valuentis talent mgt & leadership development conference pres221013 final - dist

Nicholas J Higgins, DrHCMI MCMI MSc Fin (LBS) MBA (OBS) CEO, VaLUENTiS Ltd & Dean, International School of Human Capital Management (‘ISHCM’)

Employee Engagement

This version is for print distribution and certain slides from the workshop presentation have been omitted or amended.

All rights reserved. No part of this presentation may be reproduced, translated, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, microfilming recording or otherwise without the express permission of the author.

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© 2013

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‘Celebrating ten years 2003-13’

“As evidence-based management practitioners, our purpose is to enhance effective people management (and its impact on productivity/performance) in organisations, whilst enabling greater individual managerial professionalism.”

Our mission

Rec

entl

y p

ub

lish

ed!

Talent

Management

Part I

Baselines…

The traditional view of employee engagement

contributing to improved organisational

performance...

Higher employee

engagement

Higher productivity

Higher organisation performance

“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 2005

Human capital management practice and

employee engagement contributing to improved

organisational performance (‘POP’ system)

Higher employee

engagement

Higher productivity


More effective 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 2005

Sub-optimal performance, i.e. less than achievable

Or

Sub-optimal costs, i.e. higher than necessary

Or

Both

Impaired Employee Engagement: Impact on individual and team productivity/performance

Organisations and employee engagement:

The ‘4-ball’ practice model

Play down

‘We don’t...’

Play act

‘It’s all about PR…’

Play safe

‘At least we audit/ benchmark...’

Play make

‘We do it…’

The four progressive states of employee engagement

embeddedness in organisations

The ‘Six Pillars’…

EE PLAYBOOK

1. Grounded understanding of Employee Engagement

2. Working definition of Employee Engagement

3. Measurement wisdom

4. Actioning infrastructure

5. Dynamic EE-Performance ‘playbook’

DELETE 6. Competent leadership/management

Little. Limited.

Mostly ephemeral in nature.

Exists in pockets with variation in line management.

Good working knowledge embedded across

organisation.

No definition in use. Most likely borrowed

without any real ownership, or ‘false’ ownership.

Maybe borrowed with internalisation or adapted after some organisational

focus.

Distributed ‘ownership’, whether borrowed, adapted

or created.

Limited to absenteeism metrics, employee surveys

seen as event driven if done.

Probably undertaking surveys but with no valid

construct; response rate/PR main focus.

Will do measurement basics, even to the extent of

engagement index etc. Tick box is main focus.

People management evaluation/measurement

seen as ‘core’ on a par with CRM , finance etc.

Probably in the form of basic training/management

courses.

Probably in the form of basic management courses. Most likely carry out some form of

branded programme.

Will have a number of actioning elements in place but not necessarily joined

up.

Will have necessary ‘toolkit’ to hand with ongoing programmes to suit organisation focus.

Does not exist.

May have something articulated on ‘strategies’.

Most likely collection of irrelevant case studies.

Playbook in the form of ‘manager manual’ or on-line knowledge-share. Still being

developed.

Easy access in different e-/physical formats at

different levels. Signals ‘embedded’ intent.

Will have varied mix of skilled people managers. Existing good performers

more through luck.

Will have varied mix of skilled people managers. Existing good performers

more through luck.

Will have varied mix of skilled people managers but level of competency higher than Play-Act organisations.

Cohort of well-trained people managers exists with

talent pools. Regular evaluation/reinforcement.

‘PLAY DOWN’ ‘PLAY ACT’ ‘PLAY SAFE’ ‘PLAY MAKE’

I Grounded understanding of employee engagement

II

III

IV

V

VI

Working definition of employee engagement

Measurement wisdom

Actioning Infrastructure

EE-Performance Playbook

Competent leadership/ management

The ‘4-ball’ Employee Engagement reality matrix

Pillar

17

NEGATIVE NEGATIVE NEUTRAL POSITIVE Overall value to organisation performance/competitive advantage

VaLUENTiS 5D Employee Engagement Framework

© VaLUENTiS Ltd 2002-13

Objectives awareness

Behaviour alignment

Role ‘fit’

Performance management

Feedback

Capability

Line-of-Sight

Remuneration equity

Bonus/incentives

Benefits

Role equity

Recognition

Promotional aspects

Reward (equity)

Cultural elements

Team dynamics

Communication

Resources

Local management

Physical environment

Work Environment

Development

Career progression

Competencies

Succession planning

Job/ Role architecture

Training/ Learning

Coaching/ Mentoring

Organisation design Performance/talent

management ‘Corporate’ Leadership

Communication Decision rights Work values

Trust

Organisation operating culture

The concept of Employee Engagement: A synthesis of antecedent theories and empirical evidence with human capital

management practice related to organisation performance – 100 years in the making

Source: The antecedents of Employee Engagement, Nicholas J Higgins - VaLUENTiS technical paper 2003

Wider Group

Immediate Team

Organisation Individual

•Group theory

•Trust theory

•Teams theory

•Conflict theory

•Decision-making theory

•Motivation theory

•Goal setting and task theory

•Equity (justice) theory

•Trait theory

•Expectancy theory

•Commitment theory

•Needs theory

•Social cognitive/ self efficacy theory

•Cognitive dissonance

•Wellbeing/Burnout

•Job satisfaction

•Organisation Citizenship Behaviour

•Learning theory

•Behaviourism

•Emotional Intelligence

•Psychological contract

•Leadership theory

•Organisational ‘fit’ theory

•Other I/O psychology contributions

•Organisation performance & measurement*

Human Capital Management practice/systems:

