Organizational Development Tag Archive

Strategic Analytics is a team sport

November 10, 2015| People, Systems|

Right now senior leadership in both the business and in HR are 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. (more…)

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Choose impact, not process: Evaluate HR program intent, not just the design

September 26, 2015| People, Systems|

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. (more…)

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HR Perfect Processes are the Enemy of What’s Good for the Business

August 21, 2015| Organizations, People, Systems|

(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.

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The Right Way to Scorecard HR (Don’t Focus on Turnover and Safety)

August 10, 2015| People, Systems|

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. (more…)

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ROI falls short for evaluating human capital and HR

July 29, 2015| People, Systems|

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? (more…)

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The ROI monster under the bed

July 15, 2015| People|

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. (more…)

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Employee engagement does not cause performance

March 13, 2015| People, Systems|

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.

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