Developing Human Capital

Don't squander your most valuable resource!

Collectively, your workers are your company's most important and most valuable asset. To make the most of this asset, nothing beats quantitative performance and investment measurement. Learning and Development is an 80 billion-dollar industry, and every valuable employee represents a sizable investment on the part of your company. To keep your business moving forward, effective management of human capital is crucial. It generates plenty of data, and deep analysis of this data helps you provide feedback and make adjustments to capitalize on the combined knowledge, skills, and creativity of your workers. Developing Human Capital: Using Analytics to Plan and Optimize Your Learning and Development Investments provides a guidebook for collecting, organizing, and analyzing the data surrounding human capital so you can make the most of your employees' potential.

• Use predictive analysis to optimize human capital investments
• Learn effective study design and alignment
• Get the tools you need for measurement, surveys, and analysis
• Decide what to measure and how to measure it
• Outline your company's current and future analytics technology needs
• Map data sources, and overcome barriers to data collection

Authors Gene Pease, Bonnie Beresford, and Lew Walker provide case studies in which major companies applied human capital analytics to guide people decisions, and expand upon the role of analytics in Learning and Development. Developing Human Capital: Using Analytics to Plan and Optimize Your Learning and Development Investments is an essential guide to 21st century human resources and management practices, and can keep you from squandering your company's most valuable resource.

Foreword xiii

Preface xvii

Acknowledgments xix

Introduction xxi

Chapter 1 The New Workforce 1

Defining the Generations 2

Projected Gaps as the Generations Shift 4

Chasing Down Retirement 4

Changing the Way We Work 5

Technology 6

Economy 7

Globalization 8

Demographics 9

Are Virtual Workplaces Here to Stay? 9

What Can Learning Leaders Do? 9

Summary 10

Notes 11

Chapter 2 The Need for a Strategy 13

Measurement as an Intentional Process 15

Continuum of Analytics 17

Continuum of Learning and Development

Analytics 20

Summary 22

Notes 22

Case Study: A Measurement Strategy in Action:

Pfizer 24

Chapter 3 Establishing a Measurement Framework 31

Measurement Frameworks 32

A Practical Measurement Framework for Learning 35

Summary 39

Notes 40

Case Study: Improving Collectors’ Skills: AT&T 41

Chapter 4 Planning for Success 61

Purpose and Political Will 62

Skills and Capabilities 65

Tools and Technology 66

Data 67

Taking Inventory: What It Takes 69

Developing the Plan: Measurement Blueprints 69

Summary 73

Note 73

Case Study: A Culture of Measurement: Chrysler

Academy 74

Chapter 5 Curriculum Alignment 79

Goal: To Close the Skill Gaps 80

The Performance Map 80

How We Learn from High Performers 82

Quantifying the Gap 84

Aligning and Prioritizing the Curriculum 85

Beyond Curricula 86

Summary 87

Case Study: Performance Analytics for an Aligned Curriculum: VW Credit, Inc. 88

Chapter 6 Measurement Alignment 97

Alignment Wanted 98

Maps—An Old Idea, a New Application 98

What Is a Measurement Map? 99

What Does a Measurement Map Look Like? 100

Building a Measurement Map 104

Defining the Data 106

Summary 107

Case Study: Showing Learning’s Alignment with the

Business: VW Credit, Inc. 109

Chapter 7 Improving on the Basics 115

The Basics 116

Improving Level 1 118

Improving Level 2 124

Improving the Analysis 130

Summary 137

Notes 137

Case Study: Leadership Program at a Fortune 500 Financial Company 139

Chapter 8 Hard Evidence Using Advanced Analytics 145

The Quest for Isolated Impact 146

Causation: What Really Drives Performance? 149

Isolating the Impact: Improving Levels 4 and 5 150

A Gentle Guide to the Statistics of Causation 152

Statistical Modeling and Significance 154

Isolation and the Analytics Continuum 155

Summary 156

Note 157

Case Study: Achieving Business Impact at a Major Utility Company 158

Case Study: Hard Evidence Using Advanced Analytics: Valuing Training at Defense Acquisition University 164

