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 Upside
continue to grow
Strategic
HR Planning
Culture
& Image
Organizational
Design
HR as
Business
Partner
Survey Action
Planning
Staffing
EEO/AA
Impact/Contribution to the Business
Employee
Relations
Training &
Development
Performance
Management
Labor/Union
Relations
Compensation
HR Information
Systems (HRIS)
Benefits
Safety &
Workers’
Compensation
Limit Liability
&
Protect Downside
Compliance
Labor Employee Personnel Human Organizational
Relations Relations Resources Effectiveness
Source: Rich Vosburgh
A Century of Evolution in the Function

3. The Role of HR
The 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 HR
In 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

6. Efficiency and Effectiveness

7. Three Levels of Metrics
Efficiency
What 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?
Impact
Effectiveness 17
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Efficiency
Source: Boudreau and Ramstead 62

8. Three Levels of Metrics
Effectiveness
What 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?
Impact
Effectiveness 17
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Efficiency
Source: Boudreau and Ramstead 62

9. Internal and External Historical Benchmarks

10. The Role of HR Change Agent Strategic Partner Administrative Expert
Future / Strategic Focus
Change Agent
Staffing
Organizational design
Survey action planning
Performance measurement
Training and development
Strategic Partner
Strategic HR Planning
HR as Business Partner
Culture and Image
People
Processes
Administrative Expert
Compensation
Benefits
HR information systems
Compliance
Employee Relations Expert
Employee relations
Labor relations
Safety & workers’ compensation
Diversity and EEO
Day to Day Operational Focus

11. Administrative Expert
Compensation
Payroll as %--total operating costs (benchmarked); compensation targets benchmarked against peer companies; turnover rates; quality of management review and Board material.
Benefits
Medical cost per participant; dental cost per participant; 401K employee participation rate; $ saved in union negotiations.
HRIS Systems Support
HRIS 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 Relations
Absence 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 & EEO
Attitude 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 Design
Benchmarking headcount; effectiveness of communications & key processes (no bottlenecks); spans and layers; management ratios.
Survey Action Planning
Employee satisfaction results at the work group level; rolled up to Business Unit level; norms available for Business Unit analysis.
Performance Management
Performance 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 Planning
Quality of succession management program assessment. Quality of Bench Strength. Quality of Succession Plan Follow-up (% Actions Completed).
HR as Business Partner
Any business measure of effectiveness Degree Feedback on the extent to which HR is considered a partner by those they support.
Culture and Image
Employee Satisfaction data; quality of the description and utilization of culture & image understanding; standing on the Fortune 100 Greatest Places to Work.

15. Starting with the Business Strategy

16. Basic Process for HR Strategy
Scan the
External
Environment
Identify
Strategic
Business
Issues
Identify
People
Issues
Develop HR
Strategy
Communicate
the
HR Strategy

17. The Inside-Out Approach
The Common HR Approach
The Inside-Out Approach
HR practices,
processes,
and
systems
Articulate how
what we do
adds value to
The business
Communicate
to the business
what a good
job we are
doing
Source: Patrick Wright

18. The Better HR Planning Approach
The Outside-In Approach
Identify the
business model
components
and areas to
drive value
Develop an
HR strategy
to execute the
business model
with relevant
metrics
Use the metrics
to demonstrate
or prove how
we are driving
business
performance
Source: Patrick Wright

19. Metrics Model HR People Organization Efficiency Effectiveness
Time to Hire
Cost per Hire
Headcount Ratio
Effectiveness
Customer Survey
“At the Table”
Practice/Process Impact
Efficiency
Direct Labor Costs
Indirect Labor Costs
Positions Unfilled
Effectiveness
Employee Satisfaction
Leadership Capability
Talent Retention
% Black Belt Leaders
Employer Brand
Efficiency
Cost per Unit
Shrinkage
Defects/Scrap
Effectiveness
Customer Satisfaction
Revenue Growth
Market Share
Source: Patrick Wright

