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P MPeople Management: Why organisations (and HR) keep making the same mistakes and(and HR) keep making the same mistakes and how to put them right… [Expanded edition for distribution]
People Science®
24th January 2011
Nicholas J HigginsCEO, VaLUENTiS & Dean, Int’l School of Human Capital ManagementDrHCMI MSc Fin (LBS) MBA (OBS) MCMIDrHCMI MSc Fin (LBS) MBA (OBS) MCMIHR Directors Summit 2011ICC Birmingham
P l S i ®People Science®
Analyse, Advise, Implement, EducateAnalyse, Advise, Implement, Educate
www.valuentis.com
Professional Services‘Winners of World Finance100 award’
(www.WorldFinance100.com )
www.ISHCM.com
ADDED INSERT
Smart. Smarter. Smartest...
Professional Serviceswww valuentis comwww.valuentis.com
‘PEOPLE SCIENCE®’
‘The leading human capital management
specialists’
Organisation Intelligencetto
improve organisation performance• Human Capital Management EvaluationHuman Capital Management Evaluation • Employee Engagement• Talent Management• Workforce Productivity & Performance• Predictive Analytics• HC Forensics & RiskHC Forensics & Risk• HR Function ROI Analysis• Organisation Measurement• Management Education• Organisation Strategy
SOLUTIONS
ADDED INSERT
‘ISHCM’Eight faculties:Enterprise Governance and LeadershipEvidence‐based Management (EbM) g ( )Human Capital ManagementHuman Capital MeasurementEmployee EngagementHR L d hiHR LeadershipHR Operational ExcellenceEmployment law...
...1 Masters HCMI practitioner qualificationp q4 executive programmes6 practitioner programmes80 short course modules
Unlimited customised combinationsUnlimited customised combinations...
One outstanding value proposition
ADDED INSERT
Fact 1Fact 1
“Organisations don’t exist without people.”Organisations don t exist without people.
Fact 2Fact 2
“Everything that happens within an organisation is down to the people it organisation is down to the people it employs past, present and future.”
Fact 3Fact 3
“ l i l l d“People are simultaneously ASSETS andRESOURCES from an organisationalgperformance perspective and potentialLIABILITIES from a risk perspective.”LIABILITIES from a risk perspective.
“Thi i t th h t f h it l“This is at the heart of human capitalmanagement.”
Fact 4Fact 4
“Organisations spend considerable sumseach year carrying out financial audits; buty y g ;spend very little in comparison on peoplemanagement effectiveness and/or HCMmanagement effectiveness and/or HCMaudits/evaluations.”
Overall factOverall fact
Thus, the oft-misguided question of‘How valuable are our people to thep porganisation?’ is the wrong question.
The question should be ‘How valuableare our people management practices?’and ‘How do we know?’and How do we know?
About todayAbout today…
“So today I’m going to talk about some l t bl common people management problems
encountered over the years and what to do about them”
[Note that this is a very short shortlist for the workshop]
ADDED INSERT
What organisations (HR) keep getting wrong (this is a short ‘shortlist’)…
1.Employee engagement: its concept and applicationp y g g p pp2.The use of employee surveys3 Evaluation/measurement of people management3.Evaluation/measurement of people management4.Performance management5 Th ‘ l t ’ f li t5.The ‘people competency’ of line management6.The role of HR (‘customer-agency dissonance’)
What organisations (HR) keep getting wrong (shortlist)…
1.Employee engagement: its concept and applicationp y g g p pp2.The use of employee surveys3 Evaluation/measurement of people management3.Evaluation/measurement of people management4.Performance management5 Th ‘ l t ’ f li t5.The ‘people competency’ of line management6.The role of HR (‘customer-agency dissonance’)
1. Employee engagement: its concept and application
ff...common problems• Lack of working definition
... do differently• Select or buildg
• Inadequate definition• Not measured adequately
• Understand the concept• Adopt design or construct• Not measured adequately
• Management lack understanding of concept
• Adopt design or construct• Requires Communication,
Education and understanding of concept or its impactLittle use of models to
Education and Reinforcement (CER)Map operational ‘outcome • Little use of models to
support applicationN t b dd d
• Map operational ‘outcome systems’ (mensuration)C l i t if th • Not embedded as core
management practice• Can only exist if other
problems overcome
EMPLOYEE ENGAGEMENT:EMPLOYEE ENGAGEMENT:
“Employee engagement is an ‘outcome-based’ concept. It is the term used to describe the degree to which employees can be ascribed as ‘aligned’ and ‘committed’ to an organisation such that they are at their most productive.”
VaLUENTiS International School of HCM
Or another way to look at itOr another way to look at it…
Knows what toFully
congruent Knows what to do/achieve but
unlikely to achieve it
Could do more Fullyproductive
congruent
More likely to have
Less than optimallyIndividual’s have
performance/ capability
issues
Job gets doneoptimally
productive -Could do more
‘well’
Individual sdegree of Alignment
Likely to have performance,
attitudinal
More likely to have objective High
probability ofattitudinal and/or
behavioural issues
and/or ‘potential’
issues
probability of wasted effort/
frustrationIncongruent
Degree ofCommitment
AffectiveContinuance© VaLUENTiS Ltd 2002-11
Staff engagement:The challenge for organisations
Knows what to Fully
congruentdo/achieve
but unlikely to achieve it
Could do more
Fullyproductive “Only one box in
nine reflects the
More likely to have Job gets
Less than optimally Individual’s
nine reflects the constant ‘high bar’ challenge for
i ti iperformance/ capability
issues
Job gets done
p yproductive -
Could do more ‘well’
degree of Alignment
organisations in optimising engagement
Likely to have performance,
attitudinalMore likely to have objective
High probability of wasted
across the workforce on a daily basis”attitudinal
and/or behavioural
issues
have objective and/or ‘potential’
issues
of wasted effort/
frustrationIncongruent
y
Degree ofCommitment
AffectiveContinuance© VaLUENTiS Ltd 2002-11
When I talk about models and frameworks -here’s one as an example
VaLUENTiS 5D Employee Engagement Framework
here s one as an example…VaLUENTiS 5D Employee Engagement Framework
Line-of-Sight Work Environment
Organisationtioperating
culture
Reward (equity) Development( q y) p
© VaLUENTiS Ltd 2002-11
Engagement is and always has been a MULTI DIMENSIONAL construct
VaLUENTiS 5D Employee Engagement Framework
MULTI-DIMENSIONAL construct….[expanded]
Line-of-Sight Work Environment
VaLUENTiS 5D Employee Engagement Framework [ p ]
Objectives awareness
Behaviour alignment
Role ‘fit’
Cultural elements
Team dynamics
CommunicationOrganisationPerformance management
Feedback
Capability
Resources
Local management
Physical environment
Organisationoperating culture
Organisation designPerformance/talent
Remuneration equity
Bonus/incentives
Career progression
Competencies
Performance/talent management
‘Corporate’ LeadershipCommunicationDecision rightsBonus/incentives
Benefits
Role equity
Recognition
p
Succession planning
Job/ Role architecture
Training/ Learning
gWork values
Trust
Promotional aspects
Reward (equity) Development
Coaching/ Mentoring
© VaLUENTiS Ltd 2002-11
A look back at The original Sears gmodel…
“Arguably the simple model that set the engagement movement alight. Its now Arguably the simple model that set the engagement movement alight. Its now nearly 20 years old.
