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St t i M t Wh t’Strategic Measurement: What’s Your Value Propositionp
William Schiemann, Ph.D.
SHRM Morris County
CEO, Metrus Group, Inc.
Copyright © 2009 Metrus Group, Inc.
SHRM Morris CountyJune 2009
Four Things You Will Take Away!Four Things You Will Take Away!
• How to be more strategic in your role
• Measurement savvy
• Understand the big drivers of workforce value• 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!
Copyright © 2009 Metrus Group, Inc.
HR Internal Service ratings Improved, but HR Internal Service ratings Improved, but still ranked lower than most functionsstill ranked lower than most functions
Manufacturing/Production/Operations
Quality
Information Technology
Communications/Public Affairs
Customer Service
Research & Development
Finance/Accounting Services
Security
1993
Procurement/Purchasing
Legal
Research & Development 1993
20062007
0 10 20 30 40 50 60 70
Marketing
Human Resources
Copyright © 2009 Metrus Group, Inc.
Top Ranked HR:Top Ranked HR:
1. Take actions regarding people that enables the business to grow value:enables the business to grow value:
– Execute the Unique Business Strategy– Increase Customer Value—Service– Increase Customer Value—Service– Increase Financial Impact—Productivity
Reduce Risk Compliance– Reduce Risk—Compliance
2. Add value to your internal clients
Copyright © 2009 Metrus Group, Inc.
To Follow the Yellow Brick Road…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!
Copyright © 2009 Metrus Group, Inc.
q g
Value Equals…Value Equals…
Quality of Relationship/Servicey pCost of Relationship
Copyright © 2009 Metrus Group, Inc.
At What Level Is Value Determined?At What Level Is Value Determined?
• Organizational?
F ti ( HR)?• Function (e.g, HR)?
• Individual?
Copyright © 2009 Metrus Group, Inc.
Different Strategies, Different Measures:Different Strategies, Different Measures:What’s Your Unique Value Proposition?What’s Your Unique Value Proposition?
POSSIBLE MEASURES
Cost Leadership
Innovation Customer Intimacy
PEOPLE:Alignment
• Goals/Values:− Efficiency− Spartan
R
• Goals/Values:− SOA applications− Autonomy
I ti d
• Goals/Values:− Customer focus− Empowerment
• Revenue per employee
• Innovation awards • Tenure
• Efficiency • Idea generation • Service skillsCapabilities
Efficiency analysis
• Cost awareness
Idea generation• Creativity
Service skills• Customer
knowledge• Service recovery
Engagement
y
• Task fulfillment • Diversity • Team fulfillment
Copyright © 2009 Metrus Group, Inc.
Connecting What HR Does to theValue Proposition
Copyright © 2009 Metrus Group, Inc.
To Follow To Follow the Yellow Brick Road…the Yellow Brick Road…
Then I Need:
• A Great Value Proposition
• High People Equity
• High Stakeholder Perceptions
• Which All Require the Right Measures!
Copyright © 2009 Metrus Group, Inc.
q g
People Equity is Key Driver of People Equity is Key Driver of Shareholder EquityShareholder Equity
ShareholderEquity
q yq y
Customer Equity• Relationship Value• Brand Equity• Brand Equity• Product/Service Value
ProductivityTurnover
People
People Equity
pDrivers
HR Drivers
Copyright © 2009 Metrus Group, Inc.
DriversPeople
Investments, Initiatives
People EquityPeople Equity
AlignmentA i i th di ti ?• Are we going in the same direction?
CapabilitiesCapabilities• Do we have what we need to succeed?
Engagement• Are we committed?Are we committed?
Copyright © 2009 Metrus Group, Inc.
Building AlignmentBuilding Alignment
• Communicating the Unique Goals of the OrganizationUnique
• Performance ManagementPerformance Management
• Rewards for Performance
Copyright © 2009 Metrus Group, Inc.
e a ds o e o a ce
Creating CapabilitiesCreating Capabilities
INFORMATIONRESOURCES & TOOLS
TALENT
Copyright © 2009 Metrus Group, Inc.
