Measuring and Improving HR

Managements Results
Chapter 14

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14-1

The Evolution of HRM

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14-2

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 managements time for
strategic, internal consulting activities
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14-3

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

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14-4

New Ways to Supply Transactional

Services

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14-5

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

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14-6

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
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14-7

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
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14-8

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
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14-9

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 clients situation is personal
and unique
Pay attention to the emotions surrounding the
clients factual issues
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14-10

Building Credibility and Rapport, cont.

Reflect back that you understand and care
Focus on doing whats 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
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14-11

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
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Conducting the HRM Audit, cont.

Payroll
Record-keeping
Training and development
Employee communications
Internal communications

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14-13

Types of Audits
Compliance audits
Best practices
Strategic
Function specific

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14-14

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
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14-15

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
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14-16

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14-17

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
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14-18

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

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14-19

The HR Audit Process

Determine scope of the audit
Develop the audit questionnaire
Use the questionnaire to collect data
Benchmark the findings

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14-20

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14-21

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14-22

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14-23

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14-24

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14-25

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

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14-26

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14-27

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14-28

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14-29

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14-30

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

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14-31

The High-Performance Work System, cont.

Extensive training
Labor management cooperation
Commitment to quality
Customer satisfaction

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14-32

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14-33

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14-34

Strategy-Based Metrics
Measure activities and outcomes that contribute
to achieving a companys 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
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14-35

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 companys
strategic aims and for continuous monitoring
results

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14-37

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
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HR Scorecard Sequence, cont.

6. Create strategic metrics
7. Summarize the scorecard measures in a digital
dashboard

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14-39

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14-40

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14-41

Outsourcing HRM Activities

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14-42

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14-43

Pros and Cons of Outsourcing

Pro: Can be cost effective and free HRMs time
for other work
Con: Can decrease HR job opportunities

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14-44

To Whom Do Employers Outsource HR

Functions?

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14-45

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
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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 vendors technology
leadership
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14-47

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.

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14-48

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.

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14-49