ADVANCED HUMAN RESOURCE MANAGEMENT Prof. Dr. Armin Trost

International Business Management English Version for International Business Management

Overview Retention Job Motivation and Satisfaction Employee Survey Change Management Knowledge Management Social Media HR Organization and Information Technology HR Controlling

Retention Prof. Dr. Armin Trost

Retention – Overview Key terms Turnover costs Turnover diagnosis Turnover prediction Retention measures Turnover strategies

Turnover – Definition of Key Terms The process in which employees leave the organization and have to be replaced Turnover Rate Involuntary turnover Turnover initiated by the organisation (often among people who would prefer to stay). Voluntary turnover Turnover initiated by employees Number of Employees leaving the Company in a Year  100% Number of Employees at Midyear

Performance Turnover Relation High mobility, opportunities due to high labor market value Poor Evaluation; small pay raises; poor satisfaction Average turnover underestimates critical leaves 20% Turnover 10% Average Low Middle High Performance According to: William and Livingstone (1994). Another look at the relationship between performacne and voluntary turnover. Academy of Management Journal, 37, 269-298.

Turnover Costs Visible („Direct“) Costs Hidden („Indirect“) Costs Training Onboarding Hiring Visible („Direct“) Costs Selection Marketing Vacancy Lost Productivity of Other Employees Separation Learning Curve of New Hire Hidden („Indirect“) Costs Lost Productivity of Other Employees Lost Productivity of Vacant Position Lost Productivity of Other Employees Lost Productivity of Incumbant Pre-Departure Vacancy Introduction Employee Leaves New Employee Hired New Employee Fully Effective Source: Corporate Leadership Council (1998). Employee Retention

The Psychological Contract Employer Provides Employee provides Regular Pay Benefits Social networks Challenging tasks Training Image Security Values Idendity Networks Customers Performance Creativity Capabilities Knowledge Talent Energy Time Health

Retention Factors Which of the following factors are most likely to hinder your company’s ability to retain talented employees over the next three years? Select up to three (Answers in %) The Economist Intelligence Unit 2008 (Responses of 1.000 executives around the globe)

Major Retention Factors for High Potentials Challenging and strategic Projects Board Awareness Freedom to Act Retention Professional Networks Within Competitive Salary Executive Trust & Support

New Generations require new Ways of Life 10 20 30 40 50 60 70 80 Learn Work Private

Flexible Working Structures fixed Location mobile fixed Time flexible fixed Structure flexible Employees go to Work Employees take their Work with them

The common Approach: Turnover Diagnosis Usage of scientific methods to systematically answer the question: Who leaves why? 88% of all companies survey by Mercer in 1998 conduct exit surveys and/or exit interviews to capture reasons to leave While results are always of general interest they hardly provide relevant insights for the business line (e.g. female employees leave the company for different reasons than male employees) Results taken from turnover diagnosis help companies to undertake strategic measures with regards to employer branding Turnover diagnosis can be seen as a reactive rather than as a proactive measure

Exit Interview (Example: Intel) What was the main reason that you decided to leave? Is your new position in a different line of work than the one you where in while at Intel? How would you characterize your new employer? Would you say your new employer is better than Intel, about the same as Intel, or not as good as Intel in terms of: How would you descibe your relationship with your manager while you where at Intel? How would you describe your experience with Intel? If a friend approached you and told you he/she was looking for a similar position at Intel, how likely would you be recommend Intel? Any other comments about Intel or you new position? Pay Benefits Location Working Conditions Job Security Advancement Opportunities Product Quality Coworkers Company Leadership Company Image

A simple Framework to predict Turnover 1 Employee Commitment 2 4 Capabilities to do a good Job Intention to leave/stay Supervisor Quality Turnover Social embedded ness 3 Four strong questions to be asked regularly 1 Would you recommend a friend to work at X1? 2 Do you have everything you need to do your job well? 3 Do you enjoy working with your peers and supervisor? 4 Do you seriousely consider leaving X1 within the next 6 months? 1 X = Name of the company in question

Commitment Capability Matrix clearly indicate Supervisor Quality High 5 Chris Christensen Garth McGrath Keneth Keith Carlson 4 Mark Myer John Shark Mike McGuire Kelley Clark Tom Scott Commitment 3 Rock Stewart Paul Paulson Susan Power Linda Anderson Ed Flaw Russ Rothen 2 Pete Peters Paul Cummings John Smith Low 1 1 2 3 4 5 Low Capability High

Retention Target Groups High Let Go Re- Recruit Risk of Departure Turnover Intention Don‘t Care Take Care Low Low Employee Value High Impact of Departure

Impact of „Cost of Changing Career“ Cost of Doing Nothing Benefits of working at other employer Cost of Changing Career Cost of Doing Nothing Cost of Change Benefits of staying with current employer 

