Download - HR Governance, Risk, Compliance slides at 13th African Corporate Governance Conference - 24 Nov 2014
APPLYING HR STANDARDS & METRICS
TO PROMOTE SOUND HR GOVERNANCE,
RISK, COMPLIANCE
13th Africa Corporate Governance Conference
Marius Meyer, CEO: SABPP
24 November 2014
@SABPP1
Welcome to South Africa
Where can you get the slides?
OPTION 1: FAST WAY
• www.slideshare.net/SABPP
• Twitter: @SABPP1
• Blog: hrtoday.me
OPTION 2: SLOW WAY
• Via email tomorrow
Agenda
• Clarifying the need for national and international
HR Standards
• Identify HR metrics to measure bottom-line impact
of HR
• Managing people risks in business
• Creating an ethical organisation culture
• Conclusion
Maslow’s needs in 2014
Critical questions
1. How many of you would like to eat in a
restaurant without standards?
2. Or stay in a hotel without standards?
3. Or send your child to a school (or pre-
school) without standards?
4. Or get operated in a hospital without any
standards?
5. Or fly back home on an airline without
standards?
Then when it comes to HR …
Why do we continue to
manage people and govern
the most precious part of our
organisations (i.e. people)
without standards?
Top facts about HR
• Human Capital is the biggest concern for
CEOs (PwC).
• Only 18% of CEOs feel confident that they
have the right people in place to execute
strategy (CEB).
• Human Capital is the biggest risk in
business (HCI Africa).
• Skills crisis is the top obstacle to economic
growth.
• Strikes cost SA R197 million per day.
More facts about HR
• SA losing R12 billion a year due to absenteeism.
• Only 5% of employees understand business
strategy.
• World-wide only 13% of employees actively
engaged.
• Companied with engaged employees outperform
others by 202% (Dale Carnegie).
• Companies with good HR Practices outperform
others by treating HR as critical business function,
these companies are 105% more profitable.
• Average ROI on wellness programmes: 300%.
Operational Management Consistency in the
Management of People
One of the toughest things to be is consistent
Example of inconsistency –
paternity leave
• South Africa – 3 days
• Ghana – 5 days
• Cameroon – 10 days
• Kenya – 14 days
• Australia – 14 days
• Sweden – 60 days
• UK – 12 months (parents sharing)
Why a national HR Standard?
• We need to improve the quality of HR
practice.
• Inconsistencies – practices, sites, business
units, companies, industries.
• Too many bad examples of things going
wrong – Marikana, Medupi.
• Raising the bar for the HR profession and
business impact.
• Optimising human capital in business.
468 HR Leaders developing
HR Standards for South Africa
HR Standards Facilitators
Kate Dikgale-Freeman Michael Robbins Linda Chipunza
BUSINESS STRATEGY – HR BUSINESS ALIGNMENT
❶ StrategicHRM
❷ TalentManagement
❸ HR RiskManagement
HR ARCHITECTURE
HR VALUE & DELIVERY PLATFORM
❹Work-force
planning
❺
Learning
❻Perfor-mance
❼
Reward
❽Well-ness
❾ERM
❿OD
⓫ HR Service Delivery
⓬HR Technology
(HRIS)
Prepare
Imple-ment
Review Improve⓭ HR MEASUREMENTHR Audit: Standards & Metrics
H R
C O
M P
E T E N C
I E SSABPP HRM SYSTEM STANDARDS MODEL
Global approaches to standards
• Production and safety lead – ISO standards
• Professional standards – accounting
• Top global companies – their own standards
• Canada – HR Standards & Metrics
• USA – HR Metrics (SHRM)
• ISO HR project started
• South African National HR Standards
International interest
❶ STRATEGIC HR
MANAGEMENT STANDARDDEFINITION
Strategic HR Management is a systematic
approach to developing and implementing
long-term HRM strategies, policies and plans
that enable the organisation to achieve its
objectives.
SABPP (2013)
STRATEGIC HRM PROCESS
Framework of HR policies & programmes
Environmental scan (PESTL)
HR structure, service model and capability
development
People strategy
HR strategic agenda
Organisation’s strategic intent
HR strategic agenda
HR business
plan
People strategy
Allocate roles & responsibilities
(line/HR/support functions)
MONITOR & EVALUATE
Strategic HR: It is all about alignment
HR RISK MANAGEMENT
DEFINITION
HR Risk Management is a systematic
approach of identifying and addressing people
factors (uncertainties and opportunities) that
can either have a positive or negative effect
on the realisation of the objectives of an
organisation.
SABPP (2013)
❸
Risk / Readiness Profile
H R R I S K S – 8 African countries
• Safety - accidents
• Skills shortages/gaps
• Incompetence
• Employee disengagement
• Strikes & poor employment relationships
• Fraud/corruption
• Stress
• Staff turnover
• Low staff satisfaction –impact on customer satisfaction
• Cyber security
• Conflict/disputes
• Diversity problems
• Sexual harassment
• Expatriate issues
• Non-compliance
181 babies died in state hospitals last year.
Human errors, faulty equipment & cover-up by senior medical staff were key factors.
Infection-control nurse retired, and her post not filled.
Critical shortage of nurses & clinical engineers who are responsible for maintaining ventilators.
Senior doctors presented inaccurate stats to their bosses to cover up poor management practices.
Doctors failed to alert DoH to the crisis, even though a few nurses had raised the alarm to management.