TALENT
The Engagement PyramidThe Engagement Pyramid
Advocacy
CommitmentCommitment
Satisfiers
Copyright © 2009 Metrus Group, Inc.
Measuring People EquityMeasuring People Equity
Copyright © 2009 Metrus Group, Inc.
Measures that Matter! Industry LeadershipMeasures that Matter! Industry Leadership
90%100%
71%65%
60%70%80%90%
18%37%
30%40%50%60%
18%
0%10%20%30%
0%Quality Performance Financial Performance
High People Equity Low People Equity
Copyright © 2009 Metrus Group, Inc.
Measures that Matter! Turnover Means $$Measures that Matter! Turnover Means $$
16.7%%
7.7%
Top Quartile PE Bottom Quartile PE
Copyright © 2009 Metrus Group, Inc.
p Q Q
Which Profile Do You Manage?Which Profile Do You Manage?
Alignment Capabilities Engagement Profile Superior Performance
Cheerleader
Under Equipped
Strategic Disconnect
Cheerleader
Under Achiever
Indifferent
Talent Waste
Performance Laggard
Copyright © 2009 Metrus Group, Inc.
Measures that Matter: People Equity ScoresMeasures that Matter: People Equity Scores
A C E48 52 61
EAST
A C EWEST
A C E
CENTRAL
A C EA C E49 53 53
A C E61 84 76
A C E44 27 51
A C E56 52 63
A C E29 56 53
A C E43 28 76
A C E54 26 54
A C E66 84 83
A C E
49 61 69
A C E37 51 45
A C E34 25 40
A C E58 87 80
Copyright © 2009 Metrus Group, Inc.
A - Alignment C - Capabilities E - EngagementRed = Trouble Yellow = OK Green = Strength
Drivers & Enablers of People EquityPeopleEquity
Alignment with Organizational Strategy Capabilities Engagement
Supervision
Innovation TechnologySystemsHR Systems
Unique Strategy Elements Structure
Values/Operating
Direction/Strategy
Copyright © 2009 Metrus Group, Inc.
LeadershipStyle
gy
To Follow the Yellow Brick Road…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!
Copyright © 2009 Metrus Group, Inc.
q g
Metrus HR Research and Cases Metrus HR Research and Cases
• We have learned a lot about creating value... resulting in improvement strategies for HR g p g
• Based on:– Executive interviews for Reinventing TalentExecutive 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 organizationsHuman Capital Study in over 2000 organizations
(ASQ, 2005)– Many more (see www.metrus.com)….
Copyright © 2009 Metrus Group, Inc.
HR Internal Service ratings Improved, but HR Internal Service ratings Improved, but still ranked lower than most functionsstill ranked lower than most functions
Manufacturing/Production/Operations
Quality
Information Technology
Communications/Public Affairs
Customer Service
Research & Development
Finance/Accounting Services
Security
1993
Procurement/Purchasing
Legal
Research & Development 1993
20062007
0 10 20 30 40 50 60 70
Marketing
Human Resources
Copyright © 2009 Metrus Group, Inc.
Who Are Your Stakeholders?Who Are Your Stakeholders?
• Funders?• Influencers?Influencers?• Customers/Users?• Partners/Interested Parties?Partners/Interested Parties?• Government/Community?Are all of your stakeholders equal?Are all of your stakeholders equal?
Perceptions drive: Perceptions drive: Resources, Decisions, Behaviors!
Copyright © 2009 Metrus Group, Inc.
Building HR ValueBuilding HR Value
Customer Equity• Relationship Value• Brand Equity• Product/Service Value
HR Value
HR RelationshipsHR Products& Services
HRInvestments, Initiatives
Copyright © 2009 Metrus Group, Inc.
Investments, Initiatives
Stakeholder ExampleStakeholder Example
5
5.5
Strategy &Business Acumen
4.5
ce
TrainingBusiness Acumen
4
mpo
rtan
c
ExecutiveRecruitment
3.5
Im
Familiarity
2.5
3 Compliance FamiliarityLow Moderate High
Copyright © 2009 Metrus Group, Inc.