Also note the (now) flawed use of employee satisfaction ”( ) p y
Internal service
Employee Satisfaction
External Service
Customer Satisfaction
Customer Loyalty
Revenue Growth
Employee Retention
quality Value
ProfitabilityEmployee Productivity
Putting the Service-Profit chain to workHeskett, Jones, Loveman, Sasser Jr & Schlesinger, , , gHarvard Business Review Mar-Apr 1994
Employee engagement and Organisation Performance today:
We’ve now moved on from the Sears modelExample ‘Macro’ model NHS version 1.11
We ve now moved on from the Sears model…
Leadership &
governance
Leadership &
governance
Shareholder valueTrust
performanceEmployer brand
Employer brand
Human Capital
Practices
Human Capital
Practices External External Customer SatisfactionPatient
SatisfactionRevenue Growth
Quality ofservices
Portfolio mixSafety
X-sellingClinical treatment
Work valuesWork values
Line-of-sightLine-of-sight
St ff
governanceg
Value
Proposition
Value
Proposition
Satisfaction
Customer Loyalty
Patientexperience
Growth
ProfitabilityUse of Resources
Individual/ team
Productivity
Individual/ team
Productivity
t eat e tServicePatient focusDevelopmentDevelopment
RewardReward
Work environmentWork environment
Employee EngagementStaff
EngagementPortfolio mixPrompt service
X-sellingEnvironment
ServiceCommunity
Employee Retention
Staff Retention
‘Local’ M t
‘Local’ Management
ComplianceCompliance
ManagementManagementCost controlCost control
© VaLUENTiS VBM Analytics methodology 2008-11
What organisations (HR) keep getting wrong (shortlist)…
1.Employee engagement: its concept and applicationp y g g p pp2.The use of employee surveys3 Evaluation/measurement of people management3.Evaluation/measurement of people management4.Performance management5 Th ‘ l t ’ f li t5.The ‘people competency’ of line management6.The role of HR (‘customer-agency dissonance’)
2 The use of employee surveys2. The use of employee surveys
...common problems ... do differently• Viewed as a reactive
single event• Adopt more pro-active,
integrated application• Response rate over-focus • Inadequate and/or
• Focus on ‘end’ perspective• Understand your HCM Inadequate and/or
unbalanced questioning• Overly PR based
Understand your HCM ‘model’ and ‘QS’ design
• It’s about your staff• Overly PR based• Management
complacency
• It s about your staff• Too many B-players
requiring ‘baseball bat’(!)complacency• Failure in follow-up
actioning/comms
requiring baseball bat (!)• Adopt clear inclusive
process through ‘line’actioning/comms process through ‘line’[Added note: QS = Question-statement – technical term for questionnaire response item]
Remember (?) The Employee survey expertise model
HIGH
em
en
t
MYOPIC 20/20 foresight
man
ag
tise
foresight
cap
ital
mexp
ert
um
an
c
UNFOCUSEDBLIND
Hu
LOW HIGHLOW HIGHSurvey design & measurement
expertise © ISHCM 2006
HIGH
tise
MYOPIC 20/20 foresight
exp
ert
Result: misleading o
Result: organisation has
sufficient in-
em
en
t misleading or erroneous
interpretation
depth, robust knowledge to act
upon
man
ag
UNFOCUSEDBLIND
p
cap
ital
UNFOCUSED
Limited insight due to
BLIND
Result: end up
um
an
c due to limitations of
HCM knowledge
Result: end up with ‘garbage
in-garbage out’ syndromeH
u knowledge syndrome
LOW HIGHSurvey design & measurement expertise © ISHCM 2006
HIGH
20/20 20/20 20/20
tise
MYOPICMYOPICMYOPIC 20/20 20/20 20/20 foresightforesightforesight
exp
ert
16% 8%em
en
t m
an
ag
cap
ital
25%51%
um
an
c
25%51%
Hu
UNFOCUSEDUNFOCUSEDUNFOCUSEDBLINDBLINDBLINDLOW HIGHSurvey design & measurement expertise
Sample: 147 employee surveys. All organisations with over 750 employees. ISHCM research team. Study carried out 2006-7
Employee surveys and engagement: Ten Best practices from the field...(I)
View or apply employee surveys:View or apply employee surveys:
1. As part of a wider enterprise driven focus on people management1. As part of a wider enterprise driven focus on people management2. With the appropriate importance (not as a tick-box exercise)3. As organisational feedback/diagnostics as opposed to just garnering
opinion, using a robust engagement framework in the process4. As an embedded annual/quarterly process not as one-off interventions5 With the importance of science in understanding the data and the various 5. With the importance of science in understanding the data and the various
systemic relationships that provide greater understanding and drive more sustainable interventions
Source: Employee Engagement: Factors of Successful ImplementationJournal Of Applied Human Capital Management, Volume 2 Number 1 2008
Employee surveys and engagement: Ten Best practices from the field...(II)
View or apply the employee survey process:View or apply the employee survey process:
6. As a ‘means to an end’ and not the other way around7. With emphasis on post-survey practice/intervention8. NOT as a means of just benchmarking externally (but they see the
advantages of benchmarking internally)advantages of benchmarking internally)9. In NOT over-focusing on the response ratio recognising that it’s just one
element10.As mandatory, i.e. don’t postpone the process just because something
negative may have recently happened, i.e. it’s not about internal or external PRexternal PR
Source: Employee Engagement: Factors of Successful ImplementationJournal Of Applied Human Capital Management, Volume 2 Number 1 2008
What organisations (HR) keep getting wrong (shortlist)…
1.Employee engagement: its concept and applicationp y g g p pp2.The use of employee surveys3 Evaluation/measurement of people management3.Evaluation/measurement of people management4.Performance management5 Th ‘ l t ’ f li t5.The ‘people competency’ of line management6.The role of HR (‘customer-agency dissonance’)
One for the roadOne for the road.....
“If you cannot measure it, you cannotimprove it.”
Original source attributed to Lord Kelvin 1824-1907, pioneerg pof physics and thermodynamics, first UK scientist appointedto the House of Lords.
Since used by many to illustrate the same point in differentways, i.e. substitute ‘improve’ with ‘manage’.
3. Evaluation/measurement of people management
...common problems ... do differently• Managers have patchy
understanding of HCM• Introduce DCLR
programmeg• Lack of in-situ design
operational models
g• Apply HCM elements to
operational situationsp• Default to single
dimension benchmarking
p• Need to use blended
QUAL-QUANT frameworkdimension benchmarking• Over-focus on data
collation rather than its
QUAL QUANT framework• Measurement must be
outcome focused rather collation rather than its use
• Lack of internal expertise
outcome focused rather than input focused
• Get ‘external’ help• Lack of internal expertise • Get external help[Added note: DCLR = shorthand for Design, Communicate, Learn, Reinforce]
3. Evaluation/measurement of people management
“B t h t d h t lk f “But what do we mean when we talk of ‘people management’?”
[whilst acknowledging the employee engagement elements shown earlier]
ADDED INSERT
HUMAN CAPITAL MANAGEMENT:HUMAN CAPITAL MANAGEMENT:
“Human capital management is the term which is used to describe an organisation’s multi-disciplined and integrated approach to optimising the capabilities and performance of its management and employees.”
