost impact upon the organisation (unplanned) Number of lost time injuries (LTI) Number of lost time days Occupational Health & Safety Occupational health and safety Workers Average duration rate of LTI Report performance throughout the com pensation Frequency rate of LTI organisation Workers Compensation Costing $ cost of w orkers compensation Report Number of discrimination complaints rec’d Number of sexual harassment complaints rec’d Number of physical harassment complaints rec’d Equal employment opportunity and Equal em ploym ent Number of w omen in management positions affirmative action performance ER Status Report opportunity - senior management throughout the organisation - middle management Ratio of female appointments vs male % of w omen returning to w ork after mat leave
- 28. Example KPI report(continued) $ labour cost as % of sales Revenue generated per FTEs Workforce productivity/employee Unit production per FTEs relations performance Productivity and Labour utilisation rate utilisation Quality reject rate (employee error) Number of credit returns (linked w ith employee error) Employee satisfaction Number of customer complaints (employee levels/organisational culture related) Recruitm ent Average days vacancy duration - management Average days vacancy duration - staff Recruitment performance throughout Average cost recruitment - management the organisation Average cost recruitment - staff Recruitment Status Report % new hires achieving 6 months service % new hires achieving 12 months service Staff retention performance throughout the organisation % new hires achieving sat. appraisal at first assessment Average $ cost per vacancy filled Average cost of vacancies filled Company training expenditure (% of salaries & $ commitment to staff training and Training & Development w ages) development Expenditure Report Time commitment to staff training and Average training hours per employee Training Hours Allocation Report development Participant satisfaction w ith training % training course participant satisfaction courses provided Training Performance Report Participant attendance at training % training course attendance courses provided Number of employees completing sponsored Commitment to professional tertiary studies Training and development of staff throughout the developm ent Number of employees completing sponsored MBA organisation programs Learning centres - number of courses offered - % course participation Learning centre effectiveness - Internet hours utilised throughout the organisation - e-learning courses utilised - % e-learning pass rate
- 29. Example KPI report(continued) % of internal appointments above level __ Succession Planning Status Succession planning Avg length of service of staf f appt’d above level Succession planning eff ectiveness Report ___ Number of unfair dismissal claims Workforce lost time (hours) ER Status Report Employee relations performance Number of formal union grievances throughout the organisation % w orkforce on individual contracts Internal communications - number of bulletins issued Staff alignment and commitment to the - number of emails issued organisation Em ployee relations - number of staf f brief ing sessions conducted Work/life balance - number of active f lexible w ork agreements Organisational success in providing an - number of active w orking from home ef fective w ork/life balance program agreements for all employees - number of active job sharing agreements Workforce teams Organisational effectiveness in - number of active teams creating and sustaining a team-based structure/culture - number of team meetings % compa ratio $ pay for performance gaps Organisational competitiveness and Rem une ration equity in remuneration $ pay equity gaps packaging/policy % employee share scheme take-up rate Organisation performance in managing Level of outstanding annual leave liability Accrued Annual Leave Report Adm inis tration annual leave Number of manual payroll adjustments Payroll performance Number of employees aged under 25 Number of employees aged 25–35 Demographic profile of employees by Number of employees aged 35–45 age across the organisation Number of employees aged 45–55 Organisation profile Number of employees aged over 55 Avg length of service (current employees) Average length of service of employees across the organisation Avg length of service (terminating employees) and terminating % ratio of salaried staf f to w aged staf f Adequacy of w orkforce planning % ratio of surplus staf f to required staff
- 30. Example KPI report(continued) Number of FTEs in HR Workforce Headcount Report HR FTEs as % of total w orkforce (FTEs) Human resources efficiency/cost HR headcount HR labour cost as % of sales/revenue effectiveness HR $ cost as % of total w orkforce (FTEs) Level of satisfaction w ith w ages/salary/benefits Level of satisfaction w ith conditions/physical w ork environment Level of satisfaction w ith job Staff satisfaction levels w ith the organisation and reasons for leaving. Level of satisfaction w ith personal relations (This section may not be reported on a Exit interview s Level of satisfaction w ith participation and regular monthly basis, dependent upon Exit Interview Report recognition the volume of exit interview s received Level of satisfaction w ith opportunities for and the need to create meaningful development data and protect employee confid Number of employees w ho w ould recommend company Number of employees w ho w ould seek re- employment w ith company % of appraisals completed on time Number of formal staff grievances raised Performance management Perform ance effectiveness throughout the % of individual training plans completed appraisals organisation. (This section is likely to % of employees above competent be produced on an annual basis.) % of employees below competent Average satisfaction % vs norm Staff satisfaction levels w ithin the Workforce attitude organisation. (This section is likely to surveys Average satisfaction % vs previous survey be produced on an annual basis.)
