Monthly Archives : March 2019

human resource strategy text

Perspective: Human Capital Metrics that “Matter”

By: Tanya Harris, SHRM-SCP, PMP

How often have you sat in a “strategic planning” session and have heard the phrase, “Measure what is measurable and make measurable what is not so?

Many HR professionals and business leaders have heard and even reference the quote penned by Galileo. The truth is that if your organization is expecting to win in terms of the triple bottom line (people, profits, planet) and to have a sustainable competitive advantage, your leaders must find a way to measure what counts. Simply, Human Capital Management involves the quantification of the economic value of people in both your financial accounting and management terms.

From a strategic and tactical perspective, your organization’s Human Capital Management strategy should focus on connecting people-management policies to the unique way your organization creates value. By doing so, it becomes a key to strategy creation and execution. The complexity of accurately measuring value has led to a proliferation of performance metrics, often leading to confusion, duplication, and HRIS reporting nightmare.  Those responsible for determining goals, objectives, and metrics, should participate in a calibration or consensus-building process that identifies key performance goals focusing on outcomes that enhance value. Once the primary targets have been defined, metrics that measure these goals can be established.

Organizational and HR Strategy

Strategy drives all allocation of resources, people, processes, and technology acquisition or usage; as well, should determine what projects your organization select and execute to accomplish its strategic objectives.  Your organizations’ Human Capital (people system) is the most vital asset that your organization have or can acquire to deliver successful strategy execution.

What does this mean for your human resource partners? Unfortunately, despite the increased involvement in executing and developing organizational strategy, the perception of the HR partner as administrative still exist. This perception will continue until human resources business partners (HRBP) steadily focus on initiatives that place them in full strategic partnership with other key decision makers within the business. Therefore, by creating an HR strategy that parallels and facilitates the implementation of the organizational strategy, HR can assure its position as one of the drivers of strategy by using measures that matter to support key performance drivers and drivers of financial outcomes.

What is an HR strategy and how is it formulated?

An HR strategy refers to the processes, decisions, and choices organizations make regarding how they manage their people system. HR strategies are often formulated to align with the organization’s strategy, by creating the capacity in the workforce (human capital) and how it is organized that is necessary to achieve the organization’s strategic objectives. An article from the Society of Human Resource Management (SHRM), provides a checklist to help HR professionals measure their behavior as an HR strategic partner in the formulation of strategy. A few questions to consider are:

How do you engage in strategic business activities?

Do you:

  • Help identify or design strategy options
  • Help plan implementation of the strategy
  • Help identify new business opportunities
  • Assess the organization’s readiness to implement strategies
  • Help design the organizational structure to implement a strategy
  • Assess possible merger, acquisition or divestiture strategies
  • Work with the corporate board on business strategy

Research findings by Cascio & Boudreau (2014) suggest that an HR strategy requires a focus on planned major changes in the organization and on critical issues such as the following:

  • What are the HR implications of the proposed organizational strategies?
  • What are the possible external constraints and requirements?
  • What are the implications for management practices, management development, and management succession?
  • What can be done in the short term to prepare for longer-term needs?

If as an HR leader, you and your team are not engaged in the activities indicated, it may be time to re-evaluate your value proposition to the organization.

The HR Scorecard—The Link Between Business Strategy and HR Practices

“What gets measured gets managed.”

According to the Balanced Scorecard Institute,

“The Balanced Scorecard (BSC) was originally developed by Dr. Robert Kaplan of Harvard University and Dr. David Norton as a framework for measuring organizational performance using a more BALANCED set of performance measures.”

The balanced business scorecard links measures in four perspectives: (1) Financial or Stewardship, (2), Customer & Stakeholder, (3) Internal Process, (4) Organizational Capacity or “Learning & Growth.” Therefore, an HR scorecard approach may be a significant task for many HR organizations because the people system is relegated to “Organizational Capacity” or “Learning and Growth” when looking at the four perspectives of the balanced scorecard, at least that’s the position of many HR leaders.

To overcome this challenge, the HR executive must determine the performance drivers that when implemented and executed successfully develop effective and efficient work processes. Then your HR leader must decide what steps and deliverables should be performed to create value. For example, you may have to include changing reporting relationships, clarifying employee roles, initiating new compensation and reward systems or create performance evaluations and career planning aligned with the direction of the business. Cascio & Boudreau (2014) proposes that the “HR strategy flow directly and naturally from the strategy (“it [strategy] ends up meaning everything – the people you hire, who gets promoted, what you discuss in meetings.”).

Therefore, they argue that the HR strategy requires an emphasis on critical perspectives such as the following:

  • What are the HR implications of the proposed organizational strategies?
  • What are the possible external constraints and requirements?
  • What are the implications for management practices, management development, and management succession?
  • What can be done in the short term to prepare for longer-term needs?

SUMMARY

As an HR professional, you must know your organization’s business thoroughly and have strong business acumen in terms of financial, environmental, economic, and technological forces impacting it. The HR function must be assessed on its deliverables, and how those deliverables correlate to outcomes of value to the strategy. An HR scorecard aligned with the organization’s strategy will not only bring HR “to the table,” but allow collaboration with decision makers, participate in the management team, and share accountability for organizational results provides the foundation of a legitimate framework for strategic partnerships.

