Monday, January 16, 2012

What is HR's Moneyball Metric?

I finally watched Moneyball this weekend and what a movie that was. Of course, all the way through the movie I am thinking how does this apply to HR and companies in general.

It was so interesting that the team was using anecdotal data to "hire" new players. I loved it when the data geek talked about players potential and hidden nuggets of gold that went unnoticed due to poor batting averages. He pointed out it is not necessarily about batting average, but really about getting on the base. It was a metric in baseball, that no other team was using. Historically, the players with the highest batting averages were making the most salary. Since the Oakland A's had a small budget they had to figure out how to win ball games, within these parameters.

Do we do the same think in HR and/or our organizations? Do we hire for things like, "He went to Auburn." or "She used to work for Bain and Co." Are we overpaying A-players in our organizations just because they have a great batting average?

As soon as the Oakland A's started hiring and measuring against on base percentage there was a huge backlash from the players, the coaches and even the fans. "It's just not how they did things at the A's. They base new talent on gut feel based on many years of scouting experience for the team." So, how did that legacy practice work for them?

Again, is that a similar story to what we do in HR? Do we make hiring decisions based on old policies, practices and measures that are no longer relevant?

What could be a Moneyball metric for HR? For some positions this task is easier than others. For sales, it's a no-brainer...$ of sales. Which metric could we use for new hires? How about existing employees?

Another big lesson for me that was reiterated in Moneyball was the issue of nonperformance. When you have a metric that points straight to performance and winning, it makes the "your fired" conversation so much easier. It becomes literally black and white. "Your number is X and we needed Y." Time to change teams...

If you haven't seen the movie, I encourage you to rent it...I hear the book is excellent as well!

What are your Moneyball metrics you are using to make sure you get the best and keep the best talent?

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