Monday, February 28, 2011

To Link or Not to Link Your HR Data

We have been discussing the importance of HR analytics on this blog for many weeks now. I have debriefed from 3 conferences over the last six months providing the latest and greatest research on HR Analytics.

One thing comes up over and over. You can't look at your data in silos. Whether you are talking about HR data, operational data, customer data or financial data, it needs to be analyzed from a systems perspective. We are now at a place in the metrics journey, where managers in organizations need to be predictive and have data to make better decisions.

So, that requires the leadership from all functional areas to: actually collaborate around execution of business strategy, consider initiatives to be embarked upon and to solve business problems with intelligence that already exists in each functional area.

How, you say? The first step is after you have created your beautiful, shiny new business strategy, you actually need to develop actions around that. By using a business strategy mapping process, each functional area has its marching orders and can then determine its functional metrics.

After this process is complete you then move into tracking and measuring execution. This is where it gets fun. Let's use this example:

A company has embarked on a strategy of gaining market share in the US for its product. After the strategy session it is decided that a new rewards and recognition program is on order to increase employee engagement. How do you know if this has had any impact on your desired result?

  1. Use historical employee engagement data to determine that rewards and recognition are important drivers of engagement
  2. Use turnover data and performance data to determine that your HIPO's (High Potential Employees) are turning over at the highest rate.
  3. Segment your engagement data to determine that HIPO's have the lowest satisfaction with the rewards and recognition program
  4. Segment your customer satisfaction data to determine your most satisfied customers are being served by your HIPO's
  5. Analyze your financial data and determine that your HIPO's revenue per employee is 25% higher than your regular employee population
  6. Calculate that HIPO turnover last year cost you $1.9M
By making the investment in the rewards and recognition program not only is market share impacted by retaining the HIPO's but you can also save turnover cost in the process, adding to the bottom line.

The point of this story is, if you only had HR data, you wouldn't have the full story.

Linkage is in silos are out!

And the organization lived happily ever after...

Monday, February 21, 2011

Has HR GAINED or LOST Ground Post Recession?

In the most recent edition of HR Magazine, there was a very interesting article by Edward Lawler, Jay Jamrog and John Boudreau, "Shining Light on the HR Profession" (membership required) regarding HR's positioning post recession.

SHRM distributed a survey to approximately 1000 HR executives and other types of managers to organizations ranging in size from 1,000 to more than 100,000 employees.

For me, the interesting results were these:

  1. HR Executives felt that they did improve effectiveness and their strategic role as a result of how HR responded to the recession. AND
  2. Not only did HR Executives toot their own horn but when managers were asked the same questions they agreed that HR had gained strategic and effectiveness ground.
This is the good news, HR gained ground....but there were areas that were cited where HR needs improvements:
  1. Talent Management-HR needs to make sure that they are committed to the quality of their talent management decisions and that their performance management system provides accurate data about their talent.
  2. Analytics and Metrics-No shocker here from my last few posts on the subject. The HR leaders who emphasize numbers were the ones that made the most gains in their effectiveness in the survey. Enough said...
  3. Innovation-HR needs to be open to new practices that lead to tangible results. By constantly looking at new and creative ways to solve business problems, HR can really add to its perception and reputation by being innovative.
I keep reading and hearing anecdotal data from both sides on this HR value topic. I read articles like the one described above that has a glass half full. I also, here anecdotally, that it has been too little effort too late, on HR's part, so the business has started to look outside of HR to get the 3 areas accomplished above.

What are your thoughts?

Think about your current organization, did you gain ground post recession by keeping the train on the tracks? What have you done in the 3 areas mentioned above that would add to your HR street cred?

Friday, February 18, 2011

HR Metrics Summit-Final Day Recap

After three days of listening and participating in the IQPC HR Metics Summit, I have a renewed and confirming passion around the subject of Human Capital Metrics.

It is exciting for me to hear that HR practitioners that are attending this summit are moving past typical tracking measures and actually getting to metrics that matter to the business.

Today, I heard case studies from HR professionals on how they have "linked" various data sets to create insight for the business. (Thank Goodness!). Examples include:

  • linking volunteerism to employee engagement resulting in higher productivity/performance
  • Linking employee engagement to customer loyalty resulting in increased profits
  • Linking leadership effectiveness to employee engagement leading to increased customer loyalty
I am in a unique environment at this metrics conference. I am hanging out with people like me that understand that metrics and analytics are necessary and the one way that HR can finally be strategic and add value to the business.

My concern is that HR professionals as a whole have not hopped on the the metrics train soon enough. As Jac Fitz-Enz said at the Conference Board last year, "If HR doesn't do metrics, someone else will." YIKES!

Another piece of information that got my attention last week:

Accenture just completed a study that 80% of CFO's have seen an increase in their responsibilities - and 39% said that included taking over Human Resources projects/programs
So, with reluctance to get onboard the metrics train and the increased interest from Finance in HR's business....I think we have now crossed into the urgent arena.
What are your thoughts, are we on the train, has the train left the station, can we catch up?

