I blog regularly on LinkedIn. Below are my latest posts, with links to the complete blog on LinkedIn.
June 1, 2017
“We have met the enemy and they are us” – Commodore Oliver Perry, 1813
I am truly impressed at the explosion of interest in HR analytics in recent years. It seems like almost every week there is another conference somewhere in the world where people come together to share war stories and compare best practices. The excitement about what people are working on and what might be accomplished is palpable, and I don’t want to be a buzz kill. However …
As I look across the landscape of what people are doing and talking about, I get a little nervous. My Ph.D. is in economics and I spent the first decade of my career working as a traditional labor economist. The models and frameworks I learned in graduate school and applied in my first job are very powerful and carry the potential to reveal very interesting things about how labor markets impact people’s jobs and careers.
Yet despite those interesting insights, economics is almost universally derided for trying to do too much with too little – and for good reason. The problem is that economists use woefully small amounts of data on workers and jobs to tell big stories about why things happen the way they do in the labor market. For example, Gary Becker won the Nobel prize for his theory and analysis of human capital. Yet that model considers only years of schooling and years of work experience because that’s all that was universally available at the time when he was doing his research decades ago. Though the field of labor economics has progressed in a number of ways, still today the basic human capital model of formal education and years of experience is a foundation of the way labor economists look at the world. Read the rest of the post here.
April 19, 2017
The results are in: Human resources analytics has won the battle in the court of public opinion and all companies know about HR analytics. Yet they still struggle to understand what to do with it.
In a recent survey of 528 chief human resource officers across the U.S., consulting company Evanta found that they rated “leveraging HR data and tools to create business solutions” their top priority, ahead of improving HR as a business partner, succession planning, workforce planning, recruiting, and diversity. Yet they rated “developing best practices for predictive analytics” much lower, at eleventh, behind all those.
Our conclusion? Most companies still struggle to get business insights from their HR data, and can’t yet focus on advanced analytics and prediction.
So how can companies win the analytics war? Every campaign is a series of battles. Here we provide advice for winning the initial skirmishes. The first step is knowing which analysts can best battle on your behalf. The second step is knowing how to deploy them to work most effectively with both the business and HR. Do both steps the right way and you’ll be well on your way to winning the HR analytics war. Read the rest of the post here.
April 6, 2017
People usually equate high performance with employee engagement. Yet engagement is not the same as productivity and performance. How engaged people are depends on the work design, and the work design itself can promote productivity separately from employee engagement. Individual ability also is a critical contributor. Together they are the three main contributors to job performance: state of mind, ability, and job design. Engagement refers only to the first, yet the other two are arguably more important, especially for sustained performance over an extended time.
In the short term, performance can be increased through greater effort. This is what people commonly call high performance: applying extra energy, time and persistence to accomplish stretch goals. Whether you’re running a 5-K race, juggling multiple deliverables or working late to meet a tight deadline, you have to make a conscience effort to do the best you can — or risk falling short of your goals. Discretionary effort like this is what a lot of people mean when they talk about employee engagement.
However, high performance cannot be sustained solely through persevering and extreme perspiration. Sustained high performance happens through the right combination of motivation (engagement), skills (competencies), and job design (role and responsibilities). Each of these three components must be aligned to achieve sustained high performance. Two parts — motivation and competencies — are familiar to everyone and need little explanation. The third part — job design — is equally important but receives less attention. Read more here.
March 27, 2017
HR analytics is at a crossroads today. We have at our fingertips access to the most powerful computers, the largest databases on organizational processes, and ever-expanding information on consumer behavior and the way commerce is conducted worldwide. The number HR analytics articles, surveys and events proliferates while the depth of insights aren’t keeping pace. Organizations struggle as much as ever to achieve strategic objectives while HR strives to make effective decisions when dealing with tight budgets and competing business priorities.
