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Enhancing HR Value to the CEO:Strategies for Matching Strategy to Capability
Laske and Associates, LLC
Otto Laske, PhD PsyD, Manager
Medford, MA, USA781.391.2361
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This seminar takes a comprehensive, systemic view
of the organization and its readiness for
intervention.
It addresses the people power paradox: most
companies seek their future outside of themselves,
not in their own people.
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Workshop Objectives
At the conclusion of this workshop, participants will beable to:
better understand the relationship of strategy and capability
see their own role as HR Director in a new, proactive light, as
guarantors of a balance between strategy and capability
advise the CEO on how to expand current HR evaluation levels to
measuring capability underlying performance
advise the CEO on how to improve asssessing the realism of
company strategy in light of existing capability
discuss the allotment of capability resources needed for fully
realizing present strategic objectives.
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Assumptions of this Workshop Achieving strategic objectives is more than ever dependent
on the capability of individuals and teams
Much more in-depth knowledge about human capability is
available in social psychology than has so far been
appreciated by CEOs and HR Directors We need to open a window on new and highly stratetgic
data sources that heighten the realism of strategic decision
making at the highest level of management (in particular, a
Capability Metric)
We address CEOs and HR Directors alike, focusing on
human capability.
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Workshop Topics Part I: The Relation of Company Strategy and
Work Capability Performance is based on Capability
Relevance of Capability in the Strategy Map
Part II: Building and Using a Capability Metric
Opening a Time Window on Capability
How CDREM works
What a Capability Metric Tells Management
Part III: Wrap Up
Benefits of CDREM
New Tasks of the HR Director
Case Study Deliverables
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Performance
is Based on Capability
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Human Strategy Regards Work Capability
Copyright Laske and Associates, LLC, 2002
Vision
Business Strategy
Organizational
Strategy
Human Strategy:
Capability
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Your Human Strategy Should be Guided by
Insight into Work Capability
Copyright Laske and Associates, LLC, 2002
When you need a high-level view of human
resources available to meet strategic
objectives, you need to understand current
and future work capability
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Five Dimensions of a Strategy Map(adapted from BCS Collaborative, Inc., 2001)
Human CapitalEffectiveness
Human ResourceEfficiency
Shareholder Value
FinancialPerspective
Customer
Perspective
Internal Process
Perspective
Learning &GrowthPerspective
Customer SatisfactionEmployee
Satisfaction
ManageOperatingEfficiency
Two Tiers of Learning and Growth
CompetenciesStrategic
Alignment /
MotivationCultural Climate Team
IntegrationLeadership
Deliver WorldClass services
Manage CustomerRelationships
WORK CAPABILITYCopyright Laske and Associates, LLC, 2002
Enablers
Meta-Enablers
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Impact of Capability on Performance
Meta-Enablers Measure Capability
Competence Leadership Alignment Culture TeamSynergy
Internal Business Process
[short-term]
Customer Relations
[short-term]
Financials[long-term]
Copyright Laske and Associates, LLC, 2002
CAPABILITY
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To improve the short- as well as long-term realism
of company strategy, we need to expand the
number of HR evaluation levels.
By doing so, we take into account a companys
actual work capabilities that determine its level of
current and future performance.
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Expanding HR Evaluation Levels
Copyright Laske and Associates, LLC, 2002
Evaluation Level Brief Description of
Measurement/Evaluation
Reaction Participants reaction to an HR
initiative
Learning Motivation, knowledge, orattitude changes
Implementation Changes in behavior on the jobthrough HR initiative
Enablers Survey answers regarding
Leadership, competence,
personal alignment, team
synergy, cultural climate, etc.
Work Capability Measured in terms of three
kinds of meta-enablers
(current applied, current
potential, future potential)
Business Impact Business impact of thecompanys meta-enabler
profile
Financials (ROI) Monetary value of intervention
results against cost of the HRinitiative
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Part II:
Building and Using
a Capability Metric
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Opening a Time Window
on Work Capability
Copyright Laske and Associates, LLC, 2002
To analyze and measure work capability insufficient depth means to open a time
window through which to view capability
now, in the near future, and the far future.
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Capability Evolves in Time
Copyright Laske and Associates, LLC, 2002
Current Applied Capability
Current Potential Capability
Future Potential Capability
Now Near Future (0.5
to 2 years)
Far Future (2-5
years)
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Assessing Work Capability with CDREM
CAPABILITY
METRIC
Strategic
Objectives
Current Applied
Current Potential
Future Potential
WHO: Repr.