•Training & Development

•Performance management

•Reward & recognition

•Resourcing & selection

•Organisation communication

•Talent management

•Leadership

•Organisation culture

•Employer brand

•Human capital retention

•Organisation design

•Workforce diversity

•High performance work systems

•Fayol - Principles of management

•Taylor - Scientific management

•McGregor Theory X/Y

•Mayo/Hawthorne studies

•Tavistock – Socio-technical systems

•Lewin (MIT) - group dynamics/behaviour

•Munsterberg - Industrial psychology

•Follett - Management relations/integration

•Hertzberg – Two factor theory

•Drucker – Practice of management

•Kahn – Personal engagement

•Likert – Management system/measurement scale

‘Management Pathfinder®’

Management Pathfinder ‘one-line descriptors’ [Reference]

Diversity [E2] The focus and effectiveness of diversity of the workforce and diversity policies within the organisation

Employee Centricity [legacy indicator] optional reporting indicator The degree to which the organisation has ‘employee-centric’ policies in place and delivers on them in terms of effectiveness including historical perspective

Employer Brand [E1] The degree to which the organisation has an identifiable brand and its contribution/effectiveness in related organisational areas

HR Governance [H1] [expanded version only] The overarching management of HR as a function governance of Human Capital Management within the organisation.

HR Operational Excellence [H2] [expanded version only] The degree to which the HR function possesses the requisite competence and executes its delivery objectives in terms of quality and effectiveness

Leadership [F1] The perceived effectiveness of overall management within the organisation collectively at each level

Organisation Climate [S1] The degree to which the current operating environment with in the organisation is seen to be a positive/negative factor

Organisation Communications [S2] The current effectiveness of communications in the organisation as perceived by managers and employees across all levels

Organisation Design [S3] The degree to which the overall organisation architecture, e.g. management structure, job/role design is effective

Performance Orientation [F3] The degree to which the organisation is viewed as effective in terms of focus and actions re performance related areas

Resourcing [V1] The effectiveness of current resourcing policies and processes/activities in terms of organisation requirements

Retention [V2] The effectiveness of current organisational retention approaches and efforts

Reward [V3] The effectiveness of current reward policy/strategy across all levels of the organisation

Talent Management [F2] The effectiveness of current organisational approaches to talent, its scope and its management

Learning & Development [E3] The degree to which current approaches and application of training, learning and development are effective

DIVERSITY

EMPLOYEE CENTRICITY

EMPLOYER BRAND

HR GOVERNANCE

HR OPERATIONAL EXCELLENCE

LEADERSHIP

ORGANISATION CLIMATE ORGANISATION

COMMUNICATIONS

ORGANISATION DESIGN

PERFORMANCE ORIENTATION

RESOURCING

RETENTION

REWARD

TALENT MANAGEMENT

LEARNING & DEVELOPMENT

796

813

742

674

615

431

487

642

628 594 603

684

657 599 416

‘Out-performing’ (world class)

‘Out-performing’ (peer)

‘Comparable’ (peer)

‘Under-performing’ (peer)

VaLUENTiS Management Pathfinder®: Client example (extended version)

Part II

Welcome to the future…

Mo

del

s St

rate

gies

Im

ple

men

tati

on

Le

arn

ing

TM playbook content

Survey of people management practice

£ Spend data HR/People metrics

and activity volumes

Existing employee survey data

DIVERSITY

EMPLOYEE

CENTRICITY

EMPLOYER

BRAND

HR

GOVERNANCE

HR

OPERATIONAL

EXCELLENCE

LEADERSHIP

ORGANISATION

CLIMATE ORGANISATION

COMMUNICATIONS

ORGANISATION

DESIGN

PERFORMANCE

ORIENTATION

RESOURCING

RETENTION

REWARD

TALENT

MANAGEMENT

TRAINING &

DEVELOPMENT

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

EMPLOYEE

CENTRICITY

EMPLOYER

BRAND

HR

GOVERNANCE

HR

OPERATIONAL

EXCELLENCE

LEADERSHIP

ORGANISATION


COMMUNICATIONS

ORGANISATION

DESIGN

PERFORMANCE

ORIENTATION

RESOURCING

RETENTION

REWARD

TALENT

MANAGEMENT

TRAINING &

DEVELOPMENT

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

• Line completions • HR completions • Aggregate perception and

contrasted perception • Eight line-item answer categories

• HR spend • People management spend

(e.g. recruiting, training) • Organisation spend/income

• Existing survey re-cut for comparability to provide employee ‘checker’ against Line/ HR people management completions

• HR transaction levels • ‘People’ metrics • HR metrics

• Derive HR strategy

• Various analytics/modelling/benchmarking projects

• Business case/mandate for HCM/OD intervention

• Baseline evaluation for change initiative

• Merger and acquisition

• Workforce planning

• HR function realignment

• Baseline and evaluation of MD programme

• Improve HR function’s professional standing

• HR spend/activity review

• Management development itself

• Accelerated initiation for new HR Director/new team

Management Pathfinder projects include:

