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ADVANCED HUMAN
RESOURCE MANAGEMENT
Prof. Dr. Armin Trost
English Version
for
International Business Management
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 2
Overview
Retention
Job Motivation and Satisfaction
Employee Survey
Change Management
Knowledge Management
Social Media
HR Organization and Information Technology
HR Controlling
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 3
Retention
Prof. Dr. Armin Trost
Retention – Overview
Key terms
Turnover costs
Turnover diagnosis
Turnover prediction
Retention measures
Turnover strategies
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 5
Turnover – Definition of Key Terms
Turnover
The process in which employees leave the
organization and have to be replaced
Turnover Rate
Number of Employees leaving the Company in a Year
100%
Number of Employees at Midyear
Involuntary turnover
Turnover initiated by the organisation (often among
people who would prefer to stay).
Voluntary turnover
Turnover initiated by employees
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 6
Performance Turnover Relation
Poor Evaluation; High mobility,
small pay raises; opportunities due to high
poor satisfaction labor market value
Average turnover
underestimates
20% critical leaves
Turnover
10% Average
Low Middle High
Performance
According to: William and Livingstone (1994). Another look at the relationship between performacne and
voluntary turnover. Academy of Management Journal, 37, 269-298.
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 7
Turnover Costs
Training
Onboarding
Hiring
Visible („Direct“) Costs Selection
Marketing
Vacancy Lost
Separation Productivity of
Other Employees
Learning
Curve of
Hidden („Indirect“) Costs Lost New Hire
Productivity of
Other Employees
Lost
Productivity of
Lost Vacant Position
Productivity of
Other Employees
Lost
Productivity
of Incumbant
Pre-Departure Vacancy Introduction
Employee Leaves New Employee New Employee
Hired Fully Effective
Source: Corporate Leadership Council (1998). Employee Retention
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 8
The Psychological Contract
Employer Provides Employee provides
Regular Pay Networks
Benefits Customers
Social networks Performance
Challenging tasks Creativity
Training Capabilities
Image Knowledge
Security Talent
Values Energy
Idendity Time
Health
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 9
Retention Factors
Which of the following
factors are most likely to
hinder your company’s
ability to retain talented
employees over the next
three years? Select up to
three (Answers in %)
The Economist Intelligence Unit 2008 (Responses of 1.000 executives around the globe)
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 10
Major Retention Factors for High Potentials
Challenging
and strategic
Projects
Board Freedom to
Awareness Act
Retention
Professional
Networks Competitive
Within Salary
Executive
Trust &
Support
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 11
New Generations require new Ways of Life
10 20 30 40 50 60 70 80
Learn Work Private
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 12
Flexible Working Structures
fixed Location mobile
fixed Time flexible
fixed Structure flexible
Employees go to Work Employees take their Work with them
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 13
The common Approach: Turnover Diagnosis
Usage of scientific methods to systematically
answer the question: Who leaves why?
88% of all companies survey by Mercer in 1998
conduct exit surveys and/or exit interviews to
capture reasons to leave
While results are always of general interest they
hardly provide relevant insights for the business
line (e.g. female employees leave the company
for different reasons than male employees)
Results taken from turnover diagnosis help
companies to undertake strategic measures with
regards to employer branding
Turnover diagnosis can be seen as a reactive
rather than as a proactive measure
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 14
Exit Interview (Example: Intel)
What was the main reason that you
decided to leave? Pay
Is your new position in a different line Benefits
of work than the one you where in while
at Intel? Location
How would you characterize your new Working Conditions
employer?
Job Security
Would you say your new employer is
better than Intel, about the same as Advancement Opportunities
Intel, or not as good as Intel in terms Product Quality
of:
Coworkers
How would you descibe your
relationship with your manager while Company Leadership
you where at Intel?
Company Image
How would you describe your
experience with Intel?
If a friend approached you and told you
he/she was looking for a similar
position at Intel, how likely would you
be recommend Intel?
Any other comments about Intel or you
new position?
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 15
A simple Framework to predict Turnover
1
Employee
Commitment
2 4
Capabilities to Intention to
Supervisor do a good Job Turnover
leave/stay
Quality
Social 3
embedded
ness
Four strong questions to be asked regularly
1 Would you recommend a friend to 3 Do you enjoy working with your
work at X1? peers and supervisor?
2 Do you have everything you need 4 Do you seriousely consider leaving
to do your job well? X1 within the next 6 months?
1 X = Name of the company in question
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 16
Commitment Capability Matrix clearly indicate
Supervisor Quality
High 5
Chris Christensen
Keneth Keith Carlson Garth McGrath
4 Mark Myer John Shark
Commitment
Mike McGuire Kelley Clark
Tom Scott
Rock Stewart
3
Paul Paulson Susan Power
Linda Anderson
Ed Flaw Russ Rothen
2 Pete Peters
Paul Cummings
John Smith
Low 1
1 2 3 4 5
Low Capability High
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 17
Retention Target Groups
High
Risk of Let Re-
Departure Go Recruit
Turnover
Intention
Don‘t Take
Care Care
Low
Low Employee High
Value
Impact of Departure
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 18
Impact of „Cost of Changing Career“
Cost of
Doing Cost of
Nothing Changing
Career Cost of
Cost of
Change
Doing
Benefits of Nothing
Benefits of working at
staying other
with employer
current
employer
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 19
Turnover Decision Styles
High Involvement Decision Making
Systematically and carefully taking into consideration current
employment, alternative employement opportunities, own
strength and weaknesses, long-term expectations and
private situation
Opportunity Driven Decision Making
Underestimation of appealing elements of current
employment and consistent overestimation of other
employment offers even in times of limited pressure
Fleeing from current Situation
Feeling that everything is better compared to the status quo.