SampleIndex
Variables
WHAT: Enablers
Copyright Laske and Associates LLC, 2002
2.
3a.3b.
4a.
HR
Deliverables
1.
4b.
5a-c
6.
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Three Kinds of Work Capability(adapted from E. Jaques, 1994, p. 7)
Now: Current Applied Capability (CAP): the level of
capability a person is actually applying at a given moment in
some specific work
Near Future: Current Potential Capability (CPC): the
maximum level of work a person could carry out at any given
point in time, in a domain of work they value and given
environmental support
Far Future: Future Potential Capability (FPC): the
predicted level of potential capability that a person will
possess at some specific time in the (near or far) future FPC grows throughout the life span along predictable maturational
pathways, and therefore can be reliably predicted.
CDREM measures all three kinds of work capability.
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Definition of
Different Kinds of Capability(researched by Jaques, Kegan, Basseches, Laske, 1955-2000)
Current Applied Capability = Systemic grasp &
developmental level & *personal need & energy sinks
Current Potential Capability = Balance of critical vs.
constructive thinking (complexity of processing)&
developmental level & *personal aspiration
Future Potential Capability = Developmental level &
potential, & systemic grasp & balance of critical vs.
constructive thinking (complexity of processing).
* comprising self conduct, task focus, and interpersonal perspective.
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Index Variables, Current Applied Capability
Copyright Laske and Associates, LLC, 2002
CAC
Systemic Thinking Developm. Level Personal Need Energy Sinks
Critical Constructive Risk Potential Self Task Interpersonal
Thinking Thinking Clarity Conduct Focus Perspective
Self concept Autonomy Affiliation
Risk taking Drive to achieve EmpathyChange Flexibility Resourcefulness Helpfulness
Need for power Endurance Dependency
Need for visibility Quality of Planning Bias
Confrontationalism Need to Self Protect Relationshipto Power
Change Relationship
Structure Structure under
transformation
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Capability Potential Detailed
Future Potential Capability (determined by
developmental level) developmental level (level of self awareness)
developmental potential (for reaching subsequent level)
developmental risk (for regressing to lower level)
systems thinking capacity (critical, constructive, systemic thinking)
Current Potential Capability (determined by personal
aspirations and developmental level)
task focus (autonomy, endurance, risk taking, drive to achieve,
motivation, quality of planning, follow-through, etc.)
self conduct (self confidence, flexibility regarding change, need tocontrol and direct, need for visibility, etc.)
interpersonal perspective (capacity for affiliation, bias, dependency
on others, etc.)
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Capability Is Measured
in Three Time Dimensions
Capability is measured in terms of variables definingpeople properties (sometimes called meta-enablers)
In CDREM, variables together form an index
An index is specific to a particular enabler, such as
leadership or team synergy
Each enabler is measured in three different but
interrelated time dimensions of capability: current
applied, current potential, and future potential.
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Capability Index for Leadership
Copyright Laske and Associates, LLC, 2002
Leadership
Enabler Index Variables
1. Current and futurepotential, Developmentallevel (maturity)
2. Future potential,Developmental risk vs.potential
3. Current and future,Systems thinking capacity
4. Current and future,Change flexibility
5. Current, near future, andfar future interpersonal
perspective6. Current, near future, andfar future self-conduct
7. Current, near future, andfar future approach to tasks(task focus).
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How CDREM Works
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Steps Toward Building a Capability Metric
Company Strategy
Map
HR Deliverables, from Strategy
Define Target Population
Define Representative Sample
Define Index(es) based on
Capability Standards
Copyright Laske and Associates LLC, 2002
Measurement
Objectives
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Definitions
Representative samples comprise individuals orteams who, as groups, have certain work
capability levels critical to company performance
An index comprises a set of variables used to
measure the work capability of a repr. sample
Indexes measure a samples work capability levels
against validated normative standards
Standards stipulate current and future workcapability levels defined in harmony with requisite
HR deliverables.