VaLUENTiS International School of HCM
Evaluating People management in your organisation: Our HCM ‘radar/clock’ (you’ve seen
DIVERSITYTRAINING &
organisation: Our HCM radar/clock (you ve seen this before, right?)
DIVERSITY
EMPLOYEECENTRICITY
TALENTMANAGEMENT
TRAINING &DEVELOPMENT
813
EMPLOYERBRAND REWARD
674416
HRGOVERNANCERETENTION
615657
599 416
GOVERNANCE
HR
RETENTION742 431
487684HR
OPERATIONALEXCELLENCE
RESOURCING 642
628594603
‘O t f i ’
LEADERSHIPPERFORMANCEORIENTATION
796
‘Out-performing’ (world class)‘Out-performing’ (peer)‘Comparable’
ORGANISATIONCLIMATE ORGANISATION
COMMUNICATIONS
ORGANISATIONDESIGN
Comparable (peer)
‘Under-performing’ (peer)
3. Evaluation/measurement of people management
“Thi ll t t d b k ith h ll “This all started way back with a challenge set by one of our earliest clients – could we
report a people management (aka HCM) construct on one page?”p g
ADDED INSERT
And then we did things like The HCRAnd then we did things like The HCR Standards (GHCRS2006)
HC Productivity Statement
HC Productivity Statement
CONTRACTED RESOURCE ye 31st Dec 2005 ye 31st Dec 2004
Total number of FTE days contracted in year 3,530,340 3,401,289
Total number of FTE vacation days taken in year
336,987 333,144
TOTAL NUMBER OF CONTRACTED FTE DAYS AVAILABLE
3,193,353 3,068,145
WORK RESOURCE ADJUSTMENT
CONTRACTED RESOURCE ye 31st Dec 2005 ye 31st Dec 2004
Total number of FTE days contracted in year 3,530,340 3,401,289
Total number of FTE vacation days taken in year
336,987 333,144
TOTAL NUMBER OF CONTRACTED FTE DAYS AVAILABLE
3,193,353 3,068,145
WORK RESOURCE ADJUSTMENT
Human Capital Operating Statement
Human Capital Operating Statement
WORK RESOURCE ADJUSTMENT
FTE days gained through recorded overtime work (+)
61,932 65,371
FTE days lost to illness (-) 18,431 19,016
FTE days lost to work-related illness/injury (-) 2,773 2,816
FTE days lost to industrial action (-) 249 167
FTE days recorded as lost under miscellaneous (-)
763 1,075
ACTUAL NUMBER OF CONTRACTED FTE DAYS WORKED
3,233,069 3,110,442
WORK RESOURCE ADJUSTMENT
FTE days gained through recorded overtime work (+)
61,932 65,371
FTE days lost to illness (-) 18,431 19,016
FTE days lost to work-related illness/injury (-) 2,773 2,816
FTE days lost to industrial action (-) 249 167
FTE days recorded as lost under miscellaneous (-)
763 1,075
ACTUAL NUMBER OF CONTRACTED FTE DAYS WORKED
3,233,069 3,110,442
6
ye 31st Dec 2005 ye 31st Dec 2004
OPERATING INCOME %
Revenue (£000s) 1,057,016 1,015,020
FTEs 16,352 16,047
Revenue per FTE 64,641 63,253
ye 31st Dec 2005 ye 31st Dec 2004
OPERATING INCOME %
Revenue (£000s) 1,057,016 1,015,020
FTEs 16,352 16,047
Revenue per FTE 64,641 63,253 PeopleFlow® Statement PeopleFlow® Statement PRODUCTIVITY
HCI*Revenue per FTE day (optimal) £192.96 £185.42
HCI*Revenue per FTE day (actual) £190.59 £182.90
HCI*Revenue per FTE day differential £2.37 £2.52
EMPLOYER-EMPLOYEE RELATED INDICES
Employee engagement index 69.2 68.5
Employer brand index 71.3 71.0
HUMAN CAPITAL MANAGEMENT INDEX
PRODUCTIVITY
HCI*Revenue per FTE day (optimal) £192.96 £185.42
HCI*Revenue per FTE day (actual) £190.59 £182.90
HCI*Revenue per FTE day differential £2.37 £2.52
EMPLOYER-EMPLOYEE RELATED INDICES
Employee engagement index 69.2 68.5
Employer brand index 71.3 71.0
HUMAN CAPITAL MANAGEMENT INDEX 2006 A Guide to the Human Capital
Reporting Standards
OPERATING COSTS
Total operating costs (£000s) 904,371 815,094
People costs (£000s) 532,181 464,317
Human Capital Intensity (HCI) 58.85 56.96
OPERATING INCOME ATTRIBUTABLE TO HC (HCIR per FTE)
38,041
36,029
OPERATING COSTS
Total operating costs (£000s) 904,371 815,094
People costs (£000s) 532,181 464,317
Human Capital Intensity (HCI) 58.85 56.96
OPERATING INCOME ATTRIBUTABLE TO HC (HCIR per FTE)
38,041
36,029
p
STAFFING ye 31st Dec 2005 ye 31st Dec 2004
%
No of full-time staff at start of year 14,011 13,865
Number of part-time staff at start of year (FTE eqv)
1,932 1,491
N b f th t t t f (FTE ) 104 175
p
STAFFING ye 31st Dec 2005 ye 31st Dec 2004
%
No of full-time staff at start of year 14,011 13,865
Number of part-time staff at start of year (FTE eqv)
1,932 1,491
N b f th t t t f (FTE ) 104 175 HUMAN CAPITAL MANAGEMENT INDEX
VB-HR Rating BB-BB-R BB-B-R
HC Performance Sustaining + Sustaining +
HUMAN CAPITAL MANAGEMENT INDEX
VB-HR Rating BB-BB-R BB-B-R
HC Performance Sustaining + Sustaining +
RS2 (GHCRS2006) £ % £ %
ANCILLARY PEOPLE COSTS (APC)
Training & Development costs (£000s) 8,176 7,342
Recruitment costs (£000s) 2,314 2,954
Health & Safety costs (£000s) 740 691
HR functional and related costs (£000s) 6,254 6,879
Outplacement costs (£000s) 256 53
£ % £ %
ANCILLARY PEOPLE COSTS (APC)
Training & Development costs (£000s) 8,176 7,342
Recruitment costs (£000s) 2,314 2,954
Health & Safety costs (£000s) 740 691
HR functional and related costs (£000s) 6,254 6,879
Outplacement costs (£000s) 256 53
Number of other at start of year (FTE eqv) 104 175
Full time equivalents (FTEs) at start of year
16,047 15,531
STAFFING MOVEMENT % £ %
Number of FTEs recruited in period (+) 1,427 1,874
Number of acquisitioned FTEs during period (+) - -
1,427 1,874
Number of voluntary leavers (FTE) in period (-) 996 1,065
Number of FTEs made redundant or outplaced 35 217
Number of other at start of year (FTE eqv) 104 175
Full time equivalents (FTEs) at start of year
16,047 15,531
STAFFING MOVEMENT % £ %
Number of FTEs recruited in period (+) 1,427 1,874
Number of acquisitioned FTEs during period (+) - -
1,427 1,874
Number of voluntary leavers (FTE) in period (-) 996 1,065
Number of FTEs made redundant or outplaced 35 217
HCR 1st Edition
2006
Total 17,740 17,919
HC LEVERAGE (HCIR/APC per FTE) 35.06 32.26
Total 17,740 17,919
HC LEVERAGE (HCIR/APC per FTE) 35.06 32.26
Number of FTEs made redundant or outplaced in period (-)
35 217
Number of FTE retirements in period (-) 91 76
Number of FTEs outsourced in period (-) -
Full time equivalents (FTEs) at end of year 16,352 16,047
STAFFING MISCELLANEOUS
Mean tenure (years) 5 2 5 3
Number of FTEs made redundant or outplaced in period (-)
35 217
Number of FTE retirements in period (-) 91 76
Number of FTEs outsourced in period (-) -
Full time equivalents (FTEs) at end of year 16,352 16,047
STAFFING MISCELLANEOUS
Mean tenure (years) 5 2 5 3
GH Mean tenure (years) 5.2 5.3
Mean age of workforce 34 34
Retirement population 5,391 5,304
Mean tenure (years) 5.2 5.3
Mean age of workforce 34 34
Retirement population 5,391 5,304
And eventually the full HCIntel suiteAnd eventually the full HCIntel suite...
