hr event 7.0 final annotated delegate version · optimising the capabilities and performance of its...

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Day TwoKeynote

presentation

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Human Capital Management

Manifesto’

‘The

Nicholas J Higgins, Dean, International School of Human Capital Management & Chief Executive Officer, VaLUENTiS

AUTO Intro slide

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Competitive advantage through


Strategic

AUTO intro slide

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‘The New Art of People Science’

AUTO intro slide

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‘Welcome to HR 2.0’

AUTO intro slide

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Professional Services

www.valuentis.com

www.ISHCM.com

People Science®

Analyse, Advise, Implement, Educate

Our mission in the market-place is two-fold. On the professional services side it is improving organisation performance through effective people management (organisation performance through a human capital lens) with a more scientific basis. From the School side, it is educative – expanding the knowledge of HR practitioners and managers in general in support of our first mission. We’re known for our ‘why’ ‘what’ and ‘how’ People Science approach.Much of what you see in the presentation here today is expanded upon in our practitioner journal available on our websites.

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£60,000,000,000

£120,000£60 BILLION – ESTIMATED TO BE THE AMOUNT SPENT ON PEOPLE MANAGEMENT ACTIVITIES IN THE UK EACH YEAR.

IN THE TIME THAT IT HAS TAKEN ME TO TELL YOU THAT ANOTHER £120,000 HAS BEEN SPENT.

THAT’S A CONSIDERABLE SUM...........

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It’s all about the bang for your

buck!

MEANING THAT FOR ORGANISATIONS.........

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‘...The collective individual effort is an organisation’s unique differentiator and source of competitive

advantage. PERIOD.’

‘The value of human capital to an organisation is a given. The effectiveness of its human capital

management is key to deriving this competitive advantage.’

‘Human capital is the biggest wealth creator...’

‘And can also be the biggest wealth destroyer...’

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HR 2.0

I would like to take you on a journey. 2 DOT ZERO..

WELCOME TO HUMAN CAPITAL MANAGEMENT.....

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Human Capital Management (HR 2.0)

But first an interesting insight.

We have to thank, one Stuart McArthur from Melbourne for an Australian view of the world!

Bit about the projection of Europe – apparently it is oversized to its actual geographic area relative to other continents. Particularly GB....

The point is that the ‘upside world’ is just as valid as the one that we are used.i.e. its looking at the same information from a different perspective.

From space, there is no concept of up or down......

Much of what you will see/hear today will be familiar but different and we may find it challenging. But that’s ok.....

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HUMAN CAPITAL

MANAGEMENT:“Human capital management

is the term which is used to describe an organisation’s

multi-disciplined and integrated approach to

optimising the capabilities and performance of its

management and employees.”

VaLUENTiS International School of HCM 2006

We provide a definition (as do many things in the HR space)

KEY THEMES

•HUMAN CAPITAL MANAGEMENT•EMPLOYEE ENGAGEMENT•LINK WITH ORGANISATION PERFORMANCE•HR’S ROLE WITHIN THIS (VALUE PROPOSITION)•OPPORTUNITY

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The view of HCM

‘HCM is outcome focused rather than

process driven.’

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HCM: FOUR KEY WORDS

‘ENGAGEMENT’‘PRODUCTIVITY’‘PERFORMANCE’

&‘INTELLIGENCE’

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The traditional view of employee engagement contributing to improved organisational performance...

Higher employee

engagementHigher

productivity

Higherorganisation performance

LINEAR MODEL....

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The emerging view of human capital management practice and employee engagement contributing to improved organisational performance

Higher employee

engagement

Higherproductivity


More effectivehuman capital management

SYSTEM MODEL (MODELS REALITY)

NOTE THAT POSITIVE/NEGATIVE LOOPS CAN OCCUR

PRODUCTIVITY AND PERFORMANCE CAN BE MEASURED IN MANY WAYS AS WE SHALL SEE

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HCM activities and processes in the mix...

Performance management

Talent management

ResourcingReward & benefits

Training & Development

Learning

Employer brand

Organisation communications

Organisation design

Managing change

HR strategyWorkforce intelligence

Well-being

Payroll

Employee relations

HR governance

HRIS

HR restructureHR audit

CASE MANAGEMENT

Diversity

Recruitment

Management developmentTackling absenteeism

I mentioned earlier regarding definitions. All of these everyday terms require definitions to avoid duplication or confusion.

For example take talent management (currently in vogue). What does talent management mean?

Well here’s a few....Talent management as a...•STRATEGIC DRIVER/PHILOSOPHY?•A CLUSTER OF END-TO-END PROCESSES?•A PIECE OF SOFTWARE•A SPECIFIC (NARROWER) SET OF ACTIVITIES?•ANOTHER WORD FOR SUCCESSION PLANNING?•ANOTHER WORD FOR COMPETENCY MANAGEMENT?•NON-TALENT MANAGEMENT?•MIS-TALENT MANAGEMENT?•A COMBINATION OF ABOVE?•ALL OF THE ABOVE?

It is really important as professionals that we clearly define what we mean to avoid confusion or worse, unnecessary cost and/or failed projects......

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And sometimes you just can’t get the staff?

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Human capital management (15OE)

Human capitalmanagement effectiveness

Diversity

Organisation communicationOrganisation climate

Performance orientationOrganisation design

Employee centricityEmployer brandLeadership

ResourcingRewardTalent managementTraining & DevelopmentHR governanceHR operational excellence

HR FUNCTIONINFLUENCE

HR FUNCTIONCONTROL

• To make a manageable, working evaluation of people management (a.k.aHCM), we can look at the effectiveness of each of these (all have definitions) in an integrated fashion.

• PLEASE NOTE that the top set are where HR can have influence over effectiveness of each of these areas and therefore responsibility/accountability needs to be appropriate.

• The HR function can be a strong or weak influencer given organisational context, its own capability and expectation within the organisation.

• The bottom two, not surprisingly, are under the direct control of HR.

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DIVERSITY

EMPLOYEECENTRICITY

EMPLOYERBRAND

HRGOVERNANCE

HR OPERATIONALEXCELLENCE

LEADERSHIP

ORGANISATIONCLIMATE ORGANISATION

COMMUNICATIONS

ORGANISATIONDESIGN

PERFORMANCEORIENTATION

RESOURCING

RETENTION

REWARD

TALENTMANAGEMENT

TRAINING &DEVELOPMENT

796

813

742

674

615

431

487

642

628594603

684

657599 416

‘Out-performing’ (world class)‘Out-performing’ (peer)‘Comparable’ (peer)

‘Under-performing’ (peer)

Organisation Engagement scorecard(‘radar/clock’)

And this is the way it can be reported at macro level (there are many options depending on audience, e.g. a few slices) . Numbers you see are out of 1000. A feature of the scores is they result from a combination of qualitative and quantitative data.

