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Vlerick HRday 2013: Performance Management. Prof. Koen Dewettinck
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VLERICK HR DAY! HR PRACTITIONERS MEET HR ACADEMY 12 JUNE 2013
Welcome in the track Performance management!
HR ANALYTICS: BREAKING THROUGH THE WALL
HR DAY JUNE 12 2013 PROF DR KOEN DEWETTINCK
HR ANALYTICS: BREAKING THROUGH THE WALL
WHY
WHAT
HOW
CURRENT STATUS IN BELGIUM
© Vlerick Business School
WHy
© Vlerick Business School
TIME FOR CHANGE
Global Economic Crisis
Need for justification
HR ill prepared
Characteristics of Human Capital
Important asset
Large cost
“Organizations have not applied the same rigor to understand this critical asset. Compared to functions such as finance and supply
chain management, HR has not had a traditional depth of experience in making fact-based decisions.”
© Vlerick Business School
CHARACTERISTICS OF HUMAN CAPITAL
8%
13%
15%
19%
22%
25%
28%
30%
33%
43%
52%
66%
71%
Acces to raw materials
Corporate social responsibility
Assets (physical)
Price/revenu innovation
R&D, intellectual property
Data access, data-driven…
Partnership networks
Technology
Business model innovation
Brand(s)
Products/services innovation
Customer relationships
Human capital
Factors in Maintaining Competitive advantage
Leading Through Connections, IBM 2012 CEO Study
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In God we trust,
all others must bring data.
W. Edwards Demming
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CURRENT MEASURES
80%
77%
66%
56%
56%
51%
37%
34%
20%
HRIS
Benchmark Data
Cost Efficiency
Impact on Workforce
Track Outsourced Activities
Cost of Services
Dash Board/Scorecard
Business Impact
Cost/Benefit
HR Measures Available in Organizations
Centre for Effective Organizations Survey
% Yes on a Yes/No Scale
© Vlerick Business School
WHat
© Vlerick Business School
HR ANALYTICS: BREAKING THROUGH THE WALL
“True strategic value comes from metrics that go beyond the
measurement of typical task-based activities and combine HR data with other business data.”
Asselman
“Showing the actual cause-effect relationship among what you do and business outcomes and building a strategy based on that information
makes HR analytics a reality.”
Mondore
“Getting the numbers right is just the beginning. Value is added when measures and analysis are combined with the logic to know where to look for the important connections. A story is better than a number!”
Boudreau
10
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HR ANALYTICS
11
Efficiency
Effectiveness
Impact
Resources
Effect on talent pools
Effect on strategic success
© Vlerick Business School
?
HITTING THE “WALL” IN HR MEASUREMENT
12
Value
Ad hoc HR measures
Benchmarks
Data systems
and portals
Scorecards and drill-downs
• Business Impact
• Causation • Leading
indicators • Multiple
data sources
© Vlerick Business School
HOW
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CURRENT ISSUES
• Excess of data
• Lack of expertise
• Internal view
• Process data
• Everything measured equals reality
• Prediction of a certain future
• Bread spread approach
© Vlerick Business School
LIGHTNING THE LAMP
Beyond HR, Boudreau & Ramstad, 2007
‘The Right Analytics’ Valid Questions and
Results
‘The Right Measures’
Sufficient Data
‘The Right Process’ Effective Knowledge
Management
‘The Right Logic’ Rational Talent
Strategy
HR Metrics and Analytics: a force for
strategic change
© Vlerick Business School
LOOK INTO THE MIRROR
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HR ANALYTICS CYCLE
1. Determine Critical
Outcomes
2. Create Cross-
functional Data Team
3. Assess Outcome Measures
4. Analyse Data
5. Build, Program & Execute
6. Measure & Adjust
Beyond HR, Boudreau & Ramstad, 2007
© Vlerick Business School
CASE: GOOGLE
Way to succes
“All people decisions at Google are based on data”
Analytics as separate unit
Points of contact for other units of HR
Take HR seriously! HR must speak language of data
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CASE GOOGLE: ANALYTICS VALUE CHAIN
Opinion:
Gut feeling based on
experience
Data:
Structured information,
but raw
Metrics: Ratio counts
Analysis:
Draw correlations and show
relationships
Insight:
Leads to action, and
decision making
Action:
