SttiM tWht’Strategic Measurement: What’s Your Value ......• A Great Value Proposition ......

St t i M t Wh t’Strategic Measurement: What’s Your Value Propositionp

William Schiemann, Ph.D.

SHRM Morris County

CEO, Metrus Group, Inc.

Copyright © 2009 Metrus Group, Inc.

SHRM Morris CountyJune 2009

Four Things You Will Take Away!Four Things You Will Take Away!

• How to be more strategic in your role

• Measurement savvy

• Understand the big drivers of workforce value• Understand the big drivers of workforce value—and what you can do to measure & optimize it

• Better understanding of how HR adds value—evidence based—and how you can improve it!


HR Internal Service ratings Improved, but HR Internal Service ratings Improved, but still ranked lower than most functionsstill ranked lower than most functions

Manufacturing/Production/Operations

Quality

Information Technology

Communications/Public Affairs

Customer Service

Research & Development

Finance/Accounting Services

Security

1993

Procurement/Purchasing

Legal

Research & Development 1993

20062007

0 10 20 30 40 50 60 70

Marketing

Human Resources


Top Ranked HR:Top Ranked HR:

1. Take actions regarding people that enables the business to grow value:enables the business to grow value:

– Execute the Unique Business Strategy– Increase Customer Value—Service– Increase Customer Value—Service– Increase Financial Impact—Productivity

Reduce Risk Compliance– Reduce Risk—Compliance

2. Add value to your internal clients


To Follow the Yellow Brick Road…To Follow the Yellow Brick Road…

Then I Need:

• A Great Value Proposition

• High People Equity

• High Stakeholder Perceptions

• Which All Require the Right Measures!


q g

Value Equals…Value Equals…

Quality of Relationship/Servicey pCost of Relationship


At What Level Is Value Determined?At What Level Is Value Determined?

• Organizational?

F ti ( HR)?• Function (e.g, HR)?

• Individual?


Different Strategies, Different Measures:Different Strategies, Different Measures:What’s Your Unique Value Proposition?What’s Your Unique Value Proposition?

POSSIBLE MEASURES

Cost Leadership

Innovation Customer Intimacy

PEOPLE:Alignment

• Goals/Values:− Efficiency− Spartan

R

• Goals/Values:− SOA applications− Autonomy

I ti d

• Goals/Values:− Customer focus− Empowerment

• Revenue per employee

• Innovation awards • Tenure

• Efficiency • Idea generation • Service skillsCapabilities

Efficiency analysis

• Cost awareness

Idea generation• Creativity

Service skills• Customer

knowledge• Service recovery

Engagement

y

• Task fulfillment • Diversity • Team fulfillment


Connecting What HR Does to theValue Proposition


To Follow To Follow the Yellow Brick Road…the Yellow Brick Road…

Then I Need:






q g

People Equity is Key Driver of People Equity is Key Driver of Shareholder EquityShareholder Equity

ShareholderEquity

q yq y

Customer Equity• Relationship Value• Brand Equity• Brand Equity• Product/Service Value

ProductivityTurnover

People

People Equity

pDrivers

HR Drivers


DriversPeople

Investments, Initiatives

People EquityPeople Equity

AlignmentA i i th di ti ?• Are we going in the same direction?

CapabilitiesCapabilities• Do we have what we need to succeed?

Engagement• Are we committed?Are we committed?


Building AlignmentBuilding Alignment

• Communicating the Unique Goals of the OrganizationUnique

• Performance ManagementPerformance Management

• Rewards for Performance


e a ds o e o a ce

Creating CapabilitiesCreating Capabilities

INFORMATIONRESOURCES & TOOLS

TALENT


TALENT

The Engagement PyramidThe Engagement Pyramid

Advocacy

CommitmentCommitment

Satisfiers


Measuring People EquityMeasuring People Equity


Measures that Matter! Industry LeadershipMeasures that Matter! Industry Leadership

90%100%

71%65%

60%70%80%90%

18%37%

30%40%50%60%

18%

0%10%20%30%

0%Quality Performance Financial Performance

High People Equity Low People Equity


Measures that Matter! Turnover Means $$Measures that Matter! Turnover Means $$

16.7%%

7.7%

Top Quartile PE Bottom Quartile PE


p Q Q

Which Profile Do You Manage?Which Profile Do You Manage?