The technique is in the case quite unique (as normally its one or the other). Colours are similar to classic scorecard interpretation. The scores can be linked to performance/productivity issues and help organisations/HR functions with implementation strategies around improvement.

Provides longitudinal (over time) data which can be re-evaluated (i.e. every 12 months or less) and potential predictive analytics.

Reports generated have different levels of analysis from a few pages to 80 plus pages. Can be used for HR strategies, change interventions, evaluation of various initiatives (particularly multi-factor) and so on.....

Appeals to management....Robust methodologyProvides organisations/HR functions with deep insight

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Case studies (well vignettes!)

Private•Auto•Biotechnology•Business services•Chemicals•Construction•Distribution•Food Production•Financial services

– Insurance– Investment banking– Retail banking

•FMCG•Leisure•Manufacturing/Mining

• Media• Oil & Gas• Pharmaceutical• Professional service

firms• Retail• Telecommunications• Transport• Utilities

Public• Local Government • NHS• Higher Education • Police

• We have many case studies of usage spread across a range of sectors..

• I am often asked to ‘provide’ case study material on a few slides. That’s difficult as I need many more to provide instructive learning....

• At the School, our case studies for analysis/ learning require ten pages plus (of text), and most times much more.

• What people are looking for is actually case vignettes (little summaries). As a professional service firm/practitioner school we are concerned that these diluted versions provide no learning or indeed may lead to misinterpretation.

• But come and talk to us if you want to know more...................

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EMPLOYEE ENGAGEMENT

Employee engagement is an ‘outcome-based’ concept. It is the term used to describe the degree to which employees can be ascribed as ‘aligned’ and ‘committed’ to an organisation such that they are at their most productive.

VaLUENTiS International School of HCM 2006

• The term employee engagement can mean many different things depending whom you ask

• The term is often used as a catch-all phrase (not unusual in HR)• The danger is that it can become meaningless unless certain rigour

is applied

Many use the term with ‘initiative’ on the end.

We were the first to define EE as an outcome based concept linking alignment and commitment with productivity rather than some of the more esoteric definitions around.......

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Employee engagement initiatives: 6 key steps

1. It starts with organisation context & communications2. Analysis using data3. Interpretation (factor analysis)4. Implementation plan5. Execution/evaluation6. Embedded practice

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HIGH

Hu

man

cap

ital

man

ag

em

en

t exp

ert

ise

LOW HIGHSurvey design & measurement

expertise

MYOPIC

UNFOCUSEDBLIND

20/20 foresight

Employee survey expertise model

Most employee engagement initiatives (whether as a one-off or as part of continued embedded practice) need some form of data for analysis to provide a robust plan of implementation.

Our prolonged experience and knowledge in the employee engagement field has led us to establishing a model - a ‘classic 2x2 model’ (there always has to be one in a presentation from a reputable school!!) which describes the two crucial aspects to good survey construct/instrument design..........

Explain each quadrant.......

How many of you do surveys?

Those of you with a nervous disposition may want to look away now..............

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HIGH

Hu

man

cap

ital

man

ag

em

en

t exp

ert

ise

LOW HIGHSurvey design & measurement expertise

MYOPIC

Result: misleading or

erroneous interpretation

UNFOCUSED

Limited insight due to limitations

of HCM knowledge

BLIND

20/20 foresight

Result: organisation has sufficient in-

depth, robust knowledge to act

upon

Result: end up with ‘garbage in-

garbage out’ syndrome

NOT INCLUDED IN PRESENTATION (explain verbal)

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HIGH

Hu

man

cap

ital

man

ag

em

en

t exp

ert

ise

LOW HIGHSurvey design & measurement expertise

MYOPIC

Result: misleading or

erroneous interpretation

UNFOCUSED

Limited insight due to limitations

of HCM knowledge

BLIND

20/20 foresight

Result: organisation has sufficient in-

depth, robust knowledge to act

upon

Result: end up with ‘garbage in-

garbage out’ syndrome

16%

25%51%

8%

Based on our current survey evaluation database (over 150 surveys).

It’s worrying isn’t it?

What’s more concerning is that the more we add to the sample the less the percentage in the top right.......

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Thus information gleaned from poorly designed surveys can lead nowhere.....

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Productivity and organisational performance: the collective individual effort

Higher employee

engagement

Higherproductivity



Reminder of core theme......

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Em

plo

yee

engag

emen

t

Organisation engagement

400

450

500

550

600

650

700

750

800

400 450 500 550 600 650 700 750 800

The correlation between EE and OE

Based on client sample data

Evidence so far shows some correlation between HCM effectiveness and EE though we are collecting more data all of the time........

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The original Sears model

Internal service quality

Internal service quality

Employee SatisfactionEmployee

SatisfactionExternal Service Value

External Service Value

Customer SatisfactionCustomer

SatisfactionCustomer

LoyaltyCustomer

Loyalty

Revenue Growth

Revenue Growth

ProfitabilityProfitability

Employee Retention

Employee Retention

Employee ProductivityEmployee

Productivity

Putting the Service-Profit chain to workHeskett, Jones, Loveman, Sasser Jr & SchlesingerHarvard Business Review Mar-Apr 1994

Some of you may have come across the Sears model. In some recentconversations with clients this has come up.The problem is its dead. We’ve moved on.The reason being that this model only ever described a certain scenario i.e. B2C retail and also only in a frontline customer service aspect. Though at the time it was groundbreaking stuff – the problem has been it is too often misapplied in different organisational settings. For example, satisfaction is no longer deemed sufficient and it is very scenario specific.

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The different ways to evaluate performance…

Human Capital

Practices

Human Capital

Practices

External Value

Proposition

External Value

Proposition


Satisfaction

Customer Loyalty

Customer Loyalty

Revenue Growth

Revenue Growth


Employee Retention

Employee Retention

Individual/ team

Productivity

Individual/ team

Productivity

‘Local’Management

‘Local’Management

Cost controlCost control

ComplianceCompliance

Portfolio mixPortfolio mix

X-sellingX-selling

ServiceService

Work valuesWork values

Line-of-sightLine-of-sight

DevelopmentDevelopment

RewardReward

Work environmentWork environment

Employee EngagementEmployee

Engagement

Leadership &

governance

Leadership &

governance

Shareholder value

Shareholder valueEmployer

brandEmployer

brand

© VaLUENTiS VB-HR™ HC Analytics methodology: Bank retail operations

Performance:The Sears model has moved on..........

So we’ve moved on to this. More sophisticated mapping – more complex –unfortunately yes but it doesn’t mean we can’t simplify the message.