Private

• Biotechnology

• Business services

• Chemicals

• Construction

• Distribution

• Energy

• Engineering

• Facilities Management

• Food Production

• Financial services:

o Insurance

o Investment banking

oRetail banking

oOther

• FMCG

• Healthcare

• Leisure

• Manufacturing/Mining

• Pharmaceutical

• Professional service firms

• Retail

• Telecommunications

• Transport

• Utilities

Public

• Government:

oAgency

oCentral

o Local

• NHS-Health

• Higher Education

• Police

Sector benchmarks (for what it’s worth)…

HCM (Talent) Management…

DIVERSITY

EMPLOYEE CENTRICITY

EMPLOYER BRAND

HR GOVERNANCE


LEADERSHIP

ORGANISATION CLIMATE ORGANISATION

COMMUNICATIONS

ORGANISATION DESIGN


RESOURCING

RETENTION

REWARD

TALENT MANAGEMENT

TRAINING & DEVELOPMENT

584 627

724

686

613 640

736

683

703

795

393

633

479 597

650

686

492

558

660

621

582

751

561

401

481

405

398

594 392

544

Operational indicator review: Performance Orientation [example]

Detail not available for distribution due to IP

restrictions

Performance Orientation: Areas for enhancement [example]


restrictions

TM Action Priority Matrix


restrictions

Embedding good employee engagement practice: ‘Mapping the management reality’

Individual Board members

Against embedding (Status quo OK)

Let it happen (Ambivalent/

non-committal)

Help it happen (qualified

supportive)

Make it happen (Actively

championing)

Senior managers

Middle managers

Line managers

Supervisors/Team leaders

Remember ‘actions speak louder than words…’

Problem Solving

Case study

1 day workshop

LM Module: Employee Engagement

Pre-module preparation

2-hr ‘work’ sessions ½ day workshop

CI CI CI Critical Incident

Mini- case study

Problem solving

Emp

loye

e b

ench

mar

k d

ata

(no

min

al s

et)

Pre-course assessment questionnaire

Post-course assessment questionnaire

Level 2 evaluation diagnostic

Level 2 & 3 evaluation diagnostic

Emp

loye

e b

ench

mar

k d

ata

(tim

e se

ries

set

)

3-6 Months (typical timeframe)

CI CI CI Critical Incident

Behavioural event journal

Post-course assessment

questionnaire

Pre-course assessment questionnaire

Structured coaching/ work group

Example of Employee Engagement structured module…

© VaLUENTiS VBM Analytics methodology 2008-13

Human Capital

Practices

Human Capital

Practices External

Value

Proposition

External

Value

Proposition

Customer Satisfaction

Patient Satisfaction

Customer Loyalty

Patient

experience

Revenue Growth

Quality of services

Profitability Use of Resources

Employee Retention

Staff Retention

Individual/ team

Productivity

Individual/ team

Productivity

‘ Local’ Management

‘ Local’ Management

Cost control Cost control

Compliance Compliance

Portfolio mix Safety

X - selling Clinical treatment

Service Patient focus

Work values Work values

Line - of - sight Line - of - sight

Development Development

Reward Reward

Work environment Work environment

Employee Engagement

Staff Engagement

Leadership &

governance

Leadership &

governance

Shareholder value

Trust

performance Employer brand

Employer brand

Portfolio mix Prompt service

X - selling Environment

Service Community

Example ‘Macro’ model NHS version 1.20

Mapping employee engagement and

organisation performance (example):

Human Capital Operating Statement

ye 31 s t Dec 2012 ye 31 st Dec 2011

OPERATING INCOME %

Revenue (£000s) 1,057,0 16 1,015,0 2 0

FTEs 16,352 16,047

Revenue per FTE 64,641 63,253

OPERATING COSTS

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

People costs (£0 00s) 532,181 464,317

Human Capital Intensity (HCI) 5 8 . 85 5 6 . 96

OPERATING INCOME ATTRIBUTABLE

TO HC (HCIR per FTE)

38,041

36,029

£ % £ %

ANCILLARY PEOPLE COSTS (APC)

Training & Development costs (£000s) 8,1 76 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 /A PC per FTE ) 35.06 32.26

Human Capital Productivity Statement

CONTRACTED RESOURCE ye 31 st Dec 2012 ye 31 st Dec 2011

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 WORK ED

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 +

PeopleFlow® Statement

STAFFING ye 31 st Dec 2012 ye 31 st Dec 2011

%

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 s tart 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 1,0 65

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

(-)

(-)

Employee Engagement triangulation “Squaring the circle…”

New (re)hire data

Performance appraisal data

Case data

Other internal survey/assessment data

Exit data

Organisation event log data

Critical incident data

Social media data

Customer/client/patient/citizen/ passenger data

Employee/management survey data

New (re)hire data

Performance appraisal data

Employee/management survey data

Case data

Other internal survey/ assessment data

Exit data

Organisation event log data

Critical incident data

Social media data

Customer/client/ patient/citizen data

“To this - The Engagement-Performance Matrix”

Performance area

‘Hawthorne’ for the 21st

Century organisation”

“There is much that

organisations can do for

themselves”

Organisation X Organisation Y

Organisation Z Organisation R

‘Out-performing’ (world class)

‘Out-performing’ (peer)

‘Comparable’ (peer)

‘Under-performing’ (peer)

Key:

Summary slide only

Refer to exercise pack

Organisation X - observations Organisation Y - observations

Organisation Z - observations Organisation R - observations

x-group observations

Executive summary (currently based on ‘headline’ preliminary findings):