HC Measurement
“We really have moved on from some HR benchmarking metrics.”
•Absenteeism•Turnover (voluntary)•Turnover (involuntary)•Recruitment cost per FTE•Time to fill•Training days per FTE•Training spend per FTE•Revenue per FTE
5.2%8.6%1.8%£12,56938 days3.5£871£365,121
•VB-HR™ Rating
•HC Performance
•VB-HR™ Rating
•HC Performance
VB-HR™ RatingHuman Capital Management
Overallranking
AAAAAABBBBBBCCCCC
R
rmin
r
RRB RB
VB-HR™ RatingHuman Capital Management
Overallranking
AAAAAABBBBBBCCCCC
R
rmin
r
RRB RB
HC Productivity Statement
CONTRACTED RESOURCE ye 31st Dec 2005 ye 31st Dec 2004
Total number of FTE days contracted in year 3,530,340 3,401,289
Total number of FTE vacation days taken in year
336,987 333,144
TOTAL NUMBER OF CONTRACTED FTE DAYS AVAILABLE
3,193,353 3,068,145
WORK RESOURCE ADJUSTMENT
FTE days gained through recorded overtime work (+)
61,932 65,371
FTE days lost to illness (-) 18,431 19,016
FTE days lost to work-related illness/injury (-) 2,773 2,816
FTE days lost to industrial action (-) 249 167
FTE days recorded as lost under miscellaneous (-)
763 1,075
ACTUAL NUMBER OF CONTRACTED FTE 3 233 069 3 110 442
HC Productivity Statement
CONTRACTED RESOURCE ye 31st Dec 2005 ye 31st Dec 2004
Total number of FTE days contracted in year 3,530,340 3,401,289
Total number of FTE vacation days taken in year
336,987 333,144
TOTAL NUMBER OF CONTRACTED FTE DAYS AVAILABLE
3,193,353 3,068,145
WORK RESOURCE ADJUSTMENT
FTE days gained through recorded overtime work (+)
61,932 65,371
FTE days lost to illness (-) 18,431 19,016
FTE days lost to work-related illness/injury (-) 2,773 2,816
FTE days lost to industrial action (-) 249 167
FTE days recorded as lost under miscellaneous (-)
763 1,075
ACTUAL NUMBER OF CONTRACTED FTE 3 233 069 3 110 442
Human Capital Operating Statement
ye 31st Dec 2005 ye 31st Dec 2004
OPERATING INCOME %
Revenue (£000s) 1,057,016 1,015,020
Human Capital Operating Statement
ye 31st Dec 2005 ye 31st Dec 2004
OPERATING INCOME %
Revenue (£000s) 1,057,016 1,015,020
Measurement pyramid
Human capital reporting
•Profit per FTE•HR FTE: FTE•Employee costs per FTE•HR costs per FTE•% females in senior management roles
£67,1191:112£27,469£135623%
•HCI (used with revenue per FTE to calculate HCIR per FTE)•HR budget (adjusted using standard template) MD d
•HR spend per FTE (adjusted using standard template)•Formal job offer successPlus portfolio of tertiary indicators which are more context/organisation specific
•HC leverage•HCIR per FTE
•HC Investment ratio•Employee engagement
•Voluntary turnover1
•Absenteeism1
•Accident/injury rate
•HCI (used with revenue per FTE to calculate HCIR per FTE)•HR budget (adjusted using standard template) MD d
•HR spend per FTE (adjusted using standard template)•Formal job offer successPlus portfolio of tertiary indicators which are more context/organisation specific
•HC leverage•HCIR per FTE
•HC Investment ratio•Employee engagement
•Voluntary turnover1
•Absenteeism1
•Accident/injury rate
Workforce Intelligence
HR Strategy
OrganisationalHCMCapital
B B R
BBRCCCCCC
BBRCCCB
HCMArchitecture
BBRBB
Management Employees
BBRCCCB
BBRCCCCCC
HR Customer-agency
BB
HR Capability
BB
HumanCapital
HR Functional Capital
C RRR
HR Procurement
RBB
RBBBB
BB
EFFECTIVENESS
MAINTENANCE
Workforce Intelligence
HR Strategy
OrganisationalHCMCapital
B B R
BBRCCCCCC
BBRCCCB
HCMArchitecture
BBRBB
Management Employees
BBRCCCB
BBRCCCCCC
HR Customer-agency
BB
HR Capability
BB
HumanCapital
HR Functional Capital
C RRR
HR Procurement
RBB
RBBBB
BB
EFFECTIVENESS
MAINTENANCE
BB
BB
EFFECTIVENESS
MAINTENANCE
ACTUAL NUMBER OF CONTRACTED FTE DAYS WORKED
3,233,069 3,110,442
PRODUCTIVITY
HCI*Revenue per FTE day (optimal) £192.96 £185.42
HCI*Revenue per FTE day (actual) £190.59 £182.90
HCI*Revenue per FTE day differential £2.37 £2.52
EMPLOYER-EMPLOYEE RELATED INDICES
Employee engagement index 69.2 68.5
Employer brand index 71.3 71.0
HUMAN CAPITAL MANAGEMENT INDEX
VB-HR Rating BB-BB-R BB-B-R
HC Performance Sustaining + Sustaining +
ACTUAL NUMBER OF CONTRACTED FTE DAYS WORKED
3,233,069 3,110,442
PRODUCTIVITY
HCI*Revenue per FTE day (optimal) £192.96 £185.42
HCI*Revenue per FTE day (actual) £190.59 £182.90
HCI*Revenue per FTE day differential £2.37 £2.52
EMPLOYER-EMPLOYEE RELATED INDICES
Employee engagement index 69.2 68.5
Employer brand index 71.3 71.0
HUMAN CAPITAL MANAGEMENT INDEX
VB-HR Rating BB-BB-R BB-B-R
HC Performance Sustaining + Sustaining +
FTEs 16,352 16,047
Revenue per FTE 64,641 63,253
OPERATING COSTS
Total operating costs (£000s) 904,371 815,094
People costs (£000s) 532,181 464,317
Human Capital Intensity (HCI) 58.85 56.96
OPERATING INCOME ATTRIBUTABLE TO HC (HCIR per FTE)
38,041
36,029
£ % £ %
ANCILLARY PEOPLE COSTS (APC)
Training & Development costs (£000s) 8,176 7,342
Recruitment costs (£000s) 2,314 2,954
Health & Safety costs (£000s) 740 691
HR functional and related costs (£000s) 6,254 6,879
Outplacement costs (£000s) 256 53
Total 17 740 17 919
FTEs 16,352 16,047
Revenue per FTE 64,641 63,253
OPERATING COSTS
Total operating costs (£000s) 904,371 815,094
People costs (£000s) 532,181 464,317
Human Capital Intensity (HCI) 58.85 56.96
OPERATING INCOME ATTRIBUTABLE TO HC (HCIR per FTE)
38,041
36,029
£ % £ %
ANCILLARY PEOPLE COSTS (APC)
Training & Development costs (£000s) 8,176 7,342
Recruitment costs (£000s) 2,314 2,954
Health & Safety costs (£000s) 740 691
HR functional and related costs (£000s) 6,254 6,879
Outplacement costs (£000s) 256 53
Total 17 740 17 919
PeopleFlow® Statement
STAFFING ye 31st Dec 2005 ye 31st Dec 2004
%
No of full-time staff at start of year 14,011 13,865
Number of part-time staff at start of year (FTE eqv)
1,932 1,491
Number of other at start of year (FTE eqv) 104 175
Full time equivalents (FTEs) at start of year
16,047 15,531
STAFFING MOVEMENT % £ %
Number of FTEs recruited in period (+) 1,427 1,874
Number of acquisitioned FTEs during period (+) - -
1,427 1,874
Number of voluntary leavers (FTE) in period (-) 996 1,065
Number of FTEs made redundant or outplaced in period (-)
35 217
PeopleFlow® Statement
STAFFING ye 31st Dec 2005 ye 31st Dec 2004
