1. What areas concern HR managers Labor shortages (retention, outsourcing) Skill type shortages (technology, training) Security & Privacy or security v privacy Health care cost Diversity & Benefits mix Liability exposure Accountability

2. These are the traditional “outcome” measures for HR performance Employee satisfaction Turnover rate and cost – absenteeism Unit labor cost Cost per hire Healthcare claim cost HR overhead cost per employee

3. HR Interventions that matter Self managed work teams and decentralization of decision making as the basic principles of organization design Selective hiring of new personnel, diversity Comparatively high compensation contingent on organization performance Reduced status distinction and barriers, including dress, language, office design, wage differential across all levels (much earlier Peter Drucker said no more than 20 x difference between lowest paid and the CEO) Extensive training Extensive sharing of financial and performance data throughout the organization Employment security 1 2 3 5 4 7 6

4. HR interventions matter on what outcome or performance measures Labor productivity Operational outcomes Innovation Sales (growth, industry norms, customer) Profit (growth, ROE, ROA, industry, survival) Goal accomplishment

5. HR expenditures are an investment Not just measured against other HR investment, or How our HR expenditures compare with industry averages for HR expenditure But, fundamentally, viewed as an investment, how do resources devoted to HR compare with the return possible from alternative uses of those resources

6. HR as competitive advantage: - the total scorecard - find and use as many as you can The HR revolution Financial variables Customer variables Internal variables Learning and growth norms and expectations