HR Function related…

HR as a portfolio of service & compliance activities

Complexity of Interaction Complexity of Interaction Low

Marginal Value Added

High

High

Value Add

Nature of Activity

Transaction Services

Employment Services Employment Services

Professional & Advisory Services

Corporate Governance Services

Professional & Advisory Services

Corporate Governance Services

Transaction Services

Simplified Illustration

Global HR Profiler™ © VaLUENTiS 2003-13

Hum

an C

apital M

anagem

ent

Activity-D

elivery

map

3.11 Managing

ASP/software/ Outsource Providers

4.11 Managing ASP/ERP/ software/ Outsource

Providers

1.6 HR Policy

2.5 Organisation

Restructure/ Change/ Development

3.1 Workforce Planning

1.7 HR Performance/ Strategy Review/

Audit

1.1 Employer brand

4.1 Needs

Assessment

6.1 Total Reward Programme

7.1 Employee

Communications

8.2 Risk Assessment

1.2 HR Value Proposition

1.3 HR Delivery Structure

1.4 HC Reporting

1.5 HR Capability

10.9 Reporting/ Interfaces

2.6 Acquisition/

Divestiture/ Start-up Due Diligence/

Support

2.1 Organisational

Design/ Capability Planning – BU Level

2.2 Organisational

Design/ Capability Planning –

Multi-country Level

2.3 Organisational

Design/ Capability Planning –

Global Level

2.4 Job Classification/

Evaluation

3.2 Candidate

Identification Services

3.3 Job Profile Services/

Requisition Processing

3.4 Candidate Selection

3.5 Temporary and

Contractor Staffing

3.6 General Employment

Services

3.7 Relocation

3.8 Outplacement

Services

3.9 Employment Law

Services

3.10 Consulting Line

Managers On Staffing Issues

4.2 General Training

Design, Development and Delivery

4.3 Training &

Development Management

4.4 Technical/

Functional/ Policy & Procedure Training

4.5 Employee Induction/

Orientation

4.6 Competencies/ Skills Model Development

And Assessment

4.7 Leadership/

Management Development

4.8 Executive

Development

4.9 Career Development

4.10 Consulting On

Managerial Issues

5.1 Performance (Talent)

Management Assessment

5.2 Performance (Talent)


5.3 Performance

Reviews

5.4 Succession (Talent)

Management

6.2 Wage And Salary

Management

6.3 Bonus/Incentive/

Stock Options Compensation

6.4 Senior/ Executive

Compensation

7.2 Benefits

7.3 Attendance/ Leave

Of Absence/ Exit Interviews

7.4 Return-To-Work and Job Accommodation

8.1 Risk Management/

Regulatory Compliance/ Security

9.1 HRIS Strategy

9.2 HRIS Planning

10.1 Payroll

10.2 Employee/ Manager Interaction/ Problem

Resolution

10.3 Time Reporting

10.6 Tax Reporting/ Audit

10.7 Employee

Reimbursement

10.8 Statutory Benefits/

Miscellaneous Admin

10.10 Managing Outsource

Providers

1.8 Managing External

Consultants/ Outsource Providers



5.5 Attendance

Management

6.5 Expatriate

Compensation

7.5 Company Policies And Procedures

8.3 Accident Prevention

and Training Programmes

8.4 Health/Medical

Programmes

9.3 HRIS Support

9.4 Employee Research

& Modelling

5.6 Employee Coaching

6.6 Compensation

Analysis/Pay review

6.7 Healthcare/ Welfare/

Statutory/ Other Benefit Programmes

7.6 Collective

Bargaining/ Negotiating/ Consultative

Processes

7.7 Work Practices For

Represented Employees

8.5 Incident Tracking and

Reporting



9.5 Benchmarking

9.6 Measurement and

Reporting

10.4 Special Pay,

Adjustments And Deductions

10.5 Payroll Accounting/

Recon/ Manual Calculations & Disbursement

5.7 Employee

Counselling/ Case management

5.8 PM Compliance

Support

6.8 Pension

Management

6.9 Retirement Planning/

Counselling And Administration

7.8 Conflict and Issue

Resolution

7.9 Corporate/

Community Social Responsibility

9.7 Employee

Records/Case management/Data

Maintenance

9.8 Reporting/ Interfaces

9.9 Managing

ASP/software/ Outsource Providers

5.10 Managing ASP/ERP/ Software Providers

5.9 Consulting To Line

Managers On Performance Issues



7.10 Government/

Legislative Issues


Consultants

HR GOVERNANCE

ORGANISATION DESIGN

RESOURCING TRAINING & DEVELOPMENT

PERFORMANCE (TALENT)

MANAGEMENT

REWARD

EMPLOYEE RELATIONS & COMMS

EMPLOYEE HEALTH &

SAFETY

HRIS & MEASURE-

MENT

PAYROLL

An

Cp

I L Pl

Ad

Cr

Dv Ds Pr

HR roles

Service Centre (Shared)

Corp Centre

Centres of Excellence

HR Field Manager

Business Partner

Line Manager

DELIVERY CHANNELS

DIVERSITY

EMPLOYEE CENTRICITY

EMPLOYER BRAND

HR GOVERNANCE


LEADERSHIP

ORGANISATION CLIMATE

ORGANISATION COMMUNICATIONS

ORGANISATION DESIGN


RESOURCING

RETENTION

REWARD

TALENT MANAGEMENT

TRAINING & DEVELOPMENT

Index score (HR only): 639 Index score (Line only): 606

+25

+30

+14

+51

+42

+12

+18 +62 +26

+29

+49

+32

+21

+33

+57

Client Index score: 620 (Max of 1,000)

1 2 3 4 5 6 7 8

1. Key stakeholders have been involved in helping to shape

objectives and targets for people management work

2. Does HR utilise aspects of marketing in promoting the

function/its services?