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Steps in Building a Capability Metric
Copyright Laske and Associates, LLC, 2002
HR CONCERNS
Indexes WORK
CAPABILITY
HR DELIVERABLES
Representative Sample
CORPORATE
STRATEGY
Assessment of
Capability interms of Index
Variables
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How to Define a Representative Sample
The Company
Division A
Division B
Division C
Target
Population
Sample
Copyright Laske and Associates LLC, 2002
Note: Divisions
can also be cross-
functional groups
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Structuring a Representative Sample
Copyright Laske and Associates LLC, 2002
TYPES OF SAMPLE
A. Pure Samples B. Mixed Samples
1. Executive team only (=E) 1. Balanced sample (E, M, T,
I=25%)
2. Middle management [groupleaders] only (=M)
2. Management sample (E=10%,M=50%, T=20%, I=20%)
3. Critical teams [and team
managers] only (=T)
3. Team sample (E=0%, M=30%,
T=70%, I=0%)
4. Individual contributors only (=I) 4. Workforce sample (E=0%,
M=30, T=0%, I=70)
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Indexes and Their Capability Standards
A CDREM Index is entirely customizable; it refers to
any aspect of capability HR decides to measure
An index measures capability levels with a focus on a
particular enabler (e.g. leadership)
An index is composed of a set of pertinent variables each
of which is associated with a standard (customized tocompany strategy and HR concerns flowing therefrom)
CDREM capability standards derive from current social
science research
Each index measures all three time dimensions of workcapability: current applied, current potential, and future
potential capability.
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Capability Indexes are Composed
of Meta-Enablers Measuring Capability Levels
Six Classes of
of Meta-Enablers
Any number of
customized
indexes
25 Capability
Criteria
Future
Capability
Current
Capability
Copyright Laske and Associates, LLC, 2002
Customized to
Company Strategy
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Example: Variables of aLeadership and Change Flexibility Index
Developmental level (16 levels)
Developmental potential and risk
Strength of complexity awareness (transformational capacity)
Strength of systems thinking
Self conduct self concept
flexibility for change
need for power and control
Task focus autonomy
resourcefulness under stress
quality of planning and order
Interpersonal perspective
empathy helpfulness/supportiveness
capacity for affiliation
Energy sinks (gaps between personal needs and aspirations)
Culture climate index (gaps between Personal aspirations and actualorganizational experience)
Copyright Laske and Associates LLC, 2002
Future potentialcapability
Current potential and
applied capability
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Current and Near-Future Capability Standards
Copyright Laske and Associates LLC, 2002
Dimensions of Current CapabilityFactors ofCurrent Capability
Personal Need Aspirations Org.Experience
Self Conduct: how
people perceive
themselves
Task Focus: how
people perceive their
workInterpersonal
Perspective: how
people perceive their
co-workers
Energy Sinks: gaps
between need andaspirations
Culture Climate
Index: gaps between
aspirations and org.
experience
Validated
managerial
standards of
personal and
ethical needs tobe satisfied by
work
(e.g., drive to
achieve)
Validated
managerial
standards of
aspirations held
for ownorganizational
functioning
(e.g., aspired-to
achievement)
Validated
managerial
standards of
actual ex-
perience ofthe organ-
ization
(e.g., ex-
perience of
managements
achievement
orientation)
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Far-Future Capability Standards
Copyright Laske and Associates LLC, 2002
Factors ofFuture Potential Capability
Manifestation
Level of developmental maturity 16 levels between ages 20-100, each
associated with a different degree of
leadership capability
Near-future developmental risk andpotential
Likelihood of advancing frompresent level, getting stuck at present
level, or regressing from level
Strength of systems thinking Overall capability to see the
organization systemically, rather
than by personalization
Strength of critical vs. constructive
tools (transformational capacity)
Balance of multiple perspectives in
organizational situations
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What a Capability Metric
Tells Management
Copyright Laske and Associates LLC, 2002
CDREM outcomes are stated in the
format of a Capability Metric
The metric reveals the hidden work
capability of a representative sample.
Results are stated in terms of potential-
to-risk ratios for all variables includedin the index measured.
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Format of the Capability Metric
Copyright Laske and Associates LLC, 2002
Index Variable Standard
Chosen
Risk
(ProportionMissing
Standard)*
Potential
(ProportionExceeding
Standard)*
Risk-to-Potential
Ratio
Future Potential Capability
Variable 1
Variable n
DevelopmentalMedian
Current Applied and Potential Capability
Variable 1
Variable n
Behavioral
Median
Capability Mean
* Those adhering to standard are implicitly represented by 1.0.