This is one of many models. I read somewhere recently about the possibility of the existence of 10500 universes. The number of potential productivity/performance models would appear to be of a similar number. The point is as to which one(s) are most appropriate?

For example we’ve around 50 plus just for starters.........

One point to mention is be very, very careful of linking any notion of shareholder value directly to engagement or people management practice. It is not that simple and it risks ridicule as a number of our previous reports have stated. And, any way, there are many private and public sector organisations to which it is irrelevant.

These can go as far as you want to – the point is appropriateness and practical application. FULL STOP.

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Secrets of ‘success’ from the frontline

• Reducing absenteeismStop reporting it!

• Improving retention ratesStop hiring!

• Reduce turnoverClassify all exits as sabbatical!

• Improving Total FTE to HR FTE ratioFire your HR staff!

• Improve your profit per FTEFire everybody and rehire as contractors!

• Improving overall employee engagement scoreGet rid of all your employees except managers!

Now I get asked from both clients and conference goers what are some quick-wins, takeaways and any other term we use to describe some free information. So here’s a few for you – all have been suggested at some point on the front-line.

EXPLANATIONAbsenteeism can go up as a result of intervention or it can be easily manipulated.Turnover is higher in the first two years of employment at many organisationsYes - changing the coding can be very helpful and another example of potential ‘gaming’Profit per FTE (and revenue per FTE) More potential gaming with a badly flawed metrics (as we have stated several times in print)Managers always seem to score higher in employee engagement surveys.

The point of this slide is that•Use of a single metric or group of metrics is very limited and needs to be used with caution. They can be gamed. •There also some unintended consequences of intervention if not identified at the start.•Metrics of this nature are extremely one dimensional and on their own provide very little insight without context.•And if you treat something related to people management too simply it normally comes back to bite you.......

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The HR Function Value Proposition

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The HR function is at the heart of this

trade-off.

Higher employee

engagement

Higherproductivity



Organisations have a trade-off in terms of optimising performance against investment in effective human capital management practice.

The HR function – a crucial role in the trade-off (remember bang for buck at the start).

It’s also a very challenging role!

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rating

• Why is it an organisation priority?• Where/how do we allocate HR function

spend for best return/trade-off?• What REAL difference does it make?

What shall we do in HR today?

Multiple options and priorities. Multiple ways in which to spend. Multiple ways in which the organisation doesn’t necessarily benefit.

Multiple ways for HR to get tied up in internal affairs as opposed to providing value (however it is defined and measured).

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HR FUNCTIONS HAVE

CUSTOMERS

WRONG!Now just an observation.......

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HR FUNCTIONS HAVE CUSTOMER-AGENTS;

MANAGERS AND EMPLOYEES ARE BOTH

CUSTOMERS AND AGENTS

38

HR as a portfolio of service & compliance activities

Complexity of InteractionComplexity of InteractionLow

MarginalValue Added

High

HighValue Add

Nature ofActivity

Transaction Services

Employment ServicesEmployment Services

Professional& AdvisoryServices

Corporate GovernanceServices

Professional& AdvisoryServices

Corporate GovernanceServices

Transaction Services Flex-Benefit Policy

Record Maintenance

Wage & Employment

Verification

Expense disbursement

Training Administration

Time reportingPayroll

Recruitment

Reference checking

Pension Administration

Employee Assistance

Programmes

Employee Relations

& Administration

Internal Control/Audit

Total Reward Design

Value Measurement

OverallHR Strategy

Strategic Workforce

Planning & Analysis

Case Mgt.

Employer brandStrategy

Job evaluation

Assessment centres

Quality Assurance

Health & Safety

Training Administration

Health Care Administration

Tax reporting

HR Value Proposition

Legal advice


Simplified Illustration

Here’s an illustrative curve that people seem to resonate with.......

VALUE HERE IS NOT SHAREHOLDER VALUE

We find that there are a number of different perspectives from a ‘value’ perspective linked to performance.

For example:

•Improving individual/team performance•Aiding & enhancing decision making•Minimising loss of productivity, disruption, legal claims•Ensuring efficient process•Fulfilling (internal) client need•Improving employee relations•Communications

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Global HR Profiler™© VaLUENTiS 2003-8