%
No of full-time staff at start of year 14,011 13,865
Number of part-time staff at start of year (FTE eqv)
1,932 1,491
Number of other at start of year (FTE eqv) 104 175
Full time equivalents (FTEs) at start of year
16,047 15,531
STAFFING MOVEMENT % £ %
Number of FTEs recruited in period (+) 1,427 1,874
Number of acquisitioned FTEs during period (+) - -
1,427 1,874
Number of voluntary leavers (FTE) in period (-) 996 1,065
Number of FTEs made redundant or outplaced in period (-)
35 217
Employee engagement
Basic metrics
•MD spend•Internal/external management position fill ratio•No of industrial tribunals•% union membership•HR service delivery (IT mix)Plus portfolio of tertiary indicators which are more context/organisation specific
•MD spend•Internal/external management position fill ratio•No of industrial tribunals•% union membership•HR service delivery (IT mix)Plus portfolio of tertiary indicators which are more context/organisation specific
Business objectives awareness
Role ‘fit’
Performance management
Feedback
Capability
Line-of-Sight
Cultural elements
Leadership
Communication
Resources
Local management
Physical environment
Work Environment
The VB-HR™ Employee Engagement Framework
OrganisationalArchitectureOrganisation design
Performance management
16.1
14.6
14.2
14.313.7
Business objectives awareness
Role ‘fit’
Performance management
Feedback
Capability
Line-of-Sight
Cultural elements
Leadership
Communication
Resources
Local management
Physical environment
Work Environment
The VB-HR™ Employee Engagement Framework
OrganisationalArchitectureOrganisation design
Performance management
16.1
14.6
14.2
14.313.7
RRISK
RRISK
RRISK
HR GOVERNANCE
ORGANISATION DESIGN
RESOURCING TRAINING & DEVELOPMENT
PERFORMANCE (TALENT)
MANAGEMENTREWARD
EMPLOYEE RELATIONS
& COMMS
EMPLOYEE HEALTH &
SAFETY
HRIS & MEASURE-
MENTPAYROLLHR
GOVERNANCEORGANISATION
DESIGNRESOURCING TRAINING &
DEVELOPMENT
PERFORMANCE (TALENT)
MANAGEMENTREWARD
EMPLOYEE RELATIONS
& COMMS
EMPLOYEE HEALTH &
SAFETY
HRIS & MEASURE-
MENTPAYROLL
Total 17,740 17,919
HC LEVERAGE (HCIR/APC per FTE) 35.06 32.26
Total 17,740 17,919
HC LEVERAGE (HCIR/APC per FTE) 35.06 32.26
Number of FTE retirements in period (-) 91 76
Number of FTEs outsourced in period (-) -
Full time equivalents (FTEs) at end of year 16,352 16,047
STAFFING MISCELLANEOUS
Mean tenure (years) 5.2 5.3
Mean age of workforce 34 34
Retirement population 5,391 5,304
Number of FTE retirements in period (-) 91 76
Number of FTEs outsourced in period (-) -
Full time equivalents (FTEs) at end of year 16,352 16,047
STAFFING MISCELLANEOUS
Mean tenure (years) 5.2 5.3
Mean age of workforce 34 34
Retirement population 5,391 5,304
People Science
engagement
Base salary
Bonus/incentives
Benefits
Shares
Recognition
Promotional aspects
Reward (equity) Development
Career progression
Competencies
Succession planning
Job/ Role architecture
Training/ Learning
Coaching/ Mentoring
systemRewards systemDecision rightsWork values12.8
6
14.5
13.1
13.0
12.9
Base salary
Bonus/incentives
Benefits
Shares
Recognition
Promotional aspects
Reward (equity) Development
Career progression
Competencies
Succession planning
Job/ Role architecture
Training/ Learning
Coaching/ Mentoring
systemRewards systemDecision rightsWork values12.8
6
14.5
13.1
13.0
12.9
DIVERSITY
EMPLOYEECENTRICITY
TALENTMANAGEMENT
TRAINING &DEVELOPMENT
81.3+
DIVERSITY
EMPLOYEECENTRICITY
TALENTMANAGEMENT
TRAINING &DEVELOPMENT
81.3+
1.6HR Policy
2.5Organisation Restructure/
Change/ Development
3.1Workforce Planning
1 7
1.1Employer
brand
4.1Needs
Assessment
6.1Total Reward Programme
7.1Employee
Communications
8.2Risk
Assessment
1.2HR Value
Proposition
1.3HR Delivery
Structure
1.4HC Reporting
1.5HR Capability
2.6Acquisition/ Divestiture/
Start-up Due Diligence/ Support
2.1Organisationa
l Design/ Capability Planning –
Business Unit Level
2.2Organisationa
l Design/ Capability Planning –
Multi-country Level
2.3Organisationa
l Design/ Capability Planning –
Global Level
2.4Job
Classification/ Evaluation
3.2Candidate
Identification Services
3.3Job Profile Services/
Requisition Processing
3.4Candidate Selection
3.5Temporary
and Contractor
Staffing
3.6General
Employment Services
4.2General Training Design,
Development and Delivery
4.3Training &
Development Management
4.4Technical/ Functional/
Policy & Procedure Training
4.5Employee Induction/
Orientation
4.6Competencies/ Skills Model Development
And Assessment
5.1Performance
(Talent) Management Assessment
5.2Performance
(Talent) Management Development
5.3Performance
Reviews
5.4Succession
(Talent) Management
6.2Wage And
Salary Management
6.3Bonus/Incenti
ve/ Stock Options
Compensation
6.4Senior/
Executive Compensatio
n
7.2Benefits
7.3Attendance/
Leave Of Absence/ Exit
Interviews
7.4Return-To-
Work and Job Accommodati
on
8.1Risk
Management/ Regulatory
Compliance/ Security
9.1HRIS Strategy
9.2HRIS
Planning
10.1Payroll
10.2Employee/ Manager
Interaction/ Problem
Resolution
10.3Time
Reporting
10.6Tax
Reporting/ Audit
2.7
5.5Attendance
Management
6.5Expatriate
Compensation
7.5Company
Policies And Procedures
8.3Accident
Prevention and Training Programmes
8.4Health/Medical Programmes
9.3HRIS Support
9.4Employee
Research & Modelling
5.6Employee Coaching
6.6Compensatio
n Analysis/Pay
review
6.7Healthcare/
7.6Collective
Bargaining/ Negotiating/ Consultative Processes
7.7
8.5Incident
Tracking and Reporting
8.6Managing External
Consultants/ Outsource Providers
9.5Benchmarkin
g
9.6Measurement and Reporting
10.4Special Pay, Adjustments
And Deductions
10.5Payroll
Accounting/ Recon/ Manual
Calculations &
Disbursement
5.7 9.7
GOVERNANCE DESIGN DEVELOPMENT MANAGEMENT & COMMS SAFETY MENT
1.6HR Policy
2.5Organisation Restructure/
Change/ Development
3.1Workforce Planning
1 7
1.1Employer
brand
4.1Needs
Assessment
6.1Total Reward Programme
7.1Employee
Communications
8.2Risk
Assessment
1.2HR Value
Proposition
1.3HR Delivery
Structure
1.4HC Reporting
1.5HR Capability
2.6Acquisition/ Divestiture/
Start-up Due Diligence/ Support
2.1Organisationa
l Design/ Capability Planning –
Business Unit Level
