“How to hear

«Exceed Expectation!» from your

Company

or HR KPIs"

Lesya Bobyk,

05/23/2013

HR Value

85% of companies value is based on HR assets: “people are our most valuable

asset”

Employees:

- the most valuable intangible assets

- the less understandable

- hard to evaluate

- the less manageable

Employees as Assets

▪ Employee’s knowledge and performance contribute to the value of a company

▪ Employee’s value is a part of “goodwill”

▪ Employee isn’t an asset on the balance sheet:

- Cannot assign a financial value to employees

- Company don’t own employees

Human Capital

Capital – assets for use in the production of

further assets

Physical assets decrease in value during the period

Human capital’s value generally

increases over time

Why this subject is an interesting for me?

What is the challenge in HR metrics?

What I see on the picture? How my challenge associates with the picture?

What my colleague see on my picture?

Metrics and KPIs

▪ Metric – a standard for evaluation or

measure something

▪ KPI – key metric which is used

for business decision making

Metrics Evolution

Measure HR transactions

Monitor HR Department Performance

Link HR activities to company performance

Predict the affects (ROI) of HR initiatives

HR: Cost Center

vs. Value Creating

At SoftServe. HR Evolution

Measure HR transactions

Monitor HR Department Performance

Link HR activities to company performance

Predict the affects (ROI) of HR initiatives

Implementing HR’s Strategic Role:

A Seven-Step Model* of Metrics Creating

*Source “The HR Scorecard: Lining People, Strategy and Performance” by Brian Becker, Mark Huselid

1• Clearly Define Business Strategy

2• Build a Business Case for HR As a Business Asset

3• Link HR to Strategy Map

4• Identify HR Deliverables within the Strategy Map

5• Align HR Architecture with HR Deliverables

6• Design the Strategic HR Measurement System

7• Implement Management by Measurement/Communicate Results

Implementing HR’s Strategic Role:

A Seven-Step Model* of Metrics Creating

*Source “The HR Scorecard: Lining People, Strategy and Performance” by Brian Becker, Mark Huselid

1• Clearly Define Business Strategy

2• Build a Business Case for HR As a Business Asset

3• Link HR to Strategy Map

4• Identify HR Deliverables within the Strategy Map

5• Align HR Architecture with HR Deliverables

6• Design the Strategic HR Measurement System

7• Implement Management by Measurement/Communicate Results

Company’s Purposes Example

Best Quality

Increase Market Value

Maximize Profit

Advance Technology

Best Services

Competitive Advantage

Company's Performance

Drivers

Physical Assets

Capital Resources

Core Competencies

At SoftServe. 5 Years Plan

Year 2012 2013 2014 2015 2016 2017 2018

SoftServe Head Count 1970 2398 3642 4433 5658 6984 8812

SoftServe Revenue, $ XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

SoftServe EBIT, % XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

• Value Added Services (IP)• Customer’s Business Diversification

At SoftServe. Competitive Advantage

to reveal their fullest potential

unique professional development

created for every employee

environment in SoftServe

People is

Implementing HR’s Strategic Role:

A Seven-Step Model* of Metrics Creating

*Source “The HR Scorecard: Lining People, Strategy and Performance” by Brian Becker, Mark Huselid

1• Clearly Define Business Strategy

2• Build a Business Case for HR As a Business Asset

3• Link HR to Strategy Map

4• Identify HR Deliverables within the Strategy Map

5• Align HR Architecture with HR Deliverables

6• Design the Strategic HR Measurement System

7• Implement Management by Measurement/Communicate Results

HR Purpose

Help the company achieve its mission, strategic goals & purposes

Help build & maintain the company’s competitive advantage

At SoftServe. HR Purpose:

Asseverate Velocity

Workforce Supply

Global HR

Leadership Development

Best Place To Work

20.. 2012 2013 2014 2015 2016 20..

Implementing HR’s Strategic Role:

A Seven-Step Model* of Metrics Creating

*Source “The HR Scorecard: Lining People, Strategy and Performance” by Brian Becker, Mark Huselid

1• Clearly Define Business Strategy

2• Build a Business Case for HR As a Business Asset

3• Link HR to Strategy Map

4• Identify HR Deliverables within the Strategy Map

5• Align HR Architecture with HR Deliverables

6• Design the Strategic HR Measurement System

7• Implement Management by Measurement/Communicate Results

Value Chain Questions

Which strategic objectives/goals/outcomes are critical?