Alignment Capabilities Engagement Profile Superior Performance

Cheerleader

Under Equipped

Strategic Disconnect

Cheerleader

Under Achiever

Indifferent

Talent Waste

Performance Laggard


Measures that Matter: People Equity ScoresMeasures that Matter: People Equity Scores

A C E48 52 61

EAST

A C EWEST

A C E

CENTRAL

A C EA C E49 53 53

A C E61 84 76

A C E44 27 51

A C E56 52 63

A C E29 56 53

A C E43 28 76

A C E54 26 54

A C E66 84 83

A C E

49 61 69

A C E37 51 45

A C E34 25 40

A C E58 87 80


A - Alignment C - Capabilities E - EngagementRed = Trouble Yellow = OK Green = Strength

Drivers & Enablers of People EquityPeopleEquity

Alignment with Organizational Strategy Capabilities Engagement

Supervision

Innovation TechnologySystemsHR Systems

Unique Strategy Elements Structure

Values/Operating

Direction/Strategy


LeadershipStyle

gy


Then I Need:






q g

Metrus HR Research and Cases Metrus HR Research and Cases

• We have learned a lot about creating value... resulting in improvement strategies for HR g p g

• Based on:– Executive interviews for Reinventing TalentExecutive interviews for Reinventing Talent

Management– SHRM Hawaii Study on Talent Squeeze (2007)– HR Benchmarking Study of over 1000 firms

(Quality Progress, 2007)– Human Capital Study in over 2000 organizationsHuman Capital Study in over 2000 organizations

(ASQ, 2005)– Many more (see www.metrus.com)….


HR Internal Service ratings Improved, but HR Internal Service ratings Improved, but still ranked lower than most functionsstill ranked lower than most functions

Manufacturing/Production/Operations

Quality

Information Technology

Communications/Public Affairs

Customer Service

Research & Development

Finance/Accounting Services

Security

1993

Procurement/Purchasing

Legal

Research & Development 1993

20062007

0 10 20 30 40 50 60 70

Marketing

Human Resources


Who Are Your Stakeholders?Who Are Your Stakeholders?

• Funders?• Influencers?Influencers?• Customers/Users?• Partners/Interested Parties?Partners/Interested Parties?• Government/Community?Are all of your stakeholders equal?Are all of your stakeholders equal?

Perceptions drive: Perceptions drive: Resources, Decisions, Behaviors!


Building HR ValueBuilding HR Value

Customer Equity• Relationship Value• Brand Equity• Product/Service Value

HR Value

HR RelationshipsHR Products& Services

HRInvestments, Initiatives



Stakeholder ExampleStakeholder Example

5

5.5

Strategy &Business Acumen

4.5

ce

TrainingBusiness Acumen

4

mpo

rtan

c

ExecutiveRecruitment

3.5

Im

Familiarity

2.5

3 Compliance FamiliarityLow Moderate High


2 2.5 3 3.5 4 4.5 5

Quality

Building HR ValueBuilding HR Value

Customer Equity• Relationship Value• Brand Equity• Product/Service Value

HR Value

HR RelationshipsHR Products& Services

HRInvestments, Initiatives



HR Strengths and WeaknessesHR Strengths and Weaknesses

57 30 13Responds in a supportive and helpful manner

Favorable Neutral Unfavorable

50

56

57

35

34

30

15

10

13

Responds to requests in a timely manner

Possesses required knowledge and skills

Responds in a supportive and helpful manner

45

46

50

37

39

35

18

15

15

Completes service accurately the first time

Is available when needed

Responds to requests in a timely manner

Top 3

44

44

45

36

40

37

20

16

18

Communicates required info accurately and

Do what they promise when they promise

Completes service accurately the first time

Bottom 3

26

38

44

37

41

36

38

22

20

Is proactive: anticipates your needs and

Understands your business needs

clearly


26 37 38requirements


Then I Need:






q g

What’s Wrong with These Measures?What’s Wrong with These Measures?

LeadershipCourses


Types of MetricsTypes of Metrics

ImpactTalent Meets

Customer Needs

EffectivenessEffectivenessRecruit Talent

that Stays

EfficiencyNumber of


Requisitions Filled

Sample HR Scorecard MapSample HR Scorecard Map

HRDRIVERS

BUSINESSOUTCOMES

PEOPLEENABLERS

PEOPLEDRIVERS

PEOPLEOUTCOMES

BUSINESSDRIVERS

HRSA-Selection-Rewards Management

PerformanceSuccessRatio

InternalCustomerRewards

HR Talent Index

Excellence3

StrategicElements

PeopleEquity

NetIncome

CustomerValue

TrainingImpact

5 CoreValues Talent

Match

Cost

People

Map Key:HR Drivers

Copyright © 2009 Metrus Group, Inc.Financial

OperationsCustomer

Measurement Do’sMeasurement Do’s

• Strategic first, then tactical

• Set targets

H• Have measurement owners

• Link to decisions• Link to decisions

• Tie to success, accomplishments, p

– Find measurement win-wins!


Measurement Don’tsMeasurement Don’ts

• Benchmark the wrong comparisons—e g those with different strategye.g., those with different strategy

• Pick easy versus meaningfuly g

• Overeat at the metric buffet

• Connect to punishment


Creating Personal ValueCreating Personal Value

What will make customersWhat will make customers ask for you?


We’re At The End of the Yellow Brick Road . . .We’re At The End of the Yellow Brick Road . . .


