The Changing role of Human Resource Management: ● What is Strategic Partner? ● Apply logic and good business sense; this means applying a systematic and consistent approach to identifying problems in the business ● Address real and tangible issues that relates to business objectives As Peter Drucker puts it: "If you want it, measure it; but if you can’t measure it, forget it!" Thus use financial measurement for HR, since it is a typical measurement that is applicable to every function.

Developing a business case for HR The roadmap: 1. Principles of Need Recognition Every HR activity should be based on a need to solve problems or lead to intended results. 2. List of Problems or Intended Results HR should first compile a list of the problems or intended results. Then, it should use the "Peeling the Onion" Example: Someone in your company gives this statement: "Our communication is lousy!". Raise questions to clarify the meaning of "communication" and "lousy." Find out if the situation has any financial impact by asking: "When the communication is lousy, what happens?" The answers will provide evidence on this situation.

3. Get the Evidence When you find hard evidence, ask the following questions: ● How do you measure it? ● What is it now? What is the current situation? ● What would you like it to be? ● What is the value of the difference? ● What is the total value over time? (3 to 5 years) 4. Formulate the Impact When measuring the impact, we use the "back of the envelope" economics

Example: Problem: "Low Sales Productivity" How do you measure it? Calls per hour What is it now? 15 calls per hour What would you like it to be? 20 calls per hour What is the value of the difference? 5 calls x total headcount (200) x average profit per call (Rs. 10,000) x total hours per week (30 hours) = Rs 300,000,000/week = Rs 1,200,000,000/month What is the value over time? (3 to 5 years) = Rs. 43,200,000,000,000 (for 3 years) = Rs. 72,000,000,000,000 (for 5 years)

HR measures - Examples Here are several examples of HR measures that provides financial analysis: ● Productivity Ratio ● Absenteeism Ratio/Cost ● Employee Turnover Cost: ● Recruitment Cost ● Replacement Cost ● Training Cost ● Administrative Cost ● Total Personnel Cost