Strategic Measurement: What s Your Value Proposition
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1 Strategic Measurement: What s Your Value Proposition William Schiemann, Ph.D. CEO, Metrus Group, Inc. SHRM Morris County June 2009
2 Four Things You Will Take Away! How to be more strategic in your role Measurement savvy Understand the big drivers of workforce value and what you can do to measure & optimize it Better understanding of how HR adds value evidence based and how you can improve it!
3 HR Internal Service ratings Improved, but still ranked lower than most functions Quality Manufacturing/Production/Operations Customer Service Communications/Public Affairs Information Technology Security Finance/Accounting Services Research & Development Legal Procurement/Purchasing Human Resources Marketing
4 Top Ranked HR: 1. Take actions regarding people that enables the business to grow value: Execute the Unique Business Strategy Increase Customer Value Service Increase Financial Impact Productivity Reduce Risk Compliance 2. Add value to your internal clients
5 To Follow the Yellow Brick Road Then I Need: A Great Value Proposition High People Equity High Stakeholder Perceptions Which All Require the Right Measures!
6 Value Equals Quality of Relationship/Service Cost of Relationship
7 At What Level Is Value Determined? Organizational? Function (e.g, HR)? Individual?
8 Different Strategies, Different Measures: What s s Your Unique Value Proposition? POSSIBLE MEASURES Cost Leadership Innovation Customer Intimacy PEOPLE: Alignment Goals/Values: Efficiency Spartan Revenue per employee Goals/Values: SOA applications Autonomy Innovation awards Goals/Values: Customer focus Empowerment Tenure Capabilities Efficiency analysis Cost awareness Idea generation Creativity Service skills Customer knowledge Service recovery Engagement Task fulfillment Diversity Team fulfillment
9 Connecting What HR Does to the Value Proposition
10 To Follow the Yellow Brick Road Then I Need: A Great Value Proposition High People Equity High Stakeholder Perceptions Which All Require the Right Measures!
11 People Equity is Key Driver of Shareholder Equity Shareholder Equity Turnover Customer Equity Relationship Value Brand Equity Product/Service Value People Equity Productivity People Drivers HR Drivers People Investments, Initiatives
12 People Equity Alignment Are we going in the same direction? Capabilities Do we have what we need to succeed? Engagement Are we committed?
13 Building Alignment Communicating the Unique Goals of the Organization Performance Management Rewards for Performance
14 Creating Capabilities INFORMATION RESOURCES & TOOLS TALENT
15 The Engagement Pyramid Advocacy Commitment Satisfiers
16 Measuring People Equity
17 Measures that Matter! Industry Leadership 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 71% 18% Quality Performance High People Equity 65% 37% Financial Performance Low People Equity
18 Measures that Matter! Turnover Means $$ 16.7% 7.7% Top Quartile PE Bottom Quartile PE
19 Which Profile Do You Manage? Alignment Capabilities Engagement Profile Superior Performance Cheerleader Under Equipped Strategic Disconnect Under Achiever Indifferent Talent Waste Performance Laggard
20 Measures that Matter: People Equity Scores A C E EAST A C E CENTRAL A C E WEST A C E A C E A C E A C E A C E A C E A C E A C E A C E A C E A - Alignment C - Capabilities E - Engagement Red = Trouble Yellow = OK Green = Strength
21 Drivers & Enablers of People Equity People Equity Alignment with Organizational Strategy Capabilities Engagement Supervision HR Systems Innovation Unique Strategy Elements Structure Technology Systems Values/ Operating Style Leadership Direction/ Strategy
22 To Follow the Yellow Brick Road Then I Need: A Great Value Proposition High People Equity High Stakeholder Perceptions Which All Require the Right Measures!
23 Metrus HR Research and Cases We have learned a lot about creating value... resulting in improvement strategies for HR Based on: Executive interviews for Reinventing Talent Management SHRM Hawaii Study on Talent Squeeze (2007) HR Benchmarking Study of over 1000 firms (Quality Progress, 2007) Human Capital Study in over 2000 organizations (ASQ, 2005) Many more (see
24 HR Internal Service ratings Improved, but still ranked lower than most functions Quality Manufacturing/Production/Operations Customer Service Communications/Public Affairs Information Technology Security Finance/Accounting Services Research & Development Legal Procurement/Purchasing Human Resources Marketing
25 Who Are Your Stakeholders? Funders? Influencers? Customers/Users? Partners/Interested Parties? Government/Community? Are all of your stakeholders equal? Perceptions drive: Resources, Decisions, Behaviors!
