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Speaker: Dr. Christopher LeeAssociate Vice Chancellor, Human ResourcesVirginia Community College System
Moderator: Connie Costigan Director of Marketing CommunicationsHalogen Software
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Developing Metrics to Evaluate HR's Contribution to the Achievement of
Organizational Goals Presenter:
Dr. Christopher Lee, PhD, SPHR
2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
AGENDA Business Case Business Strategy Ask Business Related Questions Checklist of Considerations Tips to Deploy Metrics Use Examples Q&A
2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
Albert EinsteinAny intelligent fool can make things
bigger and more complex... It takes a touch of genius - and a lot of courage to
move in the opposite direction.
2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
PresenterPresentation Notes
Definition of MetricsA business metric is any type of measurement used
to gauge some quantifiable component of a company's performance, such as return on
investment (ROI), employee and customer churn rates, revenues, EBITDA, and so on.
Metric = How to Keep Score
2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
Business Case for Metrics
Its Strategic It Matters Enhances HR Credibility Proof of HR Effectiveness Helps to Improve Organization Its what business does
2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
Business Case(How Do I Know HRs Making an Impact)
Reduce Costs Improve Revenue Improve Quality Increase Customer Satisfaction Contribute to Growth
2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
Organizations measure what they treasure!~Anonymous
What gets measured, gets done.~ Peter Druker
2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
STRATEGIC OPERATIONAL
Turnover of Key Positions Turnover
Revenue Per FTE Time to Hire
Profits Per Employee Absenteeism
Diversity turnover Employee Demographics
Intent to Stay/Go Results Employee Satisfaction
Engagement Score Results Number of Accidents
Labor/Operating Costs Lost Work Days
% Impact of Pay Increases Training Satisfaction 2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
Data Metrics
2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
Strategic Metrics
Impact MeasuresMarrying HR Metrics with Business
Data
2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
IMPACT
We offer our engineers 20-percent time so that theyre free to work on what theyre really passionate about. Google Suggest, AdSense for Content, and Orkut are among the many products of this perk.
~http://www.google.com/jobs/lifeatgoogle/englife/index.html
2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
Marry HR Data with Business DataA core focus of the RBS HR function was to
help business leaders utilize key people measures such as employee engagement, turnover and leadership effectiveness. The
human capital strategy enabled the provision of this data side-by-side with business data,
such as customer service scores and business performance measures.
~The Royal Bank of Scotland Group: The Human Capital Strategy
2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
Process Ask A Series of Questions Get Others Involved Draw Connections to Business Compare with Standards Share Results Take Actions Ask More Questions
2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
We learn more by looking for the answer to a question and not finding
it than we do from learning the answer itself.
Lloyd Alexander
2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
Why Does HR Exist?
A. To provide full employment for math-phobic professionals?
B. To provide for the care and feeding of employees?
C. To help organizations meet their goals?D. To comply with appropriate laws/regulations?
2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
Metrics
2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
Concepts Correlation Causation Longitudinal/Trends
2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
Preparatory Activities Know the Business of the Business Interpret Environmental Scan Produce data/reports for Decisions/Actions
2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
Indira Gandhi
The power to question is the basis ofall human progress.
2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
PresenterPresentation Notes
Old Questions?What can we count?
What should we measure in HR?What metrics are most important to the
organization?
New QuestionsWhat is most important to the organization?
What can HR do to help the organization meet these objectives?
2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
Questions?What is most important?Why is it most important?
What can HR do to help this most important thing?
Ask the 2nd and 3rd QuestionWhat happens next?
What do we do now that we know this?If this is what it is?
What does this tell us about?If we change x, will it improve y?
2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
So What?Will it helps us save money?
Drive Revenue?Increase customer retention?
Revenue, Costs, Quality, Customers!
2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
Methods Dashboards Key Performance Indicators Balanced Scorecard CBA/ROI You dont know Jack (Fitz-enz & Phillips) Index Card (Business Necessity, Strategy Focused)
2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
Sources of Data Existing operational data sources
HR Data (compensation, benefits, training assessments, budgets, etc.)
Employee Satisfaction Surveys Exit interviews HR Technology systems Interviews & Focus Groups
2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
Sources of Data (2) Industry Benchmarking Surveys
(SHRM, World at Work etc.) Customer Data Direct Observation Business Reports
2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
Organizational Competency Metrics
2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
PresenterPresentation NotesCompetencies are sometimes referred to as the "currency" or "language" of talent management. A strong competency model forms the foundation of your talent management processes allowing you to: ensure your culture and values are reflected in your talent management processestrack performance over timeprovide a framework for building future leaderscompare the talent and potential of your workforceThis is an example report showing improvement of key organizational competencies over time to help HR demonstrate
Goal Achievement Metrics
2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
PresenterPresentation NotesThe ability to demonstrate whether individual goals which are linked to organizational goals are on or off track is a compelling HR metric that clearly links performance management processes to the achievement of organizational goals.
Bench Strength Metrics
2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
PresenterPresentation NotesIn succession planning the strategic insight of knowing which individuals are high potentials, which individuals are at risk of leaving is critical to building organizational bench strength and competing in the long term.
Training Effectiveness Metrics
2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
PresenterPresentation NotesDevelopment planning that is focused on improving key competencies should be measurable in terms of better outcomes.
