OS 3524/22/08

I. Reminders. Read Hammonds and Combs et al. articles for Thurs. There will be a check of articles so please bring them to class.

II. Exam III is on Monday, 4/28, 11:45-2:45pm, in Science Center 362. No baseball caps. 4/28 Office Hours: 9am-11am, my office.

III. Exam III format.

IV. Mohler article on workplace safety. V. High performance work systems.

VI. HR metrics and scorecards.

Exam III

40 points multiple choice questions

30 points true / false questions 10 points: Choose 2 / 4

Identifications 20 points: Choose 1 of 2 essays

“When Salaries Aren’t Secret” and HR Metrics or

Employee benefits and labor relations

High Performance Work Systems

The right combination of people, technology and organizational structure that makes full use of the organization’s resources and opportunities in achieving its goals.

Task design, reward systems, information systems

HR-Related Conditions for High Performance

Teams perform work. Ee participation in staffing and work

design. Formal performance mgt process. Rewards related to performance. Work design is motivational. Ethical behavior is encouraged.

What is it that coaxes the value out of the system?

Sound business strategy

Strong firm culture Trust between workers

and management Relational

psychological contracts

Very difficult to achieve!

Scorecard …

Concise description and summary of firm performance by particular categories

Metrics: measurements that summarize organizational performance in a particular performance category.

Used to aid in firm communication and managerial decision-making

Balanced ScorecardManagement tool/system/metric to measure outcomes and indicate what efforts need to be directed at long-term goals.

Intended for: Linking strategy to stakeholder interests Directing senior manager efforts at long-term

goals Business process improvement Augmenting the information infrastructure

Balanced Scorecard

Four categories:

 Customer satisfaction  Innovation / new products  Internal / organization  Financials

Balanced Scorecard Categories

 Internal / organization

Employee capabilities and performance Information system capabilities Ee satisfaction Empowerment and alignment

Pay and other attitudinal data

 

Balanced Scorecard Categories

Customer satisfaction Satisfaction Retention Market and account shares

 

Balanced Scorecard Categories

 Innovation / new products Quality Response time Cost New product introductions

 

Balanced Scorecard Categories

 Internal / organization

Employee capabilities and performance Information system capabilities Ee satisfaction Empowerment and alignment

Pay and other attitudinal data

 

Balanced Scorecard Categories

Financials

Return on equity Return on investment Other accounting ratios Economic value added

HRM Audit

A formal review of … HR processes. The outcomes of HR functions.

based on identifying key HRM functions and measures of business performance.

Why Measure People Outcomes?

Prestige / role of HR in firms Document HR’s potential to

control costs and add value to firm. Downsizing / outsourcing / lean staffing Continuous improvement. Firms are relying on intangible, knowledge-based

assets (i.e., human resources) as sources of competitive advantage.

HR Scorecard

Same concept as the Balanced Scorecard, but focused on people-related outcomes.

Scorecard information could be aggregated and used as one component of the Balanced Scorecard.

HR Scorecard Relevant to …

HR Professionals: HR Scorecard written to this audience primarily.

Managers: So they will know to request and expect this outcome and process data from their HR professionals.

Employees: As a means to focus their behaviors and development in strategic ways.

Continuum of Criteria for Evaluating HR Effectiveness

Resources utilized

Skills or behavior or competencies

Affective reaction of ees to HR program

Results: effect on company performance

Results: return on firm investment

Cost

Value

HR Scorecard Tips(from HR Scorecard & Dr. Graham)

  The firm’s goals and strategies should guide the HR

Scorecard (HRS) Development Most HRS measures should focus on value creation. Some

HRS measures should focus on cost control. Focus on measures of “deliverables.” Include at least one HR “high performance work system”

(i.e., best practices) measure. Include at least one “HR system alignment” measure (see

ch. 6, HR Scorecard). Focus on the “vital few” indicators: No more than 25

measures in your HRS.

 

HR Scorecard Tips(from Dr. Graham)

  Be as specific as possible on the measures. For example, “% of

workers submitting at least one suggestion this year” is better than “suggestion system utilization”

Include a general description of how the measure should be evaluated. For example, are worker suggestions assessed versus a goal (i.e., 85%), prior year achievement, industry standards, etc.?

The justification of your scorecard criteria can rely upon firm goals and strategy, anticipated future challenges, current problems, as well as practical reasons such as ease of communication to employees. Justifications can also be strengthened by highlighting advantages of your criteria over potential alternatives.

 

Before HR Metrics …

HR professionals often operated independently of the business strategy.

Management asked HR professionals to focus almost solely on cost-cutting.

There was little hard data for continuous improvement processes.

Your Turn: Create Part of an HR Scorecard

1. Suggest 3 specific measures for your category that would be most useful to managers.

2. Recommend how the data will be collected for each measure.

3. Your group will be assigned one of the following categories:

Ee recruiting, selection, and retention.

Training and development investments.

Compensation and performance management.

4. I will collect one assignment per group.

Terms You Should Know

High performance work system Balanced scorecard HR scorecard HRM audit

You Should be Able To …

Discuss why HR metrics are helpful to people management.

Outline and suggest metrics for an HR scorecard.