What are the performance drivers for each goal?

How do we measure progress toward these goals?

How do employees need to behave to achieve these goals?

Does HR provide employees with the necessary competencies and behaviors?

At SoftServe. HR Value Chain

Value Added

Services

Increase Customer Retention

Workforce Supply

Leadership Development

Increase Customer

Satisfaction

Increase Employee Retention

Best Place to Work

Increase Employee

Satisfaction

Increase Cost Saving

HR Global

Enhance the Value and

Return on HR Investment

Implementing HR’s Strategic Role:

A Seven-Step Model* of Metrics Creating

*Source “The HR Scorecard: Lining People, Strategy and Performance” by Brian Becker, Mark Huselid

1• Clearly Define Business Strategy

2• Build a Business Case for HR As a Business Asset

3• Link HR to Strategy Map

4• Identify HR Deliverables within the Strategy Map

5• Align HR Architecture with HR Deliverables

6• Design the Strategic HR Measurement System

7• Implement Management by Measurement/Communicate Results

What Deliverables Criteria are

Important?

Cost

Time

Quality

Scope

At SoftServe. HR Deliverables

Workforce Supply

Scope Quality Time Cost

Lead+ Vacancies Staffing Policy

Jun-Mid Vacancies Staffing Policy

Implementing HR’s Strategic Role:

A Seven-Step Model* of Metrics Creating

*Source “The HR Scorecard: Lining People, Strategy and Performance” by Brian Becker, Mark Huselid

1• Clearly Define Business Strategy

2• Build a Business Case for HR As a Business Asset

3• Link HR to Strategy Map

4• Identify HR Deliverables within the Strategy Map

5• Align HR Architecture with HR Deliverables

6• Design the Strategic HR Measurement System

7• Implement Management by Measurement/Communicate Results

HR Architecture

3 dimensions that make up the value chain:

HR Function

HR System

Employee Behavior

At SoftServe. HR Architecture

3 dimensions that make up the value chain:

HR Function

HR System

Employee Behavior

Workshops.Personality Oriented Trainings.

Online space (Confluence) for HR Policies and

Process

Annual Competence

Model Review and Renew

Implementing HR’s Strategic Role:

A Seven-Step Model* of Metrics Creating

*Source “The HR Scorecard: Lining People, Strategy and Performance” by Brian Becker, Mark Huselid

1• Clearly Define Business Strategy

2• Build a Business Case for HR As a Business Asset

3• Link HR to Strategy Map

4• Identify HR Deliverables within the Strategy Map

5• Align HR Architecture with HR Deliverables

6• Design the Strategic HR Measurement System

7• Implement Management by Measurement/Communicate Results

What Measures are Important?

Efficiency –

rates of resource usage in achieving

result

Effectiveness –

how well result was achieved

Develop valid measures of the HR deliverables

required to meet your strategic objectives.

Cold Hot

Disqualified Worm

Engagement

Perf

orm

ance

Low

Low

High

Hig

h

E.g.. Voluntary Turnover (“Boomerang” Status)

Implementing HR’s Strategic Role:

A Seven-Step Model* of Metrics Creating

*Source “The HR Scorecard: Lining People, Strategy and Performance” by Brian Becker, Mark Huselid

1• Clearly Define Business Strategy

2• Build a Business Case for HR As a Business Asset

3• Link HR to Strategy Map

4• Identify HR Deliverables within the Strategy Map

5• Align HR Architecture with HR Deliverables

6• Design the Strategic HR Measurement System

7• Implement Management by Measurement/Communicate Results

Tips in Metrics Communication

1. Education: what is being measured , how

and when data is collected

2. Automated reproducing (online)

3. Availability (daily, weekly, monthly etc.)

4. Set HR KPIs at all

Level of the Company

At SoftServe. “People” KPI

Alignment in HR

HR KPIs are cascaded to all HR Levels

At SoftServe. “People” KPI

Alignment within Company

KPIs

Finance

Customer

People

Personal Objective

VP

%

%

10%

%

Director

%

%

25%

%

PM

%

%

40%

%

HR

30%

20%

30%

20%

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