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...

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