- 31. Example headcount report WORKFORCEHEADCOUNT REPORT Period ending: Headcount at end of last Variation on last period Variation on budget Headcount at end of this period Budgeted headcount Departm ent period ( + or - ) ( + or - ) FT PT Cas Con O/T FT PT Cas Con O/T FT PT Cas Con O/T FT PT Cas Con O/T FT PT Cas Con M'gment Staff Total M'gment Staff Total M'gment Staff Total M'gment Staff Total M'gment Staff Total M'gment Staff Total
- 32. Example workforce utilisationreport WORKFORCE UTILISATION REPORT Period ending: Variation on last Hours utilised last Hours utilised this Variation on budget period Budgeted hours Departm ent period period ( + or - ) ( + or - ) FT PT Cas Con O/T FT PT Cas Con O/T FT PT Cas Con O/T FT PT Cas Con O/T FT PT Cas Con O/T M'gment Staff Total M'gment Staff Total M'gment Staff Total M'gment Staff Total M'gment Staff Total Total com pany
- 33. Example workforce turnoverreport WORKFORCE TURNOVER REPORT Period ending: Summary results Current Period Year-to-date Total management cost $ $ Total staff cost $ $ Total company cost $ $ This period Year-to-date Avg Total cost for Avg Total Total cost $ Cost of Term inations Turnover % Turnover Departm ent headcount period headcount term inations YTD Turnover for period for period % YTD for period $ YTD YTD $ M'gment Staff Total M'gment Staff Total M'gment Staff Total M'gment Staff Total M'gment Staff Total Total com pany
- 34. Example workforce absenteeismreport WORKFORCE ABSENTEEISM REPORT (Unplanned Absenteeism) Period ending: Input values Summary results Current Period Year to Date Management standard hours per day Total management cost $ $ Staff standard hours per day Total staff cost $ $ Total company cost $ $ Current period Year-to-date Paid leave Total unplanned Paid leave Unpaid Total unplanned Department Total hours Sick leave Unpaid leave Total hours Sick leave $ Cost per (other) absenteeism (other) leave absenteeism available available for day for period Cost YTD Cost Hrs % Hrs % Hrs % Hrs % Hrs % Hrs % Hrs % Hrs % $ $ M'gment Staff Total M'gment Staff Total M'gment Staff Total M'gment Staff Total Total company
- 35. Instructions Please note,this slide does not form part of the presentation. It is included for user guidance only. This Powerpoint presentation contains instructional notes that support each slide. The presentation should open at the ‘Notes page view’ (that is, you should be able to see Powerpoint slides and notes below the slides). If you cannot see the Notes, select View/Notes Pages from the Toolbar. In the Notes Page view, you can move through the Powerpoint presentation by using the ‘page up’ and ‘page down’ keys on your keyboard or by clicking on the double arrows at the bottom right of your screen. To hide the Notes pages and view only the Powerpoint slides, select View/Slide show from the Toolbar. Either click on the double arrows or use the ‘page down’ key to advance to each new slide.