Negatively perceived elements of actual job are main drivers
for changing career
Externally Driven Decision Making
Employment alternatives including the current one are
evaluated according to friends‘ and family‘s attitudes and
expectations
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 20
Job Motivation and Satisfaction
Prof. Dr. Armin Trost
Types of Theorie
Content Theory
These theories attempt to explain those specific things
which actually motivate the individual at work
■ Maslow’s Hierarchy of Needs
■ Job Characterstics Model of Hackman & Oldham
■ Herzberg’s Theorie
Process Theory
These theories attempt to identify the relationship
among the dynamic variables which make up
motivation
■ Maslow’s Hierarchy of Needs
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 22
Job Characterstics Model by Hackman & Oldham
Job Psychological Desired
Characteristics States Outcomes
Skill Variety
Experienced
Task Identity
Meaningfulness
Task Significance Motivation
Experienced
Autonomy Performance
Responsibility
Satisfaction
Feedback Knowledge
of Results
The relationship is moderated by the
strength of an employee‘s need for growth
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 23
Two Factor-Model by Herzberg
Relative Frequencies of reported events
In „bad“ Situations in „good“ Situations
Satisfaction/No Satisfaction Dissatisfaction/No Dissatisfaction
Achievement 7 41
Motivation Factor
Recognition 18 33
The work itself 14 26
Responsibility 6 23
Advancement/Growth 11 20
Self Actualization 8 6
Compensation 17 15
Subordinate 3 6
Status 4 4
Hygiene Factor
Supervisor 15 4
Colleagues 20 3
Leadership 20 3
Company Policies 31 3
Working Condition 11 1
Private 6 1
Security 1 1
35 30 25 20 15 10 5 0 10 20 30 40 50
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 24
Expectancy Theory by Vroom
Force – the motivation or the force to
show a specific action
Expectancy – the possibility of
achieving a certain outcome through
F = (E V) certain actions
Valency – the preference an individual
has for a particular outcome, the worth
placed on a particular result
Jump Don't Jumb
V E ExV E ExV
Not loosing face 3 0,9 2,7 0,1 0,3
Health & Safety 8 0,1 0,8 0,5 4,0
Keeping warm 2 0,8 1,6 0,4 0,8
Success story 4 0,6 2,4 0,2 0,8
Force 7,5 5,9
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 25
Types of Job Satisfactioin
By Bruggemann
Vergleich Soll - Ist
Stabilisierende Diffuse
Zufriedenheit Unzufriedenheit
Erhöhung des Beibehaltung Senkung des Beibehaltung
Anspruchs- des Anspruchs- Anspruchs- des Anspruchs-
niveaus niveaus niveaus niveaus
Ohne neue
Verfälschung Neue Problem-
Problem-
der Situations- lösungs-
lösungs-
wahrnehmung versuche
versuche
Progessive Stabilisierte Resignative Pseudo- Fixierte Konstruktive
Zufriedenheit Zufriedenheit Zufriedenheit Zufriedenheit Unzufriedenheit Unzufriedenheit
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 26
McGregor’s Theory X and Y
Theory X Theory Y
The average person is lazy For most people work is as
and has an inherent dislike natural as play or rest
of work
People will exercise self-
Most people must be direction and self-control
coerced, controlled, in the service of objectives
directed and threatened to which they are
with punishment if the committed
organization is to achieve
its objectives Commitment to objectives
is a function of rewards
The average person avoids associated with their
responsibility, prefers to achievement
be directed, lacks ambition
and values security most Given the right conditions
of all the average worker can
learn to accept and to seek
responsibility
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 27
Employee Survey
Prof. Dr. Armin Trost
Employee Survey – Overview
Purpose and approaches
Employee survey operation
Commonly used content
Result interpretation
Limitations of traditional employee surveys
Strategic employee survey
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 29
Employee Survey Objectives
I II III
Insights into Identification fo Improvements
naturally hidden strengths and
subjects weaknesses – Working conditions
– Productivity
– Employee retention
– Employee Evaluation of
Satisfaction – Culture
former actions – Meeting strategic
– Corporate climate,
culture, values goals
– Commitment and
Induction of – …
capabilities related to discussion and
strategic challenges initiatives
– …
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 30
Employee Surveys can adress the Needs of
different Clients
Top-Management
Middle Management
Employees
Internal Service
Provider
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 31
Survey-Feedback
Improvement
Activitiy
Survey
Problem
Identification and Analysis and
Action Setup Reporting
Feedback
Results to all
Employees
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 32
Employee Survey Project Steps
Project Planning Feedback/Commu
& Setup nication
Report
Prestudy Action Planning
Generation
Survey Survey
Implementation
Development Administration
Prior
Evaluation
Communication
Preparation Survey Follow-Up
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 33
Survey Development
Topics
Indicator
Questions
Adjustment
Pretest
Operation & Evaluation
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 34
During the past year, have you been bothered by
pain in your abdomen?
