KEY STRATEGIES FOR MANAGING HUMAN CAPITAL RISK

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KEY STRATEGIES FOR MANAGING HUMAN CAPITAL RISK


Harold MorganSenior Vice President Human Resources, CHRO White Lodging ServicesFormer CHRO, CTA (Chicago Transit Authority), IDEX Corporation, Bally Total Fitness Corporation, Bally Manufacturing/Entertainment, Director of Employment and Labor Relations, Hyatt Hotels Corporation.

Jennifer Barton, SPHRChief Operating Officer | Willis Human Capital PracticeAs COO of the Human Capital Practice for Willis North America, Jennifer has responsibility for 48 offices throughout the U.S. and Canada representing over $330 million in revenue. In this capacity she is responsible for defining, creating and deploying best-in-class client deliverables designed to address human capital risk. Under her leadership, the practice has grown to consult with over 3,000 clients across the U.S. in areas such as Human Resources, Communication, Compliance, Health Outcomes and Reporting and Analytics.


What to Expect

1. Overview of Talent Management/Development2. Best Practice Review3. Five specific strategies for managing human

capital risk within your organization4. Key questions for getting started with your

strategies


WHITE LODGING OVERVIEWCompany Overview


Introduction to White Lodging• Established in 1985 – Headquarters in Merrillville, Indiana (30 miles from downtown Chicago)• Owner, developer and operator of premium branded hotels• One of the largest independent hotel organizations in the U.S.

− 170 branded hotels totaling more than 26,000 guestrooms in 21 states− Deep talent pool: 10,000 Associates – Full and Part Time− Manage leading brands: Marriott, Hilton, Starwood, Hyatt, InterContinental, Preferred,

Carlson• Mission: Maximize the value of each and every hotel asset for our owners

The State of the IndustryThe Brands

• Own very few, if any hotels• Manage less than 50% of the hotels bearing their name

Independent Management Model• Work for the owner instead of the brand• Offer more accountability, flexibility and ROI versus brands


HISTORYHuman Capital Risk Practical Implications


Overview

1. No Chairman of Board / CEO has ever....2. No CHRO has ever ….

4. CHRO Survey – major issue

Modify Talent Strategy All The Time

3. Talent changes all the time3. Talent Changes All The Time


Source: HR Policy Association


General Philosophy-Talent Development

1. Right people on bus (80%) + robust on-boarding2. KISS3. 50/50 – no hand holding4. Develop those with most impact (more top of

house)5. 70-20-10 – rule of training


Elements of Great Talent Management

1. Right people on bus2. Business needs generate talent plan3. Determine how to judge talent

• Competencies• Testing

4. Assess Talent 5. Produce choices for key roles (outside > 30%)6. Conduct STR ‘s of Key Leaders7. Decide on development/coaching approach8. Move plus manage talent-every move is scrutinized

current performance

against competencies

future potential

flight risk


Source: HR Policy Association

Jennifer Barton


5 SPECIFIC STRATEGIESWillis


Specific Human Capital Strategies

1. Conduct a Total Rewards Gap Assessment

2. Alignment of Compensation

3. Implementation of Flexible Work Arrangements

4. Utilization of Competencies

5. Identification of High Potential / High Performing Employees







Identification of High Potential / High Performing Employees


What is Your Employee Value Proposition?

The Company’s Ability• Attract• Motivate • Retain

Optimal Mix of Reward Elements• Compensation• Benefits• Work-Life• Performance & Recognition• Development & Career Opportunities

Employ Top Talent That Is…• Engaged• Satisfied Drive Business Success

• Performance• Results


Total Rewards Gap Assessment Evaluate or Create a Total Rewards Strategyo Effectiveness of your rewards

