For the full white paper, click here. Measuring the Intangibles Compelling proof that companies perform better when they make a concerted effort to measure things like employee performance, engagement, innovation and change By Allan Schweyer, Chairman, Enterprise Engagement Alliance Fact:
The good news is that there has never been a wider recognition of the importance and value of human resources, nor more encouragement for HR professionals to play key strategic roles in their organizations. This increased desire for strategic HR has brought with it an equally rapid rise in demands and expectations for HR measurement.
The constituents for HR want measurement systems that enhance their decisions about human capital; however, HR measures largely focus on the traditional paradigm of delivering HR services quickly, cheaply, and in ways that satisfy clients.
The three anchor points are efficiency Do we deliver HR programs and practices through frugal use of resources such as time, money and labor? Today s measurement systems largely reflect the question of efficiency, though there is some attention to effectiveness as well, through such things as turnover, attitudes, and bench strength.
Rarely do organizations consider impact Talentship and hr measures as the relative effect of different talent pools on organizational effectiveness. Hitting the Wall in HR Measurement In most organizations there is no shortage of HR measures, and no shortage of technology and products to analyze, organize, and report them.
Type HR measurement into a search engine, and you get overresults. Scorecards, summits, dashboards, data mines, data warehouses, and audits abound. Some HR organizations lament that their measurement efforts are stymied by limited budgets, but even in those with significant resources in fact, especially in these casesthe array of choices is daunting.
The paradox is that the ability to implement measurement systems is not the key issue. Even when such systems are implemented, the organizations we work with typically hit a wall. Despite ever more comprehensive databases, and ever more sophisticated HR data analysis and reporting, HR measures only rarely drive true strategic change Lawler, et al.
As Exhibit 1 shows, over time the HR profession has become more and more elegant and sophisticated, yet this trend does not seem to be leading to the desired result. Success is often claimed because business leaders are induced or held accountable for HR measures, such as turnover, employee attitudes, bench strength, or performance Over time the HR profession has become more and more elegant and sophisticated, yet this trend does not seem to be leading to the desired result The issue is how to make HR measures create a true strategic difference in the organization.
In this article we extend earlier work by proposing a framework of four elements integrating HR measures within a system for achieving strategic organizational change.
The framework provides a diagnostic tool for finding the sweet spots where HR measurement is most feasible and effective, and it provides a guide to HR and business leaders looking to take their HR measurement systems to the next level.
Having business leaders manage to such numbers is not the same as creating organization change. Many of the organizations we work with are frustrated because they seem to be doing all the measurement things right, yet increasingly they and their constituents are frustrated by the gap between the expectations for the measurement systems and its true effects.
Why do HR organizations hit the wall?
Today s HR is on the cusp of a fundamental paradigm shift. It is the same paradigm shift that saw the evolution of the Finance decision science from the professional practice of accounting, and the evolution of the Marketing decision science from the professional practice of sales.
Marketing and Finance serve as frameworks for enhancing decisions about customers and money, and those decisions happen both within and outside the Marketing and Finance functions in organizations.
Accounting and sales are essential and important professional practices, and they support and integrate with the Finance and Marketing decision sciences. Obviously, Finance is quite distinct from accounting and Marketing is quite distinct from sales. The evolution of HR and HR measurement will require a sound decision science for human capital that truly informs and enhances decisions about human resources wherever they are made.
We have coined the term talentship for this emerging decision science, by combining the word stewardship with the word talents, which focuses on the hidden and apparent talents of current and potential employees.
The evolution of talentship has significant implications for all aspects of the HR profession, including governance, HR functional design, the definition and process of strategic HR, and HR competencies. In this article, we focus on the implications for HR measurement systems that strive to drive organization change.
The LAMP Framework In financial measurement, it is certainly important to measure how the accounting or finance department operates.
Measures such as transaction processing time and benchmark staff levels are important for internal functional control; however, the vast majority of measures used for financial decisions are not concerned with how finance and accounting services are delivered.
Few financial measures tell line managers about how the finance department conducted its activities. Financial measures typically tell how well those line managers made decisions about financial resources.
In this chapter we describe the elements of this new decision science, which we call “Talentship,” and its implications for the future of strategic HR measurement. Center for Effective Organizations TALENTSHIP AND HUMAN RESOURCE MEASUREMENT AND ANALYSIS: FROM ROI TO STRATEGIC ORGANIZATIONAL CHANGE CEO PUBLICATION G () JOHN W. BOUDREAU Center for Effective Organizations University of Southern California Marshall School of Business. The framework provides a diagnostic tool for finding the "sweet spots" where HR measurement is most feasible and effective, and it provides a guide to HR and business leaders looking to take their HR measurement systems to the next level.
In HR today, the dominant paradigm remains one of service delivery. The HR profession describes itself in terms of its functional services rewards, staffing, training, benefits, etc.
The dominant framework for working with business leaders and other constituents is based on determining what HR services they need or want, and their satisfaction with those services.
It should be no surprise that most HR measures today focus on how the HR function is using and deploying its resources, and whether they are used efficiently. Cost-per-hire, timeto-fill-vacancies, cost-per-training-hour, etc. It is not unusual to see line managers held accountable for these efficiencybased measures, even when their connection to organization effectiveness is unknown.
Their measurement systems are designed to direct key decision makers to focus on the relevant information. Their systems hold decision makers accountable for the quality of their decisions about financial or marketing resources.
In the same way, HR measurement needs to extend its traditional focus on the HR function, and increase its capability to support key decisions about human capital that drive organizational effectiveness.
That requires a framework for connecting those investments to organizational effectiveness. With such a framework we can begin to identify where the potential for increased decision support may lie in HR measures.Talentship and Hr Measures.
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Boudreau payoff of specific HR investments, with measures such as cost-per-hire or HR headcount, and correlating HR practices with financial results. In the Shell example, Approach A, would design. Talentship and HR Measures Essay Sample.
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Boudreau, University of Southern California; Peter M. Ramstad, Personnel Decisions International Alooming. Request PDF on ResearchGate | On Jan 1, , J.W. Boudreau and others published Talentship and HR measurement and analysis: .