Turnover Decision Styles High Involvement Decision Making Systematically and carefully taking into consideration current employment, alternative employement opportunities, own strength and weaknesses, long-term expectations and private situation Opportunity Driven Decision Making Underestimation of appealing elements of current employment and consistent overestimation of other employment offers even in times of limited pressure Fleeing from current Situation Feeling that everything is better compared to the status quo. Negatively perceived elements of actual job are main drivers for changing career Externally Driven Decision Making Employment alternatives including the current one are evaluated according to friends‘ and family‘s attitudes and expectations

Job Motivation and Satisfaction Prof. Dr. Armin Trost

Types of Theorie Content Theory Process Theory These theories attempt to explain those specific things which actually motivate the individual at work Maslow’s Hierarchy of Needs Job Characterstics Model of Hackman & Oldham Herzberg’s Theorie Process Theory These theories attempt to identify the relationship among the dynamic variables which make up motivation

Job Characterstics Model by Hackman & Oldham Job Characteristics Psychological States Desired Outcomes Skill Variety Experienced Meaningfulness Task Identity Task Significance Motivation Performance Satisfaction Experienced Responsibility Autonomy Knowledge of Results Feedback The relationship is moderated by the strength of an employee‘s need for growth

Two Factor-Model by Herzberg Relative Frequencies of reported events In „bad“ Situations in „good“ Situations Achievement Recognition The work itself Responsibility Advancement/Growth Self Actualization Compensation Subordinate Status Supervisor Colleagues Leadership Company Policies Working Condition Private Security Motivation Factor Satisfaction/No Satisfaction Hygiene Factor Dissatisfaction/No Dissatisfaction

Expectancy Theory by Vroom Force – the motivation or the force to show a specific action Expectancy – the possibility of achieving a certain outcome through certain actions Valency – the preference an individual has for a particular outcome, the worth placed on a particular result F =  (E  V)

Types of Job Satisfactioin By Bruggemann Vergleich Soll - Ist Stabilisierende Zufriedenheit Diffuse Unzufriedenheit Erhöhung des Anspruchs-niveaus Beibehaltung des Anspruchs- niveaus Senkung des Anspruchs-niveaus Beibehaltung des Anspruchs- niveaus Verfälschung der Situations-wahrnehmung Ohne neue Problem-lösungs-versuche Neue Problem-lösungs-versuche Progessive Zufriedenheit Stabilisierte Zufriedenheit Resignative Zufriedenheit Pseudo- Zufriedenheit Fixierte Unzufriedenheit Konstruktive Unzufriedenheit

McGregor’s Theory X and Y The average person is lazy and has an inherent dislike of work Most people must be coerced, controlled, directed and threatened with punishment if the organization is to achieve its objectives The average person avoids responsibility, prefers to be directed, lacks ambition and values security most of all Theory Y For most people work is as natural as play or rest People will exercise self- direction and self-control in the service of objectives to which they are committed Commitment to objectives is a function of rewards associated with their achievement Given the right conditions the average worker can learn to accept and to seek responsibility

Employee Survey Prof. Dr. Armin Trost

Employee Survey – Overview Purpose and approaches Employee survey operation Commonly used content Result interpretation Limitations of traditional employee surveys Strategic employee survey

Employee Survey Objectives Insights into naturally hidden subjects Employee Satisfaction Corporate climate, culture, values Commitment and capabilities related to strategic challenges … II Identification fo strengths and weaknesses Evaluation of former actions Induction of discussion and initiatives III Improvements Working conditions Productivity Employee retention Culture Meeting strategic goals …

Employee Surveys can adress the Needs of different Clients Top-Management Middle Management Employees Internal Service Provider

Survey-Feedback Improvement Activitiy Survey Problem Identification and Action Setup Analysis and Reporting Feedback Results to all Employees

Employee Survey Project Steps Preparation Survey Follow-Up Project Planning & Setup Feedback/Communication Prestudy Report Generation Action Planning Survey Development Survey Administration Implementation Prior Communication Evaluation

Operation & Evaluation Survey Development Topics Indicator Questions Adjustment Pretest Operation & Evaluation

During the past year, have you been bothered by pain in your abdomen?

Q12 (Gallup) I know what is expected of me at work I have the materials and equipment I need to do my work right At work, I have the opportunity to do what I do best every day In the last seven days, I have received recognition and praise for doing good work My supervisor, or someone at work, seems to care about me as a person There is someone at work who encourages my development At work, my opinions seem to count The mission/purpose of my company makes me feel my job is important My associates (fellow employees) are committed to doing quality work I have a best friend at work In the last six months, someone at work has talked to me about my progress This last year, I have had opportunities at work to learn and grow

A Typical Way to Present Results

Survey Results (Example) Tasks and Duties Work Environment Empowerment Colleagues Direct Supervisor Communication Work Flexibility Work-Life-Balance Compensation Benefits Commitment Career Development Region South-West (32 Employees) is part of Germany (186 Employees) 1 = Best possible result; 5 = worst possible result