Hu

man

Cap

ital M

an

ag

em

en

tA

ctiv

ity-D

eli

very

map

3.11Managing

ASP/software/ Outsource Providers

4.11Managing ASP/ERP/ software/

Outsource Providers

1.6HR Policy

2.5Organisation Restructure/

Change/ Development

3.1Workforce Planning

1.7HR Performance/ Strategy Review/

Audit

1.1Employer brand

4.1Needs

Assessment

6.1Total Reward Programme

7.1Employee

Communications

8.2Risk Assessment

1.2HR Value

Proposition

1.3HR Delivery

Structure

1.4HC Reporting

1.5HR Capability

10.9Reporting/ Interfaces

2.6Acquisition/

Divestiture/ Start-up Due Diligence/

Support

2.1Organisational

Design/ Capability Planning –BU Level

2.2Organisational

Design/ Capability Planning –

Multi-country Level

2.3Organisational

Design/ Capability Planning –

Global Level

2.4Job

Classification/ Evaluation

3.2Candidate

Identification Services

3.3Job Profile Services/

Requisition Processing

3.4Candidate Selection

3.5Temporary and

Contractor Staffing

3.6General

Employment Services

3.7Relocation

3.8Outplacement

Services

3.9Employment Law

Services

3.10Consulting Line

Managers On Staffing Issues

4.2General Training

Design, Development and

Delivery

4.3Training &

Development Management

4.4Technical/ Functional/

Policy & Procedure Training

4.5Employee Induction/ Orientation

4.6Competencies/

Skills Model Development And

Assessment

4.7Leadership/ Management Development

4.8Executive

Development

4.9Career

Development

4.10Consulting On

Managerial Issues

5.1Performance

(Talent) Management Assessment

5.2Performance

(Talent) Management Development

5.3Performance

Reviews

5.4Succession

(Talent) Management

6.2Wage And Salary

Management

6.3Bonus/Incentive/

Stock Options Compensation

6.4Senior/ Executive

Compensation

7.2Benefits

7.3Attendance/

Leave Of Absence/ Exit

Interviews

7.4Return-To-Work

and Job Accommodation

8.1Risk

Management/ Regulatory

Compliance/ Security

9.1HRIS Strategy

9.2HRIS Planning

10.1Payroll

10.2Employee/ Manager

Interaction/ Problem

Resolution

10.3Time Reporting

10.6Tax Reporting/

Audit

10.7Employee

Reimbursement

10.8Statutory Benefits/

Miscellaneous Admin

10.10Managing Outsource Providers

1.8Managing External

Consultants/ Outsource Providers



5.5Attendance

Management

6.5Expatriate

Compensation

7.5Company

Policies And Procedures

8.3Accident

Prevention and Training

Programmes

8.4Health/Medical Programmes

9.3HRIS Support

9.4Employee

Research & Modelling

5.6Employee Coaching

6.6Compensation Analysis/Pay

review

6.7Healthcare/

Welfare/ Statutory/ Other

Benefit Programmes

7.6Collective

Bargaining/ Negotiating/ Consultative Processes

7.7Work Practices

For Represented Employees

8.5Incident Tracking

and Reporting



9.5Benchmarking

9.6Measurement and Reporting

10.4Special Pay,

Adjustments And Deductions

10.5Payroll

Accounting/ Recon/ Manual Calculations & Disbursement

5.7Employee

Counselling/ Case

management

5.8PM Compliance

Support

6.8Pension

Management

6.9Retirement Planning/

Counselling And Administration

7.8Conflict and

Issue Resolution

7.9Corporate/ Community

Social Responsibility

9.7Employee

Records/Case management/Dat

a Maintenance


9.9Managing


5.10Managing ASP/ERP/ Software Providers

5.9Consulting To Line Managers

On Performance Issues



7.10Government/ Legislative

Issues


Consultants

HR GOVERNANCE

ORGANISATION DESIGN

RESOURCING TRAINING & DEVELOPMENT

PERFORMANCE (TALENT)

MANAGEMENTREWARD

EMPLOYEE RELATIONS

& COMMS

EMPLOYEE HEALTH &

SAFETY

HRIS & MEASURE-

MENTPAYROLL

Here for reference only. We have ‘laminates’ available at the stand.

Here’s the entirety of human capital management (cluster) activities for an organisation (in a two-dimensional format). The HR function has the remit on all or some of these depending upon the organisation and function positioning/objectives as mentioned previously.

This map has been borne out of many previous client projects and is now ‘standard’ and can be used in many different ways from budget allocation/spend analysis through to delivery scorecards and process mapping. We have an accompanying 500-page manual. It is interesting to note that we also have over 1500 related metrics if you want to know.

And the reason why is...

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PRIMARY HR PROCESS LINKAGES 582

SECONDARY HR PROCESS

LINKAGES 3,642

3.3

2.3

3.4

4.24.4

4.5

2.2

2.4

2.1

2.5 3.5

1.2

1.3

1.4

5.4

3.1

Because in reality it is 3-dimensional. Imagine it as a ‘globe’ with many connectors connecting all of the different activities.

We have been fortunate to have conducted a number of related projects over time and map these linkages. And as you can see there are many

EXPLAIN PRIMARY AND SECONDARY.

It is why shared service and outsourcing projects become far more complicated than people first imagine. Changing one link can affect a number of others.It also points out key risks with delivery components. Remember IT is just an enabler nothing more.

I’m afraid its just the way it is......

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Rel

ativ

e Val

ue

funct

ion

(lo

gari

thm

ic s

cale

)

High

Low

Low High

Relative HR Resource-cost (spend)

OD5.1%

5.3% REW

9.4%HRIS

7.9%

16.1%5.9%

22.4%10.9%

6.7%

10.0%

P(T)MRES

HRG

T&D

ER&C

EH&SPAY

HR functional spend against value function

Source: VB-HR™ database

Here’s some live data from our database on spend....

The problem is even with a standard template such as that provided by the profiler does not necessarily provide us with the full information. In fact the real problem for organisations is.....

42

HR spend

What lies beneath?

Some of our projects have uncovered spend of on average between 30% to 70% more than that first reported (and that still doesn’t include certain outsourcing deals). It’s amazing what a few empty columns on a spreadsheet can do.

This isn’t just the HR function’s issue – its an organisational one. I find it odd that given the organisational spend on people remuneration and the spend on people management support that it is not tracked more diligently. The implications are obvious.

And I find it very bizarre when you consider that organisations go to great lengths to put a sticker on a plant pot for asset recording, for example. Can somebody provide me with an answer or should I find my own way to the asylum...............

43

Plus this...The real ‘HR Value Curve’

Value contribution

(per unit)

HR ‘Activity’ (The ’93’ as defined by VB-HR™ Profiler)

Here’s a real ‘live’ client curve....

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HR and Line ‘value dissonance’

‘Value dissonance’

Value contribution

(per unit)

HR ‘Activity’ (The ’93’ as defined by VB-HR™ Profiler)

Means that HR can close the expectation gap...

Getting HR’s view of the world and line’s view of the world can be very revealing and help to close the expectation gap (or ‘organisational blindspots’) on particular people management activities.

45

HR: The 2D versus 3D question....

Value/performance outcome

Cost

HR Activity

‘Value-based Effectiveness’

Cost

HR Activity

‘Cost efficiency’

But the big question for HR functions and their respective value propositions is the way in which the function evaluates its contribution (or is evaluated) and that of people management practice in general.

Many still only use a two dimensional framework (sometimes its only one of the dimensions) in terms of activity (input) and cost (input).

THERE’S NO OUTPUT OR EFFECTIVENESS DIMENSION (the third dimension).

This leaves HR functions vulnerable. I have said on many occasions that if the answer to the question for HR to implement change was ‘to reduce costs’, what does that say about the function’s value proposition?

It says it doesn’t have one save for being an expense item. If we are using a yardstick like HR FTE/Total FTE (as many do) why not just default to getting rid of everybody in HR bar one. You can have ratios of 1 to 10,000,000 if you want. The question is what does the organisation get for it?

If the measure of HR’s contribution defaults to ‘reduce costs’ we don’t really have a profession. So something has to change............

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HR Operational Excellence Clock

Financial acumen

Measurement(Analytics

and reporting)

People

Technology

Process(Activity/task/

system)

Structure(Delivery model)

Value proposition(mandate)

Governance(HR strategy

andleadership)

World Class HR

(Capability &

Performance)

This is just a reference slideWorld class HR

There are EIGHT key capabilities of HR functional excellence. An HR function achieves world class performance through mastering each capability. An interesting note, we see all the time, is the skewing of focus on structure and process (mainly erroneously technology driven) yet not so much on the value proposition in terms of delivery expectations etc.......Interesting question for you?How many of you have a recruitment department/unit?How many of you have a retention department/unit?It normally proves the point. They’re both pretty key so why is one there, when the other isn’t?

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Which leads us to the perennial ‘RINSE & SPIN’ question of HR’s operating structure.

So much attention is given to the structure, shared services, outsourcing, business partners, the ‘three legged stool’ and yet these are just mere enablers for delivery. The key is the delivery component which is derived through the value proposition and from the exercises I have already shown you.