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 35
Q12 (Gallup)
1. I know what is expected of 7. At work, my opinions seem
me at work to count
2. I have the materials and 8. The mission/purpose of my
equipment I need to do my company makes me feel my
work right job is important
3. At work, I have the 9. My associates (fellow
opportunity to do what I do employees) are committed to
best every day doing quality work
4. In the last seven days, I have 10. I have a best friend at work
received recognition and
praise for doing good work 11. In the last six months,
someone at work has talked
5. My supervisor, or someone to me about my progress
at work, seems to care about
me as a person 12. This last year, I have had
opportunities at work to learn
6. There is someone at work and grow
who encourages my
development
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 36
A Typical Way to Present Results
Frequencies (%)
I have the materials and equipment I need to strongly partly- dis- strongly
N Average agree
do my work right agree partly agree disagree
1 2 3 4 5
Sales Germany 35 35 36 36 29
29 45 2,92 12 23 36 19 10
Global Sales 48 28 24
48 28 24 287 2,63 19 29 28 18 6
Organization
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 37
Survey Results (Example)
1 1,5 2 2,5 3 3,5 4 4,5 5
1,7
Tasks and Duties 1,6
2
Work Environment 1,5 Region South-West
2,3 Germany
Empowerment 2,6
1,4
Colleagues 1,6
Direct Supervisor 2,3 Region South-West (32
2,1 Employees) is part of
Communication 2,8 Germany (186 Employees)
2,8
2,5 1 = Best possible result;
Work Flexibility
2,4 5 = worst possible result
2
Work-Life-Balance 1,8
Compensation 3,1
3,2
2,5
Benefits
2,6
Commitment 1,7
1,8
2,8
Career Development
2,2
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 38
Ways to interpret results
Absolute
Means and frequencies of answers related to different
items are absolutely compared. The more negative the
results by absolut means the bigger the issue
Relative
Results are compared to internal and/or external
standards or benchmarks. In most cases results of
superior unit are used
Longitudinal
Current results are compared to results of previous
surveys
Objectives
Results are compared with predefined expectations
(objectives)
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 39
Rules in Follow-up Processes
All employees get all results of the survey
Feedback of results follows a top-downn
approach from to top-management to every
single team
All teams get their own results compared to the
results of the superior organisational units
Issue, which lay beyond an organizational unit‘s
respnsibility will be escalated to the unit on the
next level
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 40
Shortcomings of Traditional Employee Survey
Approaches
Surveys are isolated events not integrated into
regular leadership processes
Not every topic is relevant for everybody on every
hierarchy level
Objectives are defined after the survey has been
conducted based on survey results. But, surveys
can‘t change priorities
Required budgets for improvement activities are not
defined. Therefore planned actions lead to minimal
impact
Focus on satisfaction – missing linkage to business
drivers and results
Tremendous efforts through intense reporting and
follow-up processes
Comparison with benchmarks means taking
the mediocre as standard
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 41
Satisfaction versus Strategy
Pulse Survey Traditional Approach
Topics Factors driving Factors driving employees‘
competititiveness satisfaction and
Business Indicators performance based on a
scientific model
Stakeholder Top-Management Employees, Managers,
(Customer) Internal Service Units
Follow-up Results are natural part of Units on all levels are
top-management agenda encouraged to work with
and decision making results and draw
Objectives are set in conclusions
advance to the survey Objectives are set after the
survey
Cycle Up to every month Every 1 to 5 years
Participants Random samples, panels, Every employee
high-potentials
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 42
Commitment & Capabilities related to Strategy X
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 43
Commitment Capability Grid – Example
Garth McGrath Innovation
high high
Mark Myer
John Shark
Cost Reduction
Russ Rothen
Schulze-Pübbelkamp
Capability Capability
SAP
Implementation Ed Flaw
Service Quality Kelley Clark
Innovation Garth McGrath
Pete Peters
low low
low high low high
Commitment Commitment
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 44
Change Management
Prof. Dr. Armin Trost
Overview
Large-Scale transformations and related human
reactions and challenges
Change Management – definition and framework
Sponsorship and commitment
Program organization
Employee communication and involvement
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 46
Types of large-scale Transformations
Reengineering
Changing the way people work
Restructuring
Changing roles and responsibilities of people
Mergers & acquisitions
Changing entire groups of people
Strategic change
Changing the direction of people‘s work
Cultural change
Changing people‘s attitutes, values and beliefs
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 47
Response to Disruptive Changes
Emotional
Response Anger
Acceptance
Active
Bargaining
Stability
Denial Testing
Immobilization
Depression
Passive
Time
According to Kübler-Ross: On Death and Dying (1967)
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 48
Resistance to Change
Resistance is a natural human reaction on
disruptive events (fear of loosing control)
Change is seen by different people differently
according to their individual frames of reference
Resistant employees are often seen as not
rationally thinking troublemakers
Resistance of informal thought leaders are of
greater power than those of formal leaders
There is always a mixture of overt and hidden
resistance. Overt resistance should be a valuable
aspect of any change process
Active involvement is propably the best way to
deal with resistance
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 49
Response to Positive Change
Pessimism
(Perceived Complexity)
Level of Tolerance
Informed Pessimism Checking Hopeful Realism
Out (?)
Informed Optimism
Uninformed
Optimism (Naivité) Completion
Time
According to: Conner: Managing at the Speed of Change
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 50
Why Transformation fail
(Kotter, 1995)
Not establishing a great enough sense of urgency
Not creating a powerful enough guiding coalition
Lacking a vision
Undercommunicating the vision
Not removing obstacles to the new vision
Not systematically planning for and creating short-
term wins
Declaring victory too soon
Not anchoring changes in the corporate culture
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 51
Sources of Complacency
Too much happy talk
from senior
Human nature, with its management
capacity for denial, A kill-the-messenger-of-bad-
especially if people are news, low-confrontation
already busy or stressed culture
The absence of a Too many
major and visible visible
Complacency resources
crisis
Organizational structures
Low overall that focus employees on
performance narrow functional goals
standards
Infernal measurement
A lack of sufficient systems that focus on
performance feedback the wrong
from external sources performance indexes
Source: John Kotter (1996): Leading Change
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 52
People-related Challenges a any Transformation
Do the people …
understand what the change is about?
agree, that the change is necessary?
see the impact on their daily work?
have required capabilities for the new situation?
get support to make the change happen?
benefit from newly expected behaviours?
