A Proven #1 Prospecting Hack You're Missing Out On
Future of HR Metrics as A Strategic Business Partner
1. Future of HR Metrics
HR As Business Partner
www.humanikaconsulting.com
2. Seta A. Wicaksana
0811 19 53 43
wicaksana@humanikaconsulting.com
• Managing Director of Humanika Amanah
Indonesia – Humanika Consulting
• Managing Director of Humanika Bisnis Digital –
hipotest.com
• Senior Expertise HR in Board Commissioners’
Committee BPJamsostek
• Lecturer in Psychology Faculty Pancasila
University
• Board of Commissioner in Yayasan Humanika
Edukasi Indonesia
• Writer “SOBAT WAY” Elexmedia Gramedia 2016
• Organizational Development Expertise
• Developing start up Business in Assessment and
Psychological Tools in hipotest.com
• Doctoral Student in Economic and Business in
Pancasila University
• Master in Psychology and Psychologist from
Indonesia University
• Undergraduate from Mathematics from
National Cryptology Academy
3.
4. Add Value
&
Maximize
Upside
Limit
Liability
&
Protect
Downside
Impact/ContributiontotheBusiness
Strategic
HR Planning
Organizational
Design
HR as
Business
Partner
Compensation
Benefits
Safety &
Workers’
Compensation
Compliance
Labor/Union
Relations
Staffing
Training &
Development
Culture
& Image
EEO/AA
Employee
Relations Performance
Management
Survey Action
Planning
HR Information
Systems (HRIS)
A Century of Evolution in the Function
Labor Employee Personnel Human Organizational
Relations Relations Resources Effectiveness
HR Continues to Evolve
& the model defines our aspirations
continue
to grow
Source: Rich Vosburgh
5. The Role of HR
The 2002 Human
Resource Competency
Study found that 43%
of HR’s impact on
business performance
came from its strategic
contribution.
Source: University of Michigan
Business School
6. HR for Effective
Organization
• In 2001, greater proportion of
respondents (41.1%) said they
were full partners in the
development and
implementation of business
strategy than in 1998 (29.4%).
• However, the expected
increase in time devoted to this
role is not reflected in the data.
• Source: HRPS/Center for Effective
Organizations
9. Effectiveness
Efficiency
Impact
Three Levels of Metrics
Efficiency
•What range of
resources (financial
and non-financial)
should be considered?
•What is the
appropriate level of
investments?
•How should investable
resources be allocated
to maximize results?
Source: Boudreau and Ramstead
10. Effectiveness
Efficiency
Impact
Three Levels of Metrics
Effectiveness
•What unique combination
of policies and practices
would best build the
necessary human capital?
•What factors link policies
and practices to human
capital enhancement?
•What attributes
distinguish effective from
ineffective policies and
practices?
Source: Boudreau and Ramstead
12. The Role of HR
PeopleProcesses
Future / Strategic Focus
Day to Day Operational Focus
Strategic Partner
• Strategic HR Planning
• HR as Business Partner
• Culture and Image
Change Agent
• Staffing
• Organizational design
• Survey action planning
• Performance measurement
• Training and development
Employee Relations
Expert
• Employee relations
• Labor relations
• Safety & workers’ compensation
• Diversity and EEO
Administrative
Expert
• Compensation
• Benefits
• HR information systems
• Compliance
13. Administrative
Expert
• Compensation
– Payroll as %--total operating costs
(benchmarked); compensation targets
benchmarked against peer companies;
turnover rates; quality of management
review and Board material.
• Benefits
– Medical cost per participant; dental cost
per participant; 401K employee
participation rate; $ saved in union
negotiations.
• HRIS Systems Support
– HRIS implementation on time and
within budget; customer satisfaction.
• Compliance
– # New EEO Charges; # Old EEO
Charges Closed; Progress on AA
Goals; Outcomes of Inspections and
Audits.
14. Employee
Relations Expert
• Employee Relations
– Turnover rates, “Best Place to Work”
rankings, legal compliance, efficiency,
union activity (or lack thereof).
• Labor Relations
– Absence of the extreme negative
(strikes, slowdowns, sit-downs,
boycotts); $ outcome of new contracts,
both immediate & longer term;
timeliness & quality of new contracts;
productivity per employee; safety &
quality measures.
• Safety and Workers’ Compensation
– # Incidents & $ value of accidents; #
employees trained; % required training
& certifications completed; audit results.
15. Change
Agent
• Staffing
– $ to Fill; Days to Fill; # Filled; Quality of
Hires; Retention of Hires.
• Organizational Design
– Benchmarking headcount; effectiveness of
communications & key processes (no
bottlenecks); spans and layers;
management ratios.
• Survey Action Planning
– Employee satisfaction results at the work
group level; rolled up to Business Unit
level; norms available for Business Unit
analysis.
• Performance Management
– Performance Reviews: Timeliness and
Quality; #/% Positions with written
accountabilities and measures; other
measures vary with the position
• Training & Development
– # Programs; #Days/Person Training;
Impact of Training; effectiveness measures
within new groups.
16. Strategic
Partner
• Strategic HR Planning
– Quality of succession management program
assessment. Quality of Bench Strength. Quality of
Succession Plan Follow-up (% Actions Completed).
• HR as Business Partner
– Any business measure of effectiveness. 360-Degree
Feedback on the extent to which HR is considered a
partner by those they support.
