Presentation on theme: "Future of HR Metrics A Brave New World"— Presentation transcript:
1 Future of HR Metrics A Brave New World Jay J. Jamrog Executive Director, HRI
2 HR Continues to Evolve & the model defines our aspirations Add Value&Maximize Upsidecontinue to growStrategicHR PlanningCulture& ImageOrganizationalDesignHR asBusinessPartnerSurvey ActionPlanningStaffingEEO/AAImpact/Contribution to the BusinessEmployeeRelationsTraining &DevelopmentPerformanceManagementLabor/UnionRelationsCompensationHR InformationSystems (HRIS)BenefitsSafety &Workers’CompensationLimit Liability&Protect DownsideComplianceLabor Employee Personnel Human OrganizationalRelations Relations Resources EffectivenessSource: Rich VosburghA Century of Evolution in the Function
3 The Role of HRThe 2002 Human Resource Competency Study found that 43% of HR’s impact on business performance came from its strategic contribution.Source: University of Michigan Business School
4 The Role of HRIn 2001, greater proportion of respondents (41.1%) said they were full partners in the development and implementation of business strategy than in 1998 (29.4%).However, the expected increase in time devoted to this role is not reflected in the data.Source: HRPS/Center for Effective Organizations
7 Three Levels of Metrics EfficiencyWhat range of resources (financial and non-financial) should be considered?What is the appropriate level of investments?How should investable resources be allocated to maximize results?ImpactEffectiveness17Upgrade this one if you have any good ideas (maybe carry over any visual elements from previous slide).Make next two slides match format that you decide for this slide.EfficiencySource: Boudreau and Ramstead62
8 Three Levels of Metrics EffectivenessWhat unique combination of policies and practices would best build the necessary human capital?What factors link policies and practices to human capital enhancement?What attributes distinguish effective from ineffective policies and practices?ImpactEffectiveness17Upgrade this one if you have any good ideas (maybe carry over any visual elements from previous slide).Make next two slides match format that you decide for this slide.EfficiencySource: Boudreau and Ramstead62
10 The Role of HR Change Agent Strategic Partner Administrative Expert Future / Strategic FocusChange AgentStaffingOrganizational designSurvey action planningPerformance measurementTraining and developmentStrategic PartnerStrategic HR PlanningHR as Business PartnerCulture and ImagePeopleProcessesAdministrative ExpertCompensationBenefitsHR information systemsComplianceEmployee Relations ExpertEmployee relationsLabor relationsSafety & workers’ compensationDiversity and EEODay to Day Operational Focus
11 Administrative Expert CompensationPayroll as %--total operating costs (benchmarked); compensation targets benchmarked against peer companies; turnover rates; quality of management review and Board material.BenefitsMedical cost per participant; dental cost per participant; 401K employee participation rate; $ saved in union negotiations.HRIS Systems SupportHRIS implementation on time and within budget; customer satisfaction.Compliance# New EEO Charges; # Old EEO Charges Closed; Progress on AA Goals; Outcomes of Inspections and Audits.
12 Employee Relations Expert Turnover rates, “Best Place to Work” rankings, legal compliance, efficiency, union activity (or lack thereof).Labor RelationsAbsence of the extreme negative (strikes, slowdowns, sit-downs, boycotts); $ outcome of new contracts, both immediate & longer term; timeliness & quality of new contracts; productivity per employee; safety & quality measures.Safety and Workers’ Compensation# Incidents & $ value of accidents; # employees trained; % required training & certifications completed; audit results.Diversity & EEOAttitude survey measures of perceived fairness; # people trained in Diversity Awareness and Diversity Leadership programs; perceived tolerance.
13 Change Agent Staffing Organizational Design Survey Action Planning $ to Fill; Days to Fill; # Filled; Quality of Hires; Retention of Hires.Organizational DesignBenchmarking headcount; effectiveness of communications & key processes (no bottlenecks); spans and layers; management ratios.Survey Action PlanningEmployee satisfaction results at the work group level; rolled up to Business Unit level; norms available for Business Unit analysis.Performance ManagementPerformance Reviews: Timeliness and Quality; #/% Positions with written accountabilities and measures; other measures vary with the position.Training & Development# Programs; #Days/Person Training; Impact of Training; effectiveness measures within new groups.
