Ultimate Performance

Meeting the challenges of high-performance HR

Until 1760 ships routinely disappeared, ran aground, or sank because seafarers could not measure longitude. The cost in life and property was immense. Today, business faces a similar challenge, as the failure to measure human resources performance is just as costly and deadly to modern organizations.

Senior executives once considered HR a "soft," unavoidable cost of doing business, responsible for compensation, employee transactions, company functions, workforce problems, and legal issues. Three factors changed this perception: the significant impact of high-performance HR, the implications of poorly performing HR, and soaring HR operating expenses. These factors have led to an increased demand and focus on HR metrics.

Ultimate Performance approaches this challenge by providing clear, proven measurement solutions that will optimize the performance of people and businesses.

Preface vii

Introduction ix

CHAPTER 1 Imperatives of Metrics 1

CHAPTER 2 A Path to Alignment 15

CHAPTER 3 Supporting Human Capital Decision Making 23

CHAPTER 4 Employee Assets and Contribution 35

CHAPTER 5 Employee Contribution to Risk 47

CHAPTER 6 The Employee Lifecycle—A Metrics Roadmap from the C-Level 59

CHAPTER 7 Missions, Objectives, and Metrics 71

CHAPTER 8 Measuring Staffing—A Better Approach to Hiring Metrics 93

CHAPTER 9 Beyond Hiring—Metrics for Employee Development and Retention 113

CHAPTER 10 Succession Planning and Internal Mobility 141

CHAPTER 11 Current Measurement Practices—Lessons from the Field 169

CHAPTER 12 Case Studies—Metrics in Action 189

CHAPTER 13 Human Capital and Organizational Performance 207

CHAPTER 14 HR Outsourcing and Metrics 221

CHAPTER 15A Practical Guide to Building Your Ultimate Dashboard 235

Conclusion 253

References 259

About the Contributing Authors 263

Index 267

Nicholas C. Burkholder is the Managing Director and Chair of OnPerformance, Inc. and founder of Staffing.org. He is actively engaged in the development and application of performance frameworks which enable organizations to achieve optimum results.

Scott Golas applies insight and realism shaped over twenty years in HR and outsourcing to demystify the rapidly evolving business of HR and workforce issues.

Jeremy Shapiro is a Vice President at Bernard Hodes Group's Hodes iQ, bringing next-generation talent acquisition and technology solutions to HR management across the world.

Just as the finance department of any complex organization is responsible for providing the tools and methodology related to implementing strategies that support the mission and objectives of an organization, so too, must the human resources department take responsibility for the development of tools and methodologies relevant to human capital assets and their place in the organizational mission, objectives, and strategy. Many HR professionals are unaware, however, that the measurement tools needed to make these calculations already exist and simply await implementation.

Ultimate Performance presents the ways, means, and actual metrics that department directors can use to transform the perception of human resources in any company or industry: what was once seen as a cost center will become a critical player in the improvement of organizational performance and a clear contributor to the bottom line.

Featuring case studies from leading corporations and other organizations around the world, this no-nonsense guide provides the tools that enable HR managers to go beyond cost-cutting to create value and help the business differentiate itself from the competition. To do this, it is essential to define and understand business objectives, identify human capital deliverables that impact the business, and measure the impact of these deliverables.

The authors demonstrate how to focus metrics on outcome rather than process. They show HR professionals how to employ these outcomes to support human capital decision making in a variety of areas, including employee assets and risks, the employee life cycle, hiring, outsourcing, succession planning and internal mobility, employee development and retention, and more.

Central to the accuracy and impact of these measurements are the metrics themselves. The metrics presented in Ultimate Performance:

• Measure results associated with customer-defined performance objectives

• Are limited to three to five specific metrics for any outcome or result

• Drive continuous performance improvement

• Are easy to calculate

• Are easy to compare

• Can be periodically reviewed and refined

Complete with solid examples of metrics in action and clear explanations of what works, what doesn't work, and how to learn from the process, Ultimate Performance provides all the necessary tools to improve the efficiency, productivity, and performance of both the employees and the HR department itself in any organization.

Meeting the challenges of high-performance HR

Until 1760 ships routinely disappeared, ran aground, or sank because seafarers could not measure longitude. The cost in life and property was immense. Today, business faces a similar challenge, as the failure to measure human resources performance is just as costly and deadly to modern organizations.

Senior executives once considered HR a "soft," unavoidable cost of doing business, responsible for compensation, employee transactions, company functions, workforce problems, and legal issues. Three factors changed this perception: the significant impact of high-performance HR, the implications of poorly performing HR, and soaring HR operating expenses. These factors have led to an increased demand and focus on HR metrics.

Ultimate Performance approaches this challenge by providing clear, proven measurement solutions that will optimize the performance of people and businesses.