Thursday, February 17, 2011

HR Metrics Summit-Day 1 Recap

I have been honored to serve as the Chairperson for IQPC's HR Metrics Summit this week in Chicago. There is a slate of excellent topics and speakers including:

  • The Evolution of HR Analytics At Sear Holdings by Steve Woolwine
  • Sales Force Effectiveness by Carl Schleyer from Sears Holdings
  • Making Manager Self Service Improvements by Brenda Sural
  • "Group Therapy" session discussing which 5 metrics you would choose to discuss with your CEO.
  • The Story of Accor's HR transformation, using HR Metrics to drive business results
  • Using Analytics to Make the Right HR Investments by yours truly :)
  • "Group Therapy" Session-When HR Metrics Fail to Connect with Your Executives, hosted by Tim Sackett, Writer, Fitful of Talent
  • Workforce Analytics: Mapping Out a Data Supply Chain by Brent Auble, SAIC.
  • Assessing the Business Impact of HR by Rick Buchman
Some of my key takeaways from day one are as follows:
  1. Case studies shared by Sears, Accor and Kraft discussed metrics being a journey that is continuously changing as the business changes
  2. All presenters discussed the importance of aligning metrics to business outcomes
  3. Data is everywhere and getting control of it is hard but worth it
  4. Simple tools already on the desktop can do the job
  5. PhD's not needed to perform most analysis
  6. Insight through data is a narcotic...people just want more
  7. HR and Finance need to hook up! Both functions need to talk the same language and combine forces to produce valuable insight
  8. There is a difference between metrics and this!
  9. Asking stupid questions leads to stupid answers. Find out what your customers want!
  10. Dashboards report what happened and Analytics on what could/will happen
Stay tuned for Day 2 recap....

What is the Difference Between Metrics and Analytics?

I know, I have been asked many times about the difference between metrics and analytics. Luk Smeyers with INostix in Europe has created a very cool list of words that show the difference between the two concepts. Thanks Luk!

A lot of my clients and contacts are asking me quite often: "In a few words, what's the difference between HR metrics and HR analytics?" For a few weeks, I have been writing down such words in my beloved iphone (the 'Notes' app). Here you go...enjoy!

1. Tangible
2. Accounting
3. Past
4. Data
5. Large
6. Transactional
7. Information
8. Low value
9. Gathering
Asking questions
10. Reporting
11. HR Scorecard
Business Scorecard
12. HR ownership
Management ownership
13. Controlling
14. Inside-in perspective
Outside-in perspective

What other differences have you seen or experienced between Metrics and Analytics?

Friday, February 4, 2011

Talent Management: Does What Get Measured Really Get Done?

I am very excited to have Sean Conrad from Halogen Software as our guest blogger today:

Cathy has done a series of great posts recently on HR metrics and analytics. I couldn’t agree more with her take on the importance of measuring and analyzing the right things – HR data that matters to the business, because these are the metrics that can be used to track against corporate objectives and to help make business decisions.

Now of course I have a pretty specific focus on talent management metrics. Over the past several years I’ve had the pleasure of working and talking to hundreds of HR professionals who are passionate about driving high performance within their companies, but who at one time or another have struggled with determining what to track. Suffice it to say that without the ability to centralize performance and talent management data in some type of system, the question is moot, because it’s nearly impossible to get meaningful insight from paper.

But for the many who have taken the step of centralizing their talent management processes and data online the task of accessing the data is much easier. But now that you know you have access to metrics, it’s important to determine which ones you and your business care about.

For example, you gather a lot of useful data during your performance management processes. Are you making strategic use of it to drive business decision-making and organizational success? Here are just some of the questions you should be able to answer using data from your process.

· What are your strongest organizational competencies? Do these support your organization's mission/vision/strategy?

· What are your weakest organizational competencies? What learning programs could you put in place to strengthen these?

· Who are your high-performing employees? Are they being rewarded appropriately? Do you need to take action to ensure they remain loyal and engaged?

· Which employees are underperforming? Do their managers have specific development plans in place to help them improve?

· Which employees are currently on a performance improvement plan? Has their performance improved as a result of the actions taken?

· If you conducted any training initiatives last year, aimed at improving specific skills, did they have the desired impact on employee performance?

· Will your organization be able to achieve its stated goals? Do employee goals for the coming year support organizational goals?

· Are managers rating employee performance fairly and consistently?

· Does every employee have goals? Does every employee have a development plan? Are they making progress on these?

· What is the profile of your high performers? How can you use that data to predict the future success of potential job candidates?

· What are your workforce planning needs? Can you forecast your employee demand 2-3 years out?

Again, collecting this data is only beneficial if you’re going to do something with it. This can sometimes require a cultural shift within your organization that may require you to change or refine existing business processes, perceptions and levels of accountability.

Getting your organization comfortable using your talent management system is an important step since you need your managers and employees to input information into the system for there to be data to report on. While an automated talent management solution that is easy to use can help, you need buy-in at the executive level to make the performance appraisal process strategic to the organization and not just to HR.

Start by determining which of the above questions are most important to your C-suite and can be tied to your strategic objectives. Then get executive buy-in into your performance management process to ensure you get the answers they are looking for.

Doing so will create a level of readiness and accountability across the organization to ensure everyone is engaged in the performance appraisal process appropriately so that you analyze performance data accurately and effectively. It’s important to note that talent management data you collect and measure must be part of your overall Human Capital Metrics so that you can determine how well employees are performing against corporate objectives. To get a complete picture on workforce performance, you need to also be measuring recruiting, learning, financial data and more.)

I am really pumped to be co-hosting an upcoming webinar with Cathy Martin that delves a lot deeper into the concept of talent management metrics and analytics. I hope you can join us on February 23!

Sean Conrad is a senior product analyst at Halogen Software, working closely with customers on a day-to-day basis. Sean is an avid writer and blogger on the topic of Talent Management. For the past 15 years Sean has focused on enabling organizations to successfully implement software solutions. An accredited Human Capital Strategist, Sean has worked with hundreds of HR professionals on defining their talent management strategy and execution.