Ways to interpret results Absolute Means and frequencies of answers related to different items are absolutely compared. The more negative the results by absolut means the bigger the issue Relative Results are compared to internal and/or external standards or benchmarks. In most cases results of superior unit are used Longitudinal Current results are compared to results of previous surveys Objectives Results are compared with predefined expectations (objectives)

Rules in Follow-up Processes All employees get all results of the survey Feedback of results follows a top-downn approach from to top-management to every single team All teams get their own results compared to the results of the superior organisational units Issue, which lay beyond an organizational unit‘s respnsibility will be escalated to the unit on the next level

Shortcomings of Traditional Employee Survey Approaches Surveys are isolated events not integrated into regular leadership processes Not every topic is relevant for everybody on every hierarchy level Objectives are defined after the survey has been conducted based on survey results. But, surveys can‘t change priorities Required budgets for improvement activities are not defined. Therefore planned actions lead to minimal impact Focus on satisfaction – missing linkage to business drivers and results Tremendous efforts through intense reporting and follow-up processes Comparison with benchmarks means taking the mediocre as standard

Satisfaction versus Strategy Pulse Survey Traditional Approach Topics Factors driving competititiveness Business Indicators Factors driving employees‘ satisfaction and performance based on a scientific model Stakeholder (Customer) Top-Management Employees, Managers, Internal Service Units Follow-up Results are natural part of top-management agenda and decision making Objectives are set in advance to the survey Units on all levels are encouraged to work with results and draw conclusions Objectives are set after the survey Cycle Up to every month Every 1 to 5 years Participants Random samples, panels, high-potentials Every employee

Commitment & Capabilities related to Strategy X

Commitment Capability Grid – Example Garth McGrath Innovation high high Mark Myer John Shark Cost Reduction Russ Rothen Capability Capability Schulze-Pübbelkamp SAP Implementation Ed Flaw Service Quality Kelley Clark Innovation Garth McGrath low low Pete Peters low high low high Commitment Commitment

Change Management Prof. Dr. Armin Trost

Overview Large-Scale transformations and related human reactions and challenges Change Management – definition and framework Sponsorship and commitment Program organization Employee communication and involvement

Types of large-scale Transformations Reengineering Changing the way people work Restructuring Changing roles and responsibilities of people Mergers & acquisitions Changing entire groups of people Strategic change Changing the direction of people‘s work Cultural change Changing people‘s attitutes, values and beliefs

Response to Disruptive Changes Emotional Response Anger Acceptance Active Bargaining Stability Denial Testing Immobilization Depression Passive Time According to Kübler-Ross: On Death and Dying (1967)

Resistance to Change Resistance is a natural human reaction on disruptive events (fear of loosing control) Change is seen by different people differently according to their individual frames of reference Resistant employees are often seen as not rationally thinking troublemakers Resistance of informal thought leaders are of greater power than those of formal leaders There is always a mixture of overt and hidden resistance. Overt resistance should be a valuable aspect of any change process Active involvement is propably the best way to deal with resistance

Response to Positive Change Pessimism (Perceived Complexity) Level of Tolerance Informed Pessimism Checking Out (?) Hopeful Realism Informed Optimism Uninformed Optimism (Naivité) Completion Time According to: Conner: Managing at the Speed of Change

Why Transformation fail (Kotter, 1995) Not establishing a great enough sense of urgency Not creating a powerful enough guiding coalition Lacking a vision Undercommunicating the vision Not removing obstacles to the new vision Not systematically planning for and creating short- term wins Declaring victory too soon Not anchoring changes in the corporate culture

Sources of Complacency Too much happy talk from senior management Human nature, with its capacity for denial, especially if people are already busy or stressed A kill-the-messenger-of-bad-news, low-confrontation culture Complacency Too many visible resources The absence of a major and visible crisis Organizational structures that focus employees on narrow functional goals Low overall performance standards Infernal measurement systems that focus on the wrong performance indexes A lack of sufficient performance feedback from external sources Source: John Kotter (1996): Leading Change

People-related Challenges a any Transformation Do the people … understand what the change is about? agree, that the change is necessary? see the impact on their daily work? have required capabilities for the new situation? get support to make the change happen? benefit from newly expected behaviours?

