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A Brave New World
HR Continues to Evolve
& the model defines our aspirations
Impact/Contribution to the Business
Add Value & Maximize Upside Strategic HR Planning Organizational Design Survey Action Planning Staffing Employee Relations Labor/Union Relations Benefits Limit Liability & Protect Downside Safety & Workers’ Compensation Compliance Training & Development Compensation EEO/AA Performance Management HR Information Systems (HRIS) Culture & Image HR as Business Partner
continu e to grow
Source: Rich Vosburgh
A Century of Evolution in the Function
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
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
Efficiency and Effectiveness .
Three Levels of Metrics Efficiency •What range of resources (financial and nonfinancial) should be considered? •What is the appropriate level of investments? •How should investable resources be allocated to maximize results? Impact Effectiveness Efficiency Source: Boudreau and Ramstead .
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 Impact Effectiveness Efficiency Source: Boudreau and Ramstead .
Internal and External Historical Benchmarks .
The Role of HR Future / Strategic Focus • Strategic HR Planning • HR as Business Partner Processes and Image • Culture Strategic Partner Change Agent • Staffing • Organizational design • Survey action planning • Performance measurement • Training and People development 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 .
dental cost per participant. Compliance # New EEO Charges. customer satisfaction. Benefits Medical cost per participant. HRIS Systems Support HRIS implementation on time and within budget.Administrative Expert Compensation Payroll as %--total operating costs (benchmarked). quality of management review and Board material. compensation targets benchmarked against peer companies. 401K employee participation rate. . Progress on AA Goals. # Old EEO Charges Closed. Outcomes of Inspections and Audits. $ saved in union negotiations. turnover rates.
“Best Place to Work” rankings. Safety and Workers’ Compensation # Incidents & $ value of accidents. boycotts). Diversity & EEO Attitude survey measures of perceived fairness. safety & quality measures. efficiency. . both immediate & longer term. $ outcome of new contracts. sit-downs. # employees trained. audit results. perceived tolerance. productivity per employee. union activity (or lack thereof). slowdowns. Labor Relations Absence of the extreme negative (strikes. # people trained in Diversity Awareness and Diversity Leadership programs.Employee Relations Expert Employee Relations Turnover rates. % required training & certifications completed. legal compliance. timeliness & quality of new contracts.
effectiveness measures within new groups. Survey Action Planning Employee satisfaction results at the work group level.Change Agent Staffing $ to Fill. management ratios. rolled up to Business Unit level. . #/% Positions with written accountabilities and measures. Days to Fill. Training & Development # Programs. Organizational Design Benchmarking headcount. Performance Management Performance Reviews: Timeliness and Quality. norms available for Business Unit analysis. Quality of Hires. effectiveness of communications & key processes (no bottlenecks). other measures vary with the position. Retention of Hires. # Filled. spans and layers. Impact of Training. #Days/Person Training.
quality of the description and utilization of culture & image understanding. Culture and Image Employee Satisfaction data. Quality of Succession Plan Follow-up (% Actions Completed). 360-Degree Feedback on the extent to which HR is considered a partner by those they support. .Strategic Partner Strategic HR Planning Quality of succession management program assessment. Quality of Bench Strength. HR as Business Partner Any business measure of effectiveness. standing on the Fortune 100 Greatest Places to Work.
Starting with the Business Strategy .
Basic Process for HR Strategy Scan the External Environment Identify Strategic Business Issues Identify People Issues Develop HR Strategy Communicate the HR Strategy .
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 .The Common HR Approach The Inside-Out Approach HR practices.
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 .
Metrics Model HR Efficiency • Time to Hire • Cost per Hire • Headcount Ratio People Efficiency • Direct Labor Costs • Indirect Labor Costs • Positions Unfilled Organization Efficiency • Cost per Unit • Shrinkage • Defects/Scrap Effectiveness • Customer Survey • “At the Table” • Practice/Process Impact Source: Patrick Wright Effectiveness • Employee Satisfaction • Leadership Capability • Talent Retention • % Black Belt Leaders • Employer Brand Effectiveness • Customer Satisfaction • Revenue Growth • Market Share .
train. on-board Cost Reduction Training Completed Grievances Client Satisfaction Surveys Performance/Potential Ratings Sales per employee Best practices recognized .Do We Really Measure how HR is Driving Business Performance? Business Objectives Driven to Win Flexible Embracing Risk Creative Global Fast Actual HR Measures Headcount Turnover Rates Succession Candidates Time to-fill.
” Accenture High Performance Workforce Study . 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.The Role of HR When executives were asked to select which descriptor best described the view of HR held their organizations.
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 Impact Effectiveness Efficiency Source: Boudreau and Ramstead .
Business Environment Company HR Department Outputs Inputs Internal Feedback: Efficiency Effectiveness External Feedback: Impact .
USC .Value Scope of HR Measurement Approaches Scorecards and Drill Downs Data Systems and Portals Benchmarks Ad hoc HR Measures Strategic Impact Organizational Effectiveness Validity and Rigor Causation Leading Indicators Time Source: Center for Effective Organizations.
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 .
nearly 40 percent of the top 2500 CEOs have been removed from their posts.” Bossidy and Charan .Tough Times for Top Executives “Over the past three years. due to a failure to execute the strategy. Nearly all of them.
To win.” Hrebiniak. 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. companies must be able to turn great strategy into great performance. they must be able to execute. Execution can itself be a source of competitive advantage. In short.” Marion Associates “Execution is a disciplined process or logical set of connected activities that enables an organization to make its strategy work.Food for thought “… it is not the lack of a strategy that causes [Senior Executives] to lose sleep. Wharton . Making Strategy Work.
Execution Strategy Alignment = Successful Execution People Processes To execute strategy you need to align your strategy. process and people! .
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? .
.The Alignment Challenge Fast Logical ! Strategy Alignment = Successful Execution Slow . . . People Processes Fast Logical ! Success and speed of execution depend on people alignment. Yet this is the hardest element to align! . And follows a different logic . .
What is the Alignment of People? .
Madrid . Overholt Human Resource Institute & Riverton Management Consulting Group Jay J. Albert A. Elena Granell Instituto De Empressa. Miles H.Research Team Dr. Vicere Pennsylvania State University Dr. Jamrog Human Resource Institute The University of Tampa Dr.
Research Questions Can we identify disconnects between people and strategy? 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 Alignment = Successful Execution People Processes .
Grounded in Management Theories from key disciplines Strategic Thinking Marketing Operations Human Resources Organizational Culture .
Included an analysis of four large data bases Organizational DNA Customer Focused Cultures Employee Behavior Organizational Culture .
The Alignment of People Five Key Elements Marketplace Approach Customer Focus Leadership Behavior Performance Culture Strategy Alignment = Successful Execution People Processes Processes .
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” .
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 .
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 .
Faster up the Learning Curve HIGHER PERFORMANCE SOONER WHAT YOU NEED TO KNOW PROCESS .
Pushing The HR Curve # People Who Know the Solution Problem Complexity Success = Intelligence + Access Source: Steve Miranda .
The “Evolving” HR Professional Never Forgets… It’s Not HR’s Productivity We Should Be Concerned About .
The “Evolving” HR Professional Never Forgets… Getting Computers To Do the Work Is A Waste of Time .
The “Evolving” HR Professional Never Forgets… Because You Can Do It Doesn’t Mean You Should Do It .
but rather the one most responsive to change. 1859 . nor the most intelligent. “On the Origin of the Species by Natural Selection”.“It is not the strongest of the species that survive.” Charles Darwin.