Calculating HC ROI & Productivity Using Employer’s Own Financial Statement Information HR Specialty Products & Services Catalogue Executive Summary A No Frills Distillation of Vendor’s Marketing Collateral Thomas A Ference President & CEO Human Resources Mining & Distribution Co Locating, Validating and Accelerating HR Innovation Office: Cell: Fax: Website:

Calculating HC ROI & Productivity Using Employer’s Own Financial Statement Information Other HR metrics are only tactical in that they measure HR “efficiency” which lacks true C-Suite credibility These 5 years-in-the-development, Wharton School-based strategic level metrics measure HR’s “effectiveness” in contributing to bottom line Metrics include HR ROI, Productivity and Liquidity Can be developed for any Business Unit that is supported by segmented financials Can overlay tactical HR metrics in the areas of Talent, Rewards, Culture and HR Services to determine where HR should focus efforts to improve HR ROI and thereby stakeholder value ROI for this service will depend on each employer’s facts and circumstances

Human Capital Investment vs. Financial Capital Investment Source: Boston Consulting Group

Patented Formulae HC ROI = EBITDA – Financial Capital Costs Human Capital Investment HC Productivity = Revenue – Material Costs HC Costs + FC Costs

HC Productivity vs. ROI by Business Unit

Human Capital Strategic Priorities Resource Commitment (People, Time and Money ) Strategic Significance High Low HIGH/LOW  Appoint an EB NPL & RPLs with accountability and authority Revise HC investment allocation strategy  Revise & align incentive compensation  Restructure base compensation system LOW/LOW  Create uniform job descriptions HIGH/HIGH  Develop a new performance management program  Develop a comprehensive professional development program  Create & staff regional “Centers of Excellence” LOW/HIGH Turning HR Tactics into HR Strategy

Next Steps This product/service is contained in the HR Specialty Products & Services Catalogue™ Operational level details about this particular service provider can be obtained in conference with the vendor The HR Mining &Distribution Co. is an independent and contracted representative of the vendor Upon your request, we will arrange for an introduction that can range from a simple, quick conference call to a services overview / system demo Tom Ference (Chicagoland area) or Thank you for your potential interest in this fresh thinking