Monday, April 25, 2011

5 HR Metric Pitfalls to Avoid

Over the last few years, I have seen many dashboards, scorecards and metrics from a wide range of companies. The lessons learned leading up to a dashboard are so valuable. So for those of you that are just starting your metrics journey, I have a list of 5 pitfalls that if avoided can make your journey a lot more successful.

1) TOO Many Metrics
2) Ignoring your metrics
3) Measuring the WRONG things
4) Metrics that are not understandable by Joe Manager
5) No accountability

Let's briefly take a look at these...

Too many metrics: I never will forget asking a HR VP to see her metrics last summer. She in turn handed me an Excel workbook with almost 500 measures. Who can focus on 500 measures at a time? I asked who received these metrics and she told me they went to the Executive team, but they never did anything with them. Shocker! LESSON LEARNED: Make sure your metrics are reasonable in number and are tied to organizational strategy (closely related to point 3 above). I get asked all the time what is the right number of metrics? I don't know that answer as it depends on industry, strategy, organization size, etc. I know it's not 500 no matter how big you are!

Ignoring your metrics: I can remember another instance when asking about metrics and the HR VP told me she wasn't sure why they kept measuring as no one did anything with the data. Getting the right measures is just HALF the battle. Making sure ACTION is taken on the results is the other half of the battle. It is all well and good that you have a nice, new dashboard, but if no one cares or takes any action, that effort is all in vein. How can you get management engaged? LESSON LEARNED: Show them WIIFM. If they know how those metrics DIRECTLY impact their department and/or their goals and objectives, then a crazy thing happens...managers will pay attention. And if you hold them accountable...they HAVE to pay attention. (see point 5)

Measuring the wrong things: This pitfall is the most frequently occurring. I see this time and time again. An HR professional understands the need for metrics and/or the CEO has asked for them. The HR person then googles HR metrics and picks out some that "look good." Bad process. You must start at your organizational strategy and work your way down from there. If metrics are not linked to where the organization is going....then you may as well measure nothing. Sure, you have tracking measures like time to fill and cost per hire, but those are linked to HR efficiency that has a link to financial performance, which is a part of any strategy. But understanding how a company's human capital is contributing to goal attainment is critical. LESSON LEARNED: Use a strategy mapping process to ensure you are measuring what matters.

Metrics that are not understandable by Joe Manager: Many times we are so involved in our own data that we forget that it needs to be "consumed" by others. In the HR arena, that usually is line management. For managers to take action on things like turnover or engagement, they need to actually be able to understand the data. Distributing huge reports with tables and rows of data is not an effective way to communicate with managers. LESSON LEARNED: Use the KISS and Killer Slide concepts. Keep data simple by using color and pictures. Keep the "big aha" to 1-2 slides, showing impact rather than just data.

No accountability: This one makes me crazy. If you don't hold people accountable for actions, then guess what... nothing happens. It is just like when I was a little girl and was told don't leave your yard. That was all I was told. So, what did I do...bolt every time. Had I been told, if you leave the yard, "you will get the biggest spanking ever," that might have had a bearing on my decision. Seriously, if we tell managers to reduce turnover and increase engagement but don't back that up with rewards and recognition, do you think they will work hard at doing those things? LESSON LEARNED: Make sure metrics are linked to your performance management and rewards and recognition programs.

What other pitfalls have you encountered in your experience? There are others....I just wanted to start the tell!!!

Monday, April 18, 2011

Don't Ignore Your Engagement Data

I have just returned from another HR Metrics Summit hosted by ASMI. I had the pleasure to present on the topic of "Using Data to Make the Right HR Investments." This is the second time I have made that presentation and the second time I was asked a question regarding employee engagement and the confidentiality of engagement data.

How can you use employee engagement data when you have said it is confidential/anonymous?

We all know that engagement data is not anonymous due to technology but we do assure our employees that the data is confidential. We tell employees that comments and individual scores will not be revealed. And I agree this is a good best practice. I also think if you have a department or business unit that has less than 10 people, you need to aggregate those scores up to the next level as confidentiality is hard to protect when you have a small report-out group.

With all that said that does not mean you can't use the engagement data while conducting other meaningful HR analytics. I am suggesting using the data along with other variables to determine valuable insights for your organization. Here are just a few examples of how engagement data can be used:

1) Analyze your engagement data, our performance data and your turnover data to understand who is leaving in your organization. Is it your highly performing and highly engaged employees? If so, what are you going to do about that?

2) Analyze your engagement data and performance data along with quality of hire data to "predict" a profile of a successful candidate for your organization.

3) Analyze your customer satisfaction data and your employee engagement data to understand what drives customer and employee engagement so that you can replicate that experience over and over.

I am not suggesting using individual scores or comments, but using the data in a different, very meaningful way.

You have the data, you are not breaching any trust issues by using that data to make better decisions and solve business issues. You have probably paid a lot of money for the data, so get your money's worth and use it!

What are your opinions on engagement data? Use it? Shelf it?

Monday, April 11, 2011

How Do You Measure Quality of Hire?

I love it when I am asked questions about specific metrics in HR. I was asked two times last week about Quality of Hire. I think this metric is getting more and more momentum as it should. If you think about the QUALITY of your instantly can make a direct connection to revenue and bottom line results: (Let's define a quality hire is one that is productive, committed, and engaged)

1) The more talented and engaged a person is, the more they will produce adding to the top line
2) The better your hires, the lower your recruiting costs
3) Employees that are more committed, give better customer service leading to increased loyalty, sales and repeat business.

So, with the impacts listed above, it makes sense to keep a pulse on the quality of hires we make. That begs the question...."How do you do that?"

A few months ago, I had a very different opinion on how you measure quality of hire. I thought that measuring performance at certain intervals would give you the definitive answer to the quality of hire question. In reality, it gives you a one dimensional look into the process. We really need to look at various metrics to truly see the whole picture. Thanks to Darren Shearer, from SuccessFactors, he suggested at a HR Metrics Conference, using a quality of hire index which would include the following components:

1) New Hire Stay Factor
2) Engagement
3) Performance Data/Productivity Curves

I like this approach as it tells the whole quality story. What are your thoughts regarding quality of hire. Do you measure this? If so, how?

Monday, April 4, 2011

How Good is Your Performance Data?

For many of my readers, you know that I am a huge proponent of analyzing performance data combined with other HR and customer data to increase organizational and individual performance.

In the past we have discussed using performance data to:

1) Profile top performers in the organization identifying key knowledge, skills and abilities, producing an A-Player profile used on the front end during the recruiting process to enhance quality hires on the first try.

2) Using performance data along with employee engagement and turnover data to predict those high performers that you are "at risk" of losing

3) Calculating Quality of Hire using 90 day performance rating along with other data to determine success rate of recruiting function.

In the three examples above it is critical that you are using reliable and valid performance data. For reliability, you want to make sure the instrument you use is reliable over time and managers understand how to rate. Validity means that you are measuring what you are supposed to be measuring. So for performance appraisals, this means making sure you have analyzed the behaviors and critical success factors for your job groups. I believe that one performance appraisal does not fit all. I also believe in the KISS principle, so you don't need a separate performance appraisal for every single job in the organization. But, it does take a competency modeling exercise to group the jobs that have "like" success factors.

I know that performance appraisals get a bad rap for a myriad of reasons but with so many HR metrics using this data for analysis, doesn't it make since to make sure your appraisals are top notch?

What grade do your performance appraisals get?