2.2Organisationa
l Design/ Capability Planning –
Multi-country Level
2.3Organisationa
l Design/ Capability Planning –
Global Level
2.4Job
Classification/ Evaluation
3.2Candidate
Identification Services
3.3Job Profile Services/
Requisition Processing
3.4Candidate Selection
3.5Temporary
and Contractor
Staffing
3.6General
Employment Services
4.2General Training Design,
Development and Delivery
4.3Training &
Development Management
4.4Technical/ Functional/
Policy & Procedure Training
4.5Employee Induction/
Orientation
4.6Competencies/ Skills Model Development
And Assessment
5.1Performance
(Talent) Management Assessment
5.2Performance
(Talent) Management Development
5.3Performance
Reviews
5.4Succession
(Talent) Management
6.2Wage And
Salary Management
6.3Bonus/Incenti
ve/ Stock Options
Compensation
6.4Senior/
Executive Compensatio
n
7.2Benefits
7.3Attendance/
Leave Of Absence/ Exit
Interviews
7.4Return-To-
Work and Job Accommodati
on
8.1Risk
Management/ Regulatory
Compliance/ Security
9.1HRIS Strategy
9.2HRIS
Planning
10.1Payroll
10.2Employee/ Manager
Interaction/ Problem
Resolution
10.3Time
Reporting
10.6Tax
Reporting/ Audit
2.7
5.5Attendance
Management
6.5Expatriate
Compensation
7.5Company
Policies And Procedures
8.3Accident
Prevention and Training Programmes
8.4Health/Medical Programmes
9.3HRIS Support
9.4Employee
Research & Modelling
5.6Employee Coaching
6.6Compensatio
n Analysis/Pay
review
6.7Healthcare/
7.6Collective
Bargaining/ Negotiating/ Consultative Processes
7.7
8.5Incident
Tracking and Reporting
8.6Managing External
Consultants/ Outsource Providers
9.5Benchmarkin
g
9.6Measurement and Reporting
10.4Special Pay, Adjustments
And Deductions
10.5Payroll
Accounting/ Recon/ Manual
Calculations &
Disbursement
5.7 9.7
GOVERNANCE DESIGN DEVELOPMENT MANAGEMENT & COMMS SAFETY MENT Science HCIntel®
Modelling anal tics linking
HR delivery and
operational risk
EMPLOYERBRAND
HRGOVERNANCE
HR OPERATIONALRESOURCING
RETENTION
REWARD
74.2
67.4+
61.5
43.1 +
48.7
64.259 460 3
68.4
65.759.9 41.6
EMPLOYERBRAND
HRGOVERNANCE
HR OPERATIONALRESOURCING
RETENTION
REWARD
74.2
67.4+
61.5
43.1 +
48.7
64.259 460 3
68.4
65.759.9 41.6
Human C it l
Human Capital Work valuesWork values
Leadership &
governance
Leadership &
governance
Shareholder value
Shareholder valueEmployer
brandEmployer
brand
Human C it l
Human Capital Work valuesWork values
Leadership &
governance
Leadership &
governance
Shareholder value
Shareholder valueEmployer
brandEmployer
brand
3.11Managing
ASP/software/ Outsource Providers
4.11Managing
ASP/ERP/software/Outsource Providers
1.7HR
Performance/ Strategy
Review/ Audit
10.9Reporting/ Interfaces
3.7Relocation
3.8Outplacement
Services
3.9Employment Law Services
3.10Consulting
Line Managers On
Staffing Issues
4.7Leadership/ Management Development
4.8Executive
Development
4.9Career
Development
4.10Consulting On
Managerial Issues
10.7Employee
Reimbursement
10.8Statutory Benefits/
Miscellaneous Admin
10.10Managing Outsource Providers
1.8Managing External
Consultants/ Outsource Providers
Managing External
Consultants/ Outsource Providers
Healthcare/ Welfare/
Statutory/ Other Benefit Programmes
Work Practices For Represented Employees
Employee Counselling/
Case management
5.8PM
Compliance Support
6.8Pension
Management
6.9Retirement Planning/
Counselling And
Administration
7.8Conflict and
Issue Resolution
7.9Corporate/ Community
Social Responsibility
Employee Records/Case management/
Data Maintenance
9.8Reporting/ Interfaces
9.9Managing
ASP/software/ Outsource Providers
5.10Managing ASP/ERP/ Software Providers
5.9Consulting To
Line Managers On Performance
Issues
6.10Managing External
Consultants/ Outsource Providers
7.10Government/ Legislative
Issues
7.11Managing External
Consultants
3.11Managing
ASP/software/ Outsource Providers
4.11Managing
ASP/ERP/software/Outsource Providers
1.7HR
Performance/ Strategy
Review/ Audit
10.9Reporting/ Interfaces
3.7Relocation
3.8Outplacement
Services
3.9Employment Law Services
3.10Consulting
Line Managers On
Staffing Issues
4.7Leadership/ Management Development
4.8Executive
Development
4.9Career
Development
4.10Consulting On
Managerial Issues
10.7Employee
Reimbursement
10.8Statutory Benefits/
Miscellaneous Admin
10.10Managing Outsource Providers
1.8Managing External
Consultants/ Outsource Providers
Managing External
Consultants/ Outsource Providers
Healthcare/ Welfare/
Statutory/ Other Benefit Programmes
Work Practices For Represented Employees
Employee Counselling/
Case management
5.8PM
Compliance Support
6.8Pension
Management
6.9Retirement Planning/
Counselling And
Administration
7.8Conflict and
Issue Resolution
7.9Corporate/ Community
Social Responsibility
Employee Records/Case management/
Data Maintenance
9.8Reporting/ Interfaces
9.9Managing
ASP/software/ Outsource Providers
5.10Managing ASP/ERP/ Software Providers
5.9Consulting To
Line Managers On Performance
Issues
6.10Managing External
Consultants/ Outsource Providers
7.10Government/ Legislative
Issues
7.11Managing External
Consultants
Management
Modelling analytics linking performance to human capital
(management)
37
EXCELLENCE
LEADERSHIP
ORGANISATIONCLIMATE ORGANISATION
COMMUNICATIONS
ORGANISATIONDESIGN
PERFORMANCEORIENTATION
79.6+
62.859.460.3+
EXCELLENCE
LEADERSHIP
ORGANISATIONCLIMATE ORGANISATION
COMMUNICATIONS
ORGANISATIONDESIGN
PERFORMANCEORIENTATION
79.6+
62.859.460.3+
Capital PracticesCapital
Practices
External Value
Proposition
External Value
Proposition
Customer SatisfactionCustomer
Satisfaction
Customer Loyalty
Customer Loyalty
Revenue Growth
Revenue Growth
ProfitabilityProfitability
Employee Retention
Employee Retention
Individual/ team
Productivity
Individual/ team
Productivity
‘Local’ Management
‘Local’ Management
Cost controlCost control
ComplianceCompliance
Portfolio mixPortfolio mix
X-sellingX-selling
ServiceService
Line-of-sightLine-of-sight
DevelopmentDevelopment
RewardReward
Work environmentWork environment
Employee EngagementEmployee
Engagement
Capital PracticesCapital
Practices
External Value
Proposition
External Value
Proposition
Customer SatisfactionCustomer