14 HR as Business Partner Culture and Image Strategic Partner Strategic HR PlanningQuality of succession management program assessment. Quality of Bench Strength. Quality of Succession Plan Follow-up (% Actions Completed).HR as Business PartnerAny business measure of effectiveness Degree Feedback on the extent to which HR is considered a partner by those they support.Culture and ImageEmployee Satisfaction data; quality of the description and utilization of culture & image understanding; standing on the Fortune 100 Greatest Places to Work.
16 Basic Process for HR Strategy Scan theExternalEnvironmentIdentifyStrategicBusinessIssuesIdentifyPeopleIssuesDevelopHRStrategyCommunicatetheHR Strategy
17 The Inside-Out Approach The Common HR ApproachThe Inside-Out ApproachHR practices,processes,andsystemsArticulate howwhat we doadds value toThe businessCommunicateto the businesswhat a goodjob we aredoingSource: Patrick Wright
18 The Better HR Planning Approach The Outside-In ApproachIdentify thebusiness modelcomponentsand areas todrive valueDevelop anHR strategyto execute thebusiness modelwith relevantmetricsUse the metricsto demonstrateor prove howwe are drivingbusinessperformanceSource: Patrick Wright
19 Metrics Model HR People Organization Efficiency Effectiveness Time to HireCost per HireHeadcount RatioEffectivenessCustomer Survey“At the Table”Practice/Process ImpactEfficiencyDirect Labor CostsIndirect Labor CostsPositions UnfilledEffectivenessEmployee SatisfactionLeadership CapabilityTalent Retention% Black Belt LeadersEmployer BrandEfficiencyCost per UnitShrinkageDefects/ScrapEffectivenessCustomer SatisfactionRevenue GrowthMarket ShareSource: Patrick Wright
20 Do We Really Measure how HR is Driving Business Performance? ObjectivesDriven to WinFlexibleEmbracing RiskCreativeGlobalFastActual HRMeasuresHeadcountTurnover RatesSuccession CandidatesTime to-fill, train, on-boardCost ReductionTraining CompletedGrievancesClient Satisfaction SurveysPerformance/Potential RatingsSales per employeeBest practices recognized
22 The Role of HRWhen executives were asked to select which descriptor best described the view of HR held their organizations, only 34% indicated that HR was viewed as a “strategic partner.”SHRM/Balanced Scorecard CollaborativeA major shortcoming in many companies is “a lack of measurement on the impact of HR.”Accenture High Performance Workforce Study
24 Three Levels of Metrics ImpactWhat is the link between sustainable strategic success and human resource management?Which talent pools are most critical for competitive advantage?How could improving human capital increase value?ImpactEffectiveness17Upgrade this one if you have any good ideas (maybe carry over any visual elements from previous slide).Make next two slides match format that you decide for this slide.EfficiencySource: Boudreau and Ramstead62
25 Business Environment Company HR Department Outputs Inputs Internal Feedback: Efficiency EffectivenessExternal Feedback: Impact
26 Scorecards and Drill Downs Data Systems and Portals Scope of HR Measurement ApproachesValueScorecards and Drill DownsStrategic Impact Organizational Effectiveness Validity and Rigor Causation Leading IndicatorsData Systems and PortalsBenchmarksAd hoc HR MeasuresTimeSource: Center for Effective Organizations, USC
27 Building an Impact Model Do you understand your business partner/client’s pain?are they interested in relieving that pain?do they see it as value added work?Can you specify the business requirements?lengthy boring processcritical to your success
29 Tough Times for Top Executives “Over the past three years, nearly 40 percent of the top 2500 CEOs have been removed from their posts. Nearly all of them, due to a failure to execute the strategy.” Bossidy and Charan
30 Food for thought“… it is not the lack of a strategy that causes [Senior Executives] to lose sleep, but rather their organization’s inability to execute against a strategy… ” Booz-Allen & Hamilton“Having a great strategy is no longer enough – lots of companies can develop great strategies. To win, companies must be able to turn great strategy into great performance. In short, they must be able to execute.” Marion Associates“Execution is a disciplined process or logical set of connected activities that enables an organization to make its strategy work. Execution can itself be a source of competitive advantage.” Hrebiniak, Making Strategy Work, Wharton
31 Execution Alignment = Successful Execution StrategyAlignment=Successful ExecutionPeopleProcessesTo execute strategy you need to align your strategy, process and people!
