The Building Blocks for Workforce Reporting
Review of Last week’s learning
The “Data Pyramid”
The different kinds of measures we use in HR
Frequency of measurement
Combining Measures to give Metrics
Key Performance Indicators
Target Setting and Benchmarking
Building a Metrics Table
Review of Last Week’s Learning (Lecture)
Who are the five groups of stakeholders who should benefit from the work of an HR Analytics Unit?
Can you give me five really important skills areas for HR Analytics experts?
What are some of the ethical questions that have to be considered in doing HR Analytics?
THE DATA PYRAMID
How does it relate to other things we know?
What should we do in the future?
What do we have?
What do we learn from it?
What does it mean?
The Building Blocks for Workforce Reporting
Data and Measurements
Targets and Key Performance
This will be hard data or quantified soft data and is our starting point.
However most such data has little value standing on its own, which is why we need to CONNECT it in some way
A calculation which links two (or more) measures/pieces of data
OR it is a percentage or a ratio, or divided by a time period
We may set TARGETS for some of our metrics to monitor against.
If they are STRATEGICALLY IMPORTANT they may be designated as a “KPI” for monitoring performance of the organisation
The Many Different Types of Measure
we can use
“Workforce Analytics” – from HRI System based on the employee records we hold –
numbers and ratios FACTUAL =HARD
Financial – eg cost savings. In most HR/L&D initiatives direct measures of
financial benefits are rare CALCULATED OR ESTIMATES = SEMI HARD
Perceptions and feelings – surveys, questionnaires, 360 assessment, votes ,
league tables – SUBJECTIVE JUDGEMENT/OPINION = SOFT
Scales – for assessments, competencies etc – SUBJECTIVE = SOFT
Profile “ fit” – comparing a “desired state” against an “actual state” SEMI-HARD
“Tick boxes” – it exists or it does not exist; we/they have this or we/they do not
FACTUAL = HARD
More in Week 11
More next term
Asking for Opinions (1)
when we ask someone’s opinion or feelings we should ALSO consider
asking “how important is this to you?
For example I can ask you how good you feel a particular policy is and you may say “very poor” but if I ask you how important it is to you, you may say “not at all”. So I might take action on that policy unnecessarily
Beware of yes/no questions unless we are asking about facts. So never ask “do you feel positive or negative” – opinions and feelings are rarely black or white.
Use a scale and the format
“to what extent do you feel….
Asking for Opinions (2)
Remember people often complete questionnaires very quickly – so:
– make questions clear and unambiguous;
– keep the number as low as possible;
– minimise “open” questions which require a lot of thinking/writing
Avoid “leading “questions which direct the
participant to certain answers
Results have to be analysed carefully
and objectively – (we will cover in a later lecture)
Where might we use “Profile Fits”?
Matching a candidate against a person specification
Assessing existing culture against an ideal culture
Assessing personal competencies against a “framework “
Assessing team effectiveness against an ideal
Create a set of statements of the “ideal”
Score the “actual” of the person, team or organisation
Have multiple assessments
Quantify the resulting scores
How often should we create data?
Factual Data on its own does not tell us very much.
To get anything from it we need to compare it with something
From Measures to Metrics
A period of TIME
Per Employee/ Department/ Location etc
Against a TARGET or BENCHMARK
Simple Ratios – percentages of a bigger number
More Complex Ratios – correlating two or more metrics
The Time Dimension
a) per interval ie per hour, day, week,
b) Describing a trend – the “moving average”
We will use a lot of metrics which are “per employee”
BUT Employees may be full time, part time, job shares PLUS
our contributing “human resource” may also include contractors,
temporary staff, agency staff, consultants, volunteers
So we must think about whether we want to look at:
What is an Employee?
Per unit of employee time
Per employed person
Per unit of human resource
– Divide by hours worked or FTE’s
– Divide by no of employees
– Divide by total cost of all relevant
Which is the bigger? FTE’s or # employees?