To give you a parallel with marketing and customers.

It would be like marketing spending all of their time focusing on whether they should operate on a product-service line or geographic line or whatever and spending no time at all on what the organisation customers need, new product development, data analytics and external market communication.

How long would that organisation exist? (not very is the answer).

A final note: strategic HR doesn’t happen because you outsource the so-called transactional stuff. It is just very clever marketing.

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Strategic Human Capital Management

49

SIX key components...

1. Macro-framework2. Due diligent analysis3. Measurement/evaluation4. Combination of people

strategies5. Front-line application 6. Identifiable value

propositions in terms of people management

which...• Leads to successful

execution

Strategic HCM

N.B. Strategic HCM may have nothing to do with the current HR function

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Strategic HCM macro-framework

Human capital

Market/ stakeholder

recognition of HC value

HC Replacement propensity

Leveraged organisation architecture

Seen as barrier to entry or investment needed to play

The contribution of HC to an organisation’sintangible value

Threat of particular jobs/roles substitute or obsolescence

Bargaining power

Talent ‘rivalry’, ‘org’ performance

and competitive advantage amongst existing

firms

34 PREMISES to provide competitive advantage (see journal article). An analysis can be undertaken to provide an organisation with the strategic understanding of its context vis-à-vis the market-place.

Talent rivalry, ‘org’ performance and competitive advantageThe intensity created by competing organisations, their individual HCM strategies and market positioning, their EB, EVP and subsequent delivery on EVP expectation through measures such as employee/ organisation engagement and HC related performance.

Human capitalPool of talent that exists dependent upon mix of education, experience, specificity of skills, location

Organisation architecture leverageThe sophistication of HCM architecture and organisation design across the performance-reward-decision rights axes to provide leverage

Intangible value (HC derived)The value derivative of HC contribution –dependent upon business model, subsequent identity of ‘contribution streams’ and operational role specificity

HC replacement propensityThe degree to which jobs/roles can be replaced by technology or rendered redundant through obsolescence or ‘at risk’ of adverse organisation performance

51

Human capital

Market/ stakeholder

recognition of HC value

HC Replacement propensity

Leveraged organisation architecture

Key strategies:•Resourcing•Employer Brand

Supporting strategies:•Diversity•Employee Centricity•HR Governance•Retention•Talent Management•Training & Development

Talent ‘rivalry’, ‘org’ performance

and competitive advantage amongst existing

firms

Key strategies: •Organisation design•HR operational excellence

Supporting strategies: •HR governance•Performance orientation

Supporting strategies:•Organisation Design•Resourcing•Retention•Training & Development

Key strategies:•HR Governance•Performance Orientation

Supporting strategies:•Employer Brand•HR operational excellence•Leadership

Key strategies:•Employee Engagement•Leadership•Retention•Talent Management

Supporting strategies:•Employee Centricity•Employer Brand•HR Governance•Organisation Climate•Organisation Communications•Organisation design•Performance Orientation•Resourcing•Reward•Training & Development

Strategic HCM: Key operational strategies

To join it all together. Each of the areas has a relevant HR operational strategy (combination of) derived.

You may have spotted the link back to the components of the RADAR clock earlier as these are the same areas of human capital management effectiveness.

Thus organisations and their HR functions have an integrated, strategic framework which links down to actual front-line execution in much the same way that a marketing strategy and plan is derived and ,also, similar to an organisation’s business (enterprise) strategy and competitive advantage is derived in the classical sense.

52

Strategic HCM Intelligence

•Absenteeism•Turnover (voluntary)•Turnover (involuntary)•Recruitment cost per FTE•Time to fill•Training days per FTE•Training spend per FTE•Revenue per FTE•Profit per FTE•HR FTE: FTE•Employee costs per FTE•HR costs per FTE•% females in senior management roles

5.2%8.6%1.8%£12,56938 days3.5£871£365,12

1£67,1191:112£27,469£135623%

•HCI (used with revenue per FTE to calculate HCIR per FTE)•HR budget (adjusted using standard template) •MD spend•Internal/external management position fill ratio•No of industrial tribunals•% union membership•HR service delivery (IT mix)Plus portfolio of tertiary indicators which are more context/organisation specific

•HR spend per FTE (adjusted using standard template)•Formal job offer successPlus portfolio of tertiary indicators which are more context/organisation specific

•HC leverage•HCIR per FTE

•HC Investment ratio•Employee engagement

•Voluntary turnover1

•Absenteeism1

•Accident/injury rate

•VB-HR™ Rating

•HC Performance

•HCI (used with revenue per FTE to calculate HCIR per FTE)•HR budget (adjusted using standard template) •MD spend•Internal/external management position fill ratio•No of industrial tribunals•% union membership•HR service delivery (IT mix)Plus portfolio of tertiary indicators which are more context/organisation specific

•HR spend per FTE (adjusted using standard template)•Formal job offer successPlus portfolio of tertiary indicators which are more context/organisation specific

•HC leverage•HCIR per FTE

•HC Investment ratio•Employee engagement

•Voluntary turnover1

•Absenteeism1

•Accident/injury rate

•VB-HR™ Rating

•HC Performance

Business objectives awareness

Role ‘fit’


Feedback

Capability

Line-of-Sight

Cultural elements

Leadership

Communication

Resources

Local management

Physical environment

Work Environment

The VB-HR™ Employee Engagement Framework

Base salary

Bonus/incentives

Benefits

Shares

Recognition

Promotional aspects

Reward (equity) Development

Career progression

Competencies

Succession planning

Job/ Role architecture

Training/ Learning

Coaching/ Mentoring

OrganisationalArchitectureOrganisation design

Performance management system

Rewards systemDecision rightsWork values

16.1

12.8

14.6

14.2

14.5

14.3

13.1

13.0

13.7

12.9

Business objectives awareness

Role ‘fit’


