Measuring and Improving HR Managements Results Chapter 14

The Evolution of HRM Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall

What This Means in Practical Terms • HRM duties have gone from supplying mostly

What This Means in Practical Terms, cont. – HR managers have to improve their

New Ways to Supply Transactional Services Copyright © 2009 Pearson Education, Inc. publishing as

HR Manager as Internal Consultant Leveraging HR entails three basic steps: • Have an

Developing HR Consulting Skills • Master basic HRM functional concepts and skills in areas

Building Credibility and Rapport • Establishing credibility as an expert requires having, among other

Building Credibility and Rapport, cont. – Ability to develop creative solutions to difficult problems

Building Credibility and Rapport, cont. – A reputation for meeting commitments – A reputation

Building Credibility and Rapport, cont. – Reflect back that you understand care – Focus

Conducting the HRM Audit – HR audits vary in scope and focus. Ten possible

Conducting the HRM Audit, cont. – Payroll – Record-keeping – Training and development –

Types of Audits • Compliance audits • Best practices • Strategic • Function specific

Reasons for Conducting Audits • Ensuring legal compliance • Keeping HR practices aligned with

Reasons for Conducting Audits, cont. • Improve employee morale • Implementing and staying current

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When to Audit? • When a business reaches various milestones • When the business

When to Audit? , cont. • Employee morale, turnover, attendance or excessive discipline problems

The HR Audit Process • Determine scope of the audit • Develop the audit

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Benchmarking in Action • SHRM provides a customized benchmarking service to enable employers to

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The High-Performance Work System • A high-performance work system (HPWS) is a set of

The High-Performance Work System, cont. – Extensive training – Labor management cooperation – Commitment

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Strategy-Based Metrics • Measure activities and outcomes that contribute to achieving a company’s strategic

The HR Scorecard Process • The HR Scorecard refers to the assigning of financial

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HR Scorecard Sequence 1. Define the business strategy 2. Outline a strategy map 3.

HR Scorecard Sequence, cont. 6. Create strategic metrics 7. Summarize the scorecard measures in

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Outsourcing HRM Activities Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 42

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Pros and Cons of Outsourcing • Pro: Can be cost effective and free HRM’s

To Whom Do Employers Outsource HR Functions? Copyright © 2009 Pearson Education, Inc. publishing

Outsourcing Checklist • Specify which services to outsource • Agree with vendor on exactly

Outsourcing Checklist, cont. • Make sure to have metrics to measure and hold accountable

Outsourcing Checklist, cont. • Ensure they have adequate disaster recovery plans • Make sure

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What This Means in Practical Terms • HRM duties have gone from supplying mostly transactional services to supplying more strategic and people-related consulting support • The implications are the following: – Employers and HR units need to find new ways to provide their traditional transaction services to free up HR management’s time for strategic, internal consulting activities Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 3

What This Means in Practical Terms, cont. – HR managers have to improve their businessanalysis, internal consulting skills – HR managers need to improve their outsourcing skills Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 4

HR Manager as Internal Consultant Leveraging HR entails three basic steps: • Have an HR strategy in place • Take steps to reduce the assets and efforts devoted to delivering transactional services • Develop the skills required to be an effective internal consultant Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 6

Developing HR Consulting Skills • Master basic HRM functional concepts and skills in areas like recruiting, interviewing and equal employment compliance • Acquire business knowledge and strategic skills needed to analyze and advise how to best align employee competencies with employer strategic needs • Build credibility and rapport Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 7

Building Credibility and Rapport • Establishing credibility as an expert requires having, among other things: – An excellent command of and understanding of the industry, organization and competition – Persuasive, high-quality suggestions – Proven ability to solve major business problems – Proven track-record of supplying high-quality work Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 8

Building Credibility and Rapport, cont. – Ability to develop creative solutions to difficult problems – A record and ability to complete projects on time and on budget – Effective interpersonal relationships and skills – A clear understanding of the issues – Excellent communication skills Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 9