Change Management Framework Initialization Management Functions Support Functions Sponsorship/ Commitment Scope & Vision Communication Organization Setup Training & Support Controlling Design Change HRM Integration Stakeholder Involvement Stabilization

Sponsorship/ Commitment Levels of Support Sponsorship Longterm support Investment personally, financially, timely Sponsorship/ Commitment Commitment visible, rationale und emotional Change Support Acceptance Acceptance Understanding Preparation Attention Time No Idea According to: Daryl Conner: Managing at the Speed of Change (1992)

Roles in a Change Program 1/2 Sponsors Have the power to sanction and legitimize change and to make decisions about change Create an environment that inables change to be made on time and within budget The sponsors make up the steering group Change Agents Responsible for making the change happen on an operational local level They directly deal with employees and managers, which are impacted by the change (targets) Target The group who must actually change attitudes and behaviour

Roles in a Change Program 2/2 Project Team Operationally drives the entire change program The project team is led by the project lead, who is responsible for the overall success of the program The project team reports to the steering group Sounding Board Key-players with a good sense of the company‘s culture and the actual mindset of the employees Provide feedback to the project team about acceptance and resistance on side of the target External Advisors Give advice to the project team from a neutral standpoint

Typical Organizational Structure Target Sponsor Steering Group SB Line Manager CA LM MA MA Project Team Project Lead CA LM SB Change Agent CA External Advisor Project Lead (Consulting) SB SB Partner Sounding Board

Relationships between different Roles Sponsor Sponsor Sponsor Sponsor Agent Agent Agent Target Target Target Linear Structure Triangular Structure Square Structure Source: Daryl Conner: Managing at the Speed of Change (1992)

Positioning What do you do for whom why? What‘s the problem (in terms of figures)? Who has the problem? What does the problem cost if not solved? What‘s the solution? What will be the difference after the solution has been implemented successfully? What are the costs of the solution?

Communication Measures efficient Available Media Employee Newspaper E-Mail Newsletter (Meassage from the CEO) Intranet (with F&Qs) Town Hall Meeting Intranet, Social Media (with forums and chatrooms) Departmentmeetings Individual employee meetings One-direction Interactive Open Space Events „Ask-the-CEO“-Meetings Workshops, Conferences Hotline Broschures Posters Videos, webcasts PPT-Presentations New Media effective

Communication Strategy When? Who informs – CEO, HR ..? How – Media usage? What is the message? Why – What to achieve with communication? Whom?

The Communication Dilemma Early Communikation ? Late Communikation High Unsecurity/ Need for Information Clarity Low Time, Progress

Employee Involvement Open Space Focus Groups Sounding Boards Involvement of many people in a one to two days event, where no content is predefined. The event is srongly facilitated Focus Groups Groups of selected employees (capable, ambitious, highly accepted) work on solutions regarding clearly defined issues Sounding Boards Members of the target group provide regular feedback to programm plans and directions and how people react Employee Surveys Employees are asked for their opinions individually or in groups by using quantitative or qualitative data collections methods Nominating thought leaders into the program organization

Open Space (Bar Camp) Up to 1000 participants Participants determine content to be discussed Major objectives are: Involvement of many people in a short period of time Collective motivation and commitment Identification and prioritization of issues Intense and strong facilitation though facilitator and techniques Work in groups with rotating constitutions Public presentations of results Duration is between 2 to 3 days

Stakeholder Analysis Power Impact strong Resistance Support weak low high

Knowledge Management Prof. Dr. Armin Trost

Knowledge Management – Overview Knowledge Economy From Sign to Wisdom Traditional Approaches in Knowledge Management Implicit versus explicit Knowledge Modern Approaches in Knowledge Management

The changing meaning of Knowledge

Challenges Employees‘ knowledge as key factor for competitiveness and corporate success (knowledge economy) Complex tasks require combination of the knowledge of multiple players New and relevant knowledge appears in increasingly shorter time periods Knowledge is located in people‘s mind and hard to be retained to the company (knowledge worker) Growing need to collect and transfer knowledge across the globe

People versus Technology People who own their knowledge Subjectivity and creativity Significant corporate value Hard to be retained Wisdom Knowledge Technology (e.g. data bases) Objektivity through documentation Limited corporate value Information and data are owned by the company Information Data

From Signs to Competitiveness Knowledge Leadership Knowledge Organization Competitive-ness + Unique/ Different Solutions Competence + Doing the right things Action + Commitment Capability IT + Task related Knowledge + Combination Information + Meaning Data + Syntax Signs Source: Klaus North: Wissensorientierte Unternehmensführung, Gabler Verlag (own translation)

What people know Peers/ organization Culture Products Customers Processes Tools/ Technology Competition (Informal) Networks Projects Solutions Partners Mistakes (Hidden) Rules

Classic #1: Central Knowledge Database Employees are encouraged to document their knowledge on a central database A facilitator takes care for quality of all documents There are general standards for creating knowledge material Downside Employees neither are motivated enough to document their knowledge nor find enough time to do so Within a short period of time masses of never used documents emerge

Classic #2: Yellow Pages Employee maintain and commend their major fields of expertise in a few words All employees find peers with certain expertise using simple search options Expertise is documented on databases with web- access or on printed booklets Overall goal is to bring people with certain expertise and demand for expertise together Downside Detailed meaning of expertise remains unclear Limited opportunity to immediately learn from what is documented

Knowledge Generation Model by Nonaka Tacit  Tacit Socialisation Tacit  Explicit Externalisation Explicit  Tacit Internalisation Explicit  Explicit Combination Source: Nonaka & Takeuchi (1995), The Knowledge-Creating Company