Feedback

Capability

Line-of-Sight

Cultural elements

Leadership

Communication

Resources

Local management

Physical environment

Work Environment

The VB-HR™ Employee Engagement Framework

Base salary

Bonus/incentives

Benefits

Shares

Recognition

Promotional aspects

Reward (equity) Development

Career progression

Competencies

Succession planning

Job/ Role architecture

Training/ Learning

Coaching/ Mentoring

OrganisationalArchitectureOrganisation design

Performance management system

Rewards systemDecision rightsWork values

16.1

12.8

14.6

14.2

14.5

14.3

13.1

13.0

13.7

12.9

DIVERSITY

EMPLOYEECENTRICITY

EMPLOYERBRAND

HRGOVERNANCE


LEADERSHIP


COMMUNICATIONS

ORGANISATIONDESIGN


RESOURCING

RETENTION

REWARD

TALENTMANAGEMENT


79.6+

81.3+

74.2

67.4+

61.5

43.1 +

48.7

64.2

62.859.460.3+

68.4

65.759.9 41.6

DIVERSITY

EMPLOYEECENTRICITY

EMPLOYERBRAND

HRGOVERNANCE


LEADERSHIP


COMMUNICATIONS

ORGANISATIONDESIGN


RESOURCING

RETENTION

REWARD

TALENTMANAGEMENT


79.6+

81.3+

74.2

67.4+

61.5

43.1 +

48.7

64.2

62.859.460.3+

68.4

65.759.9 41.6

Human Capital

Practices

Human Capital

Practices

External Value

Proposition

External Value

Proposition


Satisfaction

Customer Loyalty

Customer Loyalty

Revenue Growth

Revenue Growth


Employee Retention

Employee Retention

Individual/ team

Productivity

Individual/ team

Productivity

‘Local’ Management





X-sellingX-selling

ServiceService




RewardReward



Engagement

Leadership &

governance

Leadership &

governance

Shareholder value


brandEmployer

brand

Human Capital

Practices

Human Capital

Practices

External Value

Proposition

External Value

Proposition


Satisfaction

Customer Loyalty

Customer Loyalty

Revenue Growth

Revenue Growth


Employee Retention

Employee Retention

Individual/ team

Productivity

Individual/ team

Productivity






X-sellingX-selling

ServiceService




RewardReward



Engagement

Leadership &

governance

Leadership &

governance

Shareholder value


brandEmployer

brand

VB-HR™ Rating

Workforce Intelligence

HR Strategy

OrganisationalHCMCapital

B B R

BBRCCCCCC

BBRCCCB

HCMArchitecture

BBRBB

Management Employees

BBRCCCB

BBRCCCCCC

HR Customer-agency

BB

HR Capability

BB

HumanCapital

HR Functional Capital


Overallranking

AAAAAABBBBBBCCCCCC

R

rmin

r

RR

RRRB RB

HR Procurement

RBB

RBBBB

BB

R

EFFECTIVENESS

MAINTENANCE

RISK

VB-HR™ Rating

Workforce Intelligence

HR Strategy

OrganisationalHCMCapital

B B R

BBRCCCCCC

BBRCCCB

HCMArchitecture

BBRBB

Management Employees

BBRCCCB

BBRCCCCCC

HR Customer-agency

BB

HR Capability

BB

HumanCapital

HR Functional Capital


Overallranking

AAAAAABBBBBBCCCCCC

R

rmin

r

RR

RRRB RB

HR Procurement

RBB

RBBBB

BB

R

EFFECTIVENESS

MAINTENANCE

RISK

BB

BB

R

EFFECTIVENESS

MAINTENANCE

RISK

3.11Managing


4.11Managing

ASP/ERP/software/Outsource Providers

1.6HR Policy


Change/ Development


1.7HR

Performance/ Strategy

Review/ Audit

1.1Employer

brand4.1

Needs Assessment


7.1Employee

Communications

8.2Risk

Assessment1.2


1.3HR Delivery

Structure

1.4HC Reporting

1.5HR Capability


2.6Acquisition/ Divestiture/

Start-up Due Diligence/ Support

2.1Organisationa

l Design/ Capability Planning –

Business Unit Level2.2

Organisational Design/

Capability Planning –

Multi-country Level2.3



Global Level

2.4Job


3.2Candidate





3.5Temporary

and Contractor

Staffing

3.6General

Employment Services

3.7Relocation

3.8Outplacement

Services

3.9Employment Law Services

3.10Consulting

Line Managers On

Staffing Issues

4.2General Training Design,

Development and Delivery

4.3Training &




4.5Employee Induction/

Orientation

4.6Competencies/ Skills Model Development

And Assessment

4.7Leadership/

Management Development

4.8Executive

Development

4.9Career

Development

4.10Consulting On

Managerial Issues

5.1Performance


5.2Performance


5.3Performance

Reviews

5.4Succession

(Talent) Management

6.2Wage And

Salary Management

6.3Bonus/Incenti

ve/ Stock Options

Compensation

6.4Senior/

Executive Compensatio

n

7.2Benefits

7.3Attendance/


Interviews

7.4Return-To-

Work and Job Accommodati

on

8.1Risk



9.1HRIS Strategy

9.2HRIS

Planning

10.1Payroll



Resolution

10.3Time

Reporting

10.6Tax

Reporting/ Audit

10.7Employee

Reimbursement


Miscellaneous Admin






5.5Attendance

Management

6.5Expatriate

Compensation

7.5Company


8.3Accident

Prevention and Training Programmes


9.3HRIS Support

9.4Employee



6.6Compensatio

n Analysis/Pay

review

6.7Healthcare/

Welfare/ Statutory/

Other Benefit Programmes

7.6Collective


7.7Work

Practices For Represented Employees

8.5Incident

Tracking and Reporting



9.5Benchmarkin

g


10.4Special Pay, Adjustments

And Deductions

10.5Payroll

Accounting/ Recon/ Manual

Calculations &

Disbursement

5.7Employee

Counselling/ Case

management

5.8PM

Compliance Support

6.8Pension

Management


Counselling And

Administration

7.8Conflict and

Issue Resolution



9.7Employee

Records/Case management/

Data Maintenance


9.9Managing



5.9Consulting To

Line Managers On Performance

Issues




Issues


Consultants

HR GOVERNANCE

ORGANISATION DESIGN



MANAGEMENTREWARD

EMPLOYEE RELATIONS

& COMMS

EMPLOYEE HEALTH &

SAFETY

HRIS & MEASURE-

MENTPAYROLL

3.11Managing


4.11Managing

ASP/ERP/software/Outsource Providers

1.6HR Policy


Change/ Development


1.7HR

Performance/ Strategy

Review/ Audit

1.1Employer

brand4.1

Needs Assessment


7.1Employee

Communications

8.2Risk

Assessment1.2


1.3HR Delivery

Structure

1.4HC Reporting

1.5HR Capability


2.6Acquisition/ Divestiture/

Start-up Due Diligence/ Support

