1. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 1 Evaluating and improving the human resource function Chapter 16

2. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 16-2 Evaluating and improving the HR function  Objectives ÙExplain the approaches to evaluating the effectiveness of HR practices. ÙDiscuss the issues related to measuring and evaluating the HR function. ÙDiscuss how outsourcing HR activities may improve service delivery efficiency and effectiveness. ÙRelate how process reengineering is used to review and redesign HR practices. ÙConsider future directions for the HR function.

3. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 16-3 A strategic approach to measuring HR effectiveness  HR professionals need to adopt a system of metrics, or measurements, for human performance that will enable effective decisions to be made regarding the function and value creation in organisations.

4. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 16-4 Effective measurement of the HR function provides benefits  Marketing the HR function  Accountability  Move from subjective and intuitive measures to objective measures  Elevate the HR function to an equal footing with other functions  A guide for evaluating the HR function’s contribution to strategy implementation  A valid and systematic justification for resource allocation

5. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 16-5 Triple bottom line  The combination of economic, social and environmental performance indicators for an organisation.

6. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 16-6 Categories of HR activities  Transactional activities ÙThe day-to-day transactions such as pay administration, maintaining human resource information systems, and employee services.  Traditional activities ÙInclude performance management, learning, recruiting, selection, compensation and industrial relations.  Transformational activities  Include knowledge management, management development, cultural change, and strategic redirection and renewal.

7. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 16-7 Source: Adapted from P. Wright, G. McMahan, S. Snell, & B. Gerhart, ‘Strategic HRM: Building Human Capital and Organizational Capability’, Technical report. Cornell University, Ithaca, NY, 1998. Figure 16.1 Categories of HR activities

8. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 16-8 Adding value to the firm using the HR function  Increase efforts in traditional and transformational HR activities by: ÙDeveloping a strategy for the HR function ÙAssessing the current effectiveness of the HR function ÙRedesigning, reengineering, or outsourcing HR processes to improve efficiency and effectiveness.

9. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 16-9 Approaches for evaluating HR effectiveness  Audit approach ÙType of assessment of HR effectiveness that involves review of customer satisfaction or key indicators (e.g. turnover rate, average days to fill a position) related to an HR activity (e.g. staffing).  See Table 16.1 for more detail

10. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 16-10 Approaches for evaluating HR effectiveness  Analytic approach ÙType of assessment of HR effectiveness that involves determining the impact of, or the financial costs and benefits of, a program or practice. ÙTypes of cost-benefit analyses: Ùhuman resource accounting Ùutility analysis

11. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 16-11 Figure 16.4 Improving HR effectiveness

12. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 16-12 Source: Adapted from P. Wright, G. McMahan, S. Snell & B. Gerhart, ‘Strategic HRM: Building Human Capital and Organizational Capability’, Technical report, Cornell University, Ithaca, NY, 1998. Figure 16.5 Old and new structures for the HR organisation

13. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 16-13 Outsourcing  An organisation’s use of an outside organisation for a broad set of services.  Reasons for outsourcing: ÙEfficiency ÙEffectiveness ÙSee Table 16.7 for more detail

14. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 16-14 Reengineering  Review and redesign of work processes to make them more efficient and improve the quality of the end product or service.

15. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 16-15 Figure 16.6 The reengineering process

16. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 16-16 Summary  The roles required of the HR function have changed as people have become recognised as a true source of competitive advantage.  Strategic management of the HR function will determine whether HR will transform itself to a true strategic partner or simply disappear.

17. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 16-17 Summary (continued)  The HR function must deliver transactional, traditional and transformational services and activities to the firm, and it must be both efficient and effective.  Restructuring, reengineering and outsourcing may be appropriate in some circumstances, but require careful planning, attention to detail in implementation, and ongoing evaluation.  Multiple performance outcomes for the HR function should be considered, including financial terms and social terms.