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 53
Change Management Framework
Management Support
Functions Functions
Initialization
Sponsorship/
Commitment Communication
Scope & Vision
Organization
Setup
Training &
Controlling Support
Design
Change Stakeholder
HRM Integration
Involvement
Stabilization
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 54
Levels of Support
Sponsorship
Longterm support
Investment Sponsorship/
personally, financially, timely Commitment
Change Support
Commitment
visible, rationale und emotional
Acceptance
Acceptance
Understanding
Attention Preparation
No Idea Time
According to: Daryl Conner: Managing at the Speed of Change (1992)
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 55
Roles in a Change Program 1/2
Sponsors
– Have the power to sanction and legitimize change and
to make decisions about change
– Create an environment that inables change to be made
on time and within budget
– The sponsors make up the steering group
Change Agents
– Responsible for making the change happen on an
operational local level
– They directly deal with employees and managers,
which are impacted by the change (targets)
Target
– The group who must actually change attitudes and
behaviour
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 56
Roles in a Change Program 2/2
Project Team
– Operationally drives the entire change program
– The project team is led by the project lead, who is
responsible for the overall success of the program
– The project team reports to the steering group
Sounding Board
– Key-players with a good sense of the company‘s culture and
the actual mindset of the employees
– Provide feedback to the project team about acceptance and
resistance on side of the target
External Advisors
– Give advice to the project team from a neutral standpoint
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 57
Typical Organizational Structure
Target
Sponsor
Steering Group SB
Line Manager
CA LM
MA
MA
Project Team
Project Lead
CA LM
SB
Change
Agent
CA
External Project Lead
Advisor (Consulting)
SB
Partner SB
Sounding Board
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 58
Relationships between different Roles
Sponsor Sponsor Sponsor Sponsor
Agent Agent Agent
Target Target Target
Linear Structure Triangular Structure Square Structure
Source: Daryl Conner: Managing at the Speed of Change (1992)
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 59
Positioning
What do you do for whom why?
What‘s the problem (in terms of figures)?
Who has the problem?
What does the problem cost if not solved?
What‘s the solution?
What will be the difference after the solution has
been implemented successfully?
What are the costs of the solution?
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 60
Communication Measures
efficient Available Media
Employee Newspaper Intranet, Social Media
E-Mail Newsletter (with forums and
(Meassage from the CEO) chatrooms)
Intranet Departmentmeetings
One-direction
(with F&Qs)
Individual employee
Interactive
Town Hall Meeting meetings
Broschures Open Space Events
Posters „Ask-the-CEO“-Meetings
Videos, webcasts Workshops, Conferences
PPT-Presentations Hotline
New Media effective
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 61
Communication Strategy
When? What is the message?
Who informs – CEO, HR Why – What to achieve
..? with communication?
How – Media usage? Whom?
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 62
The Communication Dilemma
Early
Communikation ? Late
Communikation
High
Unsecurity/ Clarity
Need for Information
Low
Time, Progress
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 63
Employee Involvement
Open Space
Involvement of many people in a one to two days event,
where no content is predefined. The event is srongly
facilitated
Focus Groups
Groups of selected employees (capable, ambitious,
highly
accepted) work on solutions regarding clearly defined
issues
Sounding Boards
Members of the target group provide regular feedback to
programm plans and directions and how people react
Employee Surveys
Employees are asked for their opinions individually or in
groups by using quantitative or qualitative data collections
methods
Nominating thought leaders into the program
organization
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 64
Open Space (Bar Camp)
Up to 1000 participants Intense and strong facilitation
though facilitator and
Participants determine content techniques
to be discussed
Work in groups with rotating
Major objectives are: constitutions
– Involvement of many people in a
short period of time Public presentations of results
– Collective motivation and
commitment
– Identification and prioritization of
issues
Duration is between 2 to 3
days
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 65
Stakeholder Analysis
strong
Power
Resistance
Support
weak
low Impact high
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 66
Knowledge Management
Prof. Dr. Armin Trost
Knowledge Management – Overview
Knowledge Economy
From Sign to Wisdom
Traditional Approaches in Knowledge
Management
Implicit versus explicit Knowledge
Modern Approaches in Knowledge Management
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 68
The changing meaning of Knowledge
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 69
Challenges
Employees‘ knowledge as key factor for
competitiveness and corporate success (knowledge
economy)
Complex tasks require combination of the knowledge
of multiple players
New and relevant knowledge appears in increasingly
shorter time periods
Knowledge is located in people‘s mind and hard to be
retained to the company (knowledge worker)
Growing need to collect and transfer knowledge
across the globe
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 70
People versus Technology
People who own their knowledge
Wisdom
Subjectivity and creativity
Significant corporate value
Hard to be retained Knowledge
Technology (e.g. data bases)
Information
Objektivity through documentation
Limited corporate value
Information and data are owned by
the company Data
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 71
From Signs to Competitiveness
Knowledge Leadership
Knowledge Organization Competitive-
ness
+
Competence Unique/
Solutions + Different
Action Doing the
+ right things
Capability Commitment
IT +
Knowledge Task related
+
Information Combination
+
Data Meaning
+
Signs Syntax
Source: Klaus North: Wissensorientierte Unternehmensführung, Gabler Verlag (own translation)
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 72
What people know
Peers/
organization
Culture
Products Customers
Tools/ Processes
Technology
Competition
(Informal)
Networks Projects
Solutions
Partners
Mistakes
(Hidden)
Rules
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 73
Classic #1: Central Knowledge Database
Employees are encouraged to document their
knowledge on a central database
A facilitator takes care for quality of all
documents
There are general standards for creating
knowledge material
Downside
Employees neither are motivated enough to
document their knowledge nor find enough time
to do so
Within a short period of time masses of never
used documents emerge
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 74
Classic #2: Yellow Pages
Employee maintain and commend their major fields of
expertise in a few words
All employees find peers with certain expertise using
simple search options
Expertise is documented on databases with web-
access or on printed booklets
Overall goal is to bring people with certain expertise
and demand for expertise together
Downside
Detailed meaning of expertise remains unclear
Limited opportunity to immediately learn from what is
documented
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 75
Knowledge Generation Model
by Nonaka
Tacit Tacit Tacit Explicit
Socialisation Externalisation
Explicit Tacit Explicit Explicit
Internalisation Combination
Source: Nonaka & Takeuchi (1995), The Knowledge-Creating Company
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 76
Implicit Knowledge – Example
Source: Gerd Gigerenzer (2007). Bauchentscheidungen
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 77
McKinsey Approach
Employees publish specific knowledge through
webbased documents not longer than three
pages
Knowledge must have been proven in practise
Access to documents is tracked and reported.