Implicit Knowledge – Example Source: Gerd Gigerenzer (2007). Bauchentscheidungen

McKinsey Approach Employees publish specific knowledge through webbased documents not longer than three pages Knowledge must have been proven in practise Access to documents is tracked and reported. Reader evaluate the value of documents Employees are encouraged to commend on documents and to get in direct touch with experts (authors) Rankings are published and constantly updated about the success of all documents

Knowledge Transfer Process 3. Contacting 1. Knowledge Documentation 2. Search for Expertise Project Lead/ Manager Employee Knowledge 4. Cooperation/Support Project 5. Knowledge development/ Enhanced Network

T-Concept Focus on one field of expertise General Knowledge Focus on one field of expertise Personal commitment to enhance knowledge within that field and to proactively support colleagues where required Commitment to publish new insights Doing presentations on internal knowledge transfer conferences and training events Experts are communicated internally Expert- Knowledge

HR Organization & Information Systems Prof. Dr. Armin Trost

HR Organization and Information Systems – Overview Global Human Resource Management HR as Strategic Business Partner Roles in a global HR Organization Shared Service Center HR Outsourcing HR Information Systems Focus: e-Recruiting

Global Organizational Landscape Global Headquarter Corporate HR managing HR globally; Regional HR managing regional HR; Local HR serving Headquarter Staff Regional Headquarter Regional HR managing regional HR; Local HR serving Subsidiary Staff Subsidiary Local HR serving Subsidiary Staff

Types of Organizations Global Views the world as a single market; operations are controlled centrally from the corporate office. Transnational Specialized facilities permit local responsiveness; complex coordination mechanisms provide global integration. High Global Efficiency International Uses existing capabilities to expand into foreign markets. Multinational Several subsidiaries operating as stand-alone business units in multiple countries. Low Low High Local Responsiveness

Perceived Strength and Interests from two Perspectives Locally operating HR employee Globally acting HR employee “We are more familiar with operational requirements and practices” “We know our customers better” “We need our freedom to decide what’s good for our local customers” “We expect responsibilities to design our own processes and tools” “It’s all different in our country” “We are closer to senior management” “We know better what’s good for the company as a whole” “We are more familiar with the differences across countries” “We have the power to decide about strategic directions”

Trends in Human Resource Management Responsibilities ? Strategy Consulting Support Administration

Administrative Expert HR Roles by Dave Ulrich Strategy Strategic Partner Defining and executing strategy Change Agent Creating a renewed organization Processes People Administrative Expert Building an efficient infrastructure Employee Champion Increasing employee commitment and capability Operation Source: Dave Ulrich: Human Resource Champions 1997

Filtering Queries SERVER 75 20 5 Internet 100 Queries HR Manager Service Center / Call Center SERVER Self Service WEB 100 Queries HR Generalist HR Manager 75 20 5 Database Intranet Source: Accenture

Screenshot „Abwesenheitsmitteilung“

Virtual Advisor (Lingubot) http://www.daad.de/deutschland/en/index.html

Shared Service Center internal external Board HR Corporate Functions External Partner HR-Shared- Service HR HR HR Divisional Units

Economies of Scale and Scope through Shared Service Organization Economies of Scope decentral consolidated t0 t0 S1 C2 t1 t1 Utilization S2 C1 t0 Costs/nit Costs/Unit Shared t1 Q2 Q1 Shared Volume Time Volume Combination of similar Processes Joint Usage of Resources Economies of Scale through Decreasing redundancies Standardization of IT/HR processes Learning Economies of Scope through Combination of resources and infrastructures Leveling utilization and capacities

Decentralized Recruiting Organization HR Marketing Application management Branch A Definition of Target Profile Application Data Base Preselection Introduction Assessment Job Offer Preparation Job Offer Negotiation Applicant HR Marketing Application management Branch B Definition of Target Profile Application Data Base Preselection Introduction Assessment Job Offer Preparation Job Offer Negotiation

Identifying Duties to be Transferred into a Shared Recruiting Center close Conducting Interviews Feeding back to Candidate Negotiating Work Contract Arranging Interviews Relationship to Candidate Writing Job Offers Pre-Selecting Cand. Searching in the Talent Pool Publishing Job-Postings online Maintaining Candidate Information distant Recording unsolicited Applications in the System high low Ability to Standardize

Shared Recruiting Center Integrated Recruiting Organization with centralized e-Recruiting Technology Branch A Definition of Target Profile Introduction Assessment Job Offer Negotiation HR marketing Application management Shared Recruiting Center Pre- Selection e-Recruiting Applicant Job Offer Preparation Branch B Definition of Target Profile Introduction Assessment Job Offer Negotiation

Modernd HR-Organization Central Coordination Partner-/Supplier Management Employees Applicants Customers Managers HR Business Partner near to business Individual support of managers on HR-related topics Center of Expertise company wide Dealing with complex HR-related Issues Shared Service Center company wide Delivery of standardized and regularly demanded services to all employees with high volume (e.g. payroll) IT Hotline ESS MSS

