Edge in Knowledge Storyboard

1

Determining Metrics that Matter for HR CUPA
Conference February 7-8, 2008
Presented By Cathy Martin Co-Founder Sr. VP of
Sales Marketing Intellectual Capital
Consulting, Inc. cathymartin_at_intellectual-capital.
net
2
Agenda

• Business Case for HR Metrics
• HR MAP
• Types of Measures
• Business Impact for Each Measure
• Wrap Up/Questions

3
Why should HR be concerned about metrics?What
are you currently measuring? Do your metrics
matter?
4
(No Transcript)
5
Steps in Creating Metrics that Matter

• Step 1 Define Business Strategy
• ?
• Step 2 Determine How to Execute
• ?
• Step 3 Link HR to Strategy Map
• ?
• Step 4 Create Measures
• ?
• Step 5 Link to Strategic Business Results
• ?
• Step 6 Set Targets
• Step 7 Communicate Results

Next Steps
6
Step 1 Define Business Strategy
Step 1
7
Step 1 Define Business Strategy
Increase enrollments 25
How
XYZ college is a premier college providing a
world class education, skills training and
lifelong learning for job success in a global
economy
Vision (what)
XYZ college is committed to meeting development
needs of individuals, employers and communities
by creating market opportunities through market
driven technical education.
Mission (what)
8
Step 1 Define Business Strategy
Step 1

• Goals
• Performance against budget

• Workforce Planning metrics
• Staffing
• Diversity
• Attrition
• Turnover

• Bookstore
• Registration
• Scheduling

9
Step 2 Determine How to Execute
IT
HR Employee Drivers
Sales
Marketing
Operations
Engineering
10
Step 3 Link HR to Strategy Map
HR MISSION
We provide quality HR services to attract,
develop, motivate and retain a diverse
workforce within a supportive work environment.
We do this with an emphasis on customer
service based on consultation and communication
HR VISION
Provide the highest quality support services to
make XYZ the company of choice for learning and
working.
FINANCIAL
CUSTOMER
Enhance the value and return On HR investment
Reduce certain HR related costs
Customer Satisfaction
Customer Retention
HR Programs
HR Delivery
Productivity
Increase employee satisfaction with HR services
Improve Employee commitment
Enhance diversity Among workforce
Workplace Planning
INTERNAL
Retention
Strengthen Recruit hire of good fit
Strengthen RewardS Recognition Program
Turnover
Talent Development
HR Process Improvement
Enhance HR Staff Knowledge Skills In Strategic
Areas
Increase customer service skills in workforce
Succession Planning
Create, model Best practices in HR
LEARNING GROWTH
11
What Measures are Important?

• The key is to measure both efficiency (cost
  and productivity) as well as effectiveness
  (quality and value) and evaluate this mix of
  metrics in the context of the drivers of demand
  for HRs services.
• Richard T. Roth, Atlanta, HR Magazine

12
Step 4 Create Measures

• HR Efficiency Measures
• Cost per hire
• HR staff per employee
• Days to hire
• Training cost per employee
• Accidents rates
• Name others

What is wrong with using JUST efficiency measures?
13
Step 4, continued

• HR Effectiveness Measures
• Quality of hire
• Employee satisfaction
• Training quality-Kirkpatricks four measures
• Number of hours consulting
• of employees with certain knowledge
• Name others

What type a measure is turnover?
What is wrong with using JUST effectiveness
measures?
14
Gap

• HR Efficiency Measures
• Turnover by age, tenure, race
• Training level 1 evaluations
• Staffing ratios

• HR Effectiveness Measures
• Turnover by performance
• Did behavior change on the job? Results?
• New hire performance at 90 days

15
Step 5 Link to Strategic Business Results

• You must have a clear connection between your
  metrics and your business results
• Can your metric pass the following criteria?
• Does it have a direct/indirect impact on revenue?
• Does it have a direct/indirect impact on costs?
• What is the action that you will take based on
  the result?

16
Impact Example
17
Metrics that Matter
HR MISSION
We provide quality HR services to attract,
develop, motivate and retain a diverse
workforce within a supportive work environment.
We do this with an emphasis on customer
service based on consultation and communication
HR VISION
Provide the highest quality support services to
make XYZ the company of choice for learning and
working.
FINANCIAL
CUSTOMER
Enhance the value and return On HR investment
Reduce certain HR related costs
Customer Satisfaction
Customer Retention
HR Programs
HR Delivery
Productivity
Increase employee satisfaction with HR services
Improve Employee commitment
Enhance diversity Among workforce
Workplace Planning
INTERNAL
Retention
Strengthen Recruit hire of good fit
Strengthen RewardS Recognition Program
Turnover
Talent Development
HR Process Improvement
Enhance HR Staff Knowledge Skills In Strategic
Areas
Increase customer service skills in workforce
Succession Planning
Create, model Best practices in HR
LEARNING GROWTH
18
Company XYZ HR Scorecard
19
Steps in Creating Strategic Measures

• Step 1 Define Business Strategy
• ?
• Step 2 Determine How to Execute
• ?
• Step 3 Link HR to Strategy Map
• ?
• Step 4 Create Measures
• ?
• Step 5 Link to Strategic Business Results
• ?
• Step 6 Set Targets-Monitor for Impact
• Step 7 Communicate Results

Next Steps
20
In our experience, when creating measures that
matter, you must ask these important questions

• Is this company a people oriented or
  manufacturing business?
• Does the metric have an impact on results?
• Does the metric measure efficiency or
  effectiveness?
• What action will you be taking based on that
  metric?

21
Metric Pitfalls to Avoid

• Collecting too much data so that you cannot focus
  on the metrics that matter
• Make sure that metrics are tied back to your
  strategy
• Relying on poor data
• Make sure data is objective and statistically
  sound
• Focusing on metrics that are short term in nature
  like those preferred by Wall Street
• Use balance scorecard approach so you have a
  holistic view
• Harvard Business
  School, Michael Sisk

22
Firms that carefully link HR activities to
business strategy, measured by metrics have a 33
higher return on total capital than organizations
that do not.
Watson Wyatt Research 2003
23
(No Transcript)
24
ICC Client List

• IBM
• Intercontinental Hotel Group
• Hampton Inc.
• HBW Insurance
• Bellsouth Business Systems
• MetLife
• Prudential Bank
• GV Financial
• Prince William County Service Authority
• Maxum Specialty Insurance Group
• MindSpring Enterprises
• Place Properties
• Vulcan, Inc.

• Aon Corporation
• AGSI
• Specialized Risk Services
• Pond Co.
• AIG
• Pacific Wholesaler Brokers
• AH Enterprises
• Swett Crawford
• Signature
• ASAC Corporation
• Guy Carpenter Co.
• Genuine Parts/NAPA Auto
• Cypress Communications
• Southern Company