Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 14-1 Measuring and Improving...

Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 14-1

Measuring and Improving HR Management’s Results

Chapter 14


The Evolution of HRM


What This Means in Practical Terms

• HRM duties have gone from supplying mostly transactional services to supplying more strategic and people-related consulting support

• The implications are the following:

– Employers and HR units need to find new ways to provide their traditional transaction services to free up HR management’s time for strategic, internal consulting activities


– HR managers have to improve their business-analysis, internal consulting skills

– HR managers need to improve their outsourcing skills

What This Means in Practical Terms, cont.


New Ways to Supply Transactional Services


HR Manager as Internal Consultant

Leveraging HR entails three basic steps:

• Have an HR strategy in place

• Take steps to reduce the assets and efforts devoted to delivering transactional services

• Develop the skills required to be an effective internal consultant


Developing HR Consulting Skills

• Master basic HRM functional concepts and skills in areas like recruiting, interviewing and equal employment compliance

• Acquire business knowledge and strategic skills needed to analyze and advise how to best align employee competencies with employer strategic needs

• Build credibility and rapport


Building Credibility and Rapport

• Establishing credibility as an expert requires having, among other things:

– An excellent command of and understanding of the industry, organization and competition

– Persuasive, high-quality suggestions

– Proven ability to solve major business problems

– Proven track-record of supplying high-quality work


– Ability to develop creative solutions to difficult problems

– A record and ability to complete projects on time and on budget

– Effective interpersonal relationships and skills

– A clear understanding of the issues

– Excellent communication skills

Building Credibility and Rapport, cont.


– A reputation for meeting commitments

– A reputation for creating solutions that work

• Rapport requires the following:

– You listen more than you talk

– Acknowledge that client’s situation is personal and unique

– Pay attention to the emotions surrounding the client’s factual issues



– Reflect back that you understand and care

– Focus on doing what’s best for the client

– Focus on the client as an individual

– Work to constantly find new ways to be of greater service

– View methodologies, models, techniques and business processes as a means to an end



Conducting the HRM Audit

– HR audits vary in scope and focus. Ten possible areas of focus include:

– Recruitment and selection

– Compensation

– Employee relations

– Mandated benefits

– Group benefits


– Payroll

– Record-keeping

– Training and development

– Employee communications

– Internal communications

Conducting the HRM Audit, cont.


Types of Audits

• Compliance audits

• Best practices

• Strategic

• Function specific


Reasons for Conducting Audits

• Ensuring legal compliance

• Keeping HR practices aligned with employer needs/strategy

• Identifying opportunities for improvement

• Improving efficiency and productivity

• Identify root problem areas and cost reduction opportunities


• Improve employee morale

• Implementing and staying current with world-class practices

• Measuring and improving performance across the organization as well as results from key HR projects or initiatives

• Increasing commitment to continuous improvement

Reasons for Conducting Audits, cont.


When to Audit?

• When a business reaches various milestones

• When the business grows to the point where line managers can no longer make their own hiring, discipline, promotion and other decisions without HR assistance

• The employer creates or modifies an employee handbook

• A new head of HRM arrives


• Employee morale, turnover, attendance or excessive discipline problems seem to signal need for evaluation

• The company becomes a government contractor or subcontractor

When to Audit?, cont.


The HR Audit Process

• Determine scope of the audit

• Develop the audit questionnaire

• Use the questionnaire to collect data

• Benchmark the findings


Benchmarking in Action

• SHRM provides a customized benchmarking service to enable employers to compare their HR-related metric results with other companies

• Comparable figures can be broken down by industry, employee size, company revenue, industry sectors and geographic region


The High-Performance Work System

• A high-performance work system (HPWS) is a set of employee and HRM-related practices that translate into organizational effectiveness

• The DOL lists the following characteristics of HPWS:

– Multi-skilled work teams

– Empowered front-line workers


– Extensive training

– Labor management cooperation

– Commitment to quality

– Customer satisfaction

The High-Performance Work System, cont.


Strategy-Based Metrics

• Measure activities and outcomes that contribute to achieving a company’s strategic aims

• Preparing a list of these metrics requires:

– Defining the business’ strategic goals

– Create a strategy map to identify what the strategy-based metrics might be

– Use the strategy map to identify important strategic metrics


The HR Scorecard Process

• The HR Scorecard refers to the assigning of financial and non-financial goals to HRM-related activities required for achieving the company’s strategic aims and for continuous monitoring results


HR Scorecard Sequence

1. Define the business strategy

2. Outline a strategy map

3. Identify the strategically required outcomes

4. Identify the required workforce competencies and behaviors

5. Identify the required HR system policies and activities


6. Create strategic metrics

7. Summarize the scorecard measures in a digital dashboard

HR Scorecard Sequence, cont.


Outsourcing HRM Activities


Pros and Cons of Outsourcing

• Pro: Can be cost effective and free HRM’s time for other work

• Con: Can decrease HR job opportunities


To Whom Do Employers Outsource HR Functions?


Outsourcing Checklist

• Specify which services to outsource

• Agree with vendor on exactly what HR activities will be outsourced and what will be retained internally

• Review multiple providers and decide on one partner

• Clarify exactly what services the vendor will provide


• Make sure to have metrics to measure and hold accountable the vendor

• Look for financial stability in the prospective vendor

• Check their service record with other clients

• Consider the costs

• Look at the prospective vendor’s technology leadership

Outsourcing Checklist, cont.


• Ensure they have adequate disaster recovery plans

• Make sure they will provide your in-house people with adequate training regarding procedures, etc.

Outsourcing Checklist, cont.


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Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 14-1 Measuring and Improving...

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