Public sector case study
STAFF COMPLAINTS:
Shortage of nurses, leading to overworked staff being vulnerable to human error.
High baby-to-nurse ratio – babies not getting adequate care and attention.
Specialist doctors consult junior doctors on the phone without personally accessing high-risk cases.
Inadequate training for medical staff.
30 May 2010
If you don’t manage HR risks
HR risks – people risk, governance
and compliance
HR RISK MANAGEMENT PROCESS
Assessment of risk tolerance for each risk
Identify and evaluate impact of
HR risks
HR practices, programmes, metrics to
manage risks
HR Risk Map
HR Risk Register
Organisation’s risk management
structures and processes
HR Risk Register
HR Risk Management
Plan
HR Risk Map
MONITOR & EVALUATE
⓭ HR MEASUREMENT
DEFINITION
HR measurement is a continuous process of
gathering, analysing, interpreting and
presenting quantitative and qualitative data to
measure and align the impact of HR practices
on organisational objectives, including
facilitating internal and external auditing of HR
policies, processes, practices and outcomes.
SABPP (2013)
HR MEASUREMENT SYSTEM
MONITOR &
EVALUATE
What are the drivers behind those issues?
What issues do we need to manage
(risks/opportunities)?
What are the outcomes specified
in the SLA?
How can we measure those in a Balanced
Score Card?
METRICS
METRICS FOR PEOPLE MANAGEMENT IN THE ORGANISATION
METRICS FOR HR EFFECTIVENESS/
EFFICIENCY
How can we measure those
drivers?
Management system & resources to collect
and report
Financial and operational reporting
systems in organisation
HR manager’s response to
metrics?
Key Human Capital Metrics• Revenue per employee (Revenue/FTE)
• Profit per FTE (Revenue-Operating cost/FTE)
• Human Capital ROI (benefits-costs/costs)
• Leadership quality index
• Employee engagement score
• Employee satisfaction score
• Organisation climate score
• Employer of choice index
• Human capital risk index (less than 10% risk)
• HR customer satisfaction score
The need for consistency and quality
POSITIONING GRC IN
COMPANIES
GOVER-NANCE
RISKCOM-
PLIANCE
LEADERSHIP
MANAGEMENT
CU
LTUR
E
CO
NTR
OLS
Triple bottom-line: 3 P’s
PEOPLE(Social)
PLANET(Environment)
PROFITS(Financial
performance)
S U S T A I N A B I L I T Y
“Good human resource management is imperative for good governance”
Mervin King
HR governance defined:
is the act of leading, directing & controlling the HR function to promote sound corporate governance in pursuit of the overall business goal of economic, social & environmental sustainability
Workplace behaviour
OOPs !! What if ? the pilots had not read the Instruction book
What if ? The ground staff didn't think that
house keeping was an important issue
Who insured it and will they pay ??
RISK Reporting
GUIDELINES FOR HR GRC
• Transform HR management to HR governance by taking
full responsibility for GRC in the HR space, but with a
clear link to overall GRC and business strategy
• Identify all stakeholders and engage with them
• Design and implement a robust HR risk management
plan
• Develop HR standards – good HR practices
• Infuse HR governance in your organisation
• Evaluate the impact of HR on the bottom-line
RATING SCALE TO ASSESS HR
PROBLEMATIC MEDIOCRE EXCELLENT
High Risk Medium Risk Low/no Risk
HR practice is non-existent, has a low uptake or is applied poorly. Little, no or poor results are evident. Requires urgent attention to move to medium risk over short or medium term.
Some pockets of excellence, but they are isolated, and applied inconsistently in certain parts of company. Some occasional positive results comparable to typical average HR standards. Should be addressed before it becomes problematic.
HR leading practice is well infused, aligned and integra-ted across the company and applied consistently with clear results. Comparable to world-class standards. Should be maintained, reinforced or used as a model for other companies.
SUSTAINABLE PERFORMANCE
“Whether a company sustains exceptional performance depends first and foremost on whether it continues to
have the right people in power.”
Ethics Management Process …
Develop or revise code of ethics & processes
Build an ethical culture
Integrate ethical
standards
Assess ethics risk and
opportunities
Report & Disclose
Reference: Ethics SA www.ethicssa.org
National HR Governance Strategy Alignment
HR Professional Standards:• HRMS (13)• HRMSAS (13)• HRPPS (30+)
HR Products/Services:• CPD• Mentoring• Professional registration• Research• HR Academy – QCTO• Curriculum standards
HR Metrics:• National HR Scorecard• HR Service Standards
HR Auditing:• Internal Audit• External Audit
King IV:HR Governance
ISO: HR
IntegratedReporting
HR Competencies
Conclusion
HR standards are needed to improve the
consistency and quality of HR management.
Consider the SABPP approach, process and
methodology, but develop your own HR
standards for your country.
Best wishes with your HR governance work.
For more information, contact us on [email protected]
Let us build well governed HR functions
[email protected] (Professional Registration)
[email protected] (Professional Services)
[email protected] (Stakeholder Relations)
[email protected] (Research)
[email protected] (Learning & Quality)
[email protected] (Strategy inputs)
[email protected] (Social media)
Website : www.sabpp.co.za Blog: hrtoday.me
New office: 8 Sherborne Str, Parktown, South Africa
Tel: +27 11 482-8595 Fax: +27 11 482-4830
Cel: 082 859 3593 (Marius Meyer)