The term FTE = Full Time Equivalent, which is based on
the weekly hours for a standard employee (eg 35 hours)
Example: The commonly used “Metric” of
The calculation of Labour turnover itself is a simple example of a metric.
We start with counting people who leave – and decide a specific period,
such as a month, to group them together. We then divide by the total headcount,
to give us a percentage. SO:
Labour turnover (sometimes called “attrition”) and expressed as a percentage:
# left the organisation during a period of time
Average number of people in the organisation during the period
Typically we calculate this using the period of per month – we may then “annualise it” by multiplying by 12 and calling it “the annual running rate”.
Note: this is an example of when we combine two HARD measures – the result is HARD
Creating an “INDEX”
An INDEX may be a) a combination of two pieces of raw data that we have found to be correlated
E.G We may create an Index called Team Turnover-Engagement which is the ratio of Annualised Labour Turnover divided by Average Engagement score for a specific team/group.
(If positively correlated we multiply; if negatively we divide)
Or b) a formula using several different pieces of raw data. For example we may want to create a “Leadership Effectiveness Index”. What do you think we might put into that?
Combining 2 or more Measures
to give a Metric
When we combine two SOFT measures the result is SOFT – VERY SOFT!
E.G Employer brand score/ engagement score
When we combine a HARD measure with a SOFT the result is SOFT
E.G Labour turnover over Employee Satisfaction score
SOFT IS NOT “BAD”. We just need to check validity and reliability more carefully (see next week’s lecture)
When we have a metric how do we know
whether it is good or bad?
Example: The % of people satisfied with the company policies is 66%
We have to compare that measure against something
Maintaining a previous good result – keep up the good work
Looking for an improvement on previous results – we are not good enough
Working towards an ideal goal – a vision of what CAN be achieved
Meeting a target that has been externally given to us – we have to show achievement
Benchmarking against comparable organisations – how good are we?
A Basis for Improvement
“Benchmarking is the process of understanding your performance, comparing it against the learning how they perform better, and using that information to improve.” The Baldridge Quality System, Stephen George
A Source of Innovation
“Benchmarking is a management practice that facilitates the continuous input of new information to an organisation.” Kaplan & Norton
Segmenting organisational data to provide comparisons between divisions, departments or teams
Data will be truly comparable if controlled by the HR Analytics department
External Benchmarking – shared
Sharing specific metrics by agreement between organisations in the same sector – “Benchmark Clubs”. Normally using previously agreed metrics definitions/calculations
In the private sector commercial confidentiality can be an issue. Note that sharing is most likely to be at the “high” consolidated level
External Benchmarking – seeking “best practice”
This can be done by belonging to a general benchmarking service for which you pay. Normally your organisational identity is not revealed to others in the service. Many metrics have limited comparability in this mode due to calculation methodologies.
However exact comparability may not be as important as looking at who has the best results in a metrics area and then examining why that is so.
See the Saratoga Institute, owned by PWC
The Gallup Q12 Organisation (engagement)
SHRM (US equivalent of CIPD)
We have to be very careful making comparisons that we are using the
same base measures/data
Key Performance Indicators (KPI’s)
Its important because we need it to support a Corporate Strategic Objective
When is a Measure or (usually) a Metric important enough
to be a KPI for one or more Managers?
(This may mean that achievement means a bonus)
WHAT REALLY WILL
MAKE A DIFFERENCE
TO OUR PERFORMANCE ?
Its important because we need it to support an HR Strategic Objective
Its important because we need it to help solve a major workforce issue
Its important because we need it to show to an external body/stakeholder that we are managing it well
BUILDING A METRICS TABLE
We are going to build up a full set of possible Metrics in different
areas of HR as we go through the module
For each Metric we will:
Give it a name
Clearly define the calculation of the metric
Show the source of the data
Define the frequency of calculating the metric
Make notes on its use; its reliability and relation to other metrics
We will start this in the next class