2.1Organisationa

l Design/ Capability Planning –

Business Unit Level2.2



Multi-country Level2.3



Global Level

2.4Job


3.2Candidate





3.5Temporary

and Contractor

Staffing

3.6General

Employment Services

3.7Relocation

3.8Outplacement

Services

3.9Employment Law Services

3.10Consulting

Line Managers On

Staffing Issues

4.2General Training Design,

Development and Delivery

4.3Training &




4.5Employee Induction/

Orientation

4.6Competencies/ Skills Model Development

And Assessment

4.7Leadership/

Management Development

4.8Executive

Development

4.9Career

Development

4.10Consulting On

Managerial Issues

5.1Performance


5.2Performance


5.3Performance

Reviews

5.4Succession

(Talent) Management

6.2Wage And

Salary Management

6.3Bonus/Incenti

ve/ Stock Options

Compensation

6.4Senior/

Executive Compensatio

n

7.2Benefits

7.3Attendance/


Interviews

7.4Return-To-

Work and Job Accommodati

on

8.1Risk



9.1HRIS Strategy

9.2HRIS

Planning

10.1Payroll



Resolution

10.3Time

Reporting

10.6Tax

Reporting/ Audit

10.7Employee

Reimbursement


Miscellaneous Admin






5.5Attendance

Management

6.5Expatriate

Compensation

7.5Company


8.3Accident

Prevention and Training Programmes


9.3HRIS Support

9.4Employee



6.6Compensatio

n Analysis/Pay

review

6.7Healthcare/

Welfare/ Statutory/

Other Benefit Programmes

7.6Collective


7.7Work

Practices For Represented Employees

8.5Incident

Tracking and Reporting



9.5Benchmarkin

g


10.4Special Pay, Adjustments

And Deductions

10.5Payroll

Accounting/ Recon/ Manual

Calculations &

Disbursement

5.7Employee

Counselling/ Case

management

5.8PM

Compliance Support

6.8Pension

Management


Counselling And

Administration

7.8Conflict and

Issue Resolution



9.7Employee

Records/Case management/

Data Maintenance


9.9Managing



5.9Consulting To

Line Managers On Performance

Issues




Issues


Consultants

HR GOVERNANCE

ORGANISATION DESIGN



MANAGEMENTREWARD

EMPLOYEE RELATIONS

& COMMS

EMPLOYEE HEALTH &

SAFETY

HRIS & MEASURE-

MENTPAYROLL

HC Productivity Statement

CONTRACTED RESOURCE ye 31st Dec 2005 ye 31st Dec 2004

Total number of FTE days contracted in year 3,530,340 3,401,289

Total number of FTE vacation days taken in year

336,987 333,144

TOTAL NUMBER OF CONTRACTED FTE DAYS AVAILABLE

3,193,353 3,068,145

WORK RESOURCE ADJUSTMENT

FTE days gained through recorded overtime work (+)

61,932 65,371

FTE days lost to illness (-) 18,431 19,016

FTE days lost to work-related illness/injury (-) 2,773 2,816

FTE days lost to industrial action (-) 249 167

FTE days recorded as lost under miscellaneous (-)

763 1,075

ACTUAL NUMBER OF CONTRACTED FTE DAYS WORKED

3,233,069 3,110,442

PRODUCTIVITY

HCI*Revenue per FTE day (optimal) £192.96 £185.42

HCI*Revenue per FTE day (actual) £190.59 £182.90

HCI*Revenue per FTE day differential £2.37 £2.52

EMPLOYER-EMPLOYEE RELATED INDICES

Employee engagement index 69.2 68.5

Employer brand index 71.3 71.0

HUMAN CAPITAL MANAGEMENT INDEX

VB-HR Rating BB-BB-R BB-B-R

HC Performance Sustaining + Sustaining +

HC Productivity Statement

CONTRACTED RESOURCE ye 31st Dec 2005 ye 31st Dec 2004

Total number of FTE days contracted in year 3,530,340 3,401,289

Total number of FTE vacation days taken in year

336,987 333,144

TOTAL NUMBER OF CONTRACTED FTE DAYS AVAILABLE

3,193,353 3,068,145

WORK RESOURCE ADJUSTMENT

FTE days gained through recorded overtime work (+)

61,932 65,371

FTE days lost to illness (-) 18,431 19,016

FTE days lost to work-related illness/injury (-) 2,773 2,816

FTE days lost to industrial action (-) 249 167

FTE days recorded as lost under miscellaneous (-)

763 1,075

ACTUAL NUMBER OF CONTRACTED FTE DAYS WORKED

3,233,069 3,110,442

PRODUCTIVITY

HCI*Revenue per FTE day (optimal) £192.96 £185.42

HCI*Revenue per FTE day (actual) £190.59 £182.90

HCI*Revenue per FTE day differential £2.37 £2.52

EMPLOYER-EMPLOYEE RELATED INDICES

Employee engagement index 69.2 68.5

Employer brand index 71.3 71.0

HUMAN CAPITAL MANAGEMENT INDEX

VB-HR Rating BB-BB-R BB-B-R

HC Performance Sustaining + Sustaining +

Human Capital Operating Statement

ye 31st Dec 2005 ye 31st Dec 2004

OPERATING INCOME %

Revenue (£000s) 1,057,016 1,015,020

FTEs 16,352 16,047

Revenue per FTE 64,641 63,253

OPERATING COSTS

Total operating costs (£000s) 904,371 815,094

People costs (£000s) 532,181 464,317

Human Capital Intensity (HCI) 58.85 56.96

OPERATING INCOME ATTRIBUTABLE TO HC (HCIR per FTE)

38,041

36,029

£ % £ %

ANCILLARY PEOPLE COSTS (APC)

Training & Development costs (£000s) 8,176 7,342

Recruitment costs (£000s) 2,314 2,954

Health & Safety costs (£000s) 740 691

HR functional and related costs (£000s) 6,254 6,879

Outplacement costs (£000s) 256 53

Total 17,740 17,919

HC LEVERAGE (HCIR/APC per FTE) 35.06 32.26

Human Capital Operating Statement

ye 31st Dec 2005 ye 31st Dec 2004

OPERATING INCOME %

Revenue (£000s) 1,057,016 1,015,020

FTEs 16,352 16,047

Revenue per FTE 64,641 63,253

OPERATING COSTS

Total operating costs (£000s) 904,371 815,094

People costs (£000s) 532,181 464,317

Human Capital Intensity (HCI) 58.85 56.96

OPERATING INCOME ATTRIBUTABLE TO HC (HCIR per FTE)

38,041

36,029

£ % £ %

ANCILLARY PEOPLE COSTS (APC)

Training & Development costs (£000s) 8,176 7,342

Recruitment costs (£000s) 2,314 2,954

Health & Safety costs (£000s) 740 691

HR functional and related costs (£000s) 6,254 6,879

Outplacement costs (£000s) 256 53

Total 17,740 17,919

HC LEVERAGE (HCIR/APC per FTE) 35.06 32.26

PeopleFlow® Statement

STAFFING ye 31st Dec 2005 ye 31st Dec 2004

%

No of full-time staff at start of year 14,011 13,865

Number of part-time staff at start of year (FTE eqv)