Reader evaluate the value of documents
Employees are encouraged to commend on
documents and to get in direct touch with
experts (authors)
Rankings are published and constantly updated
about the success of all documents
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 78
Knowledge Transfer Process
3. Contacting
1. Knowledge 2. Search for
Documentation Expertise Project Lead/
Employee Manager
Knowledge
4. Cooperation/Support
Project
5. Knowledge development/
Enhanced Network
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 79
T-Concept
General Knowledge
Focus on one field of expertise
Personal commitment to enhance
knowledge within that field and to
proactively support colleagues where
Expert- required
Knowledge
Commitment to publish new insights
Doing presentations on internal knowledge
transfer conferences and training events
Experts are communicated internally
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 80
HR Organization &
Information Systems
Prof. Dr. Armin Trost
HR Organization and Information Systems –
Overview
Global Human Resource Management
HR as Strategic Business Partner
Roles in a global HR Organization
Shared Service Center
HR Outsourcing
HR Information Systems
Focus: e-Recruiting
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 82
Global Organizational Landscape
Global Headquarter
Corporate HR managing HR globally;
Regional HR managing regional HR;
Local HR serving Headquarter Staff
Regional Headquarter
Regional HR managing regional HR;
Local HR serving Subsidiary Staff
Subsidiary
Local HR serving Subsidiary Staff
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 83
Types of Organizations
Global Transnational
Views the world as a single Specialized facilities permit
High
market; operations are local responsiveness;
controlled centrally from complex coordination
Global Efficiency
the corporate office. mechanisms provide
global integration.
International Multinational
Uses existing capabilities Several subsidiaries
Low
to expand into foreign operating as stand-alone
markets. business units in multiple
countries.
Low High
Local Responsiveness
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 84
Perceived Strength and Interests from two
Perspectives
Locally operating Globally acting
HR employee HR employee
“We are more familiar with “We are closer to senior
operational requirements management”
and practices”
“We know better what’s
“We know our customers good for the company as a
better”
whole”
“We need our freedom to
decide what’s good for our “We are more familiar with
local customers” the differences across
countries”
“We expect
responsibilities to design “We have the power to
our own processes and decide about strategic
tools” directions”
“It’s all different in our
country”
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 85
Trends in Human Resource Management
Responsibilities
?
Strategy
Consulting
Support
Administration
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 86
HR Roles by Dave Ulrich
Strategy
Strategic Partner Change Agent
Defining and Creating a renewed
executing strategy organization
Processes People
Administrative Employee Champion
Expert
Increasing employee
Building an efficient commitment and
infrastructure capability
Operation
Source: Dave Ulrich: Human Resource Champions 1997
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 87
Filtering Queries
Internet
SERVER
Service
Self Center
100 Service / Call HR
Queries WEB Center Generalist
HR
75 20 5 Manager
Database
Intranet
Source: Accenture
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 88
Screenshot „Abwesenheitsmitteilung“
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 89
Virtual Advisor (Lingubot)
http://www.daad.de/deutschland/en/index.html
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 90
Shared Service Center
internal external
Board
HR Corporate
Functions
HR HR HR HR
HR
External Partner
HR-Shared-
Service
HR
HR HR
Divisional Units
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 91
Economies of Scale and Scope through Shared
Service Organization
Economies of Scale Economies of Scope
decentral consolidated
t0
S1
C2
Utilization
t1
S2
Costs/Unit
Costs/nit
C1 t0
Shared
t1
Q2 Q1 Shared Volume Time
Volume
Combination of similar Processes Joint Usage of Resources
Economies of Scale through Economies of Scope through
Decreasing redundancies Combination of resources and
infrastructures
Standardization of IT/HR
processes Leveling utilization and capacities
Learning
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 92
Decentralized Recruiting Organization
HR Application
Marketing management
Definition of Target
Profile Preselection Application
Branch
A Data Base
Introduction Assessment
Job Offer Job Offer
Preparation Negotiation
Applicant
HR Application
Marketing management
Definition of Target
Preselection
Profile Branch Application
B Data Base
Introduction Assessment
Job Offer Job Offer
Preparation Negotiation
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 93
Identifying Duties to be Transferred into a
Shared Recruiting Center
close Conducting Interviews
Feeding back to Candidate
Negotiating Work Contract
Arranging Interviews
Relationship
Writing Job Offers
to Candidate
Pre-Selecting Cand. Searching in the Talent Pool
Publishing Job-Postings online
Maintaining Candidate Information
distant Recording unsolicited Applications in the System
high low
Ability to Standardize
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 94
Integrated Recruiting Organization with
centralized e-Recruiting Technology
Definition of Target
Profile Branch
A
Introduction Assessment
Job Offer Negotiation HR Application
marketing management
Pre-
Shared
Applicant e-Recruiting Recruiting
Selection
Center
Job Offer
Preparation
Definition of Target
Profile Branch
B
Introduction Assessment
Job Offer Negotiation
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 95
Modernd HR-Organization
Central Coordination
HR Business Partner Center of Expertise
Customers
near to business company wide
Individual support of
Dealing with complex HR-
Managers managers on HR-
related Issues
related topics
Shared Service Center
IT
company wide
Employees Hotline
Delivery of standardized and regularly
Applicants ESS demanded services to all employees with
high volume (e.g. payroll)
MSS
Partner-/Supplier Management
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 96
Outsourcing Purposes
Quality
Focus Flexibility
Cost