3. HR systems are consistent across

global/regional/country areas; such as compensation,

benefits, performance management, career progression,

talent management etc

4. There is a recognised process for reviewing performance

against the objectives and targets contained in the HR

strategy

5. The recruiting process is consistent across the

organisation

6. [HR capability in] new employee and employee exit

administration

7. The organisation does a good job of providing

opportunities for personal development (for example,

project assignments, lateral transfers)

8. Recruiting efforts are specifically designed to support the

organisation's business plan

9. The organisation evaluates the effectiveness of training

people receive

10. Managers use available workforce data effectively when

making decisions

Disagreement Agreement

Mean Line responses Mean HR responses

HR and Line congruency (or not!)

Part III

Summary…

Now a REALITY to measure/map this in

(quasi) real-time

Higher employee

engagement

Higher productivity


More effective human capital management

Source: The Enterprise-wide Application of Human Capital Intelligence (HCMi), N J Higgins & G Cohen ,VaLUENTiS white paper

When leading edge means leading edge…

HCM Intelligence – ‘The Full Monty’

HC Measurement & evaluation

•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%

£12,569

38 days

3.5

£871

£365,121

£67,119

1:112

£27,469

£1356

23%

•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 success

Plus 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 success

Plus 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

DIVERSITY

EMPLOYEE

CENTRICITY

EMPLOYER

BRAND

HR

GOVERNANCE

HR

OPERATIONAL

EXCELLENCE

LEADERSHIP

ORGANISATION


COMMUNICATIONS

ORGANISATION

DESIGN

PERFORMANCE

ORIENTATION

RESOURCING

RETENTION

REWARD

TALENT

MANAGEMENT

TRAINING &

DEVELOPMENT

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

EMPLOYEE

CENTRICITY

EMPLOYER

BRAND

HR

GOVERNANCE

HR

OPERATIONAL

EXCELLENCE

LEADERSHIP

ORGANISATION


COMMUNICATIONS

ORGANISATION

DESIGN

PERFORMANCE

ORIENTATION

RESOURCING

RETENTION

REWARD

TALENT

MANAGEMENT

TRAINING &

DEVELOPMENT

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

Customer

Satisfaction

Customer

Satisfaction

Customer

Loyalty

Customer

Loyalty

Revenue

Growth

Revenue

Growth

ProfitabilityProfitability

Employee

Retention

Employee

Retention

Individual/

team

Productivity

Individual/

team

Productivity

‘Local’

Management

‘Local’

ManagementCost controlCost control

ComplianceCompliance

Portfolio mixPortfolio mix

X-sellingX-selling

ServiceService

Work valuesWork values

Line-of-sightLine-of-sight

DevelopmentDevelopment

RewardReward

Work environmentWork environment

Employee

Engagement

Employee

Engagement

Leadership

&

governance

Leadership

&

governance

Shareholder

value

Shareholder

valueEmployer

brand

Employer

brand

Human

Capital

Practices

Human

Capital

Practices

External

Value

Proposition

External

Value

Proposition

Customer

Satisfaction

Customer

Satisfaction

Customer

Loyalty

Customer

Loyalty

Revenue

Growth

Revenue

Growth

ProfitabilityProfitability

Employee

Retention

Employee

Retention

Individual/

team

Productivity

Individual/

team

Productivity

‘Local’

Management

‘Local’