2 2.5 3 3.5 4 4.5 5
Quality
Building HR ValueBuilding HR Value
Customer Equity• Relationship Value• Brand Equity• Product/Service Value
HR Value
HR RelationshipsHR Products& Services
HRInvestments, Initiatives
Copyright © 2009 Metrus Group, Inc.
Investments, Initiatives
HR Strengths and WeaknessesHR Strengths and Weaknesses
57 30 13Responds in a supportive and helpful manner
Favorable Neutral Unfavorable
50
56
57
35
34
30
15
10
13
Responds to requests in a timely manner
Possesses required knowledge and skills
Responds in a supportive and helpful manner
45
46
50
37
39
35
18
15
15
Completes service accurately the first time
Is available when needed
Responds to requests in a timely manner
Top 3
44
44
45
36
40
37
20
16
18
Communicates required info accurately and
Do what they promise when they promise
Completes service accurately the first time
Bottom 3
26
38
44
37
41
36
38
22
20
Is proactive: anticipates your needs and
Understands your business needs
clearly
Copyright © 2009 Metrus Group, Inc.
26 37 38requirements
To Follow the Yellow Brick Road…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!
Copyright © 2009 Metrus Group, Inc.
q g
What’s Wrong with These Measures?What’s Wrong with These Measures?
LeadershipCourses
Copyright © 2009 Metrus Group, Inc.
Types of MetricsTypes of Metrics
ImpactTalent Meets
Customer Needs
EffectivenessEffectivenessRecruit Talent
that Stays
EfficiencyNumber of
Copyright © 2009 Metrus Group, Inc.
Requisitions Filled
Sample HR Scorecard MapSample HR Scorecard Map
HRDRIVERS
BUSINESSOUTCOMES
PEOPLEENABLERS
PEOPLEDRIVERS
PEOPLEOUTCOMES
BUSINESSDRIVERS
HRSA-Selection-Rewards Management
PerformanceSuccessRatio
InternalCustomerRewards
HR Talent Index
Excellence3
StrategicElements
PeopleEquity
NetIncome
CustomerValue
TrainingImpact
5 CoreValues Talent
Match
Cost
People
Map Key:HR Drivers
Copyright © 2009 Metrus Group, Inc.Financial
OperationsCustomer
Measurement Do’sMeasurement Do’s
• Strategic first, then tactical
• Set targets
H• Have measurement owners
• Link to decisions• Link to decisions
• Tie to success, accomplishments, p
– Find measurement win-wins!
Copyright © 2009 Metrus Group, Inc.
Measurement Don’tsMeasurement Don’ts
• Benchmark the wrong comparisons—e g those with different strategye.g., those with different strategy
• Pick easy versus meaningfuly g
• Overeat at the metric buffet
• Connect to punishment
Copyright © 2009 Metrus Group, Inc.
Creating Personal ValueCreating Personal Value
What will make customersWhat will make customers ask for you?
Copyright © 2009 Metrus Group, Inc.
We’re At The End of the Yellow Brick Road . . .We’re At The End of the Yellow Brick Road . . .
Copyright © 2009 Metrus Group, Inc.
A Call To Action ChecklistA Call To Action Checklist——Adopt a New MindsetAdopt a New Mindsetpp
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 & g pScorecard?
Do we have a high People Equity (Alignment, Capabilities, Engagement)?
Are we measuring the right strategic things? (e.g.,ACE d it D i t j t E t S ti f ti )?and its Drivers--not just Engagement or Satisfaction)?
Are Our Stakeholders Rating Us Highly?
Copyright © 2009 Metrus Group, Inc.
What’s My Personal Value Proposition?
Great Sources for Additional InformationGreat Sources for Additional Information• Reinventing Talent Management: How to Maximize Performance...