Satisfaction
Customer Loyalty
Customer Loyalty
Revenue Growth
Revenue Growth
ProfitabilityProfitability
Employee Retention
Employee Retention
Individual/ team
Productivity
Individual/ team
Productivity
‘Local’ Management
‘Local’ Management
Cost controlCost control
ComplianceCompliance
Portfolio mixPortfolio mix
X-sellingX-selling
ServiceService
Line-of-sightLine-of-sight
DevelopmentDevelopment
RewardReward
Work environmentWork environment
Employee EngagementEmployee
Engagement Pathfinder (OE indicators)
‘RADAR’
What organisations (HR) keep getting wrong (shortlist)…
1.Employee engagement: its concept and applicationp y g g p pp2.The use of employee surveys3 Evaluation/measurement of people management3.Evaluation/measurement of people management4.Performance management5 Th ‘ l t ’ f li t5.The ‘people competency’ of line management6.The role of HR (‘customer-agency dissonance’)
4 Performance management4. Performance management
...common problems ... do differently• Trying to use ‘one size
fits all’ system• Standard platform with
tiered customisation• Competing objectives
causing confusion• Ensure PM objectives
clarified and understood • Variable quality of face-
time, feedback and rating• Need to ensure constant
MC maintenance, g• Still viewed as onerous
task• Evaluate the PMS and
identify ‘neg’ driverstas• Too often defaults into
negative perception
de t y eg d e s• Requires constant
monitoringnegative perception monitoring[Added note: MC = Management Competency;PMS = Performance Management System (N.B. this is not just software)]
3 Performance management3. Performance management
“F t d ill t ti I’d j t lik t “For today as an illustration, I’d just like to show you output from a real example of a
multi-divisional organisation who had problems getting an effective PMS to work”p g g
ADDED INSERT
VALUE-ADD4• Focus on coaching
styleNote the spreadPerformance Leadership
style • Normally linked to
well-defined scorecard for clear LOS
Note the spread along the ‘curve’
3
Very little awareness of performanceAny reviews done in unstructured ad hoc
LOS
• Formal process (inc 360 degree) supported with3
PerformanceManagement
mannerInformal, no formal documentationValue destroying
supported with continual documentation
• Value adding in geometric wayJ
PM ‘Maturity Curve’
EVOLUTION1
2
Performance Appraisal
practice
• Evaluative with focus on
geometric wayJI
HG
FEAppraisalPerformance
Awareness
• Seen as administrative-
focus on performance against role objectives
• Joint-owned process with two-A
CD
BSeen as administrativebased task
• Mainly one-way, usually associated with poor performance monitoring
pway communication
• Done semi-annually with formal documentation
A
p g• Normally done on
annual basis• Management have
limited understanding
• If conducted by management well should be value-adding
VALUE-NEGATIVEand tends still to be value negative A = business unit
© VaLUENTiS Ltd
VALUE-ADD • Minimum of twice-annual review (event-driven)• 360° feedback• Forced ranking
3
• Forced ranking• Objectives based on role• Ranking linked to reward, management of under-
performance and development needs• Continuous on-line collation of formal
2
Type 3Embedded PM
Continuous on line collation of formal documentation
‘Multi BU1
2
Type 2Integrated PM
Multi BU tiered l ti ’
EVOLUTIONType 1
Core Platform• Twice-annual review• 180° feedback
solution’
• Annual review• 90° feedback• Forced ranking
Obj i b d
• 180° feedback• Forced ranking• Objectives based on
competencies• Ranking linked to• Objectives based on
role• Ranking linked to
reward and management of under performance
• Ranking linked to reward, management of under-performance and development needs
• On-line collation ofof under-performance• Manual collation of
formal documentation
On line collation of formal documentation
VALUE-NEGATIVE
© VaLUENTiS Ltd
VALUE-ADD• Minimum of twice-annual review (event-driven)
360° f db k
3
• 360° feedback• Forced ranking• Objectives based on role• Ranking linked to reward, management of under-
performance and development needs 3
Type 3Embedded PM
performance and development needs• Continuous on-line collation of formal
documentation
BU mapping to
1
2
Type 2Integrated PMJ
BU mapping to tiered solution –
[note ‘the journey’]EVOLUTION
Integrated PM
Type 1Core Platform
T i l i
IHG
FE
[note the journey ]
• Annual review• 90° feedback
• Twice-annual review• 180° feedback• Forced ranking• Objectives based on
competenciesA
CD
B
• Forced ranking• Objectives based on
role• Ranking linked to
competencies• Ranking linked to
reward, management of under-performance and development needs
A
reward and management of under-performance
• Manual collation of formal documentation
development needs• On-line collation of
formal documentation
VALUE-NEGATIVE
© VaLUENTiS Ltd
What organisations (HR) keep getting wrong (shortlist)…
1.Employee engagement: its concept and applicationp y g g p pp2.The use of employee surveys3 Evaluation/measurement of people management3.Evaluation/measurement of people management4.Performance management5 Th ‘ l t ’ f li t5.The ‘people competency’ of line management6.The role of HR (‘customer-agency dissonance’)
5. The ‘people competency’ of line management......
...common problems ...do differently• Lack of understanding as
to what people • Clear HCM framework
with blended learning management actually involves
programmes and measurement
• Varied mix of line managers
• Standard MC platform with assessments
• No set bar to becoming line ‘people manager’
• Adopt ‘license to manage’ hurdles
• Too many ‘B’-players• HR role compensation
• Requires exit routepaths• Role definition reviewHR role compensation Role definition review
[Added note: MC = Management Competency]
3. The ‘people competency’ of line management......
“A th ll ill t ti f t d h ’ “Another small illustration for today, here’s an output from a management development
project looking at manager’s desire for learning type and duration – a very learning type and duration a very
important component for getting ‘buy-in’ to MD programmes MD programmes.