A Call To Action ChecklistA Call To Action Checklist——Adopt a New MindsetAdopt a New Mindsetpp

Business Acumen? Do I understand the unique business Value Proposition & Strategy?

Do we have a strong People Strategy?

Does HR have a strong Value Proposition & g pScorecard?

Do we have a high People Equity (Alignment, Capabilities, Engagement)?

Are we measuring the right strategic things? (e.g.,ACE d it D i t j t E t S ti f ti )?and its Drivers--not just Engagement or Satisfaction)?

Are Our Stakeholders Rating Us Highly?


What’s My Personal Value Proposition?

Great Sources for Additional InformationGreat Sources for Additional Information• Reinventing Talent Management: How to Maximize Performance...

– Schiemann, John Wiley & Sons, 2009

• The Workforce Scorecard: Managing Human Capital to Execute• The Workforce Scorecard: Managing Human Capital to Execute Strategy– Huselid, Becker, Beatty, Harvard Business School Publishing, 2005

• People Equity: The Hidden Driver of Qualityp q y Q y– Kostman and Schiemann, Quality Progress, May 2005

• Bullseye: Hitting Your Strategic Targets…– Schiemann & Lingle, Free Press, 1999

• Strategic Surveys: Linking People to Business Strategy– Schiemann & Morgan, Getting Action from Organizational Surveys, Jossey-

Bass, 2006

• The HR Value Proposition• The HR Value Proposition– Ulrich and Brockbank, Harvard Business School Press, 2005

• People Equity: The New Paradigm for Measuring and Managing Human Capital


Human Capital– Schiemann, HR Planning, April 2006, Volume 29.1

Thank You!Thank You!Dr. William Schiemann

Metrus [email protected]

908 231 1900Copyright © 2009 Metrus Group, Inc.

908-231-1900

About MetrusAbout MetrusMetrus Group is an industry leader in strategic performance measurement,assessment, and organizational change. For nearly twenty years we havepartnered with the most successful – and challenging – organizations in theworld to help them achieve superior sustainable business results through theworld to help them achieve superior, sustainable business results through thedevelopment of their People Equity and the creation of a high performance,measurement-managed culture.

Our Services Include:HR Strategy, Value and Performance MetricsPeople Equity Assessment & SolutionsBalanced Scorecard/Dashboard Design and AssessmentDevelopment of Quantifiable Performance MetricspEmployee Surveys and Linkage ResearchLeadership Development and TrainingCorporate Ethics, Alignment, and Accountability AuditsMeasurement Driven Organizational Change

[email protected] www.metrus.com953 Route 202, Somerville, NJ 08876 (908) 231-1900, ext. 101

Measurement-Driven Organizational Change


, , ( ) ,

Coming Soon…Coming Soon…

Reinventing Talent is an outstanding blend of research and practice. It reports compelling research on the value of investing in talent and offers specific recommendations on how to developoffers specific recommendations on how to develop people equity through alignment, capabilities, and engagement. The book confirms what good people managers do and offers specific guidelines for those wanting to upgrade their people managementwanting to upgrade their people management skills.

Dave UlrichProfessor Ross School of BusinessProfessor, Ross School of Business

University of MichiganPartner, The RBL Group

Published by:


As chair elect of the SHRM Foundation, I would like to thank the Morris Countywould like to thank the Morris County chapter for it’s support, and to share with you some of the work that the Foundationyou some of the work that the Foundation does, as well as resources that are available to you as SHRM membersavailable to you as SHRM members.


What Does the SHRM Foundation Do? What Does the SHRM Foundation Do?

The SHRM Foundation advances and supports the human resource profession through:the human resource profession through:

• Research Grants

• Scholarships

• Educational Products

This work is made possible by charitable contributions from individuals, chapters, state councils, companies and others in the HR community.


y

Effective Practice Guidelines Report Series Effective Practice Guidelines Report Series (available to SHRM members at no cost)(available to SHRM members at no cost)

Distills best research findings and expert opinion on a given topic

Seven titles now available:– HR Strategy

Retaining Talent– Retaining Talent– Developing Leadership Talent– Implementing Total Rewards

StrategiesStrategies– Employee Engagement and

Commitment– Selection Assessment– Selection Assessment

Methods– Performance Management


Foundation DVDs Foundation DVDs (available to SHRM members at no cost)(available to SHRM members at no cost)

Real-world case studies of successful companies, highlighting strategic HR in actiong g g s a eg c ac o

DVD, discussion guide and powerpoint presentationpowerpoint presentation

Six titles now available:S i F d– Seeing Forward

– Trust Travels– Ethics in the Workplace– Fueling the Talent Engine– HR In Alignment– HR Role Models


HR Role Models

Educational Awards & ScholarshipsEducational Awards & Scholarships

• Regional Scholarship Program$100 000$100,000

• Student Scholarships $50,000Student Scholarships $50,000

• Dissertation Awards $20,000

• SHRM Masters Series $25,000


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