Outsourcing Purposes Quality Focus Flexibility Cost

Scope of Serices outsourced in the United States Relative Frequency (in %) Health Care Pension Benefits Admin Payroll Recruitment (/wo Mgr) Relocation HR Development Management Development Compensation Admin HR Technology Mobility/Expatriates Performance Management …partially …completely Source: SHRM 2004 Human Resource Outsourcing Survey Report

Top Factors in Considering HR Outsourcing Vendors A proven track record Cost of vendor services Guaranteed service levels Flexible contract options Recommendations from other comp. A compatible corporate culture Niche in a specific area (n=168 HR Professionals in Companies that currently outsource) Source: SHRM 2004 Human Resource Outsourcing Survey Report

Non-critical Functions Internal versus external Recruiting-Expertise depend on Positions to be filled Internal External External Internal Expertise External Internal Non-critical Functions Key Functions Executives

HR Information System Example SAP HCM

User and Expert Systems

Expert System User Interface

Services can be classified according to the Type of Users and Tasks Administration Standardized processing Automatization Reliable results Value Creation Creative usage Personal judgements Fuzzy output Task User Master data management Leave request Online-Application Training booking Employee-/Self- Assessment Knowledge Management Performance Management Employees Rare usage Event-triggered No training efforts Payroll Accounting Application screening Training administration Talent Relationship Management Succession planning HR Controlling Experts Frequent usage Limited to intense training efforts * Inclusing applicants, managers etc.

User and Expert Systems Usage HR Expert Systems User User Systems Employees Centralization Decentralization Decentral Central

e-Recruiting Innovation Waves Online- Application Backend/ Integration Website Laggards Late Majority Early Majority Early Adaptors Innovators 1995 2000 2005 2010 2015

Typical e-Recruiting functionalities Search request creation, approval and maintenance Job-posting on copmany career website and on public job boards Applicant portal supporting job search, registration and online-application Application screening and filtering based on selection criteria Automatic communication with candidates via e-mail Creation and approval of short-lists through line managers Interview administration and invitation

Learning Management System (e-Learning) Lerner Portal personalized & intranet-based LMS Learning Management System CMS Content Management System External Content Qualifications Training Administration Learning Content Generation Literature Databases Role Learning Strategies Relevant Websites Embedding external Content Personalized Training Offers Profile-Matching Communities of Practice Formal Standards Tests & Certificates Learning History Authorization Analytics Collaboration Authorization & Accounting Company Information Tests

Social Media Prof. Dr. Armin Trost

Social Media – Overview Social Media User and Usage Recruiting und Employer Branding Learning and Development Social Media Platforms Internal Social Media Policies

Forrester Ladders Creators Critics Collectors Joiners Spectators Write blogs, upload videos, generate content used by others Critics React on others‘ content, edit wikis, engage in forums Collectors Collect and sort internet content actively, use tags and RSS, evaluate content Joiners Maintain relations to others Spectators Pasively use web content Inactives Don‘t use content generated by others Was macht die Personalabteilung? Was macht einen Mitarbeiter aus?

Social Media Activity Source: http://www.forrester.com/empowered/tool_consumer.html (01.12.2010) US: Forrester Research's North American Technographics® Online Benchmark Survey, Q2 2010 (US), 26,913 respondents Europe: Forrester Research's European Technographics® Benchmark Survey, Q2 2010, 25,535

Social Media User Types in Employer Branding Networker Brand Builder Communicator Actively build networks into relevant target groups Reach target group Me too Transfer a clear employee value proposition Clear employer profile Intensively share career-related information in any situation Be present Spontaneousely share career-related information and content Be there Maturity

Social Media/Web 2.0 Platform Usage Employer Branding Repu-tation Carreer-info Job-Posting Inter-action Talent Search TRM Blogs Forums

Social Media Roadmap Way to a Social Media Strategy for Recruiting and Employer Branding Objectives Listen Do it Check and Develop Definition of Key and Bottleneck Functions Target Group Identification Setting Social Media Objectives Involve and understand target group Consider internal conditions Definition & action on Social Media Activities Employer Branding Sourcing Talent Relationship Management Clarify rules and responsibilities Constantly check effects of Social Media Activities Set priorities and develop selected Social Media Activities

Twitter Incident Journalist Editor Medium Witness Interview Text Article Reader Time Incident Witness Tweet Follower Follower‘ Time

Elements of a Twitter Strategy How will the twitter account be positioned and what will be the relevant content Who are the target groups? Who are relevant multiplicators (Follower)? How will the twitter account be marketed/sold? What are measurable objectives? Who/which person will represent the twitter account? Who decide upon the shared content?