• Culture and Image
– Employee Satisfaction data; quality of the description
and utilization of culture & image understanding;
standing on the Fortune 100 Greatest Places to Work.
18. Basic Process for HR
Strategy
Scan the
External
Environment
Identify
Strategic
Business
Issues
Develop
HR
Strategy
Communicate
the
HR Strategy
Identify
People
Issues
19. The Common HR Approach
HR practices,
processes,
and
systems
Articulate how
what we do
adds value to
The business
Communicate
to the business
what a good
job we are
doing
The Inside-Out Approach
Source: Patrick Wright
20. The Better HR Planning
Approach
Identify the
business model
components
and areas to
drive value
Develop an
HR strategy
to execute the
business model
with relevant
metrics
Use the metrics
to demonstrate
or prove how
we are driving
business
performance
The Outside-In Approach
Source: Patrick Wright
21. Efficiency
• Time to Hire
• Cost per Hire
• Headcount Ratio
Effectiveness
• Customer Survey
• “At the Table”
• Practice/Process
Impact
Efficiency
• Direct Labor Costs
• Indirect Labor Costs
• Positions Unfilled
Effectiveness
• Employee Satisfaction
• Leadership Capability
• Talent Retention
• % Black Belt Leaders
• Employer Brand
Efficiency
• Cost per Unit
• Shrinkage
• Defects/Scrap
Effectiveness
• Customer Satisfaction
• Revenue Growth
• Market Share
OrganizationHR People
Metrics Model
Source: Patrick Wright
22. Do We Really Measure how HR is
Driving Business Performance?
Business
Objectives
➢ Driven to Win
➢ Flexible
➢ Embracing Risk
➢ Creative
➢ Global
➢ Fast
Actual HR
Measures
➢ Headcount
➢ Turnover Rates
➢ Succession Candidates
➢ Time to-fill, train, on-board
➢ Cost Reduction
➢ Training Completed
➢ Grievances
➢ Client Satisfaction Surveys
➢ Performance/Potential
Ratings
➢ Sales per employee
➢ Best practices recognized
23.
24. The Role of HR
When executives were asked to
select which descriptor best
described the view of HR held
their organizations, only 34%
indicated that HR was viewed as
a “strategic partner.”
SHRM/Balanced Scorecard Collaborative
A major shortcoming in many
companies is “a lack of
measurement on the impact of
HR.”
Accenture High Performance Workforce Study
25.
26. Effectiveness
Efficiency
Three Levels of Metrics
Impact
•What is the link
between sustainable
strategic success and
human resource
management?
•Which talent pools are
most critical for
competitive advantage?
•How could improving
human capital increase
value?
Impact
Source: Boudreau and Ramstead
28. Scope of HR Measurement
Approaches
Source: Center for Effective Organizations, USC
Ad hoc HR
Measures
Benchmarks
Data Systems
and Portals
Scorecards
and
Drill Downs
Strategic Impact
Organizational Effectiveness
Validity and Rigor
Causation
Leading Indicators
29. Building an
Impact
Model
➢ Do you understand your business
partner/client’s pain?
• are they interested in relieving that pain?
• do they see it as value added work?
➢ Can you specify the business
requirements?
• lengthy boring process
• critical to your success
30.
31. Tough Times
for Top
Executives
“Over the past three years, nearly
40 percent of the top 2500 CEOs
have been removed from their
posts. Nearly all of them, due to a
failure to execute the strategy.”
Bossidy and Charan
32. Food for
Thought
• “… it is not the lack of a strategy that causes
[Senior Executives] to lose sleep, but rather their
organization’s inability to execute against a
strategy… ” Booz-Allen & Hamilton
• “Having a great strategy is no longer enough –
lots of companies can develop great strategies.
To win, companies must be able to turn great
strategy into great performance. In short, they
must be able to execute.” Marion Associates
• “Execution is a disciplined process or logical set
of connected activities that enables an
organization to make its strategy work. Execution
can itself be a source of competitive advantage.”
Hrebiniak, Making Strategy Work, Wharton
35. The Alignment Challenge
Strategy
People Processes
Alignment
=
Successful Execution
Fast -
Logical !
Fast -
Logical !
Slow . . .
And follows a
different logic . . .
Success and speed of execution depend on people alignment,
Yet this is the hardest element to align!
42. Impact
Measurement
It’s all about
Change
• Impact measurement is not about numbers … its
about change
• Numbers only provide you with a common and
specific language
• If your clients don’t know you they won’t trust you
• Fear of being “found out”
43. Higher
Values for
HR
Success for those who:
• Provide new thinking on old topics
• Balance increased strategic role with employee
champion role
• Closely align HR strategies to business needs
• Navigate hard economic times without damaging higher
order or systems mechanisms
• Use systems thinking and measurement (efficiency,
effectiveness and impact)
• Help create systems and process for today’s realities
and deleting systems that do not add value
46. Key Attributes for the
21st Century HR Professional
INTELLIGENCE
ACCOUNTABILITY CURIOSITY
Source: Steve Miranda
• Hit it to me / My team
• How good:
- Do I HAVE to be?
- CAN I be?
• So much to learn
So little time
• I wonder what will
happen today
• Why vs How
• Let me show you something
you don’t already know
47. Faster up the Learning Curve
WHAT YOU
NEED TO KNOW
HIGHER PERFORMANCE
PROCESS
SOONER
48. Pushing The HR Curve
Success = Intelligence + Access
Source: Steve Miranda