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 97
Scope of Serices outsourced in the United States
Relative Frequency (in %)
0 10 20 30 40 50 60 70
Health Care
Pension Benefits Admin
Payroll
Recruitment (/wo Mgr)
Relocation
…partially
HR Development
…completely
Management Development
Compensation Admin
HR Technology
Mobility/Expatriates
Performance Management
Source: SHRM 2004 Human Resource Outsourcing Survey Report
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 98
Top Factors in Considering HR Outsourcing
Vendors
A proven track record 89%
Cost of vendor services 82%
Guaranteed service levels 64%
Flexible contract options 53%
Recommendations from other comp. 41%
A compatible corporate culture 40%
Niche in a specific area 38%
(n=168 HR Professionals in Companies that currently outsource)
Source: SHRM 2004 Human Resource Outsourcing Survey Report
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 99
Internal versus external Recruiting-Expertise
depend on Positions to be filled
Internal External
Expertise
External Internal
External Internal
Non-critical Functions Key Functions Executives
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 100
HR Information System
Example SAP HCM
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 101
User and Expert Systems
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 102
Expert System User Interface
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 103
Services can be classified according to the Type
of Users and Tasks
Task Administration Value Creation
Standardized processing Creative usage
Automatization Personal judgements
User Reliable results Fuzzy output
Employees Master data Employee-/Self-
management Assessment
Rare usage
Leave request Knowledge Management
Event-triggered
Online-Application Performance
No training efforts
Training booking Management
Experts Payroll Talent Relationship
Accounting Management
Frequent usage
Application screening Succession planning
Limited to intense
training efforts Training administration HR Controlling
* Inclusing applicants, managers etc.
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 104
User and Expert Systems Usage
HR
Expert
Systems
User
User
Systems
Employees
Decentral Centralization Central
Decentralization
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 105
e-Recruiting Innovation Waves
Online- Backend/
Website Application Integration
Laggards
Late Majority
Early Majority
Early Adaptors
Innovators
1995 2000 2005 2010 2015
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 106
Typical e-Recruiting functionalities
Search request creation, approval and maintenance
Job-posting on copmany career website and on public
job boards
Applicant portal supporting job search, registration and
online-application
Application screening and filtering based on selection
criteria
Automatic communication with candidates via e-mail
Creation and approval of short-lists through line
managers
Interview administration and invitation
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 107
Learning Management System (e-Learning)
Lerner Portal LMS CMS External
personalized & Learning Management Content Management Content
intranet-based System System
Qualifications Training Learning Literature
Administration Content Databases
Generation
Role
Learning
Strategies Relevant
Embedding Websites
external
Personalized
Profile-Matching Content
Training Offers
Communities of
Formal Practice
Tests & Standards
Learning History Certificates
Authorization
Analytics
Collaboration
Authorization & Company
Tests Accounting Information
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 108
Social Media
Prof. Dr. Armin Trost
Social Media – Overview
Social Media User and Usage
Recruiting und Employer Branding
Learning and Development
Social Media Platforms
Internal Social Media Policies
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 110
Forrester Ladders
Creators
Write blogs, upload videos, generate content
used by others
Critics
React on others‘ content, edit wikis, engage in
forums
Collectors
Collect and sort internet content actively, use
tags and RSS, evaluate content
Joiners
Maintain relations to others
Spectators
Pasively use web content
Inactives
Don‘t use content generated by others
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 111
Social Media Activity
Source: http://www.forrester.com/empowered/tool_consumer.html (01.12.2010)
US: Forrester Research's North American Technographics® Online Benchmark Survey, Q2 2010 (US), 26,913 respondents
Europe: Forrester Research's European Technographics® Benchmark Survey, Q2 2010, 25,535
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 112
Social Media User Types in Employer Branding
Networker
Brand Builder
Communicator Actively build
networks into
Me too Transfer a clear relevant target
employee value groups
Intensively share proposition
career-related
Spontaneousely information in any Reach target
share career- situation group
related information Clear employer
and content profile
Be present
Be there
Maturity
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 113
Social Media/Web 2.0 Platform Usage
Employer Repu- Carreer- Job- Inter- Talent
TRM
Branding tation info Posting action Search
Blogs
Forums
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 114
Social Media Roadmap
Way to a Social Media Strategy
for Recruiting and Employer Branding
Check and
Objectives Listen Do it
Develop
Definition of Key Involve and Definition & action on Constantly check
and Bottleneck understand target Social Media Activities effects of Social
Functions group Employer Branding Media Activities
Target Group Consider internal Sourcing Set priorities and
Identification conditions develop selected
Talent Relationship Social Media
Setting Social Management
Media Objectives Activities
Clarify rules and
responsibilities
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 115
Twitter
Journalist Editor Medium
Incident
Witness Interview Text Article Reader
Time
Incident
Witness Tweet Follower Follower‘
Time
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 116
Elements of a Twitter Strategy
How will the twitter account be
positioned and what will be the
relevant content
Who are the target groups?
Who are relevant multiplicators
(Follower)?
How will the twitter account be
marketed/sold?
What are measurable
objectives?
Who/which person will
represent the twitter account?
Who decide upon the shared
content?