ManagementCost controlCost control

ComplianceCompliance

Portfolio mixPortfolio mix

X-sellingX-selling

ServiceService

Work valuesWork values

Line-of-sightLine-of-sight

DevelopmentDevelopment

RewardReward

Work environmentWork environment

Employee

Engagement

Employee

Engagement

Leadership

&

governance

Leadership

&

governance

Shareholder

value

Shareholder

valueEmployer

brand

Employer

brand

VB-HR™ Rating

Workforce Intelligence

HR Strategy

OrganisationalHCM

Capital

B B R

BBRCCCCCC

BBRCCCB

HCMArchitecture

BBRBB

Management Employees

BBRCCCB

BBRCCCCCC

HR Customer-

agency

BB

HR Capability

BB

HumanCapital

HR Functional Capital

Human Capital Management

Overall

ranking

AAAAAABBBBBBCCC

CC

C

R

rmin

r

RR

RRRB RB

HR Procurement

RBB

RBBBB

BB

R

EFFECTIVENESS

MAINTENANCE

RISK

VB-HR™ Rating

Workforce Intelligence

HR Strategy

OrganisationalHCM

Capital

B B R

BBRCCCCCC

BBRCCCB

HCMArchitecture

BBRBB

Management Employees

BBRCCCB

BBRCCCCCC

HR Customer-

agency

BB

HR Capability

BB

HumanCapital

HR Functional Capital

Human Capital Management

Overall

ranking

AAAAAABBBBBBCCC

CC

C

R

rmin

r

RR

RRRB RB

HR Procurement

RBB

RBBBB

BB

R

EFFECTIVENESS

MAINTENANCE

RISK

BB

BB

R

EFFECTIVENESS

MAINTENANCE

RISK

3.11

Managing

ASP/software/

Outsource Providers

4.11

Managing

ASP/ERP/soft

ware/Outsour

ce Providers

1.6

HR Policy

2.5

Organisation

Restructure/

Change/ Development

3.1

Workforce

Planning

1.7

HR

Performance/

Strategy

Review/ Audit

1.1

Employer

brand

4.1

Needs

Assessment

6.1

Total Reward

Programme

7.1

Employee

Communications

8.2

Risk

Assessment

1.2

HR Value

Proposition

1.3

HR Delivery

Structure

1.4

HC Reporting

1.5

HR Capability

10.9

Reporting/

Interfaces

2.6

Acquisition/

Divestiture/

Start-up Due

Diligence/ Support

2.1

Organisationa

l Design/

Capability

Planning –

Business Unit

Level

2.2

Organisationa

l Design/

Capability

Planning –

Multi-country

Level

2.3

Organisationa

l Design/

Capability

Planning –

Global Level

2.4

Job

Classification/

Evaluation

3.2

Candidate

Identification

Services

3.3

Job Profile

Services/


3.4

Candidate

Selection

3.5

Temporary

and

Contractor

Staffing

3.6

General

Employment Services

3.7

Relocation

3.8

Outplacement Services

3.9

Employment

Law Services

3.10

Consulting

Line

Managers On

Staffing Issues

4.2

General

Training

Design,

Development

and Delivery

4.3

Training &


4.4

Technical/

Functional/

Policy &

Procedure

Training

4.5

Employee

Induction/

Orientation

4.6

Competencies

/ Skills Model

Development

And

Assessment

4.7

Leadership/


4.8

Executive Development

4.9

Career Development

4.10

Consulting On

Managerial

Issues

5.1

Performance

(Talent)

Management

Assessment

5.2

Performance

(Talent)


5.3

Performance

Reviews

5.4

Succession

(Talent) Management

6.2

Wage And

Salary

Management

6.3

Bonus/Incenti

ve/ Stock

Options

Compensatio

n

6.4

Senior/

Executive

Compensatio

n

7.2

Benefits

7.3

Attendance/

Leave Of

Absence/ Exit

Interviews

7.4

Return-To-

Work and Job

Accommodati

on

8.1

Risk

Management/

Regulatory

Compliance/ Security

9.1

HRIS Strategy

9.2

HRIS

Planning

10.1

Payroll

10.2

Employee/

Manager

Interaction/

Problem

Resolution

10.3

Time

Reporting

10.6

Tax

Reporting/

Audit

10.7

Employee

Reimburseme

nt

10.8

Statutory

Benefits/

Miscellaneous

Admin

10.10

Managing

Outsource

Providers

1.8

Managing

External

Consultants/

Outsource Providers

2.7

Managing

External

Consultants/

Outsource

Providers

5.5

Attendance

Management

6.5

Expatriate

Compensatio

n

7.5

Company

Policies And

Procedures

8.3

Accident

Prevention

and Training

Programmes

8.4

Health/Medica

l Programmes

9.3

HRIS Support

9.4

Employee

Research &

Modelling

5.6

Employee

Coaching

6.6

Compensatio

n

Analysis/Pay

review

6.7

Healthcare/

Welfare/

Statutory/

Other Benefit

Programmes

7.6

Collective

Bargaining/

Negotiating/

Consultative Processes

7.7

Work

Practices For

Represented

Employees

8.5

Incident

Tracking and

Reporting

8.6

Managing

External

Consultants/

Outsource Providers

9.5

Benchmarkin

g

9.6

Measurement

and Reporting

10.4

Special Pay,

Adjustments

And

Deductions

10.5

Payroll

Accounting/

Recon/

Manual

Calculations

&

Disbursement

5.7

Employee

Counselling/

Case

management

5.8

PM

Compliance

Support

6.8

Pension

Management

6.9

Retirement

Planning/

Counselling

And

Administratio

n

7.8

Conflict and

Issue

Resolution

7.9

Corporate/

Community

Social

Responsibility

9.7

Employee

Records/Case

management/

Data

Maintenance

9.8

Reporting/

Interfaces

9.9

Managing

ASP/software/

Outsource

Providers

5.10

Managing

ASP/ERP/

Software

Providers

5.9

Consulting To

Line

Managers On

Performance

Issues

6.10

Managing

External

Consultants/

Outsource

Providers

7.10

Government/

Legislative Issues

7.11

Managing

External

Consultants

HR

GOVERNANCE

ORGANISATION

DESIGN

RESOURCING TRAINING &

DEVELOPMENT

PERFORMANCE

(TALENT)