26 Building HR Value Customer Equity Relationship Value Brand Equity Product/Service Value HR Value HR Products & Services HR Relationships HR Investments, Initiatives
27 Stakeholder Example Strategy & Business Acumen Training Importance Executive Recruitment 3 Compliance Familiarity Low Moderate High Quality
28 Building HR Value Customer Equity Relationship Value Brand Equity Product/Service Value HR Value HR Products & Services HR Relationships HR Investments, Initiatives
29 HR Strengths and Weaknesses Favorable Neutral Unfavorable Responds in a supportive and helpful manner Possesses required knowledge and skills Responds to requests in a timely manner Top 3 Is available when needed Completes service accurately the first time Bottom 3 Do what they promise when they promise Communicates required info accurately and clearly Understands your business needs Is proactive: anticipates your needs and requirements
30 To Follow the Yellow Brick Road Then I Need: A Great Value Proposition High People Equity High Stakeholder Perceptions Which All Require the Right Measures!
31 What s s Wrong with These Measures? Diversity Balance Training Hours Pay Appraisals Completed Health Coverage Satisfaction Grievances Leadership Courses Turnover Headcount Ethics
32 Types of Metrics Impact Talent Meets Customer Needs Effectiveness Recruit Talent that Stays Efficiency Number of Requisitions Filled
33 Sample HR Scorecard Map HR DRIVERS PEOPLE ENABLERS PEOPLE DRIVERS PEOPLE OUTCOMES BUSINESS DRIVERS BUSINESS OUTCOMES HRSA -Selection -Rewards HR Talent Index Training Impact Management Excellence 5 Core Values Performance Success Ratio 3 Strategic Elements Talent Match People Equity Internal Customer Value Cost Net Income Map Key: HR Drivers People Operations Customer Financial
34 Measurement Do s Strategic first, then tactical Set targets Have measurement owners Link to decisions Tie to success, accomplishments Find measurement win-wins!
35 Measurement Don ts Benchmark the wrong comparisons e.g., those with different strategy Pick easy versus meaningful Overeat at the metric buffet Connect to punishment
36 Creating Personal Value What will make customers ask for you?
37 We re At The End of the Yellow Brick Road...
38 A Call To Action Checklist Adopt a New Mindset Business Acumen? Do I understand the unique business Value Proposition & Strategy? Do we have a strong People Strategy? Does HR have a strong Value Proposition & Scorecard? Do we have a high People Equity (Alignment, Capabilities, Engagement)? Are we measuring the right strategic things? (e.g.,ace and its Drivers--not just Engagement or Satisfaction)? Are Our Stakeholders Rating Us Highly? What s My Personal Value Proposition?
39 Great Sources for Additional Information Reinventing Talent Management: How to Maximize Performance... Schiemann, John Wiley & Sons, 2009 The Workforce Scorecard: Managing Human Capital to Execute Strategy Huselid, Becker, Beatty, Harvard Business School Publishing, 2005 People Equity: The Hidden Driver of Quality Kostman and Schiemann, Quality Progress, May 2005 Bullseye: Hitting Your Strategic Targets Schiemann & Lingle, Free Press, 1999 Strategic Surveys: Linking People to Business Strategy Schiemann & Morgan, Getting Action from Organizational Surveys, Jossey- Bass, 2006 The HR Value Proposition Ulrich and Brockbank, Harvard Business School Press, 2005 People Equity: The New Paradigm for Measuring and Managing Human Capital Schiemann, HR Planning, April 2006, Volume 29.1
40 Thank You! Dr. William Schiemann Metrus Group
41 About Metrus Metrus Group is an industry leader in strategic performance measurement, assessment, and organizational change. For nearly twenty years we have partnered with the most successful and challenging organizations in the world to help them achieve superior, sustainable business results through the development of their People Equity and the creation of a high performance, measurement-managed culture. Our Services Include: HR Strategy, Value and Performance Metrics People Equity Assessment & Solutions Balanced Scorecard/Dashboard Design and Assessment Development of Quantifiable Performance Metrics Employee Surveys and Linkage Research Leadership Development and Training Corporate Ethics, Alignment, and Accountability Audits Measurement-Driven Organizational Change wschiemann@metrus.com Route 202, Somerville, NJ (908) , ext. 101
42 As chair elect of the SHRM Foundation, I would like to thank the Morris County chapter for it s support, and to share with you some of the work that the Foundation does, as well as resources that are available to you as SHRM members.
43 What Does the SHRM Foundation Do? The SHRM Foundation advances and supports the human resource profession through: Research Grants Scholarships Educational Products This work is made possible by charitable contributions from individuals, chapters, state councils, companies and others in the HR community.
44 Effective Practice Guidelines Report Series (available to SHRM members at no cost) Distills best research findings and expert opinion on a given topic Seven titles now available: HR Strategy Retaining Talent Developing Leadership Talent Implementing Total Rewards Strategies Employee Engagement and Commitment Selection Assessment Methods Performance Management
45 Foundation DVDs (available to SHRM members at no cost) Real-world case studies of successful companies, highlighting strategic HR in action DVD, discussion guide and powerpoint presentation Six titles now available: Seeing Forward Trust Travels Ethics in the Workplace Fueling the Talent Engine HR In Alignment HR Role Models
46 Educational Awards & Scholarships Regional Scholarship Program $100,000 Student Scholarships $50,000 Dissertation Awards $20,000 SHRM Masters Series $25,000
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