vlerick hrday 2013: performance management. prof. koen dewettinck

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


WHY

WHAT

HOW

CURRENT STATUS IN BELGIUM

© Vlerick Business School

WHy


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.”


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


In God we trust,

all others must bring data.

W. Edwards Demming


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


WHat



“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


HR ANALYTICS

11

Efficiency

Effectiveness

Impact

Resources

Effect on talent pools

Effect on strategic success


?

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


HOW


CURRENT ISSUES

• Excess of data

• Lack of expertise

• Internal view

• Process data

• Everything measured equals reality

• Prediction of a certain future

• Bread spread approach


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


LOOK INTO THE MIRROR


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


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


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


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


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


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


CURRENT STATUS


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


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%


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


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)


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


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

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THANK YOU!

vlerick hrday 2013: performance management. prof. koen dewettinck

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