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Evidence-based HR
The primary goal of Evidence-Based Human Resources
is to empirically demonstrate the impact of talent on
business performance outcomes. At the core of this effort
are various measures that business leaders use to determine
the overall success of the organization: the Key
Performance Indicators (KPIs). Determining what these
KPIs are can be challenging for many human resources
teams, especially those that have focused their analytic
resources on enhancing the efficiency of the department.
Here’s where to look:
- Company corporate-level score cards or dashboards
A company’s balanced scorecard is generally comprised of
a mix of KPIs and other performance indicators. Frequently
dashboard or scorecards will contain other measures that
senior leaders have agreed are important to the organization,
but that are not used to determine whether the organization
has achieved its strategy.
- The executive compensation section of the company’s
Schedule 14A statements
The highest level executives of a company are typically held
accountable by the board of directors to "deliver" against a
clear set of outcomes measures. As a result, the KPIs of the
organization may be articulated in the formulas used to
determine executives’ pay increases or bonuses.
- The organization’s strategic plan
Strategic plans frequently provide a set of clear, empirical
goals as well as prescriptions for how to achieve them.
Consulting them may allow practitioners to obtain the measures
that make up the KPIs as well as gain insights into the
types of evidence-based interventions that are consistent
with the organization’s strategic goals.
- Executive Management
In some organizations, the easiest way to obtain information
about KPIs is to simply ask the CFO, COO, CEO, or one of
their direct reports. An added benefit to this approach is the
opportunity this affords of demonstrating HR’s commitment
to supporting the organization’s strategic goals.
The fact that a company’s KPIs might be difficult to
obtain may be a short-term hurdle for evidence-based
practitioners, but it also demonstrates the significance
of Evidence-Based Human Resources’ potential impact.
In Beyond HR John Boudreau and Peter Ramstad illustrate
that if, by chance, a competitor obtained a copy of a
company’s strategic financial plans, it could very well be
devastating to a company. However, if a competitor got
his hands on a company’s HR plan, the consequences
would not be nearly as dire. Once HR objectives are
empirically linked to the overall health of the organization,
the value of the company’s human capital plans is bound
to increase significantly.
Learn more about Evidence-based HR in Evidence-Based Human Resources: A Practitioner’s Guide (CB-1427S)
Human Resources, Ethics and Compliance
Conducting Periodic Reassessment of Reporting
Relationships and Program Leadership Since
reporting structure and organizational processes are
less important than the character and competencies of
the individuals leading the human resources and the
ethics and compliance functions, what these professionals
bring to the effort needs to be periodically reassessed.
Interviews with senior executives suggest that the periodic
assessment of the optimal human resources and
ethics and compliance relationship falls within one of two
broad categories of concern: risk or social responsibility.
In either event, ethics and compliance is at the core of
such a process, but the engagement of human resources
will depend on the context of the review. If it is risk,
the connecting link between the two programs will have
a heavy compliance emphasis. If the oversight exercised
is within the rubric of social responsibility, the focus will
be on ethics. In either structure, there is periodic independent
director board involvement.
Where risk mitigation is the ultimate objective, those
interviewed recognize that a common reporting relationship
of the human resources and ethics and compliance
functions may result in a sharper and more coordinated
focus on risk identification and mitigation. However, a
common - and high level - reporting relationship may
not be a necessary condition for achieving greater focus
on risk. And in an era of increased legal and regulatory
scrutiny, such an arrangement may diminish the vital
need for ethics and compliance program independence. In
other words, there are both advantages and disadvantages
to this approach.
In this regard, a U.S. energy company human resources
executive, who reports to the company’s CEO, warns of
the potential tension between human resources and ethics
and compliance when the latter has insufficient independence
from the CLO: "Legal sees its role as defending the
organization no matter what, and human resources has
the view of telling the truth and managing the outcome
in a way that will make the organization a better place
to work."
Learn more about Ethics and Compliance in Working at the Intersection of Human Resources, Ethics, and Compliance - The Need for Collaboration (CB-1453)
Strategic Workforce Planning
In the past, workforce planning’s sole purpose was to
project headcount. Today, many software packages and
web-based tools meet such operational workforce planning
needs. Strategic workforce planning, however, does
far more than spew headcount projections. Its robustness
comes not only from new data-mining technology, but
also from the metrics, analytics, modeling, and (not
infrequently) people imported from Finance, Marketing,
Operations Research, Strategic Planning, and other
functions.
These infusions of tools and talent enable companies to
move beyond short-term budget (or headcount) planning
to look ahead at organizational capacity issues: What
kinds of skills will we need two, three, or five years from
now? How can we get there through recruitment, training,
career mobility? Yet the biggest difference between
SWP and the older, more operational approach is this:
Once leaders grasp that the primary beneficiary of strategic
workforce planning is the business, they may decide
to own the process rather than leave it in the province
of HR.
While headcount projections are useful for short-term
planning, today’s SWP uses quantitative analysis and
modeling to provide valuable inputs to senior executives’
most critical business decisions, for example:
- Understanding the impacts of business strategy
- Demonstrating human capital's impact on business results
- Managing human capital risks
- Determining a company's talent strategy
- Assessing the execution of HR strategy against goals
Learn more about Strategic workforce planning in Implementing Strategic Workforce Planning (CB-1444)
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