Chapter 9 Optimization through Predictive Analytics 169

Predictive Analytics 170

How to Optimize Investments 171

Getting the Data for Optimization 174

Predictive Analytics—A Learning Game Changer 175

Pioneers of Predictive Analytics in Human Resources 176

Conclusion 177

Notes 179

Case Study: Optimizing Performance Management: VF Corporation 180

Chapter 10 In Conclusion—Get Started 187

Note 189

Appendix A Talent Development Reporting Principles (TDRp): Managing Learning like a Business to Deliver
Greater Impact, Effectiveness, and Efficiency 191

Appendix B What It Takes 219

Appendix C Measurement Plan: Blueprints for Measurement 225

Appendix D Using Bloom’s Taxonomy 233

Appendix E Guidelines for Creating Multiple Choice Questions 237

Appendix F Getting Your Feet Wet in Data: Preparing and Cleaning the Data Set 241

Appendix G How Many Participants Do You Need in a Study? 255

Glossary 259

About the Authors 273

Index 275

GENE PEASE is the founder and CEO of Vestrics (a Capital Analytics Company), the leading provider of workforce optimization software and consulting services. The firm has been recognized with awards from Bersin and Associates, CLO Magazine, CIO Review Magazine, Gartner, and the ROI Institute.

BONNIE BERESFORD, PHD, is the Director of Performance Strategy and Design at AMCI Global. While Vice President at Capital Analytics, Beresford’s work has earned her clients three CLO Magazine - Business Impact awards.

LEW WALKER, SPHR, is the Vice President of Human Resources at AT&T. He serves on the Editorial Board of CLO Magazine and is a frequent conference speaker.

In some ways, it’s surprising that learning and development (L&D) is such a large and fast-growing industry—to the tune of around $80 billion. We no longer live in an era of lifelong employee loyalty, so why are the most successful companies, from Defense Acquisition University to Pfizer, still spending so much on L&D? They know how to measure the business benefit of L&D spending. Using case studies from these and other top firms, Gene Pease, Bonnie Beresford, and Lew Walker walk you through how to ensure that your human capital dollars are well spent.

Developing Human Capital is one of the first works to explore learning and development from a data-driven, analytical standpoint. This text is remarkably comprehensive, explaining study design and alignment, measurement tools, and future analytics strategy. If you have no idea what to measure or how to measure it, this book is the perfect resource. Maybe you’ve been “building the business case” for training and other development for years, but without quantitative measurement, the business case is just marketing. This book explains why now is the time to develop a measurement strategy for your firm’s L&D investments.

To anyone in the HR or learning and development fields, it will come as no surprise that technology is central to developing human capital. Computer-based learning modalities, analytic software, and an overwhelming surplus of data are part of the new reality. The authors incisively add the generational shift and changing workplace to this mix, and the result is an enormous opportunity to gather information that will drive better human capital decisions. And by now it is so well known that it hardly bears repeating: in the 21^st century, optimized human capital investment is the permanent home of competitive advantage.

Quantify and predict the true business benefit of learning and development

For decades, human resource management was more of an art than a science. Now, Developing Human Capital is guiding the transition to “big data.” In today’s business environment, human capital is the golden ticket to competitive success, and we now have access to mountains of data to help make the right decisions to build performance. It’s time to quantify the impact of learning and development investment. In this excellent addition to the respected Wiley & SAS Business Series, you’ll learn what to measure, when to measure it, and what to do with the data once you have it.

This book shows that human capital analytics really works. Short case studies from heavy hitters across industries show how businesses are already going beyond ROI to measure the real impact of L&D investments. As you read through Developing Human Capital, you’ll acquire the knowledge you need to build a measurement plan and align it with strategic goals. Using advanced analytics tools, you’ll be able to dig down to the hard evidence that supports those crucial L&D expenditures.

You’ve heard it before and you’ll hear it again: predictive analytics and big data are the future of business. Why should human capital be any exception? It is now possible to measure nearly all aspects of the learning process. With the tools in Developing Human Capital, you can create a map to maximized potential for every employee. Read this book to learn the language of tech-driven, data-driven analytics, and translate that language into better human capital investments.