1,932 1,491

Number of other at start of year (FTE eqv) 104 175

Full time equivalents (FTEs) at start of year

16,047 15,531

STAFFING MOVEMENT % £ %

Number of FTEs recruited in period (+) 1,427 1,874

Number of acquisitioned FTEs during period (+) - -

1,427 1,874

Number of voluntary leavers (FTE) in period (-) 996 1,065

Number of FTEs made redundant or outplaced in period (-)

35 217

Number of FTE retirements in period (-) 91 76

Number of FTEs outsourced in period (-) -

Full time equivalents (FTEs) at end of year 16,352 16,047

STAFFING MISCELLANEOUS

Mean tenure (years) 5.2 5.3

Mean age of workforce 34 34

Retirement population 5,391 5,304

PeopleFlow® Statement

STAFFING ye 31st Dec 2005 ye 31st Dec 2004

%

No of full-time staff at start of year 14,011 13,865

Number of part-time staff at start of year (FTE eqv)

1,932 1,491

Number of other at start of year (FTE eqv) 104 175

Full time equivalents (FTEs) at start of year

16,047 15,531

STAFFING MOVEMENT % £ %

Number of FTEs recruited in period (+) 1,427 1,874

Number of acquisitioned FTEs during period (+) - -

1,427 1,874

Number of voluntary leavers (FTE) in period (-) 996 1,065

Number of FTEs made redundant or outplaced in period (-)

35 217

Number of FTE retirements in period (-) 91 76

Number of FTEs outsourced in period (-) -

Full time equivalents (FTEs) at end of year 16,352 16,047

STAFFING MISCELLANEOUS

Mean tenure (years) 5.2 5.3

Mean age of workforce 34 34

Retirement population 5,391 5,304

Strategic HCM

Intelligence

A combination of methods, starting with the basic...

With that framework comes 360 degree intelligence.

So from a few metrics, •We can derive a more robust and structured measurement framework of tiered (layered) reporting... •Moving through to a an employee engagement scorecard, linking up with the OE RADAR clock shown earlier on effective human capital management practice...•Onto a more sophisticated understanding of the productivity and performance models describing an organisation’s actual business output....(as shown earlier)•Backed up with the HR input profile which can also be used as a system risk scorecard, for example, as much as a resource/spend profile...•Through to a more standardised HC reporting template (either internal or external) – for example the open source GHCRS2006 standards and other Rating outputs.Coming back full circle......

This isn’t a wish list. These are all live to varying degrees in various clients. Interestingly public sector enterprises are taking just as much a lead particularly in the engagement-productivity space.

53

Survey response 1

1. To what extent does the current focus on talent management match current/future organisation priorities?

No answer

Not at all

To some extent

To a reasonable extent

To a large extent

To a great extent

Sample = 66

My thanks to all those who responded to yesterday’s survey on your SPOT-ME devices.

And here are some very interesting charts.......

54

Survey response 2

2. How clear are the HR function’s duties and responsibilities in relation to the corresponding management responsibility vis-à-vis people?

No answer

Not at all

To some extent


To a large extent

To a great extent

55

Survey response 3

3. How much does the organisation utilise employee metrics/analytics/performance data in its management decision-making?

No answer

Not at all

To some extent


To a large extent

To a great extent

56

Survey response 4

4. To what degree is the organisation able to forecast accurately the future shape of the workforce and the available labour pool to determine resourcing needs?

No answer

Not at all

To some extent


To a large extent

To a great extent

57

Survey response 5

5. Can the organisation/HR function provide a robust ‘return on investment’ chart for the current HR spend?

No answer

Not at all

To some extent


To a large extent

To a great extent

58

Survey response 6

6. To what degree has your organisation evaluated the effectiveness of its people management practice using a comparative measurement framework?

No answer

Not at all

To some extent


To a large extent

To a great extent

The charts tell a story....and they seem to concur with our database sample collected from several hundred clients.

If HR functions and their organisations are serious on people management effectiveness then one would expect answers to be in the ‘To a large extent’ and ‘To a great extent’.

The fact that they are in the minority shows the challenge and opportunity thrown down to HR functions.........

59

Time for HR to take the lead

60

Human capital management at the heart of productivity and organisational performance

Higher employee

engagement

Higherproductivity



Reminder slide...

61

HR: The 2D versus 3D question....

Cost

HR Activity

‘Cost efficiency’

Performance outcome/ value

Cost

HR Activity

‘Value-based Effectiveness’

REPEATING SLIDE FOR REFERENCE

HR FUNCTION AS SUPPLY CHAIN HR FUNCTION AS HCM FUNCTION

• Treats measurement as a necessary evil to provide benchmark data .....of little or limited value

• Process and cost data are prevalent even though they ultimately tell you nothing more than you are operationally efficient (which should be a given) or not

• Function in dangerending up knowing more and more about less and less

• Function has peripheral influence (in the main)

• Prone to large-scale outsourcing

• Uses intelligence in its many guises to inform in value appraisal/decision-making

• These include business case design, evaluation of people interventions, setting people strategy, communicating to and educating line managers etc.

• Provides the function with definable and measurable progress/value contribution

• Function improves capability and influence/remit and seen ultimately as key contributor

• Measured use of outsourcing

62

The HCM (HR) Function’s choice...

‘UPGRADE AND RESHAPE’

OR

‘SLASH AND BURN’

The economic climate out there is changing some of the internal dynamics of organisations.

Given the various options, they essentially boil down to two.

The HR function can take the opportunity to ‘upgrade and reshape’ or to ‘slash and burn’.

It hurts when I read announcements such as that by Lloyds Bank that they are slashing their HR function by some 30% (around 280 people) when no discernible employee reductions have taken place (as far as I know)........

63

Einstein once said that.......

“The definition of insanity is doing the same thing over and over again and expecting different results”

Which leads me to Einstein.

My experience is that many organisations, with respect to managing people seem to come very close at times to Einstein’s definition. And that’s a little sad.....thus.....

64

Brave New HR (2.0)

World

I’d like to think that with the thinking and tools available, HRprofessionals through their functions have a clear opportunity.

Therefore I’d like to end my presentation with an upbeat message on the ‘earth theme’ with which I started. It’s now over 500 years since Columbus set sail for the new world on 3rd August 1492 (a trip he was to make several times) with about 90men, and three ships – the Santa Maria, the Niña, and the Pinta.

For me these three ships represent the 3 Dimensions of the HR function’s being:

Activity, Cost, and Performance outcome/value..

WELCOME. WELCOME TO THE BRAVE NEW HR WORLD. THANK YOU......

hr event 7.0 final annotated delegate version · optimising the capabilities and performance of its...

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