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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:

  1. 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.
  2. 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.
  3. 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.
  4. 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:

    1. Understanding the impacts of business strategy
    2. Demonstrating human capital's impact on business results
    3. Managing human capital risks
    4. Determining a company's talent strategy
    5. 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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    Human Resources Topics:
  • HR Practices
  • HR Technology
  • Management Compensation
  • IT Salary and IT Staffing
  • Salary and Staffing non IT
  • Recent HR Research:
    click titles for details

    2010 Global Compensation Planning Report
    ME-2610

    IT Staff Planning Bundle
    JA-7732

    U.S. Salary Increase Budgets for 2010 – Winter Update
    CB-1463

    2010 Global Pay Summary
    ME-2614

    Internet and IT Position Description HandiGuide® - 2010 Edition
    JA-7725



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