Key Terms of Social Network Analysis Nodes, Relations, Density, Centrality, Cliques, Clusters, Stars

Career Cluster versus Professional Cluster Purpose is to share career-related content Purpose is to share professional content High Centrality Little Centrality Active Candidates Active und passive Candidates Access through HR Access through the line Passive approach Active approach

Learning on Demand Wiki, Blogs Communities of Practice YouTube Tutorials Communities of Practice Literature Peers Off-the-Job Training iTunes U Conferences Direct Manager Simulations Yellow Pages Education Offerings Podcasts Micro-Blogging Yammer Social Expert Communites

Formal versus informal Learning 20% 80% 80% Formel Learning Informal Learning 20% Cross, J. (2006). Informal Learning: Rediscovering the Natural Pathways That Inspire Innovation and Performance. San Francisco/CA: John Wiley. Budget Effect

YouTube Tutorials

Audio and Video Podcasts Easy to produce and share with others Flexible usage anywhere at any time Short duration Direct access through mobile Internet Usage of gadgets (Smartphones)

Principals of informal Learning Learning content is easily produced, shared and found via Web 2.0 (e.g. YouTube) Flexible and problem-related usage of content („Learning-on-Demand“ instead of „Learning- just-in-case“) Learning from others (peers) through Social Media und Communities of Practice Room and infrastructures allow self-directed learning and knowledge exchange Was macht die Personalabteilung? Was macht einen Mitarbeiter aus?

Internal Talent Markets Talents Jobs & Projekte Rules Experiences Projects Expectations Preferences References Requirements Challenges Objectives Working Conditions References Internal notice periods Roles and views Compensation rules HR Consultant According to: Bryan, L., Joyce, C., & Weiss, L. (2006). Making a Market in Talent. McKinsey Quarterly.

Social Media Policy at Yahoo! Personal Blog Guidelines Legal Parameters Legal Liability. When you choose to go public with your opinions via a blog, you are legally responsible for your commentary. (..) Company Privileged Information. Any confidential, proprietary, or trade secret information is obviously off-limits for your blog per the Proprietary Information Agreement you have signed with Yahoo!. Press Inquiries. (..) If a member of the media contacts you about a Yahoo!-related blog posting or requests Yahoo! information of any kind, contact PR. Best Practice Guideline Be Respectful of Your Colleagues Get Your Facts Straight Povide Context to Your Argument. Engage in Private Feedback.

HR Controlling Prof. Dr. Armin Trost

HR Controlling – Overview Purpose of HR Controlling Important indicators in HR Performance indicator positioning and implementation ROI of HR investments

Purposes of HR Controlling Evaluation Diagnosis Prognosis Past investment Current Situation Future Situation

Indicators in HRM Employer Branding Recruiting Workforce Structure % Awareness # Applications Reasons to apply Employer image Recruiting Time-to-fill Cost per Hire Offer-Acceptance-Rate Interviews per Hire New Hire Satisfaction Hiring Manager Satisfaction No-show-Rate Workforce Structure Age Gender Span of controll Tenure % Freelancers % Female Leaders Expatriation # Expatriates Return-Rate

Indicators in HRM Training Development HR-related costs Productivity Training days/employee Training costs/employee Training quality Development # High Potentials HiPos ready for promotion Duration on one level HR-related costs Salary/Total costs Salary/employee Compensation structure Productivity Revenue/employee Human Capital Value Added Verbesserungs-vorschläge/Mitarbeiter Employee satisfaction Commitment Retention/Safety Turnover Rate HiPo Turnover Boomerang-Rate Bradford Factor (SxSxD) # Accidents/ 1000 Employees

Classic #1: Cost-per-Hire Which components make up cost-per-hire and how is cost per hire divided through organizational units involved and new employees? Advertising costs Candidates‘ travel costs Executive search retainer and contingency fee Selection tools and measures Salary of employees involved in recruiting (HR, Line) Costs for facilities of the recruiting organization Market Research Opportunity costs related to involved line employees Costs of recruiting infrastructure (e.g. e-Recruiting) Referral bonuses HR Marketing events Sign-on-bonuses Relocation costs Onboarding costs

Cost Elements – Case Exlusively Recruiting (special accounts) Advertising Events Exlusively Recruiting (special accounts) Job ads (e.g. in newspapers); Postings in job boards; Website/Homepage modifications; Marketing material; Image campaigns Job fairs; College recruiting; Direct mailings; Open days at SAP; Company visits; Inhouse events Image Reports; Labor Market Research etc. Travel Assessment Travel costs of recruiters and/or candidates Assessment centers; reference/background investigation; Assessment tools; tests Related to Recruiting (e.g. cost centers) Search Agencies Operating Costs Executive search; Retained search; Contingency search; Direct source providers; Contractors Relocation Recruiters payroll and trainings; Applicant tracking systems; Infrastructure costs; IT support; Office costs; Communication costs Estate agents; Removal firms; Visa / Work Permit Application; Relocation services; Tax service; Temporary housing; Rental car; Language training Referral Bonuses Employee Referrals; Candidate Referrals Sign on Bonuses

Classic #2: Time-to-Fill When does it start? When does it end? Workforce Demand Start HR Marketing/ Search Signed Job Offer End of Onboarding Vacancy Selection First Day at Work End of Probation Period ? ?