elementso Alignment to your business

strategyo Competitive position

Develop an Action Plan o Resources and

recommendationso Prioritization and eligibility


Pay for Performance in Theory

Does NotMeet

PartiallyMeets

Meets Exceeds Far Exceeds

Performance

Employee Population Merit Increase

Percent of Population

Percent Increase

Low

High

Low

High


Pay for Performance in Reality

Does NotMeet

PartiallyMeets

Meets Exceeds Far Exceeds

Performance

Employee Population Merit Increase

Percent of Population

Percent Increase

Low

High

Low

High


Merit Matrix Modeling

1st Quartile2nd

Quartile3rd

Quartile4th

QuartilePayout

17% 39% 22% 22% 100%

Outstanding 10% 7.5% 6.5% 5.5% 3.5% 0.59%

Significantly Exceeds Standards

20% 5.5% 4.5% 3.5% 1.5% 0.79%

Fully Meets Standards 60% 4.0% 3.0% 2.0% 0.0% 1.47%

Does Not Fully Meet Standards

5% 0.0% 0.0% 0.0% 0.0% 0.00%

Does Not Meet Standards 5% 0.0% 0.0% 0.0% 0.0% 0.00%

2.85%

Largest increase to those who perform well and paid low in

their range

Distribution of Employees by BOTH Performance and Within Pay Range


New Ways to Define When, Where and How Work Gets Done

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

40%

50%

10%

Helping Employees Balance Personal and Professional

Work-Life Demands

Weak Adequate Excellent

Why• 1 out of 5 cares for an elderly parent• Women comprise 60% of workforce• 80% of men would like fewer hours• Priority from Boomers to Millennials

In Practice• High-Performers• Teams establish blueprints• Establish and hit benchmarks**


Identify Behaviors and Skills Critical to Success

CUSTOMER FOCUS

The ability to plan a course of action while keeping customer information and feedback top-of-mind. This includes how we interact with customers directly, interface with customers online and how we select the products that we offer.

Developing and / or Low Performing

Medium Performing High Performing

Able to work successfully with difficult customers and satisfy their requirements.

Maintains professionalism while responding with urgency.

Acts on feedback concerning products and services the Company provides.

Identifies opportunities to improve company operations.

Provides supports to others in meeting difficult customer requirements and/or coping with customer care difficulties.

Reaches win-win agreements with customers.

Evidences in depth understanding of the Company’s customer experience; uses this information to identify better ways to serve the customer

Oversees highly complex customer focus initiatives and assignments with success; makes customer experience a top priority in every aspect of work.

Provides guidance to others in meeting difficult customer requirements and/or coping with customer care difficulties.

Creates opportunities for others to develop in-depth understanding of the Company’s customer experience and the business operations that make this experience a reality.

For Illustrative Purposes Only


Identify High-Potential and High-Performing

Low Potential Moderate Potential High Potential

High Highly valued, seasoned professional in current role; remain at current level

Does extremely well at current job with potential to do more, give stretch assignments to help prepare for next position.

Consistently performs well in a variety of assignments, prime targets for recruitment by other companies.

Effective

Probably solid performers in current roles. Could progress higher in specialty and become a high performer.

These individuals should be considered for a bigger job at the same level if they can deliver better results.

Current role may still provide opportunity for growth / development; focus should be on helping them improve performance

LowConsider reassignment, reclassification or exit.

Tight performance management is crucial, consider helping leader manage time more effectively.

Maybe job mismatch, new hire with lots of potential, or new assignments. May require coaching to improve performance.


Create a Plan to Manage Your Human Capital

Tale

nt In

vent

ory

HIPOs

Succession Candidates

Career Growth Candidates

Non-HIPOs

Key Contributors

Team Players

Problem Children

Exit

Remember 10% | 20%| 70%• Projects• Taskforce• Job Rotations• Temporary Accountability• Stretch Assignments• Fix-it / Turn-around• Development Plans• Cross-Functional moves• Internal and External Leadership Development• 360 Feedback


Not Everything at OnceAction Tool

Delivering on this initiative would help achieve business objectives?

Line managers are likely to cooperate, if asked to support this initiative?

We have the capabilities within our HR team to deliver this initiative well?

We have the infrastructure (e.g., technology, tools) to deliver this initiative well?

Results from the initiative can be measured to validate its effectiveness? How?

Leadership buy-in has been obtained or is likely to be obtained?

Who will be accountable for the success / failure of the initiative?

What are the estimated direct and indirect costs associated with this tactic?

Can we secure the budget necessary to deliver this initiative well?


Key Take Away

Human Capital is an Asset … Manage it.

Whether a company competes on the basis of productivity, innovation, customer loyalty, efficiency, speed, or agility, the workforce has a make-or-break impact on those results.

It is important to have the right talent, with the right skills, in the right place, at the right time, and at the right cost.


Questions, Final Comments and Contact Information

Harold Morgan Senior Vice President Human ResourcesWhite Lodging [email protected]

Jennifer BartonChief Operating OfficerWillis Human Capital [email protected]

KEY STRATEGIES FOR MANAGING HUMAN CAPITAL RISK

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