…and how to give it to themWhat CEOs Want

Patti Phillips, Ph.D.

* What CEOs WantROI Institute and ATD research show that the data CEOs receive are not demonstrating they are getting what they want out of their talent investment. (N=96)

MeasuresCurrently Measure

Should Measure Importance

Inputs and Indicators 94% 86% 6

Efficiency 78% 82% 7

Reaction 53% 22% 8

Learning 32% 28% 5

Application 11% 61% 4

Impact 8% 96% 1

ROI 4% 74% 2

Awards 40% 44% 3

* Analytics drives talent decisions.

HCA

Planning

Development Acquisition

Engagement

McKinsey & Company and The Conference Board report, False Summit: Why the Human Capital Function Still has Far to Go (2012), states that human capital analytics is the linchpin of human capital investment. It is the thread that runs through all things human capital.

1. Framework that includes measures important to all stakeholders.

2. Process model describing step-by-step how to capture, analyze, and report data.

3. Standards that ensure reliable implementation of the process model.

4. Reporting that answers the six critical questions senior executives ask.

5. Seamless integration that ensures we give CEOs what they routinely.

* Success with Analytics

Levels of Evaluation Measurement Focus

0 Inputs The input into the project in terms of scope, volume, efficiencies, costs Participants, Hours, Costs, Timing

1 Reaction Reaction to the project or program, including the perceived value

Relevance, Importance, Usefulness, Appropriateness, Intent to use, Motivation to take action

2 Learning Learning to use the content and materials, including the confidence to use what was learned

Skills, Knowledge, Capacity, Competencies, Confidence, Contacts

3 ApplicationUse of content and materials in the work environment, including progress with actual items and implementation

Extent of use, Task completion, Frequency of use, Actions completed, Success with use, Barriers to use, Enablers to use

4 ImpactThe consequences of the use of the content and materials expressed as business impact measures

Productivity, Revenue, Quality, Time, Efficiency, Customer Satisfaction, Employee Engagement

Typical Measures

5 ROI Comparison of monetary benefits from program to program costs

Benefit-Cost Ratio (BCR), ROI%, Payback Period

MeasurementLevels

Measurement Category

RecommendedTarget*

0 InputsNumber of programs, participants, costs, efficiencies

100%

1 ReactionReaction and satisfaction with experience, content, value of program

100%

2 LearningAcquisition of knowledge, skill, information, awareness, insights

80-90%

3 ApplicationUse of knowledge, skill, information, awareness, insights

30%

4 ImpactChanges in business impact measures such as output, quality, time, engagement

10-20%

5 ROICompares monetary benefits to cost of program, project, or initiative

5-10%

*Target percentage of programs is based on typical number and variety of HR initiatives.

* Measurement Targets

MeasurementLevels

Measurement Category

2006Status

2011Status

0 InputsNumber of programs, participants, costs, efficiencies

100% 100%

1 ReactionReaction and satisfaction with experience, content, value of program

92% 89%

2 LearningAcquisition of knowledge, skill, information, awareness, insights

48% 59%

3 ApplicationUse of knowledge, skill, information, awareness, insights

11% 34%

4 ImpactChanges in business impact measures such as output, quality, time, engagement

8% 21%

5 ROICompares monetary benefits to cost of program, project, or initiative

2% 11%

* 2011 Global Leadership Development Practices Survey Percent of Leadership Programs Measured at Each Level

N=232; large organizations with leadership development budgets averaging $3 million annually

8

Develop/ Review

Objective of Program

Develop EvaluationPlans and

Baseline Data

Collect Data During

ProgramImplementation

Collect DataAfter

ProgramImplementation

Evaluation Planning Data Collection

LEVEL 1: REACTION

LEVEL 2:LEARNING

LEVEL 3: APPLICATION

LEVEL 4: IMPACT

* ROI Methodology Process Model

Isolate the Effects

Convert Data To

MonetaryValue

Calculate the Return

OnInvestment

Generate Impact Study

Data Analysis Reporting

LEVEL 5: ROI

Intangible Benefits

Capture Costs of Program

Identify Intangible Measures

9

* Reporting

Chain of Impact

Reporting occurs at two levels: micro (investment) and macro (strategic). It includes quantitative, qualitative, financial, and non-financial data.

Reporting answers the six critical questions senior executive ask: So what? How much? How do you know? What is it worth? How can we improve? What are the risks?

It allows you to declare value, improve programs, influence decisions, and give CEOs what they want.

What is your story?

Inputs

Reaction

Learning

Application

Impact

ROI

Intangibles

* Seamless Integration  Assess

Situation

Analyze Maturity

Integrate Results

Define Analytical Approach

Invest & Evaluate

Execute

Find Cause

 

 Human Capital

Strategy

Fitz-enz, J., Phillips, P. P., and Ray, R. (2012). Human Capital Analytics: A Primer. The Conference Board. Research Report R-1500-12-RR, p. 23.

www.roiinstitute.net