MANAGEMENT

REWARDEMPLOYEE

RELATIONS

& COMMS

EMPLOYEE

HEALTH &

SAFETY

HRIS &

MEASURE-

MENT

PAYROLL

3.11

Managing

ASP/software/

Outsource Providers

4.11

Managing

ASP/ERP/soft

ware/Outsour

ce Providers

1.6

HR Policy

2.5

Organisation

Restructure/

Change/ Development

3.1

Workforce

Planning

1.7

HR

Performance/

Strategy

Review/ Audit

1.1

Employer

brand

4.1

Needs

Assessment

6.1

Total Reward

Programme

7.1

Employee

Communications

8.2

Risk

Assessment

1.2

HR Value

Proposition

1.3

HR Delivery

Structure

1.4

HC Reporting

1.5

HR Capability

10.9

Reporting/

Interfaces

2.6

Acquisition/

Divestiture/

Start-up Due

Diligence/ Support

2.1

Organisationa

l Design/

Capability

Planning –

Business Unit

Level

2.2

Organisationa

l Design/

Capability

Planning –

Multi-country

Level

2.3

Organisationa

l Design/

Capability

Planning –

Global Level

2.4

Job

Classification/

Evaluation

3.2

Candidate

Identification

Services

3.3

Job Profile

Services/


3.4

Candidate

Selection

3.5

Temporary

and

Contractor

Staffing

3.6

General

Employment Services

3.7

Relocation

3.8

Outplacement Services

3.9

Employment

Law Services

3.10

Consulting

Line

Managers On

Staffing Issues

4.2

General

Training

Design,

Development

and Delivery

4.3

Training &


4.4

Technical/

Functional/

Policy &

Procedure

Training

4.5

Employee

Induction/

Orientation

4.6

Competencies

/ Skills Model

Development

And

Assessment

4.7

Leadership/


4.8

Executive Development

4.9

Career Development

4.10

Consulting On

Managerial

Issues

5.1

Performance

(Talent)

Management

Assessment

5.2

Performance

(Talent)


5.3

Performance

Reviews

5.4

Succession

(Talent) Management

6.2

Wage And

Salary

Management

6.3

Bonus/Incenti

ve/ Stock

Options

Compensatio

n

6.4

Senior/

Executive

Compensatio

n

7.2

Benefits

7.3

Attendance/

Leave Of

Absence/ Exit

Interviews

7.4

Return-To-

Work and Job

Accommodati

on

8.1

Risk

Management/

Regulatory

Compliance/ Security

9.1

HRIS Strategy

9.2

HRIS

Planning

10.1

Payroll

10.2

Employee/

Manager

Interaction/

Problem

Resolution

10.3

Time

Reporting

10.6

Tax

Reporting/

Audit

10.7

Employee

Reimburseme

nt

10.8

Statutory

Benefits/

Miscellaneous

Admin

10.10

Managing

Outsource

Providers

1.8

Managing

External

Consultants/

Outsource Providers

2.7

Managing

External

Consultants/

Outsource

Providers

5.5

Attendance

Management

6.5

Expatriate

Compensatio

n

7.5

Company

Policies And

Procedures

8.3

Accident

Prevention

and Training

Programmes

8.4

Health/Medica

l Programmes

9.3

HRIS Support

9.4

Employee

Research &

Modelling

5.6

Employee

Coaching

6.6

Compensatio

n

Analysis/Pay

review

6.7

Healthcare/

Welfare/

Statutory/

Other Benefit

Programmes

7.6

Collective

Bargaining/

Negotiating/

Consultative Processes

7.7

Work

Practices For

Represented

Employees

8.5

Incident

Tracking and

Reporting

8.6

Managing

External

Consultants/

Outsource Providers

9.5

Benchmarkin

g

9.6

Measurement

and Reporting

10.4

Special Pay,

Adjustments

And

Deductions

10.5

Payroll

Accounting/

Recon/

Manual

Calculations

&

Disbursement

5.7

Employee

Counselling/

Case

management

5.8

PM

Compliance

Support

6.8

Pension

Management

6.9

Retirement

Planning/

Counselling

And

Administratio

n

7.8

Conflict and

Issue

Resolution

7.9

Corporate/

Community

Social

Responsibility

9.7

Employee

Records/Case

management/

Data

Maintenance

9.8

Reporting/

Interfaces

9.9

Managing

ASP/software/

Outsource

Providers

5.10

Managing

ASP/ERP/

Software

Providers

5.9

Consulting To

Line

Managers On

Performance

Issues

6.10

Managing

External

Consultants/

Outsource

Providers

7.10

Government/

Legislative Issues

7.11

Managing

External

Consultants

HR

GOVERNANCE

ORGANISATION

DESIGN

RESOURCING TRAINING &

DEVELOPMENT

PERFORMANCE

(TALENT)

MANAGEMENT

REWARDEMPLOYEE

RELATIONS

& COMMS

EMPLOYEE

HEALTH &

SAFETY

HRIS &

MEASURE-

MENT

PAYROLL

HC Productivity Statement

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



336,987 333,144


3,193,353 3,068,145


FTE days gained through recorded overtime

work (+)

61,932 65,371


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


FTE days recorded as lost under miscellaneous

(-)

763 1,075

ACTUAL NUMBER OF CONTRACTED FTE DAYS WORKED

3,233,069 3,110,442

PRODUCTIVITY




EMPLOYER-EMPLOYEE RELATED INDICES




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


HC Productivity Statement

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



336,987 333,144


3,193,353 3,068,145


FTE days gained through recorded overtime

work (+)

61,932 65,371


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


FTE days recorded as lost under miscellaneous

(-)

763 1,075

ACTUAL NUMBER OF CONTRACTED FTE DAYS WORKED

3,233,069 3,110,442

PRODUCTIVITY




EMPLOYER-EMPLOYEE RELATED INDICES




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



ye 31st Dec 2005 ye 31st Dec 2004

OPERATING INCOME %

Revenue (£000s) 1,057,016 1,015,020

FTEs 16,352 16,047


OPERATING COSTS


People costs (£000s) 532,181 464,317

Human Capital Intensity (HCI) 58.85 56.96



38,041

36,029

£ % £ %


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





Total 17,740 17,919

HC LEVERAGE (HCIR/APC per FTE) 35.06 32.26


ye 31st Dec 2005 ye 31st Dec 2004

OPERATING INCOME %

Revenue (£000s) 1,057,016 1,015,020

FTEs 16,352 16,047


OPERATING COSTS


People costs (£000s) 532,181 464,317

Human Capital Intensity (HCI) 58.85 56.96



38,041

36,029

£ % £ %


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





Total 17,740 17,919

HC LEVERAGE (HCIR/APC per FTE) 35.06 32.26


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


Full time equivalents (FTEs) at start of year

16,047 15,531




1,427 1,874

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


35 217

Number of FTE retirements in period (-) 91 76

Number of FTEs outsourced in period (-) -







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


Full time equivalents (FTEs) at start of year

16,047 15,531




1,427 1,874

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


35 217

Number of FTE retirements in period (-) 91 76

Number of FTEs outsourced in period (-) -






HCM Intelligence

Management Pathfinder

(OE indicators) ‘RADAR’