Alexis Fink and I invite you to join us May 10-12 in San Francisco for a learning program on Strategic Analytics that provides tools and skill building to close the gaps. We show how to use analytics to make better strategic decisions and be a stronger business partner and leader. Together, we’ll learn how to:
- Bring together the business and HR to effectively identify and solve systematic talent and business challenges
- Analyze and decide when to focus on improving current HR practice, and when to rethink how everything fits together to support the business
- Determine whether you can rely on the data you have at hand in your HR systems to make strategic decisions, or go out and collect different information
- Identity where to find additional sources of data where needed
- Forge your own path when benchmarks would lead you astray
- Integrate analytics and influencing to get results
Specific examples from the participants’ current business, human capital and analytics challenges will be used throughout the workshop to demonstrate how to apply the Strategic Analytics approach, and determine what to do and what not to do. Whether you are a business leader, HR professional, or analyst, the workshop will help you make better business and human capital decisions, and direct the analytics conducted in your organization for more actionable insights.
Alexis and I jointly lead the workshop, combining our 35 plus years of working and consulting with organizations on how to optimize integrated talent management systems, total rewards, leadership and talent development, competency systems, HR and predictive analytics, strategic workforce planning, spans of control, team dynamics, organizational design, and matrix-based decision making processes.
The workshop provides participants with models and a process for conducting analytics that support improved organizational effectiveness and strategy execution. It incorporates the enterprise approach used by senior business leaders, and the human capital approach used by HR and frontline managers, which are usually applied separately and fail to find the root causes of organizational problems. The workshop shows how to integrate them for a comprehensive, systems approach to diagnosing the sources of strategy execution failure. The insights have direct implications for enterprise investment that can be used to inform annual planning and budgeting decisions.
Individuals and teams interested in using data and analytics to improve organization effectiveness and strategy execution should attend. The workshop is appropriate for HR professionals, analytics experts, function and unit leaders, line managers, and others involved with diagnosing and improving organizational effectiveness and strategy execution.
August 23, 2016
Everyone knows what talent management means, right? Yet despite widely accepted common practice, most talent management approaches fall way short of the mark when it comes to improved strategy execution and organizational effectiveness.
When we talk about accomplishing business objectives and achieving strategic success, the talent that’s embodied in people plays a critical role: without the contributions of individuals, nothing would ever happen. Yet this traditional way of defining and focusing on talent leaves a gaping hole in what we need to know: there are other major components of work design that must be included to optimize organizational performance and achieve strategic success. No one is an island, and that applies in spades at work. Read the rest here.
May 17, 2016
In the spirit of the election season, I would like to propose a type of nonpartisan party platform for candidates for analytical leader or officer positions within organizations. And even if you aren’t in charge of analytics, these are good principles to live by as someone who has to wrestle with what the analyses in your organization really mean and how best to use them – or ignore them.
1. Diagnosis before action. There should be the equivalent of a Hippocratic oath for people-related data. If doctors have to swear to first do no harm, can’t we ask the same of our data analysts and business leaders? The equivalent oath would go something like this. “I promise to take no actions based on any piece of people-related data without first doing a careful diagnosis of the drivers of individual and organizational behavior, including team dynamics.” Anyone caught violating this part of the manifesto will have to attend a daylong seminar on applying multivariate statistical analyses to social science research questions, which is a much more painful choice … trust me. Read the remaining principles HERE.
April 27, 2016
Every leader wants the best people possible working for them. Compensation is the most prominent and costly part of job design that directly impacts the bottom line in multiple ways. So not surprisingly line leaders pay inordinate attention to compensation when trying to maximize margins and performance. Yet there are many aspects of compensation that get lost or glossed over in the search for the perfect pay rate. Before your next heated conversation about how much to pay your people consider the following points. Pay is good for attracting and retaining talent….Read the rest here.
March 15, 2016
In honor of Pi Day (March 14), I decided this is a good time to channel Marie Antoinette and take stock of the current state of the HR analytics revolution. Just like with any revolution, the current state of HR analytics appears to have its share of zealous converts, soldiers and civilians, active resisters, and PR that obscures what’s really happening on the front lines. And perhaps the biggest question is whether it’s a genuine revolution that’s truly advancing the “national interests” of the business or a distraction that’s drawing attention away from where the real battles should be waged. Read the rest here.