32 The biggest questions facing CEOs today How do I know if my company is aligned?How do I create the alignment I want?How do I maintain the alignment I want?
33 The Alignment Challenge Fast -Logical !StrategyAlignment=Successful ExecutionSlow . . .And follows adifferent logic . . .Fast -Logical !PeopleProcessesSuccess and speed of execution depend on people alignment,Yet this is the hardest element to align!
36 Research Team Dr. Albert A. Vicere Pennsylvania State University Dr. Elena GranellInstituto De Empressa,MadridDr. Miles H. OverholtHuman Resource Institute &Riverton ManagementConsulting GroupJay J. JamrogHuman Resource InstituteThe University of Tampa
37 Research QuestionsCan we identify disconnects between people and strategy?Can we identify disconnects between people and process?Can we identify strategy and operational blockages?Can we identify tensions that create disconnects and blockagesStrategyAlignment=Successful ExecutionPeopleProcesses
38 Grounded in Management Theories from key disciplines Strategic ThinkingMarketingOperationsHuman ResourcesOrganizational Culture
39 Included an analysis of four large data bases Organizational DNACustomer Focused CulturesEmployee BehaviorOrganizational Culture
40 The Alignment of People Five Key ElementsStrategyMarketplace ApproachAlignment=Successful ExecutionCustomer FocusLeadership BehaviorPerformancePeopleProcessesProcessesCulture
41 Impact Measurement It’s all about Change Impact measurement is not about numbers … its about changeNumbers only provide you with a common and specific languageIf your clients don’t know you they won’t trust youFear of being “found out”
42 Higher Values for HR Success for those who: Provide new thinking on old topicsBalance increased strategic role with employee champion roleClosely align HR strategies to business needsNavigate hard economic times without damaging higher order or systems mechanismsUse systems thinking and measurement (efficiency, effectiveness and impact)Help create systems and process for today’s realities and deleting systems that do not add value
45 21st Century HR Professional Key Attributes for the21st Century HR ProfessionalWhy vs HowLet me show you somethingyou don’t already knowINTELLIGENCEACCOUNTABILITYCURIOSITYHit it to me / My teamHow good:- Do I HAVE to be?- CAN I be?So much to learnSo little timeI wonder what willhappen todaySource: Steve Miranda
46 Faster up the Learning Curve SOONERHIGHER PERFORMANCEWHAT YOUNEED TO KNOWPROCESS
47 Pushing The HR Curve Success = Intelligence + Access # People Who Know the SolutionProblem ComplexitySuccess = Intelligence + AccessSource: Steve Miranda
48 The “Evolving” HR Professional Never Forgets…It’s Not HR’sProductivityWe ShouldBe ConcernedAbout3
49 The “Evolving” HR Professional Never Forgets…Getting ComputersTo Do the WorkIs AWaste of Time1
50 The “Evolving” HR Professional Never Forgets…Because YouCan Do ItDoesn’t MeanYou ShouldDo It5
51 “It is not the strongest of the species that survive, nor the most intelligent,but rather the one mostresponsive to change.”Charles Darwin, “On the Origin of theSpecies by Natural Selection”, 1859Charles Darwin, “On the Origin of theSpecies by Natural Selection”, 18592