Employee engagement

Basic metrics

Measurement pyramid

Modelling analytics linking performance to human capital

(management)

HR delivery and

operational risk

Human capital reporting

‘Thank you.’

Nicholas J Higgins [email protected] VaLUENTiS Ltd, 2nd Floor, Berkeley Square House, Berkeley Square, London W1J 6BD HO: +44 (0)207 887 6108 M: +44 (0)7811 404713 www.valuentis.com www.ISHCM.com www.NicholasJHiggins.com www.HCglobal.blogspot.com


http://www.valuentis.com/

http://www.ishcm.com/

http://www.nicholasjhiggins.com/

http://www.hcmglobal.blogspot.com/

THE EE

PLAYBOOK

Line of sight

Work environment

Operating culture

Development

Reward (equity)

Performance link

What we bring…

Employee Engagement Solutions Evidenced based definition,

understanding and application

Measurement wisdom and expertise

On-line tools and analytics

Survey design expertise

Project management

expertise

Actioning strategies and

tactics

Frontline blended learning

‘License to manage’ programmes

Senior management feedback sessions

Global reach

‘Ten years of innovation…’

VaLUENTiS Ltd, 2nd Floor, Berkeley Square House, Berkeley Square, London W1J 6BD HO: +44 (0)207 887 6108/21 www.valuentis.com www.ISHCM.com

http://www.valuentis.com/


Management

Pathfinder®

Think Human Capital.

Who participates Outputs Evaluation level

Benefits

BRONZE - (Lite) Level 1

TM Pathfinder •Employees •Managers •HR personnel ...plus baseline HC metrics and demographic data

1.Initial knowledge session 2.Employee engagement assessment (inc. recut of existing

survey data) 3.Level 1 TM Playbook including Organisation engagement

(15OE) assessment (‘RADAR’) 4.Best practice recommendations (lite) 5.Feedback/review session

- Provides robust and quantitative insight of employee and organisation engagement

- Briefing on summary improvement actions - Potential for further people management

insight and actioning - Management learning particularly where

interwoven in MD programme

SILVER Level 2

TM Pathfinder •Employees •Managers •HR personnel ...plus baseline HC metrics, demographic & HR spend data

1.Initial knowledge session 2.Employee engagement assessment (inc. re-cut of existing

survey data) 3.Organisation engagement (15OE) assessment 4.Strategic HCM value driver analysis and assessment 5.Line/HR view congruency 6.HR spend analysis 7.Production of HC operating statements 8.Level 2 TM Playbook including recommendations &

routemap (80+ page technical report) 9.Feedback/review session and presentation

GOLD Level 3

TM Pathfinder •Employees •Managers •Personnel ...plus baseline HC metrics, demographic, HR spend & functional activity and organisation performance data

1.Initial knowledge session 2.Employee engagement assessment (inc. re-cut of existing

survey data) 3.Organisation engagement (15OE) assessment 4.Strategic HCM value driver analysis and assessment 5.Line/HR view congruency 6.HR spend analysis 7.Production of HC operating statements 8. Level 3 TM Playbook including full implementation

routemap with detailed actions (extended report) 9.Feedback/review session

Extended options and advisory

As required

- Bespoke additional services, analyses and reports to fit client context and requirements

Provides extensive client solution coverage


- Detailed commentary on strengths, areas for enhancement and corresponding improvement actions (‘in loco’ HR strategy)

- Detailed insight of HC related operating performance

- Comparative benchmarks to assess performance and progress

- Management development


- Detailed commentary on strengths, areas for enhancement

- Fully comprehensive implementation routemap with detailed actions

- HR function ‘profile’ assessment - Detailed insight of HC related operating

performance - Comparative benchmarks to assess

performance and progress - Management development

Professional Services www.valuentis.com

VaLUENTiS Ltd, 2nd Floor, Berkeley Square House, Berkeley Square, London W1J 6BD +44 (0) 207 887 6108

Professional Services www.valuentis.com

Smart. Smarter. Smartest...

‘PEOPLE SCIENCE®’

Organisation Intelligence

to improve organisation performance

• Human Capital Management Evaluation • Employee Engagement • Talent Management • Workforce Productivity & Performance • Predictive Analytics • HC Forensics & Risk • HR Function ROI Analysis • Organisation Measurement • Management Education • Organisation Strategy

SOLUTIONS

‘The leading human capital management specialists’

Think HR. Think Human Capital.™

Only one place to learn Human Capital Management. Being human is unique. Attaining an M Sc in HCM is even more so.

2nd Floor, Berkeley Square House, Berkeley Square, London W1J 6BD Tel: +44 (0)207 887 6121 Fax: +44 (0)207 887 6100 [email protected] www.ISHCM.com

…+

