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Document Sample
Chapter 12
Evaluating and improving
human resource management
Learning objectives
• Understand approaches to evaluating human
resource management activities
• Describe how effective evaluation contributes to
the strategic achievement of organisational
goals
• Outline the steps and phases involved in
benchmarking
• Outline the key components of a ROI evaluation
HRM measurement and
evaluation
• provides a basis for determining how HR adds
value to the organisation and improves its
capacity to deliver its mission
• identifies areas that have met or exceeded
targets and highlight poorer performing
dimensions for attention
• common evaluation measures include:
performance on strategic goals; job satisfaction
ratings; the level of participation in training and
development activities; % of employee/volunteer
retention; and customer satisfaction surveys
HR Audit
Includes:
• productivity per dollar of people costs e.g. salary,training etc
• extent to which recruitment, selection, and retention processes meet
the organisation’s targets
• success rate of talent identification and succession management
programs aimed to develop current employees for promotion
• number and nature and resolution of employee grievances
• degree to which training has closed the gap between current
competencies and needed future competencies
• % of ‘poor’ performers’ improved performance as a result of HR
initiatives
• Employee satisfaction and engagement levels
Benchmarking
• a systematic process of measuring an organisation’s
products, services and practices against those of similar
organisations, particularly those organisations that are
deemed superior performers
Basic elements typically covered include:
• Employment and Deployment
• Salaries and Remuneration
• Staff Training and Development
• Equal Employment Opportunity
• Occupational Health Safety and Welfare
• Employee Relations
Benchmarking steps
Step 1 Identify the essential functions, products Phase 1 : Planning
or outputs to benchmark
Step 2 Identify external organisations or Phase 2: Analysis
functions within the organisation with superior
work practices for comparison
Step 3 Determine what data sources are to be
used e.g. HR systems, personnel records,
surveys, interviews
Step 4 Determine the current level of
performance. The baseline measurement will
enable the gap in performance to be identified
Step 5 Develop a vision for improving future Phase 3: Integration
practice based on the benchmarking findings
Step 6 Report progress to all stakeholders on an
ongoing basis. Communication and feedback are
crucial components of benchmarking
Step 7. Establish functional goals linked to the Phase 4: Action
overall vision for the organisation
Step 8 & 9 Develop action plans and implement
the best practice findings.
Step 10 Update knowledge on current work
practice to facilitate continuous quality
improvement
Example of data from the Racial and Gender Report Card
College Professional Administration by Position
Division I
White Black Asian Hispanic Native Other Minority
American
2005-06 Men Women Men Women Men Women Men Women Men Women Men Women
Academic Advisor/Counselor 24.5% 49.1% 13.5% 10.0% 0.0% 0.1% 1.2% 1.0% 0.0% 0.0% 0.3% 0.3%
Business Mgr. 42.8% 48.3% 1.0% 2.1% 0.3% 0.7% 1.0% 2.8% 0.0% 0.3% 0.0% 0.7%
Compliance Coordinator/Officer 43.5% 42.3% 7.9% 4.4% 0.3% 0.3% 0.9% 0.3% 0.0% 0.0% 0.0% 0.0%
Equipment Mgr. 75.4% 9.9% 7.0% 1.6% 1.9% 0.0% 2.4% 1.1% 0.5% 0.0% 0.0% 0.3%
Fundraiser/Development Mgr. 64.6% 26.5% 4.5% 1.1% 0.7% 0.7% 0.9% 0.2% 0.2% 0.0% 0.2% 0.4%
Facility Mgr. 79.2% 11.6% 4.1% 1.6% 1.9% 0.3% 0.8% 0.0% 0.0% 0.0% 0.5% 0.0%
Life Skills Coordinator 17.8% 57.2% 10.6% 9.6% 0.5% 0.0% 1.4% 1.9% 0.5% 0.0% 0.0% 0.5%
Promotions/Marketing Mgr. 59.5% 32.3% 2.9% 2.4% 0.5% 0.0% 1.6% 0.5% 0.0% 0.0% 0.3% 0.0%
Sports Information director 88.4% 9.5% 0.4% 0.4% 0.0% 0.4% 0.9% 0.0% 0.0% 0.0% 0.0% 0.0%
Asst. or Assoc. SID 69.7% 24.4% 1.5% 1.1% 0.6% 0.8% 0.6% 0.6% 0.2% 0.0% 0.4% 0.0%
Strength Coaches 75.2% 9.9% 10.3% 1.2% 0.8% 0.2% 0.8% 0.4% 0.6% 0.2% 0.0% 0.2%
Ticket Manager 52.4% 38.8% 3.3% 1.6% 1.0% 1.0% 1.3% 0.3% 0.0% 0.0% 0.0% 0.3%
Note: Data provided by the NCAA. Historically Black Institutions excluded
x= Data not recorded
Source: (Lapchick et al 2006).