February 19, 2016
- Benchmarking employee engagement, survey data, and spans of control is not strategic
- You have to embed that data in the larger context of work design and what drives organizational performance to truly understand what’s actionable and where you need more info to drive change in the right direction
Leaders love to benchmark, which is how they evaluate operational performance. So benchmark data play a central role in a lot of analytics carried out both in the business and by HR. Benchmark data on quality, margins, market share, customer satisfaction, and other areas are essential for measuring strategy execution. Read the rest here.
January 28, 2016
Who are Millennials and what do they really want? There are so many stereotypes and caricatures of Millennials, it’s hard to know what’s fact versus fiction.
In Jennifer Deal’s and my new book What Millennials Want From Work we take a look at the complete picture of what defines Millennials and their desires. The book is based on survey data from more than 25,000 Millennials and 29,000 people from other generations in 22 countries.
We find that some of what you’ve heard about Millennials is true – to a certain extent – but that most of the hype is just that: hype. Read the rest here.
December 1, 2015
Businesses worldwide are in the midst of a data feast and statistical Renaissance. Data scientists are being hired at a rapid clip, the likes of which haven’t been seen since the launch of the Internet and the frenzied search to hire anyone who could do HTML programming and build web sites. Based on reports from the front lines of business analysis, it would appear safe to conclude that the promise of Big Data is being realized daily. But is it?
We certainly have more and more data on where people are at any moment with their cell phones, and how they browse and shop online. Google almost singlehandedly has launched the most recent transformation of the advertising industry toward ever greater data-based decision making. For companies deep in the throes of large-scale transformation of how they interact with customers and learn about their buying patterns, it can feel right now like you are living in the eye of a hurricane: things may be relatively calm at this very instance (meaning you aren’t losing a ton of business to new and emerging business models), but the prospects for calm weather and an easier time making money are a long ways off.
My take on all of this: don’t get swept up in the hype. Read the rest here.
November 10, 2015
Right now senior leadership in both the business and in HR is leaving value on the table. We have to end the “business as usual,” nonintegrated way enterprise analytics and human capital analytics are conducted.
The lack of coordination is understandable at first glance. People are very busy: dividing business and HR process management and the accompanying analytics up into separate domains makes it easier to tackle the tasks. That way the leadership of the business and the leadership of HR stick to what they know best, including the analytics needed to monitor and assess progress. But the divide-and-conquer approach is precisely where things go wrong. Read the rest here.
October 20, 2015
HR is becoming more and more data based and analytical. Yet the insights that we’re getting from the data are not increasing as quickly as the rapid proliferation of software tools, seminars, and people with “data scientist” titles. Why is that? A big part of the problem lies in the kinds of analysis we’re doing, with too much emphasis focused on techniques that appear to provide new insights, but which more often than not are a distraction: data mining and linkage analysis.
Data mining. The motivation behind data mining is eminently reasonable: you look for statistically meaningful relationships between measures to inform further analysis. However, data mining is one of the most risky things you can do with HR data. If people are clamoring for insights and you find an interesting relationship in the data, it is tempting to present the results to engage your audience. But presenting interesting relationships is very different from specifying and testing a full causal model. Read the rest here.
September 26, 2015
In my previous post I argued that HR needs to stop focusing on “best practices” and making its processes world class. A related problem happens when it comes to evaluating how HR is doing, and what criteria should be used. The problem is that HR too often focuses on the programs as designed, not whether they really address what the business needs. Three examples illustrate this point: compensation, leadership development and competency models, and training and development.
Compensation. A key issue in evaluating an HR program is whether you evaluate the program’s design or its intent. For example, merit raises are supposed to motivate people to perform. The design goal of the program is to differentiate compensation based on performance, which is one target measurement. The program’s intent—providing increased motivation to perform—is separate and much more difficult to measure.
August 21, 2015
(a.k.a. Are You Helping to Improve Strategy Execution Where It’s Most Needed?)
For decades HR has been searching for the right ways to make strategic contributions to the business. I have my own opinions about how HR can do that, some of which are detailed below and in previous posts (for example, on HR scorecards and on measuring ROI). But even more important than what it should do is what it should not do. HR needs to stop obsessing over making HR processes world class.