20. Do We Really Measure how HR is Driving Business Performance?
Objectives
Driven to Win
Flexible
Embracing Risk
Creative
Global
Fast
Actual HR
Measures
Headcount
Turnover Rates
Succession Candidates
Time to-fill, train, on-board
Cost Reduction
Training Completed
Grievances
Client Satisfaction Surveys
Performance/Potential Ratings
Sales per employee
Best practices recognized

22. The Role of HR
When 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 Collaborative
A major shortcoming in many companies is “a lack of measurement on the impact of HR.”
Accenture High Performance Workforce Study

23. Impact

24. Three Levels of Metrics
Impact
What 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?
Impact
Effectiveness 17
Upgrade 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.
Efficiency
Source: Boudreau and Ramstead 62

25. Business Environment Company HR Department Outputs Inputs
Internal Feedback: Efficiency Effectiveness
External Feedback: Impact

26. Scorecards and Drill Downs Data Systems and Portals
Scope of HR Measurement Approaches
Value
Scorecards and Drill Downs
Strategic Impact Organizational Effectiveness Validity and Rigor Causation Leading Indicators
Data Systems and Portals
Benchmarks
Ad hoc HR Measures
Time
Source: 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 process
critical 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
Strategy
Alignment =
Successful Execution
People
Processes
To 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 !
Strategy
Alignment =
Successful Execution
Slow . . .
And follows a
different logic . . .
Fast -
Logical !
People
Processes
Success and speed of execution depend on people alignment,
Yet this is the hardest element to align!

35. What is the Alignment of People?

36. Research Team Dr. Albert A. Vicere Pennsylvania State University
Dr. Elena Granell
Instituto De Empressa,
Madrid
Dr. Miles H. Overholt
Human Resource Institute &
Riverton Management
Consulting Group
Jay J. Jamrog
Human Resource Institute
The University of Tampa

37. Research Questions
Can 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 blockages
Strategy
Alignment =
Successful Execution
People
Processes

38. Grounded in Management Theories from key disciplines
Strategic Thinking
Marketing
Operations
Human Resources
Organizational Culture

39. Included an analysis of four large data bases
Organizational DNA
Customer Focused Cultures
Employee Behavior
Organizational Culture

40. The Alignment of People
Five Key Elements
Strategy
Marketplace Approach
Alignment =
Successful Execution
Customer Focus
Leadership Behavior
Performance
People
Processes
Processes
Culture

41. Impact Measurement It’s all about Change
Impact measurement is not about numbers … its about change
Numbers only provide you with a common and specific language
If your clients don’t know you they won’t trust you
Fear of being “found out”

42. Higher Values for HR Success for those who:
Provide new thinking on old topics
Balance increased strategic role with employee champion role
Closely align HR strategies to business needs
Navigate hard economic times without damaging higher order or systems mechanisms
Use 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

44. Conclusion

45. 21st Century HR Professional
Key Attributes for the
21st Century HR Professional
Why vs How
Let me show you something
you don’t already know
INTELLIGENCE
ACCOUNTABILITY
CURIOSITY
Hit it to me / My team
How good:
- Do I HAVE to be?
- CAN I be?
So much to learn
So little time
I wonder what will
happen today
Source: Steve Miranda

46. Faster up the Learning Curve
SOONER
HIGHER PERFORMANCE
WHAT YOU
NEED TO KNOW
PROCESS

47. Pushing The HR Curve Success = Intelligence + Access # People Who
Know the Solution
Problem Complexity
Success = Intelligence + Access
Source: Steve Miranda

48. The “Evolving” HR Professional
Never Forgets…
It’s Not HR’s
Productivity
We Should
Be Concerned
About 3

49. The “Evolving” HR Professional
Never Forgets…
Getting Computers
To Do the Work
Is A
Waste of Time 1

50. The “Evolving” HR Professional
Never Forgets…
Because You
Can Do It
Doesn’t Mean
You Should
Do It 5

51. “It is not the strongest of the species that survive,
nor the most intelligent,
but rather the one most
responsive to change.”
Charles Darwin, “On the Origin of the
Species by Natural Selection”, 1859
Charles Darwin, “On the Origin of the
Species by Natural Selection”, 1859 2