Important Link
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L d hi C bilit M t i
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Leadership Capability Metric
Adherence/
STANDARDMissing/
RISK
Exceeding/
POTENTIAL
(Future Potential Capability)
(Current Applied Capability)
Dev. Level
Dev. Potential
Change Flexibility
Systemic Thinking
Self Conduct
Task Focus
Interpers. Perspective
Energy Sinks
Copyright Laske and Associates LLC, 2002
-1.0 +1.0
CDREM
Index
Present State
Future State
Unused current potential
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High-Level Summary for Leadership
Copyright Laske and Associates LLC, 2002
Negative Findings Positive FindingsOverall: Risk Outweighs Potential
Risk 1: There is a large deficit in far-
future potential capability (developmental
level and systemic grasp) that cannot be
alleviated by training
Potential 1: There are pockets of sample
members exceeding the standard set for
developmental potential, but they are not
sufficient to offset the overall lack of far-
future developmental capability
Risk 2:a. Whatever current potential capability
there is, is presently not used (energy
sink)
b. The area of greatest current deficit isself conduct (i.e., self concept, risk
taking, change flexibility, need for power
and visibility); this reflects a lack of far-
future potential capability
Potential 2: There are pockets of sample
members exceeding the standard set for
interpersonal perspective (emotional
intelligence), but they not sufficient to
offset the overall lack of far-futurecapability
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Actionable Detail, Example
Index Criterion ProportionMissing
Standard
ProportionAdhering to
Standard
ProportionExceeding
Standard
Prognostic Findings
Degree of
systemsthinking
33% 50% 17%
Diagnostic Findings
Conduct (self
concept,
flexibility forchange, need for
power)
45% 37% 18%
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Reaction of a Manufacturing Firm
Repr. sample regards the middle management level
High future potential capability is too long-term to beactionable
High energy sinks require immediate harnessing of current
potential in all ways possible (e.g., reward structure)
Available options: start a massive management development effort geared to harnessing
existing behavioral and developmental potential
diminish unused potentials
by wide-scoped job re-assignment and work place restructuring by firing parts of middle management, and either rehiring or
outsorcing managers showing high current & future potential
capability
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Example 2
Team Synergy Metric of a pharmaceuticalcompany with good capability potential
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High-Level Summary for Team Synergy
Copyright Laske and Associates LLC, 2002
Negative Findings Positive Findings
Overall: Potentials Outweigh Risks
Risk 1: Lack of maturity level and
resultant systems thinking deficit of team
members presently pose the greatest risk
to team synergy; risk is not outweighed
by potential
Potential 1: There are large potentials for
developmental advance and change
flexibility that need program support
(coaching, mentoring, team restructuring)
Risk 2:
Self conduct risks exaggerated or low
self concept, lack of flexibility for
change, need for power and visibility
are considerable, but outweighed by
adherance to, and exceeding of, standard
Potential 2: There is a huge potential for
developing interpersonal perspective
(emotional intelligence), and a more
balanced self concept.
Risk 3: Existing potentials of team
synergy are currently unused.
Potential 3: future potential (far future)
solidly supports current potential (near
future),
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A Capability Metric Facilitates:
Copyright Laske and Associates LLC, 2002
1. Applications for Venture Capital
2. Merger and Acquisition Decisions3. Re-Visioning of Organizational Strategy
4. Change Management Initiatives
5. Human Capital Readiness Reports
6. Restructuring of Reward Systems
7. Outsourcing Decisions
8. Automation and Web Transfer Decisions
9. Management Development Programs
10. Employee Development Programs
11. Culture Climate Enhancement
12. Internal Business Process Enhancement
13. Customer Relations Enhancement.
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Following-Up Capability Assessments
Results:
Following up assessments enables comparisons against a base line
established by the initial capability metric
Follow up delivers insight into the effectiveness of developmental
programs for all three aspects of capability
Timing:
Current and future potential is followed up annually
Current applied capability can be followed up in periods shorter
than a year.
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Part III
Copyright Laske and Associates LLC, 2002
Wrap Up
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What CDREM Delivers
CDREM is a tool for calibrating the quality of human
capital in organizations in terms of work capability
CDREM provides a Capability Metric detailing present,
near-future, and far-future work capability
A capability metric reveals the hidden potential of a
companys workforce
Findings in a Capability Metric heighten the realism of
strategic decision making at the highest level of
management.
Copyright Laske and Associates, LLC, 2002
A C bilit M t i
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A Capability Metric
Scores Hidden Company Intelligence
Copyright Laske and Associates LLC, 2002
CompetenciesStrategic
Alignment /
MotivationCultural Climate
Team
IntegrationLeadership
Developmental(long-term)
Potential
Behavioral(short-term)
Potential
Financial
Perspective
Customer
PerspectiveInternal Process
Perspective
Work Capability
Enabler
Intelligence
S l t d B fit f C bilit A t
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Selected Benefits of Capability Assessment
A Capability Metric:
is based on objective (social-science) standards of
work capability in organizations
is customized to current company strategy
extends the time window on capability into the
future
strengthens and broadens the role of the HR
Director at the strategy table
introduces a heightened realism into HR programdesign and intervention, including e-HR
(personalization of information).