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 117
Key Terms of Social Network Analysis
Nodes,
Relations,
Density, Centrality,
Cliques, Clusters, Stars
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 118
Career Cluster versus
Professional Cluster
Career Cluster Professional Cluster
Purpose is to share Purpose is to share
career-related content professional content
High Centrality Little Centrality
Active Candidates Active und passive Candidates
Access through HR Access through the line
Passive approach Active approach
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 119
Learning on Demand
Communities Wiki, Blogs
of Practice
YouTube
Tutorials
Communities
of Practice Literature
Peers
Off-the-Job iTunes U
Training
Conferences
Direct
Manager
Simulations Yellow
Pages
Yammer
Social Expert
Education Podcasts Communites
Offerings
Micro-Blogging
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 120
Formal versus informal Learning
20%
80%
80% Formel Learning
Informal Learning
20%
Cross, J. (2006). Informal Learning: Rediscovering
Budget Effect the Natural Pathways That Inspire Innovation and
Performance. San Francisco/CA: John Wiley.
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 121
YouTube Tutorials
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 122
Audio and Video Podcasts
Easy to produce and share with others
Flexible usage anywhere at any time
Short duration
Direct access through mobile Internet
Usage of gadgets (Smartphones)
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 123
Principals of informal Learning
Learning content is easily produced, shared and
found via Web 2.0 (e.g. YouTube)
Flexible and problem-related usage of content
(„Learning-on-Demand“ instead of „Learning-
just-in-case“)
Learning from others (peers) through Social
Media und Communities of Practice
Room and infrastructures allow self-directed
learning and knowledge exchange
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 124
Internal Talent Markets
Talents Jobs & Projekte Rules
Experiences Requirements Internal notice periods
Projects Challenges Roles and views
Expectations Objectives Compensation rules
Preferences Working Conditions
References References
HR Consultant
According to: Bryan, L., Joyce, C., & Weiss, L. (2006). Making a Market in Talent. McKinsey Quarterly.
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 125
Social Media Policy at Yahoo!
Personal Blog Guidelines
Legal Parameters
– Legal Liability. When you choose to go public with your
opinions via a blog, you are legally responsible for your
commentary. (..)
– Company Privileged Information. Any confidential, proprietary,
or trade secret information is obviously off-limits for your blog
per the Proprietary Information Agreement you have signed
with Yahoo!.
– Press Inquiries. (..) If a member of the media contacts you
about a Yahoo!-related blog posting or requests Yahoo!
information of any kind, contact PR.
Best Practice Guideline
– Be Respectful of Your Colleagues
– Get Your Facts Straight
– Povide Context to Your Argument.
– Engage in Private Feedback.
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 126
HR Controlling
Prof. Dr. Armin Trost
HR Controlling – Overview
Purpose of HR Controlling
Important indicators in HR
Performance indicator positioning and
implementation
ROI of HR investments
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 128
Purposes of HR Controlling
Evaluation Diagnosis Prognosis
Past Current Future
investment Situation Situation
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 129
Indicators in HRM
Employer Branding Workforce Structure
– % Awareness – Age
– # Applications – Gender
– Reasons to apply – Span of controll
– Employer image – Tenure
– % Freelancers
Recruiting – % Female Leaders
– Time-to-fill
– Cost per Hire Expatriation
– Offer-Acceptance-Rate – # Expatriates
– Interviews per Hire – Return-Rate
– New Hire Satisfaction
– Hiring Manager
Satisfaction
– No-show-Rate
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 130
Indicators in HRM
Training Productivity
– Training days/employee – Revenue/employee
– Training costs/employee – Human Capital Value
– Training quality Added
– Verbesserungs-
Development vorschläge/Mitarbeiter
– # High Potentials – Employee satisfaction
– HiPos ready for promotion – Commitment
– Duration on one level
Retention/Safety
HR-related costs – Turnover Rate
– Salary/Total costs – HiPo Turnover
– Salary/employee – Boomerang-Rate
– Compensation structure – Bradford Factor (SxSxD)
– # Accidents/
1000 Employees
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 131
Classic #1: Cost-per-Hire
Which components make up cost-per-hire and how is cost per hire divided
through organizational units involved and new employees?
Advertising costs Opportunity costs related to
involved line employees
Candidates‘ travel costs
Costs of recruiting
Executive search retainer and infrastructure (e.g.
contingency fee e-Recruiting)
Selection tools and measures Referral bonuses
Salary of employees involved HR Marketing events
in recruiting (HR, Line)
Sign-on-bonuses
Costs for facilities of the
recruiting organization Relocation costs
Market Research Onboarding costs
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 132
Cost Elements – Case
Advertising Events
Exlusively
Recruiting
Job ads (e.g. in newspapers); Job fairs; College recruiting; Direct
Postings in job boards; mailings; Open days at SAP;
Website/Homepage modifications; Company visits; Inhouse events (special accounts)
Marketing material; Image Image Reports; Labor Market
campaigns Research etc.
Travel Assessment
Travel costs of recruiters Assessment centers;
and/or candidates reference/background investigation; Related to Recruiting
Assessment tools; tests (e.g. cost centers)
Search Agencies
Operating Costs
Relocation
Executive search; Retained search;
Contingency search; Direct source Estate agents; Removal firms; Recruiters payroll and trainings;
providers; Contractors Visa / Work Permit Application; Applicant tracking systems;
Relocation services; Tax service; Infrastructure costs; IT support;
Temporary housing; Rental car; Office costs; Communication costs
Referral Bonuses Language training
Employee Referrals; Candidate
Referrals Sign on Bonuses
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 133
Classic #2: Time-to-Fill
When does it start? When does it end?
Workforce Start HR Signed Job End of
Demand Marketing/ Offer Onboarding
Search
Vacancy Selection First Day End of
at Work Probation
Period
?