Necessary But, Not Sufficient
Turnover Cost Per Hire
Cost of Turnover HR Staffing/# of Employees
Voluntary Turnover % Of Employee Complaints
Involuntary Turnover Healthcare Cost Per Employee
Average length of service Absenteeism Rate
Average age of employees Yield Rate
Time to Hire Internal Promotions Rate 2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
Strategic Metric Examples
% Employees who feel mgmt supports their success
Increase productivity/Training(ROI)
% Increase in Pay for % in Performance
Training Costs/Revenue by unit
Intent to Stay % Employee Satisfaction/Training $Turnover percentage by manager Avg Rating Group/Leader RatingCompensation/Sales Ratio Staffing/Unit of ProductionRating/Sales Ratio Cost hire by positionCompensation/Rating Ratio
2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
Happy Marriage
% Employees who feel mgmt supports their success
Department Performance,Sales,
Employee Satisfaction/By Unit Customer Sales/By UnitAppraisal Rating Retention of Key Talent (& slackers)Appraisal Rating Compensation
Recruitment, retention, source, etc. DiversityTurnover Percentage by Manager Managers Rating
Employee Satisfaction RetentionCompensation Budget Total Operating Expenses
2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
Metric Quality Checklist Strategic Simple Specific Small Number Actionable Timely
2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
Strategic Tied to . . .
Mission Strategy Goal Initiative (Period).
Owner, Sponsor, Customer
2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
Simple K.I.S.S. Simple to
Collect* Communicate Use
2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
SpecificRelated to target area of business
activity, effort, or performance
Small Number1 2 per HR area
6-15 overall
2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
High-performing companies take a radically different approach to HR. They put much more
effort than low performers into measuring workforce performance,
High performers actually focus efforts on fewer, carefully chosen HR projects, but they keep refining
and experimenting in these areas to make them stronger.
~ High-Performing Companies Make HR a Strategic Partner, Others Don't2010, The Boston Consulting Group (BCG) and the World Federation of People Management
Associations (WFPMA).
2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
Actionable Action taken based upon results Decisions made as a result Improve quality of business decision
2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
Timely Regular interval Just in Time Alerts
2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
Developing Metrics to Evaluate HRs Contribution
Though standards are evolving, simple figures will not necessarily provide enough information. Many companies track retention, for example, but to solve a turnover problem, HR needs to discover why people leave. HR adds value when professionals decide not only what to measure, but also how to interpret the data when compared to benchmarks and how to improve its methodology to get the kind of information the organization can use to achieve its overall goals.
~HR Measurement and Metrics: Gaining HR a Seat at the Strategy Table
2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
Impact
In the very early days, Google got rid of all managers. Although they were later reintroduced, a belief persisted within the company that managers do not really make a difference.
So the analytics team looked at a combination of performance review data and employee surveys, where employees review their bosses to determine whether there were significant differences between the impact of the best and worst bosses. The answer from the data was a resounding yes.
~http://www.google.com/jobs/lifeatgoogle/englife/index.html
2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
Technology Tools
Automates Data Gathering, so that you can concentration on
2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
Actions/DecisionsAsk Better QuestionsShare and Compare
Define MetricMake Information
Gather data 2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
Chan Master Mingjiao
Accumulate learning by study, understand what you learn by
questioning.
2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
PresenterPresentation Notes
Tips Summary So What? Test Impact, not information measures Look Outward, Not Inward Target audience is Operations Merge HR Data with Business Data Report cost of doing nothing Recommend uses of metric w/ reports Fewer, Better Each metric has a customer
2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
Review Identify Business Purpose Ask a series of questions Agree upon Metrics with customers
Benchmark, where appropriate Identify use of information before gathering information
Refine and Repeat (?????) 2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
Q&A
Additional questions regarding the webinar? Contact:Christopher Lee- [email protected]
For additional Halogen Software inquiries or to request a personalized demonstration, contact: Connie Costigan [email protected]
2013 Halogen Software Inc. Confidential Not to be used, copied or redistributed without Halogens prior written permission.
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Developing Metrics to evaluate hrs contribution to the achievement of organizational goalsDeveloping Metrics to Evaluate HRs Contribution to the Achievement of Organizational GoalsDeveloping Metrics to Evaluate HR's Contribution to the Achievement of Organizational GoalsAGENDASlide Number 5Definition of MetricsBusiness Case for MetricsBusiness Case(How Do I Know HRs Making an Impact)Slide Number 9Slide Number 10Slide Number 11Strategic MetricsIMPACTMarry HR Data with Business DataProcess Why Does HR Exist?Slide Number 18ConceptsPreparatory ActivitiesSlide Number 21Old Questions?Questions?Slide Number 24MethodsSources of DataSources of Data (2)Organizational Competency MetricsGoal Achievement MetricsBench Strength MetricsTraining Effectiveness MetricsSlide Number 32Slide Number 33Slide Number 34Metric Quality ChecklistStrategicSimpleSpecificSlide Number 39ActionableTimelyDeveloping Metrics to Evaluate HRs ContributionImpactTechnology ToolsSlide Number 45Slide Number 46Tips SummaryReviewQ&ASlide Number 50
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