Process or policy change
Google figure: google’s analytics value chain
© Vlerick Business School
1. PROJECT OXYGEN: DO MANAGERS MATTER?
• Performance reviews
• Employee surveys
Available data
•One cluster
•Cut data into bottom and top
•Big differences
Chart •Great manager
award
•Double blind interviews
Qualitative studies
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1. PROJECT OXYGEN: DO MANAGERS MATTER?
3 p
itfa
lls
8 w
ays t
o s
uccess
- Coach
- Empower
- Express concern
- Be productive
- Communicate
- Develop careers
- Have a vision
- Have technical skills
- Tough Transition
- No consistent approach
- Too little communication
© Vlerick Business School
1. PROJECT OXYGEN: “HITTING THE WALL”
“Managers don’t impact
googler performance”
1000’s of people
managers
Favorable rating of
managers
Good managers
have a better performing
team
8 best practices
and 3 pitfalls
Upward feedback surveys
Google figure: google’s analytics value chain
© Vlerick Business School
CURRENT STATUS
© Vlerick Business School
2013 STUDY ON USE OF DATA IN HR IN BELGIUM
Three focal questions:
WHAT do organisations measure?
HOW do they use these measures?
WHY do organisations measure?
5 domains
Recruitment & selection
Engagement
Training & development
Comp & ben
Turnover
24
© Vlerick Business School
METHODOLOGY
15 Belgian companies
10 members of BEL20
Large companies of varying sectors (1,750 to 200,000 employees)
Interviews with HR-professionals
25
Sector % organizations
Financial activities 20%
Information & Communication 13%
Industry 27%
Production & Distribution of electricity* 13%
Other commercial services 27%
© Vlerick Business School
EFFICIENCY!!
R&S
T&Dev.
Engagement Comp & Ben
Turnover
26
Measurement % organizations # training hours per employee Training evaluation form
100% 86%
Number of participants 71% Number of courses Type of the course
54% 54%
Measurement % organizations Time to fill 100 % Number of candidates 66% Number of starters 66% Number of vacancies 60% Recruitment channels 60%
Measurement % organizations Number of leavers 93% Exit interview 86% Reason of resignation 64% Profile of leaver 43% Demographical characteristics 29%
• All do engagement surveys • Often linked to other HR-data • No systematic action plan implementation
• External and internal benchmarking • Often linked to other HR-data • Use of simulation tools
© Vlerick Business School
ONE STEP FURTHER….
R&S
T&Dev.
Engagement Comp & Ben
Turnover
27
• Link to absenteeism / turnover • Link to productivity • Use of “quick scans”
• Simulations for cost of promotion • Simulations for changed comp-scheme
• Often trigger to analyses in other domains
• Region specific benchmarking
• Learning penetration linked to engagement, turnover
• Usefulness of training some months after programme
• Supervisor rating of training effectiveness
• Turnover of starters • Supervisor performance evaluation • Measure of quality external partners • Evaluation recruitment channels (inflow not quality)
© Vlerick Business School
DATA IN HR: VALUE & FUTURE
Overall enthusiasm about the use of data in HR
But need for alignment with organisational strategy and targets
Benefits
More credibility for HR
HR is seen as a strategic partner
Further professionalisation of HR
Opportunity for HR to be innovative
28
© Vlerick Business School
DATA IN HR: VALUE & FUTURE
Problems
Quality of data cannot be guaranteed
Too much data
Lack of integrated system
HR-professionals often miss competencies to deal with data and lack of insight in the business
Expensive and time consuming
Lack of audience
29
THANK YOU!