?
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 134
Performance Indicator Positioning
What?
Which Indicator?
For whom? Why?
Who benefits To which objectives
from the indicator? is the indicator related?
How?
Which sources and methods are used to collect the data when?
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 135
Balanced
Scorecard Financials
Objective KPI
Customer Processes
Objective KPI Objective KPI
Vision &
Strategy
People
Objective KPI
Source: Robert Kaplan and
David Norton, “Strategic
Learning and the Balanced
Scorecard, 1996
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 136
Performance Indicator Framework
Positioning Operation Usage
Client Method Reporting
CEO, HR Head, Survey, Statistics Online/ Paper,
Manager Views, Roles
Source
Objectives People, Systems Training
Interpretation,
Object Owner Presentation, Usage
Employee, Org. Unit, Decentral/central, HR
HR Function Controlling Usage
Action planning,
Topic Timing tracking, monitoring
Function
Diagnosis, Prognosis,
Evaluation
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 137
Implementing an HR Controlling System
Example: Turnover Early Warning
Definition of Scope/Objectives Analysis Method Definition
Definition of client, objectives and Systematic analysis of turnover Definition of methods and tools to
function reasons and possible early track/measure turnover drivers
Setting budgests, timeline and indicators and predictors
project structure Develpment of a model to explain Defining ways to analyse and
Approach definition and predict turnover behavior report data and results
Meeting with client/steering group Interviews with managers, former Workshop with experts, clients
and project lead employees, experts and HR managers
Evaluation Operation Implementation
Determination of validity and Tracking data and report to clients Development and installation of
acceptance Data usage and related actions controlling system and related
Defining fields for improvements technical infrastructure
Identification and training of
employees (clients) impacted
Validation study interviews with
client, user tracking
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 138
Traditional ways to evaluate Investments in HRM
Investment Costs Objectives Success Indicators
Management development 1.000 k€ Improvement of customer Responses to the training by
program (200 participants) and market orientation the participants
Higher customer Customer satisfaction
satisfaction
Employee survey 1.000 k€ Improvements of Response rate
(20.000 employees) employee satisfaction,
Amount of defined actions as
working conditions and
result to the survey
processes
Implementation of a 1.000 k€ Performance Relative amount of
performance management improvements performance management
system (5.000 employees) meetings
Better linkage between
operational work and Responses of managers and
strategic directions employees
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 139
Return on Investment (ROI)
Benefit - Costs
ROI = 100%
Costs
Cummulated Benefits
Profit
Cummulated Costs
Operating Costs
Investment
Time
Project Start Break-
start Operation Even
ROI
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 140
From Problem to ROI
Problem
Cost of doing nothing
Solution
Cost of solution
Impact of solution
ROI
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 141
Value Added and ROI of Human Capital
Döner Shop Design Office
FTE = 1 FTE = 1
P&B = Pay & Benefits P&B
40
OE = Other Expenses
R R
(Total expenses minus Pay
& Benefits) 220 220
P&B
R = Revenue 180
FTE = Full-Time Equivalent
OE
160
OE
20
Human Capital Value R – OE 220 – 160 220 – 20
Added (HCVA) = = 60 = 200
FTE 1 1
Human Capital Return R – OE 220 – 160 220 – 20
= = 1,50 = 1,11
on Investment (HCROI) P&B 40 180
Source: Jac Fitz-Enz: The ROI of Human Capital.
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 142
Measuring Employee Performance
Company Example Indicators
Revenue 200.000 k€ Revenue/FTE 100 k€
Employees 2.000 FTE Profit/FTE 10.000 €
Total Expenses 180.000 k€ HCVA* 160.000 k€
Personnel Exp. 140.000 k€ HCVA/FTE 80 k€
Workdays/Year 220 HCROI** 114 %
* Human Capital
Value Added
= Revenue – (Total Exp. – Personnel Exp.)
** Human Capital ROI Human Capital Value Added
= × 100%
Personnel Expenses
*/** Source: Jac Fitz-Enz (2000). The ROI of Human Capital. Amacon.
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 143
How much does a Top-Perfomer add more Value
than an average Employee?
Reponse by HR Directors
Source: Corporate Leadership Council (2003)
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 144
Added Value in Key Functions compared to Other
Functions
Added
Value
C B A
1 2 3
0,5 1 1,5
Performance
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 145
Differenciated Added Value Estimation
C 10% B 70% A 20%
Key FTE 20 FTE 140 FTE 40
Function Factor 1 Factor 2 Factor 3
Per FTE (k€): Per FTE (k€): Per FTE (k€):
10% HCVA 69 HCVA 139 HCVA 208
P-Exp. 80 P-Exp. 100 P-Exp. 120
Benefit - 11 Benefit 39 Benefit 88
Others FTE 180 FTE 1.260 FTE 360
Factor 0,5 Factor 1 Factor 1,5
Per FTE (k€): Per FTE (k€): Per FTE (k€):
90%
HCVA 35 HCVA 69 HCVA 104
P-Exp. 60 P-Exp. 70 P-Exp. 90
Benefit -25 Benefit -1 Benefit 14
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 146
Training ROI Calculation
Example
A Revenue (T€) 7.772.361
B Expenses (T€) 6.652.523
C Pay & Benefits (T€) 3.549.686
D FTE 28.797
E Human Capital Value Added (HCVA)/FTE (T€) 162 (A-(B-C))/D
F Productivity Increases 1%
G Impacted FTE (prop.) 1%
H Impacted FTE (abs.) 288 D*G
I HCVA Increase/FTE (T€) 1,62 E*F
J Increase of Operating Income (T€) 467 H*I
K Costs of Training Measure (T€) 420
L Training ROI per Year 11% (J-K)/K
Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de 147