Now, to be clear, I am not saying that HR should settle for bad policies and practices. But one of the biggest barriers to HR being a true strategic partner is an over-emphasis on HR “best practice.”
There are a thousand things that can be done to fix existing organizational processes and to help people do their jobs better and be more efficient. On the HR side, managers can give better feedback and help their teams to do their work more efficiently. HR can improve the efficiency and effectiveness of recruiting, onboarding, performance management, and training. And so on.
August 10, 2015
The balanced scorecard has popularized the idea that organizations should regularly measure and monitor key metrics about people. And if there are data available that describe what is going on with the people in your organization, what’s the harm in reporting them? Isn’t more information better than less?
The answer is “yes and no.” Sticking your head in the sand and acting as if there are no data to inform human capital decisions ignores reality. But reporting HR data simply for the sake of sharing is not smart. If you present data without knowing its full value and how to act on it, you will create more problems than you solve. You need a model of what’s driving the behavior you’re observing and why you should care about it.
Consider turnover. What is the “right” level of turnover? In a call center, 50% annual turnover could be a cause for celebration, while 15% turnover for nuclear power plant engineers could be a disaster. The only way to tell the story the right way is to provide further information about the context. Many call centers have annual turnover in excess of 100%, so getting to 50% could be a great achievement. There are a very limited number of nuclear power plants engineers in most countries, so losing even one can create issues for the companies running these plants. If you report only turnover in your scorecard, and don’t embed that information in the larger organizational context, you open the door to people taking action in ways that don’t promote the business’ bottom line.
July 29, 2015
In my previous post I discussed why ROI falls short as a tool for making business decisions. Here I address why ROI doesn’t live up to the promise it’s supposed to have for evaluating human capital and HR.
HR is often asked to show the ROI of its programs and processes. Think about how this usually plays out. When applied to human capital or HR, ROI is almost always used defensively to justify programs and policies for which there is not enthusiastic support. At the same time, there often is unwavering support for people and processes that key stakeholders “know” are critical for strategic success. So if ROI is not the preferred method for understanding how people and processes contribute to strategic success, what is? And how can organizations better diagnose what levers they need to pull to improve strategy execution and organizational effectiveness?
For example, effective strategy execution often can be improved through better communication about goals and priorities. An HR objective of better communication about goals and priorities can lessen the amount of time needed to complete work processes, which in turn can improve resource use efficiency—a monetary benefit that can be included in ROI. However, the benefits of better communication do not necessarily show up directly and immediately in more efficient use of resources. Instead, more efficient use of resources is often realized only after a significant delay following the improved communication, or in conjunction with other interventions such as team coaching, improved leadership and IT support, or changes in the work design. The benefit of improved communication can be expressed in monetary terms and included in ROI only in the minority of cases where it has an immediate and direct impact on resource efficiency.
July 15, 2015
Return on investment (ROI) is perhaps the most universally applied tool ever created in the history of finance. It is a standard measurement used to evaluate the financial return from an investment or project.
For all its power, though, ROI is a lot like the monster or bogeyman hiding under the bed that young children fear. It can seem big and scary, even at times all powerful, when we are young. But when we grow up and can see things with a broader perspective, we understand the reality and can put our youthful fears to rest. ROI today is used like a litmus test for HR—if HR cannot show a high enough ROI, then Finance will never approve what HR wants to do. And HR is like the young child fearing the ROI bogeyman under the bed: it doesn’t have the right perspective on the limitations of ROI and what should be done instead.
In my next post I will address why ROI doesn’t live up to the promise it’s supposed to have for evaluating HR. But first here I address why it’s lacking as a tool for making business decisions.
March 13, 2015
We know from decades of research and practice that performance leads to job satisfaction. When people are productive, accomplish their objectives, get good feedback on their performance, and are rewarded for being productive, they usually are satisfied with their jobs.
The counter argument – employee engagement causes performance – makes intuitive sense yet does not necessarily hold empirically. The easiest way to make most employees happy is to keep their compensation the same and cut their responsibilities in half. However, doing so would completely destroy profits. Thus employee engagement does not always “cause” improved organizational performance.