Editor's Notes
- #3 Our interactions with HR professionals in large and small, and private and public organisations all over Australia tell us that while HR professionals generally see the merit of introducing comprehensive human resources business reporting they are ultimately concerned about the following: If the CEO/senior executive team does not presently understand the role played and contribution made by HR, what is the point of introducing reports? They will not be valued. If comprehensive reporting is introduced by the HR department, the CEO/senior executive team will assume that current performance levels and thereafter identified solutions are ultimately the HR manager’s responsibility. Therefore, the starting point in this presentation is to address these two fundamental issues: why would we want to measure HR, and what value does it add?
- #4 This slide identifies the path the presentation will follow: enhancing CEO/senior executive team understanding of why they should value HR demonstrating the potential opportunity linked to the business the role HR should play going forward where HR KPIs and measurement tools fit.
- #5 This slide provides an illustration of a balanced scorecard model developed by well known HR identity, Professor David Ulrich from the University of Michigan. The model attempts to outline the four key roles that HR plays in any organisation (and to suggest that there should be an equal contribution in all four areas). The problem (as highlighted) is that many CEOs/line managers have HR ‘tagged’ as contributing in only two of the four areas, where the role is principally one of administration and advice.
- #6 This slide highlights how HR wants to be viewed by the organisation and how its functional role should be spread across all quadrants. (That is, there is an opportunity for HR to contribute much more if there is greater recognition and support of its capacity.)
- #7 This slide highlights how HR wants to be viewed by the organisation and how its functional role should be spread across all quadrants. (That is, there is an opportunity for HR to contribute much more if there is greater recognition and support of its capacity.)
- #8 Reinforcing the previous slides, this slide illustrates how HR usually starts in an organisation, and how its role progressively develops/changes over time. Unfortunately, in many organisations the function does not develop beyond the third step (internal police) where it remains principally focused on policies, procedures, controls and administration. It is only when the HR function progresses/is enabled to take additional steps that it becomes more proactive and customer focused, and thereby capable of making value-added contributions in increasingly broader areas of business performance. (i.e. Again highlighting the opportunity available to the CEO/senior executive team.)
- #9 This slide is intended to highlight the changing role that HR has played in leading organisations over the past decade, and where the transitions in thinking have occurred.
- #10 As outlined in previous slides, the HR function provides many opportunities for the CEO/senior executive team to enhance business performance. Most organisations will not, however, take advantage of these opportunities until they have recognised the relationship between business performance and the workforce. Key issues confronting most organisations competing in the global marketplace are outlined in this slide. If the workforce can contribute to resolving some, or even all, of these problems, why doesn’t the CEO/senior executive team take more interest in, and demand more from, the HR team?
- #11 Following the same ‘theme’, the intention of this slide is to focus on the critical success factors that inherently underpin an organisation’s success and sustainability. This will help determine whether there is an opportunity to enhance performance by recognising the causal link with the organisation’s workforce. (i.e. Can the workforce contribute to enhancing performance in these critical areas? And if the answer is yes, why don’t we take more interest in and demand more from the HR team?)
- #12 In concluding this section of the presentation, we are endeavouring to draw all of the content together into one simple, clear outcome for the CEO/senior executive team: To recognise the potential of the workforce to contribute to the achievement of business strategies and objectives, and to capitalise on this opportunity by re-evaluating and better understanding the contribution the HR team can make.
- #13 In this next section of the presentation, we turn our attention away from the opportunity available to the CEO/senior executive team and towards the role and contribution the HR team should make in this newly defined environment. As a critical starting point, we suggest that in order to capitalise on workforce potential, the HR team must recognise that its ultimate purpose is to optimise workforce performance, and that that central objective should dictate all future projects and initiatives.
