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The Value of HR This presentation provides summary results from key HR research done over the past fifteen years. Compiled by Darin Phillips
Shareholder Returns ,[object Object],[object Object]
Three HR Generations ,[object Object],[object Object],[object Object],[object Object],[object Object]
What is 3 rd  Generation HR worth? ,[object Object],[object Object]
3 rd  Generation: Follow-up Research… ,[object Object],[object Object]
What is included in an HR HPWS? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
What is included in an HR HPWS? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Employee Development = Retention ,[object Object],[object Object],[object Object],[object Object]
The Power of Profiles ,[object Object],[object Object]
Employees Need Direction ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],http://gmj.gallup.com/press_room/release.asp?i=114   ,[object Object],[object Object],[object Object],[object Object],[object Object]
HR Adds Shareholder Value in Europe ,[object Object],[object Object],[object Object],[object Object],http://www.watsonwyatt.com/research/resrender.asp?id=hci2002&page=1
HR Adds Shareholder Value in Europe ,[object Object],http://www.watsonwyatt.com/research/resrender.asp?id=hci2002&page=1
Benefits of e-HR Systems ,[object Object],[object Object],http://www.watsonwyatt.com/research/resrender.asp?id=W-524&page=1   These organizations are already maximizing the impact and returns of the limited e-HR investments they have made to date. It is possible that as they make new investments in e-HR, their HR performance may decline until the return on those investments is realized. These organizations have made limited investments in e-HR, and are not operating efficiently relative to their peers.  These are the organizations that have properly focused e-HR investments as they moved quickly along the e-HR progression scale over the past few years. They have implemented their e-HR initiatives with excellence, and have the opportunity to continue to be early adopters and maintain competitive advantage over their peers . These primarily large organizations have made significant investments in e-HR initiatives, and have yet to realize the full performance payoffs.
Benefits of e-HR in Europe ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],http://www.watsonwyatt.com/research/resrender.asp?id=2000861&page=1
Benefits of e-HR in Europe ,[object Object],And how does it benefit your company? And what barriers do you face in implementing? And are you achieving your e-HR goals? http://www.watsonwyatt.com/research/resrender.asp?id=2000861&page=1
People Management = Higher Returns ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],http://www.watsonwyatt.com/research/resrender.asp?id=W-488&page=1
Critical Competencies Produce Results ,[object Object],http://www.watsonwyatt.com/research/resrender.asp?id=W-488&page=1   http://www.watsonwyatt.com/research/resrender.asp?id=W-99&page=1   ,[object Object]
Critical Competencies Produce Results ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],http://www.watsonwyatt.com/research/resrender.asp?id=W-488&page=1   http://www.watsonwyatt.com/research/resrender.asp?id=W-99&page=1
Market Capitalization of Talent ,[object Object],[object Object],[object Object],http://www.personneltoday.com/pt_archive/arch_details.asp?ID=15731&Source=1
Shifting Values, Shifting Rewards ,[object Object],[object Object],[object Object],http://www.conference-board.org/knowledge/knowledgeBook.cfm?id=497&nav=hr
HR Factors Affect Profit ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],http://www.pims-europe.com
HR Factors Affect Market Value ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],http://www.watsonwyatt.com
Employee Engagement ,[object Object],[object Object],[object Object],[object Object]
Attract & Retain or Lose to Resignation What attracts and retains high performers? 79% stay because of opportunities for advancement 69% stay because their job is redesigned 65% stay because they are learning new skills in their current job Why do high performers resign? 56% leave because they are dissatisfied with company management 56% leave due to inadequate opportunity for promotion 50% leave due to dissatisfaction with pay - “Strategic Rewards” by Watson Wyatt, 1999
Non-Financial Corporate Value ,[object Object],[object Object],Tobin’s  q A future-oriented and risk-adjusted capital market measure of performance that reflects both current and anticipated profitability by dividing the markets valuation of a firm’s assets by their current replacement cost.
Keys to HR Impact ,[object Object],[object Object],[object Object],[object Object],[object Object]
HR System Impact - Shareholder Value The difference between a non-strategic HR system (0) and one that has removed the barriers to performance (20) are dramatic. Improving the relative sophistication of the HR system by adopting best practices does not provide measurable value (20%-60% adoption of a strategic HR system). Integrating the strategic elements of HR into the broader fabric of the organization provides a significant improvement in shareholder value (60%-80%). When HR systems have adopted best practices and aligned those systems with business priorities and initiatives they return the greatest shareholder value (80%-100%). - Huselid, Mark and Becker, Brian (1995).  High Performance Work Systems and Organizational Performance.  Paper presented at the  1995 Academy of Management Annual Conference , Vancouver, BC.
HR Skills vs. Importance ,[object Object],[object Object]

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The Value Of HR

  • 1. The Value of HR This presentation provides summary results from key HR research done over the past fifteen years. Compiled by Darin Phillips
  • 2.
  • 3.
  • 4.
  • 5.
  • 6.
  • 7.
  • 8.
  • 9.
  • 10.
  • 11.
  • 12.
  • 13.
  • 14.
  • 15.
  • 16.
  • 17.
  • 18.
  • 19.
  • 20.
  • 21.
  • 22.
  • 23.
  • 24. Attract & Retain or Lose to Resignation What attracts and retains high performers? 79% stay because of opportunities for advancement 69% stay because their job is redesigned 65% stay because they are learning new skills in their current job Why do high performers resign? 56% leave because they are dissatisfied with company management 56% leave due to inadequate opportunity for promotion 50% leave due to dissatisfaction with pay - “Strategic Rewards” by Watson Wyatt, 1999
  • 25.
  • 26.
  • 27. HR System Impact - Shareholder Value The difference between a non-strategic HR system (0) and one that has removed the barriers to performance (20) are dramatic. Improving the relative sophistication of the HR system by adopting best practices does not provide measurable value (20%-60% adoption of a strategic HR system). Integrating the strategic elements of HR into the broader fabric of the organization provides a significant improvement in shareholder value (60%-80%). When HR systems have adopted best practices and aligned those systems with business priorities and initiatives they return the greatest shareholder value (80%-100%). - Huselid, Mark and Becker, Brian (1995). High Performance Work Systems and Organizational Performance. Paper presented at the 1995 Academy of Management Annual Conference , Vancouver, BC.
  • 28.