Accountability in Human Resource Management Dr. Jack J. Phillips

Dr. Phillips has 27 years of corporate experience in five industries. He has served as training and development manager at two fortune 500 companies. In 1992, Dr. Phillips founded Performance Resources Organization (PRO), an international consulting firm specializing in human resources accountability programs. Dr.Phillips has authored or edited ten books addressing human resource development.

The need for a Results-Based Approach Tim Epps, vice president of People Systems for Saturn Corp., in Troy Michigan, explains, “HR must become bottom line valid. It must demonstrate its validity to the business, its ability to accomplish business objectives and its ability to speak of accomplishments in business language. The HR function must perform in a measurable and accountable way for the business to reach its objectives.” (Phillips 1996)

Important trends related to HR contribution n Increased importance of the HR function n Increased accountability n Organizational change and quality programs n Improvement in productivity n Adoption of HR strategies n Growing use of HR information systems n Reliance on partnership relationships

Important trends related to HR contribution (cont.) n Increased importance of the HR function n Increased accountability n Organizational change and quality programs n Improvement in productivity n Adoption of HR strategies n Growing use of HR information systems n Reliance on partnership relationships

Measuring the HR contribution n Surveys n HR accounting n HR auditing n HR case studies n HR cost monitoring n Competitive benchmarking n Key indicators

Measuring the HR contribution (cont.) n HR effectiveness index n HR management by objectives n HR profit centers n Return on investment

Developing a results-based approach and a new model n Purposes of measurement and evaluation n Obstacles to measuring the contribution n Levels of evaluation n The attitude of the HR team n Sharing responsibilities for the HR measurement and evaluation n A results-based model for program implementation

Purposes of measurement and evaluation n To determine whether a program is accomplishing its objectives. n To identify the strengths and weaknesses of the HR process n To calculate the ROI in an HR program n To gather data to assist in marketing future programs.

Purposes of measurement and evaluation (cont.) n To determine if the program was appropriate n To establish a data base that can assist management in marketing decisions

Obstacles to measuring the contribution n Evaluation cost n Lack of top management commitment n Lack of evaluation knowledge n Attention to evaluation design n Fear of evaluation n Lack of standards

Levels of evaluation It is helpful to view HR measurement and evaluation as consisting of three levels: n Measure of perceived effectiveness n Measures of performance n Measures of return on investment

A Results-Based Model for Program Implementation * Step one: Needs analysis *Step two: Measurement and evaluation System Step three: Program Objectives Step four: Program Development Step five: Program Implementation *Step six: Cost Monitoring * Step seven: Data collection and analysis * Step eight: Interpretation and conclusion * Step nine: Communicate results *Steps receiving recent emphasis

Evaluation design Evaluation design Is important to the overall process of HR measurement. It includes the timing of measurements and the minimization of factors that can threaten the validity of program evaluation results. (Phillips, 1996)

Evaluation design issues n Control groups n Timing of measurements n Factors that jeopardize validity 1) Time or history 2) Effects of testing 3) Mortality 4) Selection bias

Evaluation design and implementation Common evaluation designs. n One-shot program evaluation design n Single group, pre- and post-program measurement design n Single group, time series design n control group design n Ideal evaluation design

One-shot program evaluation design Program fully implemented Program or initiated completed Program Implementation period time Data collected

Single group pre- and post- measurement design Program fully implemented Program or initiated Program completed implementation period Time Data collected #1Data collected #2

Single group, Time Series Design Program Fully implemented or Program program completed initiated implementation period time Data collected Data collected Data collected Data collected #1 #2 #3 #4

Control group design Program fully implemented Program or initiated completed Program Implementation period Experimental Time group Data collected #1 Data collected #2 Control No program Time group

Ideal evaluation design Program fully implemented Program initiated or completed Program implementation Experimental period Time group A Data collected #! Data collected #2 Control group No program Time Program fully implemented or Program initiated completed Program implementation Experimental period Time group B Data collected #2

Post measure only, control group design Program fully implemented Program or initiated completed Program implementation Experimental period Time group Data collected #1 Control No program Time group

Measuring the total human resource effort Measuring the human resource effort will help management understand and appreciate the ways in which the human side of an organization interacts with and effects the financial side. (Phillips 1996)

Measurement issues Measurement is important to determine success of performance. Success also depends on the ability to measure performance and to use these measurements persuasively to obtain needed resources. (Phillips 1996)

Measurement issues (cont..) The following principles of performance measurements apply: n The effectiveness of any function can be measured by some combinations of cost, time, quantity, quality, or behavioral indices.

Measurement issues(cont.) n A measurement system promotes productivity by focusing attention on the most important issues, tasks, and objectives of the organization. n The performance of white collar workers is best measured in groups. n The ultimate measure is effectiveness, not efficiency.

Measurement issues (cont.) n Managers can be measured by the effectiveness and efficiency of the units they manage.

The HR contribution model HR contribution model HR Management Functions Programs Policies Practices Strategy Activities HR performance measures HR investment Absence rate Turnover rate Job satisfaction Organizational commitment Organizational effectiveness measures Revenue Employees Assets Employee costs Operating income employee costs Other factors Revenue growth rate Industry type Economy Market forces Strategic choices

HR performance measures In determining which strategy of measures to use, for your HR program, four rules should be considered.

The Four Rules 1. Each measure should represent the impact of as many functions as possible within the HR department. 2. Each function should represent functions that are important across business and industry groups.

The Four Rules 3. Each measure should represent data that is available and assessable. 4. All of the measures must account for the large portion of the activities, programs,, and services of the HR department.

HR performance measures (cont). n HR expenses n Absence rate n Turnover rate n Job satisfaction n Organizational commitment

Using benchmarking to measure HR effectiveness The benchmarking process develops standards of excellence from organizations that are considered to have the best practices. (Phillips 1996).

The seven phase benchmarking process 7 Initiating ]improvement from benchmarking 1 Determining what to benchmark 2 Build the benchmark team 3 Identify benchmarking partners 4 Collect data 5 Analyze data 6 Distribute information to benchmark partners