- #14 This slide is intended to reinforce the principle outlined in the previous slide: that HR needs to optimise workforce performance and contribute to business outcomes instead of searching for and introducing the latest ‘fad’, regardless of whether it has any identified/real benefit! (i.e. Throughout the last 50 years, there has been a search for the Holy Grail of management. Just consider some of the jargon and programs that we have initiated over the years! Is it really any wonder that when HR unveils its latest program the organisation meets it with skepticism at best and outright defiance at worst? The key understanding is to accept that there is no Holy Grail. The best thing HR professionals can do is to partner with their clients and respond to real business needs that clients struggle with day in and day out.)
- #15 Continuing the same theme, this slide provides a humorous reflection of how line managers may see/value the HR department’s current offering.
- #16 This slide broadens the theme expressed in previous slides (i.e. that the principal role of HR is to optimise workforce performance in order to achieve business strategies and objectives) and provides an alternative balanced scorecard highlighting key areas where HR can directly contribute to enhanced workforce performance: workforce productivity; workforce capability; workforce satisfaction; and workforce wellbeing. Key questions to be considered/asked are: What would happen if our workforce: was as productive as it could be? was as capable as it could be? was as satisfied as it could be? had the highest level of wellbeing possible? Would this lead to: optimum workforce performance? a real contribution to business strategies and objectives? a point of potential differentiation in the marketplace? the potential to be regarded as an employer of choice? Should we (the CEO/senior executive team) all understand/recognise/support HR initiatives/programs into the future that will enhance workforce performance in at least one of the four areas?
- #17 This slide provides more detail about specific programs and services that HR can/does provide in relation to each of the areas that contributes to optimising workforce performance.
- #18 This slide provides more detail about specific programs and services that HR can/does provide in relation to each of the areas that contributes to optimising workforce performance.
- #19 This slide provides more detail about specific programs and services that HR can/does provide in relation to each of the areas that contributes to optimising workforce performance.
- #20 This slide provides more detail about specific programs and services that HR can/does provide in relation to each of the areas that contributes to optimising workforce performance.
- #21 Having now clearly identified the HR opportunity available to the CEO/senior executive team, the last key issue to address is clarifying where accountability for workforce performance rests. Unfortunately, all too often the CEO/senior executive team assigns accountability to the HR department.
- #22 Against this background of assigning accountability to the HR function, we note that in most organisations: employees are assigned to senior executives’ budget centres and organisation charts senior executives ultimately decide who will be hired and fired senior executives ultimately decide who will be promoted or receive a pay increase. The obvious conclusion therefore is that with such clear senior executive team responsibilities, it is not logical or practical to hold HR solely accountable for workforce performance.
- #23 This slide suggests that accountability for workforce performance rests principally with the senior executive team, fully supported by the HR department. The implication is that in introducing integrated HR business reporting, the results achieved and the decisions made are the joint responsibility of the CEO/senior executive team and the HR manager.
- #25 This slide shows the principal purpose and objectives of introducing HR key performance indicators.
- #26 This slide identifies the key factors that must be taken into account in order to effectively implement and sustain HR key performance indicators.
- #27 This slide identifies the key factors that must be taken into account in order to effectively implement and sustain HR key performance indicators.
- #28 This slide provides an overview of the HR key performance indicators that may be suitable for/introduced into your organisation.
- #29 This slide provides an overview of the HR key performance indicators that may be suitable for/introduced into your organisation.
- #30 This slide provides an overview of the HR key performance indicators that may be suitable for/introduced into your organisation.
- #31 This slide provides an overview of the HR key performance indicators that may be suitable for/introduced into your organisation.
- #32 This slide provides an example of a specific HR measurement tool that may support your key performance indicator report and be suitable for application within your organisation.
- #33 This slide provides an example of a specific HR measurement tool that may support your key performance indicator report and be suitable for application within your organisation.
- #34 This slide provides an example of a specific HR measurement tool that may support your key performance indicator report and be suitable for application within your organisation.
- #35 This slide provides an example of a specific HR measurement tool that may support your key performance indicator report and be suitable for application within your organisation.