Note the difference with the standard output of so many MD programmes seen”
ADDED INSERT
MC programme: Learning channel preference
Duration and technique preferences – Central Support100%
75%CICI
PS
CS
AL Action LearningAL Action LearningAL Action Learning
efer
enceSPS
ALOTJ
CS
C
SPSAL
OTJ
CS
C
AL
CS
PS
P
CS
PS
P
C SSCI Critical Incident
AL Action Learning
CS Case Study
C Coaching
CI Critical IncidentCI Critical Incident
AL Action LearningAL Action Learning
CS Case StudyCS Case Study
C CoachingC Coaching
50%
hniq
ue p
re
M
CS
SGDG
M
CS
SGDG
CI
SAL
OTJM
SG
DG
P CI
ALOTJ
M
CS
DG
P
CI
ALOTJ
M
CS
DG
P
PS AL
CS
PS AL
CS
M Mentoring
CS Case Study
DG Discussion Group
P Panel
M MentoringM Mentoring
CS Case StudyCS Case Study
DG Discussion GroupDG Discussion Group
P PanelP Panel
25%
TechRPM
P
RPM
P
RP M
SG
DGM
SG
DG
RPRP
PS Problem Solving
RP Role Playing
OTJ On the job learning
P Panel
PS Problem SolvingPS Problem Solving
RP Role PlayingRP Role Playing
OTJ On the job learningOTJ On the job learning
P PanelP Panel
RPRP
PPS Simulation
SG Structured Games
S SimulationS Simulation
SG Structured GamesSG Structured Games
2 hours or less ½ day 1 day 2 daysDuration
What organisations (HR) keep getting wrong (shortlist)…
1.Employee engagement: its concept and applicationp y g g p pp2.The use of employee surveys3 Evaluation/measurement of people management3.Evaluation/measurement of people management4.Performance management5 Th ‘ l t ’ f li t5.The ‘people competency’ of line management6.The role of HR (‘customer-agency dissonance’)
HR FUNCTIONS HR FUNCTIONS:
THE THE CUSTOMER-AGENCY CUSTOMER AGENCY
PROBLEMPROBLEM
3. The role of HR (‘customer-agency dissonance’)
“As I have said repeatedly on many i h f i ff f hoccasions, the HR function suffers from the
customer-agency problem; having g y p g‘customers’ (to serve) on the one hand and ‘agents’ (to influence/enforce upon) on the agents (to influence/enforce upon) on the
other.
This is a subject that has rarely been broached and yet affects daily life if you’re broached and yet affects daily life if you re in HR and has wider consequences for the
i ti ”organisation”ADDED INSERT
Ten common areas of HR function HCMimprovement.....
HCMPersonnel
20152016
202016
7...
20112012
20132014
2015
201120122013
20142015
20112011
‘Splitting the core’:
The reality choiceThe reality choice for HR functions
3. The role of HR (‘customer-agency dissonance’)
“In a soon to be released article ‘Splitting “In a soon to be released article ‘Splitting The Core: The break-up of HR’ I advocate
h h i i i b bili f hithat there is an increasing probability of this occurring with some empirical evidence
already appearing”
ADDED INSERT
6. The role of HR: ‘Splitting the core’ -implications
Split core PERSONNEL HC MANAGEMENT
RoleTraditional admin support function
Strategic and operational interaction
Organisation behaviour and Expert focus Due process Organisation behaviour and
performance
Customer- Organisation as customers Organisation as agentsagency Organisation as customers Organisation as agents
StaffingVarious ‘narrow’ technician backgrounds
Wide career management throughputbackgrounds throughput
MeasurementMainly single-dimension efficiency benchmarking
Comprehensive and sophisticated 3D applicationsy g p pp
Reporting to Finance/Operations Director HC Director/CEO
Outsourcing probability High Low
3. The role of HR (‘customer-agency dissonance’)
“And when it comes to understanding and And when it comes to understanding and positioning with regards to Value Based
HRHR…
[the next three slides back by popular demand]”
ADDED INSERT
Value-based HR: HR as a portfolio of service & compliance activitiesservice & compliance activities
HighValue Add Corporate Governance
ServicesCorporate Governance
ServicesSimplified Illustration
Professional& Advisory
Services
Professional& Advisory
ServicesIllustration
Nature of
& AdvisoryServices& AdvisoryServices
Nature ofActivity
Employment ServicesEmployment Services
Transaction ServicesTransaction Services
MarginalValue Added
Complexity of InteractionComplexity of InteractionLow
Value Added
High
The real ‘HR Value Curve’The real HR Value Curve
Value contributioncontribution
(per unit)
HR ‘Activity’ (The ’93’ as defined by VB-HR™ Profiler)
HR and Line ‘value dissonance’HR and Line value dissonance
Value contribution
‘Value contribution
(per unit)
dissonance’Means that HR can closeMeans that HR can close the expectation gap...
HR ‘Activity’ (The ’93’ as defined by VB-HR™ Profiler)
Remembering (arguably the most incisive quote ever)...
Management is doing things right; Leadership is doing the i ht thiright things.
Peter F Drucker (November 19th 1909 - November 11th 2005)
And finallyAnd finally,
“Have you met DES”
DESDES…
“DES is not an individual but a collective b di f i i l lembodiment of organisational elements
of…”
ADDED INSERT
‘DYSFUNCTIONAL DYSFUNCTIONAL
EQUILIBRIUM EQUILIBRIUM
SSYNDROME’
DESDES…
“DES is where everyday organisational DES is where everyday organisational interactions/engagements have become ‘dysfunctional’ but have also reached an dysfunctional but have also reached an
‘equilibrium’ between the various players, d th thi ( f i ifi ) and thus nothing (of any significance)
changes.
However armed with your 3D DES specs However, armed with your 3D DES-specs you can see them all around. Here’s a
f ”few…”ADDED INSERT
DES: some common examples involving people…
• HR compensating for line management ‘people p g g p pmanagement’ inadequacies
• Board meetings which swap information instead of Board meetings which swap information instead of decision-making
• Performance management systems that don’t • Performance management systems that don t manage performance (or indeed poor performers)
• Reward mechanisms that reward the wrong • Reward mechanisms that reward the wrong behavioursOrganisation with a ‘talent management strategy’ • Organisation with a ‘talent management strategy’ but staff don’t know how to get promoted (which is a common finding)a common finding)
• ‘Groupthink’
Thank youThank you…
“But more on DES next time…ut o e o S e t t e
‘S i h l ’‘Same time, same channel.’
THANKYOU”
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