Balanced scorecard approach
• The balanced scorecard is a management and
measurement system that provides a framework
for translating an organisation’s vision and
strategy into action (Kaplan, 1996; Kaplan &
Norton, 1996)
• used to translate strategy into operational terms
by measuring a full range of perspectives:
financial, customer, internal business process,
and learning and growth
The HR Scorecard*
Focuses on measures of five key human resource related elements:
• 1. Workforce Success. The degree to which the workforce has
accomplished the key strategic objectives for the business.
• 2. Right HR Costs. Is the total investment in the workforce
appropriate?
• 3. Right Types of HR Alignment. The extent to which there is
alignment of HR practices with the business strategy and
differentiated across positions, where appropriate.
• 4. Right HR Practices. The degree to which the design and
implementation of best HR management policies and practices is
used throughout the organisation.
• 5. Right HR Professionals. The skills in HR needed to design and
implement a world-class HR management system are present.
*See: http://www.markhuselid.com/hr.html
Kirkpatrick’s 4-level model of
evaluation
• Level 1: Measures reaction and the action
planned following training or learning initiatives.
• Level 2: Measures learning and knowledge
changes as it relates to successful program
implementation
• Level 3: Measures the extent to which trainees
apply learned skill and knowledge to the job.
• Level 4: Measures changes in business results
related directly to the HR initiative
Return On Investment
• a traditional financial measure based on
historic data and thus is a relatively static
measure
• The formula for ROI is:
(total benefit - total costs)=____X 100 = ROI
total costs
Calculating ROI
Example: Training program
Participant Annual improvement Basis of estimate Isolation Confidence Adjusted
1 value (A) factor (B) level (C) value (D)
$36,000 Improvement in 50% 85% $15,300
project efficiency.
Time saved problem
solving ($3k mth X 12)
In this case the participant allocates 50% of the improvement to training but is only 85%
confident about this estimate. The confidence % is then multiplied by the estimate to develop a cost
benefit value, as follows:
Improvement value (A) = $36,000 X % of improvement isolated to training
= 50% X Confidence level (C)
= Cost benefit improvement value (D) $15,300
ROI = (Total benefits - Program costs) X 100
Example of Impact Study Report
• Program Title: Continuous Improvement
Program in Customer Relationship Management
• Target Audience: Pilot groups of cross-
functional team members
• Duration: 6 weeks (36 hours)
• Technique to Isolate Effects: Participant
estimation, trend analysis
• Technique to Convert Data to Monetary
Value: Historical costs, internal experts, labour
cost per unit, units per person per hour (formula)
• Fully Loaded Program Costs: $53 000
Reaction Learning Application Business Return on Intangible
Results Results Results Impact Investment Benefits
Results
4.8 out of 5 Participants 94% applied Monetary ROI (%) = Increased
achieved on demonstrated Continuous benefits from Net Program systems view
Overall ability with Improvement increased units Benefits Increased
Satisfaction select skills to a per person per Cost problem
4.8 out of 5 continuous defined project hour $79,550 $149,608- solving skills
achieved on improvement within 30 days Value (based 53,000 Improved cross
recommending skills during of workshop upon average 53,000 functional
program to action learning 86% report CRM life cycle = 1.82 x 100 = collaboration
others scenarios (i.e. significant of 21.5 weeks) 182% Improved
Rating of 4.5 root cause productivity Monetary decision
on relevance of analysis increase in benefits from making
program to exercises daily work as a increased Improved
daily job ;values added result of labour process
94% reported flow analysis applied efficiencies: understanding
intention to demonstration) Continuous $70,058 Better picture
apply learnings Participants Improvement of the cost
to Team completed skills associated with
Project Plan Qualification CRM
within 30 days assessment
of the with 100%
workshop accuracy
Summary
• evaluation assists the organisation to assess financial
costs and benefits of HR plans and polices
• evaluation can be internally or externally focussed and
may be carried out by organisational staff, external
agencies contracted to undertake evaluations or by
independent bodies
• each form of evaluation provides the organisation
feedback on which to assess how its HR contributes
strategically to organisational effectiveness