Building Credibility and Rapport, cont. – A reputation for meeting commitments – A reputation for creating solutions that work • Rapport requires the following: – You listen more than you talk – Acknowledge that client’s situation is personal and unique – Pay attention to the emotions surrounding the client’s factual issues Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 10

Building Credibility and Rapport, cont. – Reflect back that you understand care – Focus on doing what’s best for the client – Focus on the client as an individual – Work to constantly find new ways to be of greater service – View methodologies, models, techniques and business processes as a means to an end Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 11

Conducting the HRM Audit – HR audits vary in scope and focus. Ten possible areas of focus include: – Recruitment and selection – Compensation – Employee relations – Mandated benefits – Group benefits Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 12

Conducting the HRM Audit, cont. – Payroll – Record-keeping – Training and development – Employee communications – Internal communications Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 13

Reasons for Conducting Audits • Ensuring legal compliance • Keeping HR practices aligned with employer needs/strategy • Identifying opportunities for improvement • Improving efficiency and productivity • Identify root problem areas and cost reduction opportunities Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 15

Reasons for Conducting Audits, cont. • Improve employee morale • Implementing and staying current with worldclass practices • Measuring and improving performance across the organization as well as results from key HR projects or initiatives • Increasing commitment to continuous improvement Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 16

When to Audit? • When a business reaches various milestones • When the business grows to the point where line managers can no longer make their own hiring, discipline, promotion and other decisions without HR assistance • The employer creates or modifies an employee handbook • A new head of HRM arrives Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 18

When to Audit? , cont. • Employee morale, turnover, attendance or excessive discipline problems seem to signal need for evaluation • The company becomes a government contractor or subcontractor Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 19

The HR Audit Process • Determine scope of the audit • Develop the audit questionnaire • Use the questionnaire to collect data • Benchmark the findings Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 20

Benchmarking in Action • SHRM provides a customized benchmarking service to enable employers to compare their HR -related metric results with other companies • Comparable figures can be broken down by industry, employee size, company revenue, industry sectors and geographic region Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 26

The High-Performance Work System • A high-performance work system (HPWS) is a set of employee and HRM-related practices that translate into organizational effectiveness • The DOL lists the following characteristics of HPWS: – Multi-skilled work teams – Empowered front-line workers Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 31

The High-Performance Work System, cont. – Extensive training – Labor management cooperation – Commitment to quality – Customer satisfaction Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 32

Strategy-Based Metrics • Measure activities and outcomes that contribute to achieving a company’s strategic aims • Preparing a list of these metrics requires: – Defining the business’ strategic goals – Create a strategy map to identify what the strategy-based metrics might be – Use the strategy map to identify important strategic metrics Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 35

The HR Scorecard Process • The HR Scorecard refers to the assigning of financial and non-financial goals to HRM-related activities required for achieving the company’s strategic aims and for continuous monitoring results Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 36

HR Scorecard Sequence 1. Define the business strategy 2. Outline a strategy map 3. Identify the strategically required outcomes 4. Identify the required workforce competencies and behaviors 5. Identify the required HR system policies and activities Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 38

Pros and Cons of Outsourcing • Pro: Can be cost effective and free HRM’s time for other work • Con: Can decrease HR job opportunities Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 44

Outsourcing Checklist • Specify which services to outsource • Agree with vendor on exactly what HR activities will be outsourced and what will be retained internally • Review multiple providers and decide on one partner • Clarify exactly what services the vendor will provide Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 46

Outsourcing Checklist, cont. • Make sure to have metrics to measure and hold accountable the vendor • Look for financial stability in the prospective vendor • Check their service record with other clients • Consider the costs • Look at the prospective vendor’s technology leadership Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 47

Outsourcing Checklist, cont. • Ensure they have adequate disaster recovery plans • Make sure they will provide your in-house people with adequate training regarding procedures, etc. Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 48

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 49