Performance Indicator Positioning What? Which Indicator? For whom? Who benefits from the indicator? Why? To which objectives is the indicator related? How? Which sources and methods are used to collect the data when?

Balanced Scorecard Financials Customer Processes Vision & Strategy Objective KPI Customer Processes Objective KPI Objective KPI Vision & Strategy People Objective KPI Source: Robert Kaplan and David Norton, “Strategic Learning and the Balanced Scorecard, 1996

Performance Indicator Framework Positioning Operation Usage Client CEO, HR Head, Manager Objectives Object Employee, Org. Unit, HR Function Topic Function Diagnosis, Prognosis, Evaluation Method Survey, Statistics Source People, Systems Owner Decentral/central, HR Controlling Timing Reporting Online/ Paper, Views, Roles Training Interpretation, Presentation, Usage Usage Action planning, tracking, monitoring

Implementing an HR Controlling System Example: Turnover Early Warning Definition of Scope/Objectives Analysis Method Definition Definition of client, objectives and function Setting budgests, timeline and project structure Approach definition Systematic analysis of turnover reasons and possible early indicators Develpment of a model to explain and predict turnover behavior Definition of methods and tools to track/measure turnover drivers and predictors Defining ways to analyse and report data and results Meeting with client/steering group and project lead Interviews with managers, former employees, experts Workshop with experts, clients and HR managers Evaluation Operation Implementation Determination of validity and acceptance Defining fields for improvements Tracking data and report to clients Data usage and related actions Development and installation of controlling system and related technical infrastructure Identification and training of employees (clients) impacted Validation study interviews with client, user tracking

Traditional ways to evaluate Investments in HRM Costs Objectives Success Indicators Management development program (200 participants) 1.000 k€ Improvement of customer and market orientation Higher customer satisfaction Responses to the training by the participants Customer satisfaction Employee survey (20.000 employees) Improvements of employee satisfaction, working conditions and processes Response rate Amount of defined actions as result to the survey Implementation of a performance management system (5.000 employees) Performance improvements Better linkage between operational work and strategic directions Relative amount of performance management meetings Responses of managers and employees

Return on Investment (ROI) Benefit - Costs ROI =  100% Costs Cummulated Benefits Profit Cummulated Costs Operating Costs Investment Time Project start Start Operation Break- Even ROI

From Problem to ROI Problem Cost of doing nothing Solution Cost of solution Impact of solution ROI

Value Added and ROI of Human Capital Döner Shop Design Office FTE = 1 FTE = 1 P&B 40 P&B 180 P&B = Pay & Benefits OE Other Expenses (Total expenses minus Pay & Benefits) R Revenue FTE Full-Time Equivalent R 220 R 220 OE 160 OE 20 Human Capital Value Added (HCVA) R – OE 220 – 160 220 – 20 = = 60 = 200 FTE 1 1 Human Capital Return on Investment (HCROI) R – OE 220 – 160 220 – 20 = = 1,50 = 1,11 P&B 40 180 Source: Jac Fitz-Enz: The ROI of Human Capital.

Measuring Employee Performance Company Example Indicators Revenue 200.000 k€ Revenue/FTE 100 k€ Employees 2.000 FTE Profit/FTE 10.000 € Total Expenses 180.000 k€ HCVA* 160.000 k€ Personnel Exp. 140.000 k€ HCVA/FTE 80 k€ Workdays/Year 220 HCROI** 114 % * Human Capital Value Added = Revenue – (Total Exp. – Personnel Exp.) Human Capital Value Added ** Human Capital ROI = × 100% Personnel Expenses */** Source: Jac Fitz-Enz (2000). The ROI of Human Capital. Amacon.

How much does a Top-Perfomer add more Value than an average Employee? Reponse by HR Directors Source: Corporate Leadership Council (2003)

Added Value in Key Functions compared to Other Functions B A 1 2 3 1 1,5 0,5 Performance

Differenciated Added Value Estimation B A 10% 70% 20% Key Function FTE 20 FTE 140 FTE 40 Factor 1 Factor 2 Factor 3 Per FTE (k€): Per FTE (k€): Per FTE (k€): 10% HCVA 69 HCVA 139 HCVA 208 P-Exp. 80 P-Exp. 100 P-Exp. 120 Benefit - 11 Benefit 39 Benefit 88 Others FTE 180 FTE 1.260 FTE 360 Factor 0,5 Factor 1 Factor 1,5 90% Per FTE (k€): Per FTE (k€): Per FTE (k€): HCVA 35 HCVA 69 HCVA 104 P-Exp. 60 P-Exp. 70 P-Exp. 90 Benefit -25 Benefit -1 Benefit 14

Training ROI Calculation Example