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New Tasks of the HR Director
Copyright Laske and Associates LLC, 2002
Th P i i l T k f th HR Di t
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The Principal Task of the HR Director
Is To Answer to Work Capability Concerns
Strategic
Company
Objectives
Insight into
Work
Capability
CONCERNSAssessment
of Work
Capability
CDREM
HR Solutions
and Deliverables
Copyright Laske and Associates, LLC, 2002
Th N d f I t ti T A h
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The Need for Integrating Two Approaches
to Human Capital Management
Copyright Laske and Associates, LLC, 2002
Ad hoc &
situational:
Opinion-survey
based Best
Practices
Grounded in
social science:
Assessment-
based Capability
Metrics
State of Human Capital
The old way The new way
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The best way to explore the utility of a
Capability Metric is to carry out a
CDREMcase study targeting some high-
level company concern.
Copyright Laske and Associates LLC, 2002
C St d D li bl
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Case Study Deliverables
A CDREM case study by Laske and Associates accomplishes:
translating HR capability concerns into measurable indexes
structuring and sizing one or more representative samples
defining capability standards appropriate to the companys
present strategic objectives and cultural climate
carrying out the assessment proper (developmental interviewing,
behavioral questionnaire)
calibrating the Capability Metric for one or more indexes
interpreting capability findings with attention to actionable
insight
suggesting appropriate CDREM follow up assessments.
Copyright Laske and Associates LLC, 2002
H L M
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How to Learn More
Copyright Laske and Associates LLC, 2002
References
Becker, B. E., M.A. Huselid, & D. Ulrich (2001). The HR scorecard. Boston, MA: Harvard BusinssSchool Press.Fitz-enz, J. & Phillips, J.J. (1998). A new vision for human resources. Menlo Park, CA: Crisp.Kaplan, R. & D.P. Norton (2001). The strategy-focused organization. Boston, MA: HarvardBusiness School Press.Jaques, E. (1994). Human Capability. Falls Church, VA: Cason Hall & Co.Kaplan, R. & D. P. Norton (1996). The Balanced Scorecard. Boston, MA: Harvard Business SchoolPress.Laske, O. (2002a). How will you deliver strategic human resources beyond domain competence?Human Capital Online, Delhi, India.Laske, O. (2002b). After competence, emotional intelligence, and learning and growth:Whats the next step? HR.com, February.
Laske, O. (2002c). The place where work happens. Submitted to The OD Practitioner.
Laske, O. & B. Maynes (2002). Growing the top management team. A. & N. Korac-Kakabadse (Eds.),Journal of Management Development, 21. Cranfield, Bedfordshire, U.K.Laske, O. (2001a). Linking two lines of adult development: The Developmental Structure/ProcessTool. Bulletin of the Society for Research in Adult Development (SRAD), 10.1, 8-11.Laske, O. (2001b). A learning and growth metric for strategy-focused organizations(http://www.balancedscorecard.org/wpapers.html).Laske, O. (2001c).The CDREM readiness report(http://www.balancedscorecard.org/wpapers.html).Laske, O. (2001d). CDREM for managers (http://www.balancedscorecard.org/wpapers.html).Laske, O. (2001e). What lies beyond alignment with strategy and other HR enablers? HR.com,Nov. 16, 01.Laske, O. (2001f). What do meta-enablers add to your insight into the workforce? HR.com, Nov.30, 01.
Laske, O. (2001g). How do you access and assess intangible human-resource assets? HR.com,Dec. 14, 01.Laske, O. (2000a). Foundations of scholarly consulting. Consulting Psychology Journal, 52.3,178-200.Laske, O. (1999a).Tranformative effects of coaching on executives professional agenda. Ann
rbor, MI: Bell & Howell Company (www.bellhowell.infolearning.com; order no. 9930438)Laske, O. (1999b). An integral model of developmental coaching. Consulting Psychology Journal,51.3, 139-159.
L k d A i LLC
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Laske and Associates, LLCSpecialists in Human Capital Measurement
Otto E. Laske PhD PsyD
Founder & Manager
51 Mystic St.
West Medford, MA 02155, U.S.A.
(781) 391-2361
Consultation on strategic human-resourcesmanagement, including web-based systems
Design of Capability Metrics
What gets measured, gets managed