Reference

Cascio, W., & Boudreau, J. (2014). HR strategy: Optimizing risks, optimizing rewards. Journal of Organizational Effectiveness, 1(1), 77-97

https://www.shrm.org/hr-today/news/hr-magazine/Pages/0812boudreau.aspx

 

group of people sitting in chairs

Using CliftonStrengths to Bridge Generational Gaps at Work

BY NATE DVORAK AND RYAN PENDELL

Everybody loves working for Gary.

He’s been a manager at the same manufacturing company for 20 years. He knows every detail about his employees’ lives — from their favorite teams to their kids’ names.

He delivers honest, unflinching feedback that makes people carefully examine their performance. And he makes people laugh — often in the same conversation.

Gary has coached and mentored every person on his team for decades. Without a doubt, many of his coworkers have stayed at the company because they love having Gary as their leader.

This year Gary decided to retire, and the site leadership thinks they have the perfect person to fill his role: Shanna. She is a conscientious, methodical and an extremely reliable supervisor. Shanna’s team has been the plant’s top performers since she arrived five years ago, and she has developed many cost-saving and safety-improving initiatives. Site leaders are eager to promote Shanna to expand her leadership skills and keep her engaged.

There’s just one problem: Shanna is nothing like Gary. They have completely different leadership styles, personalities and — although nobody says it out loud — Shanna is 30 years younger than Gary. What’s going to happen when millennial Shanna gets thrown in with a team of baby boomer “lifers” with more experience and longer tenures? Honestly, even Gary was secretly skeptical.

Getting Honest About New Generations in Management

Gary’s and Shanna’s situation is increasingly common in workplaces today as the baby boomer generation retires and Gen Xers and millennials take on more supervisory and leadership roles. Traditional organizations that worked desperately to attract millennials are now having to navigate an intergenerational workplace.

Millennials make up 38% of the workforce, and that percentage is only increasing. But as millennials enter management roles, only 39% strongly agree that they know the strengths of the people they work with regularly, which is lower than all other generations.

A major component of managing changes in leadership is easing individuals’ anxieties and worries. Strengths-based education and dialogue are valuable tools for doing this:

  • CliftonStrengths focuses on future potential. When people think about their strengths, they focus less on how things could go wrong and more on how they can make things go right.
  • CliftonStrengths is universal. All people — regardless of generation — have talents that contribute to their team’s success. A strengths-based approach shifts the conversation from “us vs. them” differences, stereotypes and biases.
  • CliftonStrengths is personal. In times of change, people want to know that somebody is paying attention to them personally. Having strengths-based conversations lets each person know that they are seen and respected as an individual and a contributor.
  • Strengths-based conversations focus on the positive. Having conversations about CliftonStrengths help individuals think more about why differences are good rather than bad.

Not Bad, Just Different Strengths

When Gary’s team filed into the conference room, the skepticism was obvious. Here were Gary, Shanna and Joan from site leadership who were going to tell everybody to “get along and give Shanna a chance.”

Joan began by talking about Gary’s top CliftonStrengths themes: Woo, Significance,Restorative, Relator and Maximizer. She asked the team to talk about how Gary used his strengths in his management role. Everyone shared what made Gary so beloved and irreplaceable. It was clear that this recognition meant a lot to Gary.

Next, Joan presented Gary’s bottom CliftonStrengths themes: Achiever, Adaptability,Arranger, Command and Competition. She asked everyone to talk about Gary’s bottom themes. With a lot of good-natured laughs, most of the team agreed that these areas of lesser talent were “no big deal” because Gary was good at so much else.

Finally, Joan brought up Shanna’s top CliftonStrengths themes: Consistency, Relator,Discipline, Achiever and Restorative. Joan asked Shanna in what areas she used her strengths as a manager. To everyone’s surprise, Shanna had two of the same top strengths as Gary — they just showed up a little differently.

One team member mentioned that he had the same strengths as Shanna. Another said that she had some of Gary’s other strengths and could help out if Shanna needed it. Soon people were sharing their strengths and letting Shanna know how they worked best.

By the end of the meeting, the team was buzzing with anticipation. The question on everyone’s mind had shifted from, “What does Shanna lack?” to “What is Shanna amazing at, and how can we best work with her?”

The facts of the situation had not changed: Shanna wasn’t Gary. She would never be Gary. But Shanna had unique talents too. The team didn’t need another Gary to survive. In fact, Shanna might be just the person the team needed to solve some of its most intractable problems.

Joan noticed by the end of the meeting that Gary was beaming.

“I’m just so glad to see that the team I built is going to do just fine without me,” said Gary afterward. “Shanna is going to be great.”

Gallup can help you bring the power of CliftonStrengths to your organization:

Nate Dvorak is a Researcher, Predictive Analytics, at Gallup.

Ryan Pendell is a writer at Gallup.