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Accountability in Human Resource Management
Dr. Jack J. Phillips
Dr. Jack J. Phillips
Dr. Phillips has 27 years of corporate experience in five industries. He has served as training and development manager at two fortune 500 companies. In 1992, Dr. Phillips founded Performance Resources Organization (PRO), an international consulting firm specializing in human resources accountability programs.
Dr.Phillips has authored or edited ten books addressing human resource development.
The need for a Results-Based Approach
Tim Epps, vice president of People Systems for Saturn Corp., in Troy Michigan, explains, “HR must become bottom line valid. It must demonstrate its validity to the business, its ability to accomplish business objectives and its ability to speak of accomplishments in business language. The HR function must perform in a measurable and accountable way for the business to reach its objectives.” (Phillips 1996)
Important trends related to HR contribution Increased importance of the HR function Increased accountability Organizational change and quality programs Improvement in productivity Adoption of HR strategies Growing use of HR information systems Reliance on partnership relationships
Important trends related to HR contribution (cont.) Increased importance of the HR function Increased accountability Organizational change and quality programs Improvement in productivity Adoption of HR strategies Growing use of HR information systems Reliance on partnership relationships
Measuring the HR contribution
Surveys HR accounting HR auditing HR case studies HR cost monitoring Competitive benchmarking Key indicators
Measuring the HR contribution (cont.) HR effectiveness index HR management by objectives HR profit centers Return on investment
Developing a results-based approach and a new model
Purposes of measurement and evaluation Obstacles to measuring the contribution Levels of evaluation The attitude of the HR team Sharing responsibilities for the HR
measurement and evaluation A results-based model for program
implementation
Purposes of measurement and evaluation To determine whether a program is
accomplishing its objectives. To identify the strengths and weaknesses of
the HR process To calculate the ROI in an HR program To gather data to assist in marketing future
programs.
Purposes of measurement and evaluation (cont.) To determine if the program was
appropriate To establish a data base that can assist
management in marketing decisions
Obstacles to measuring the contribution Evaluation cost Lack of top management commitment Lack of evaluation knowledge Attention to evaluation design Fear of evaluation Lack of standards
Levels of evaluation
It is helpful to view HR measurement and evaluation as consisting of three levels:
Measure of perceived effectiveness Measures of performance Measures of return on investment
A Results-Based Model for Program Implementation
*Step one: Needs analysis
*Step two: Measurement and evaluation System
Step three: Program Objectives
Step four: Program Development
Step five: Program Implementation
*Step six: Cost Monitoring
* Step seven: Data collection and analysis
* Step eight: Interpretation and conclusion
* Step nine: Communicate results
*Steps receiving recent emphasis
Evaluation design
Evaluation design Is important to the overall process of HR measurement. It includes the timing of measurements and the minimization of factors that can threaten the validity of program evaluation results.
(Phillips, 1996)
Evaluation design issues
Control groups Timing of measurements Factors that jeopardize validity 1) Time or history 2) Effects of testing 3) Mortality 4) Selection bias
Evaluation design and implementation Common evaluation designs. One-shot program evaluation design Single group, pre- and post-program
measurement design Single group, time series design control group design Ideal evaluation design
One-shot program evaluation design Program fully implemented Program or initiated completed Program Implementation period
time
Data collected
Single group pre- and post- measurement design
Program fully implemented Program or initiated Program completed implementation period Time
Data collected #1 Data collected #2
Single group, Time Series Design
Program Fully implemented or Program program completed initiated implementation
period time
Data collected Data collected Data collected Data collected #1 #2 #3 #4
Control group design
Program fully implemented Program or initiated completed Program Implementation period Experimental Time group
Data collected #1 Data collected #2
Control No program Time group
Ideal evaluation design Program fully implemented Program initiated or completed Program implementation Experimental period Time group A Data collected #! Data collected #2
Control group No program Time
Program fully implemented or Program initiated completed Program implementation Experimental period Time group B Data collected #2
Post measure only, control group design
Program fully implemented Program or initiated completed Program implementation
Experimental period Time group
Data collected #1
Control No program Time group
Measuring the total human resource effort
Measuring the human resource effort will help management understand and appreciate the ways in which the human side of an organization interacts with and effects the financial side. (Phillips 1996)
Measurement issues
Measurement is important to determine success of performance. Success also depends on the ability to measure performance and to use these measurements persuasively to obtain needed resources. (Phillips 1996)
Measurement issues (cont..)
The following principles of performance measurements apply:
The effectiveness of any function can be measured by some combinations of cost, time, quantity, quality, or behavioral indices.
Measurement issues(cont.)
A measurement system promotes productivity by focusing attention on the most important issues, tasks, and objectives of the organization.
The performance of white collar workers is best measured in groups.
The ultimate measure is effectiveness, not efficiency.
Measurement issues (cont.)
Managers can be measured by the effectiveness and efficiency of the units they manage.
The HR contribution model HR contribution model
HR Management
•Functions
•Programs
•Policies
•Practices
•Strategy
•Activities
HR performance measures
•HR investment
•Absence rate
•Turnover rate
•Job satisfaction
•Organizational commitment
Organizational effectiveness measures
Revenue
Employees
Assets
Employee costs
Operating income
employee costs Other factors
•Revenue growth rate
•Industry type
•Economy
•Market forces
•Strategic choices
HR performance measures
In determining which strategy of measures to use, for your HR program, four rules should be considered.
The Four Rules
1. Each measure should represent the impact of as many functions as possible within the HR department.
2. Each function should represent functions that are important across business and industry groups.
The Four Rules
3. Each measure should represent data that is available and assessable.
4. All of the measures must account for the large portion of the activities, programs,, and services of the HR department.
HR performance measures (cont).
HR expenses Absence rate Turnover rate Job satisfaction Organizational commitment
Using benchmarking to measure HR effectiveness
The benchmarking process develops standards of excellence from organizations that are considered to have the best practices.
(Phillips 1996).
The seven phase benchmarking process
7
Initiating
]improvementfrom benchmarking
1Determining what to benchmark
2
Build the benchmark team
3 Identify benchmarking partners 4Collectdata
5
Analyze data
6
Distribute informationto benchmarkpartners