ROI For HR Practice Toolkit

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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