– Schiemann, John Wiley & Sons, 2009
• The Workforce Scorecard: Managing Human Capital to Execute• The Workforce Scorecard: Managing Human Capital to Execute Strategy– Huselid, Becker, Beatty, Harvard Business School Publishing, 2005
• People Equity: The Hidden Driver of Qualityp q y Q y– 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• The HR Value Proposition– Ulrich and Brockbank, Harvard Business School Press, 2005
• People Equity: The New Paradigm for Measuring and Managing Human Capital
Copyright © 2009 Metrus Group, Inc.
Human Capital– Schiemann, HR Planning, April 2006, Volume 29.1
Thank You!Thank You!Dr. William Schiemann
Metrus [email protected]
908 231 1900Copyright © 2009 Metrus Group, Inc.
908-231-1900
About MetrusAbout MetrusMetrus Group is an industry leader in strategic performance measurement,assessment, and organizational change. For nearly twenty years we havepartnered with the most successful – and challenging – organizations in theworld to help them achieve superior sustainable business results through theworld to help them achieve superior, sustainable business results through thedevelopment of their People Equity and the creation of a high performance,measurement-managed culture.
Our Services Include:HR Strategy, Value and Performance MetricsPeople Equity Assessment & SolutionsBalanced Scorecard/Dashboard Design and AssessmentDevelopment of Quantifiable Performance MetricspEmployee Surveys and Linkage ResearchLeadership Development and TrainingCorporate Ethics, Alignment, and Accountability AuditsMeasurement Driven Organizational Change
[email protected] www.metrus.com953 Route 202, Somerville, NJ 08876 (908) 231-1900, ext. 101
Measurement-Driven Organizational Change
Copyright © 2009 Metrus Group, Inc.
, , ( ) ,
Coming Soon…Coming Soon…
Reinventing Talent is an outstanding blend of research and practice. It reports compelling research on the value of investing in talent and offers specific recommendations on how to developoffers specific recommendations on how to develop people equity through alignment, capabilities, and engagement. The book confirms what good people managers do and offers specific guidelines for those wanting to upgrade their people managementwanting to upgrade their people management skills.
Dave UlrichProfessor Ross School of BusinessProfessor, Ross School of Business
University of MichiganPartner, The RBL Group
Published by:
Copyright © 2009 Metrus Group, Inc.
As chair elect of the SHRM Foundation, I would like to thank the Morris Countywould like to thank the Morris County chapter for it’s support, and to share with you some of the work that the Foundationyou some of the work that the Foundation does, as well as resources that are available to you as SHRM membersavailable to you as SHRM members.
Copyright © 2009 Metrus Group, Inc.
What Does the SHRM Foundation Do? What Does the SHRM Foundation Do?
The SHRM Foundation advances and supports the human resource profession through: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.
Copyright © 2009 Metrus Group, Inc.
y
Effective Practice Guidelines Report Series Effective Practice Guidelines Report Series (available to SHRM members at no cost)(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– Retaining Talent– Developing Leadership Talent– Implementing Total Rewards
StrategiesStrategies– Employee Engagement and
Commitment– Selection Assessment– Selection Assessment
Methods– Performance Management
Copyright © 2009 Metrus Group, Inc.
Foundation DVDs Foundation DVDs (available to SHRM members at no cost)(available to SHRM members at no cost)
Real-world case studies of successful companies, highlighting strategic HR in actiong g g s a eg c ac o
DVD, discussion guide and powerpoint presentationpowerpoint presentation
Six titles now available:S i F d– Seeing Forward
– Trust Travels– Ethics in the Workplace– Fueling the Talent Engine– HR In Alignment– HR Role Models
Copyright © 2009 Metrus Group, Inc.
HR Role Models
Educational Awards & ScholarshipsEducational Awards & Scholarships
• Regional Scholarship Program$100 000$100,000
• Student Scholarships $50,000Student Scholarships $50,000
• Dissertation Awards $20,000
• SHRM Masters Series $25,000
Copyright © 2009 Metrus Group, Inc.