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- 1. ROI of Human Capital Interventions

A Practice Toolkit

2. 3. Step 1

Presenting Problem to Real Problem

4. Step 1. Presenting Problem to Real Problem

The first task of the practitioner is almost always analysis

Starts with a presenting problem not a hunch but a problem as it presents itself

5. Step 1. Presenting Problem to Real Problem

Example

Let's take an example higher staff turnover for Graduate Engineers (let say compared to an industry standard)

The first question should not be, what skills and knowledge are required. It should be which metric(s) are affected negatively.

6. Step 1. Presenting Problem to Real Problem

Example

7. Step 1. Presenting Problem to Real Problem

1.1 Calculating benchmark employee cost

8. Step 1. Presenting Problem to Real Problem

1.2 Cost of 'covering' a vacant position (Calculated costs of other employees 'filling in' while the position is vacant)

9. Step 1. Presenting Problem to Real Problem

1.3 Cost to fill a vacant position

10. Step 1. Presenting Problem to Real Problem

1.4 On boarding & Orientation cost

11. Step 1. Presenting Problem to Real Problem

1.5 Cost of productivity ramp-up (During the first 3 months, an average new employee performs at 50% productivity of a tenured top performing employ

12. Step 1. Presenting Problem to Real Problem

1.6 Unit cost for filling a vacancy

R 74964

Two important learning points:

Know your metrics

Negotiate, and even request help from your client to determine the right metrics. They are closer to the business and at the same time you obtain by in for the intervention.

13. Step 1. Presenting Problem to Real Problem

1.7 Total cost ofreplacing graduate engineers

R 74964 x 6 = R 449784

Let's assume that we had to replace five graduate engineers the past six months

14. Step 1. Presenting Problem to Real Problem

Now we can move on to analysis

We know now which metricsare affected

Consultant speciality

15. Step 1. Presenting Problem to Real Problem

The basic tasks in analysis

16. Step 1. Presenting Problem to Real Problem

Two types of data

Quantitative

The truth is in a number however does not say much about context

Data

More about context, how people experience in their own words.

Qualitative

17. Data gathering

Before

intervention

Before

intervention

Step 1. Presenting Problem to Real Problem

Questionnaires

Surveys

Tests

Interviews

Focus groups

Observation

Performance records

Knowledge and skills testing

Program follow up

Project assignments

After

intervention

After

intervention

18. Step 1. Presenting Problem to Real Problem

Data gathering

Before

intervention

Target population/participants;

Supervisors of target population/participants;

Subordinates of target population/participants;

Peer Group;

HRD Staff;

Documentation:

- Organizational Performance Records:

19. Disciplinary records; 20. Safety records; 21. ScorecardsAfter

intervention

22. Step 1. Presenting Problem to Real Problem

Contextual factors to consider when selecting data collection methods

Before

intervention

After

intervention

Time for participants to respond;

Costs;

Amount of disruption of normal activities;

What is the level of certainty that you will achieve with the result;

Practicality;

Culture/Philosophy example the 10% syndrome.

23. Step 1. Presenting Problem to Real Problem

Requirements for effective data collection instruments and techniques

Before

intervention

Construct validity ( methods, techniques and test instruments should be evaluated in terms of its theoretical grounding);

Predictive validity (methods, techniques and test instruments should be evaluated regularly in terms of its ability to predict what it purport to predict);

Face validity for line management very important!

After

intervention

24. Step 1. Presenting Problem to Real Problem

Requirements for effective data collection instruments and techniques

Before

intervention

After

intervention

Reliability:

Produce consistent results over time, that differentiates effectively, and are independent of the assessor/data collector, or context.

25. Step 1. Presenting Problem to Real Problem

Data consolidation

26. Step 1. Presenting Problem to Real Problem

Data analysis

27. Note the following !

Because this toolkit does not aim to transfer knowledge about analysis as such the previous slides provides a brief and high level overview, for the sake of a clearity for the sake of the toolkit we assume that the analysis provided clarity about the problem.

28. Step 1. Presenting Problem to Real Problem

Brief Exposition of Problem

Our analysis shows that the HR and line managers involved in selection decisions do interviews in a haphazard and nonscientific fashion

Solution

Following discussions with consultants, HR experts and line all agreed we need to implement competency based interviewing

Lets assume this based on the core example

29. Step 1. Presenting Problem to Real Problem

The training department is instructed to develop an appropriate program and put all line and support staff through training they however indicate that a change in results is required quickly and that ROIfor the training need to be justified soon after implementation

Lets assume this based on the core example

30. Presenting Problem to Real Problem

So we have addressed this even before we asked any questions about training and now we can move on to the next step

Starts with a presenting problem not a hunch but a problem as it presents itself

31. Step 2a

Planning the Intervention (Starting With the End In Mind)

32. Step 2a: Planning the Intervention (With ROI in Mind)

When we plan an intervention considering that we want to measure ROI- we really reverse engineer (or start with the end in mind) We use the Kirkpatrick Model to achieve this

33. Step 2a: Planning the Intervention (With ROI in Mind)

Back to our case study to show how we plan backwards remember these objectives and measures for clarification, based on our core example/case study (re graduate engineers)

34. Step 2a: Planning the Intervention (With ROI in Mind)

Back to our case study to show how we plan backwards remember these objectives and measures a merely examples

Remember this is a snapshot there is a whole learning map and coursedevelopment process underlying these objectives

35. Step 2a: Planning the Intervention (With ROI in Mind)

Back to our case study to show how we plan backwards remember these objectives and measures a merely examples

36. Step 2a: Planning the Intervention (With ROI in Mind)

What have we achieved by planning the intervention this way?

ROI ?

Results

A path trail linking the business need with the intervention

Results

Results

Results

37. Step 2a: Planning the Intervention (With ROI in Mind)

We can also go some steps further and plan where we will get the information to evaluate the intervention and how

38. Step 2b

Planning the Intervention (Planning Beyond Training With ROI In Mind)

39. Step 2b: Planning the Intervention (With ROI in Mind)

Usually once we have done the planning and developed the training intervention we are ready to implement

40. We need to determine what technique(s) we will use to show that the intervention actually had an impact but our dilemma is this

Step 2b: Planning the Intervention (With ROI in Mind)

External Factors

Management

Attention

OR

SOMETHING

ELSE?

Incentives

AND YES THERE IS

IMPROVEMENT

AFTER

PROGRAM

Systems/Procedures

Changes

Here is our training

program

IS IT THE

TRAINING

PROGRAM?

41. Step 2b: Planning the Intervention (With ROI in Mind)

We have to isolate the effects of our intervention!

Isolating the results/effect of our intervention is the most difficult and also most important element of building the case for value (ROI);

Because of this, value at the higher levels is seldom determined;

However, the credibility not only of your study to show value, but also the training function is based on this element.

42. Step 2b: Planning the Intervention (With ROI in Mind)

We have to isolate the effects of our intervention!

The complexity of isolating the effect, is a function of the variables that are in play at any moment in time in an organization;

The analyst should however always try to prove a causal relationship to an acceptable degree of accuracy;

Acknowledging the forces that influence individual, group and business performance is the first step in this process.

43. Step 2b: Planning the Intervention (With ROI in Mind)

We have to isolate the effects of our intervention!

Remember that we are trying to isolate the effect ofout interventionto an acceptable degree of accuracy this makes very important to involve and agree with the client:

What metrics should change as result of the intervention (see step 1)

What isolation technique will be used (because they differ in terms of accuracy)

Lets consider the isolation techniques

44. Step 2b: Planning the Intervention (With ROI in Mind)

Let's look