...Organizations WHAT MAKES HR A STRATEGIC PARTNER? CEO PUBLICATION G 09-01 (555) EDWARD E. LAWLER III Center for Effective Organizations Marshall School of Business University of Southern California JOHN W. BOUDREAU Center for Effective Organizations Marshall School of Business University of Southern California Center for Effective Organizations - Marshall School of Business U n i v e r s i t y o f S o u t h e r n C a l i f o r n i a - L o s A n g e l e s, C A 9 0 0 8 9 – 0 8 7 1 (2 1 3) 7 4 0 - 9 8 1 4 FAX (213) 740-4354 http://ceo-marshall.usc.edu What Makes HR a Strategic Partner? Edward E. Lawler III Center for Effective Organizations University of Southern California 3415 S. Figueroa Street., #200 Los Angeles, CA 90089-0871 Tel: 213-740-9814 Email: elawler@marshall.usc.edu John W. Boudreau Center for Effective Organizations University of Southern California 1 What Makes HR a Strategic Partner? Edward E. Lawler III and John W. Boudreau Executive Summary For several decades, the HR function in corporations has been encouraged to become a strategic partner. Data from a longitudinal study of large corporations suggest that HR is not now a strategic partner and that little or no movement toward it becoming one has occurred. An analysis of what HR can do to become a strategic partner shows some clear actions that HR can take. These include talent development in HR, creating corporate centers of excellence, developing the right metrics and analytics, and...
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...indicators (KPIs) in human resources (HR). The article provides an overview of how HR activities are supported in order to reach the partial goals of HR as defined in the strategic map. Overall the aim of the paper is to show the possibilities of using the modern Balanced Scorecard method in human capital. Key words: key performance indicators, entrepreneurial sector, HR scorecard, performance, Balanced Scorecard 1. INTRODUCTION Many companies have implemented tools for measuring their performance in order to stay in business and come in contact with tough competition. Organizations must face not only to more demanding conditions but in the current period to the world financial crisis as well. Due to these reasons, the organizations are forced to measure performance of the organization and contribute to the stability of the organization in today´s competitive environment. Organizations try to measure performance according to the financial drivers but in the recent period top leaders attempted to find new performance indicators which would take the “wind from sail” to their rivals in the market. One of these competitive advantages is human capital. As the Tootell et al. (2009) stated “since 1980s there has been an increasing emphasis on the importance of HR measurement.” Yeung and Berman (1997) declared that “HR measures should be impact rather than activity orientated, forward looking than backward looking, and should focus on the entire HR system not just on individual practices...
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...indicators (KPIs) in human resources (HR). The article provides an overview of how HR activities are supported in order to reach the partial goals of HR as defined in the strategic map. Overall the aim of the paper is to show the possibilities of using the modern Balanced Scorecard method in human capital. Key words: key performance indicators, entrepreneurial sector, HR scorecard, performance, Balanced Scorecard 1. INTRODUCTION Many companies have implemented tools for measuring their performance in order to stay in business and come in contact with tough competition. Organizations must face not only to more demanding conditions but in the current period to the world financial crisis as well. Due to these reasons, the organizations are forced to measure performance of the organization and contribute to the stability of the organization in today´s competitive environment. Organizations try to measure performance according to the financial drivers but in the recent period top leaders attempted to find new performance indicators which would take the “wind from sail” to their rivals in the market. One of these competitive advantages is human capital. As the Tootell et al. (2009) stated “since 1980s there has been an increasing emphasis on the importance of HR measurement.” Yeung and Berman (1997) declared that “HR measures should be impact rather than activity orientated, forward looking than backward looking, and should focus on the entire HR system not just on individual...
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...|HR Metrics | |Absence Rate |[(# days absent in month) |Measures absenteeism. Determine if your company has an | | |÷ |absenteeism problem. Analyze why and how to address issue. | | |(Ave. # of employees during mo.) x (# of |Analyze further for effectiveness of attendance policy and | | |workdays)] |effectiveness of management in applying policy. | | |x 100 | | |Cost per Hire |(Advertising + Agency Fees + Employee |Costs involved with a new hire. Use EMA/Cost per Hire Staffing | | |Referrals + Travel cost of applicants and |Metrics Survey as a benchmark for your organization which is | | |staff + Relocation costs + Recruiter pay |available on the SHRM.org Web site. Cost per Hire can be used as| | |and benefits) |a measurement to show any substantial improvements to savings in | | |÷ |recruitment/retention costs. Determine what your recruiting | | |Number...
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...KEY REQUIREMENTS OF HUMAN CAPITAL (OR HR) METRICS Four elements are necessary for enhanced human capital metrics or measurement:2 Evidence—to establish that the effects of HR are indeed significant enough to merit intensive measurement and study. Explanation—to provide a logical reason to suggest why and how human resources create their significant effects on organizations. Purpose—the goals of measurement systems must consider the effects of measures on key stakeholders within and outside the organization. Method—a model and framework to support developing better HR measures. To be most useful, HR metrics should focus on outcomes that are directly relevant to the strategic objectives of a business. They should guide decisions about employees and programs, and they should be expressed in language that key decision makers find meaningful. Our objectives, therefore, are to develop a set of HR measures that indicate clearly how people create value. In the language of corporate finance, they do so in at least three different ways:3 1. By enhancing return—that is, the expected performance in a position, as defined by a competency model. Firms do this by selecting for specific skills and by training for specific skills. 2. By reducing risk—by lowering the variability in performance, and by reducing or eliminating factors that might derail performance. Firms use selection methods to screen out counterproductive behaviors and employee assistance programs...
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...Chartered Institute of Personnel and Development Human capital reporting An internal perspective a guide 1 – a CIPD guide for personnel professionals to help them identify, collate, analyse and communicate data on human capital Written by Jim Matthewman and Floriane Matignon of Mercer Human Resource Consulting Acknowledgements The document draws on the perspectives, experience and measurement methods set out in the recent book by Haig R. Nalbantian, Richard A. Guzzo, Dave Kieffer and Jay Doherty, Play to Your Strengths: Managing your internal labour markets for lasting competitive advantage (New York: McGraw Hill, 2004). We are grateful to members of the CIPD Human Capital Working Party who provided input and advice: Greg Aitken, Head of Employee Research and Measurement, Royal Bank of Scotland Group Ron Collard, Partner, PricewaterhouseCoopers Andrew Mayo, Director, Mayo Learning International Tim Miller, Group Head of Human Resources, Standard Chartered Bank Tony Palmer, Head of the Marple Partnership Vicky Wright, Partner, Human Capital, Ernst & Young Human capital reporting Human capital reporting: an internal perspective 3 Human capital reprting Contents Preface 4 Introduction 6 Step 1 – Setting human capital management in context 10 Step 2 – Getting started: gathering and collating the data 21 Step 3 – Measuring human capital: tools and methodologies 27 Step 4 – Reporting the data:...
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...A Dissertation Report On “Putting HR on Balanced Scorecard” (A Case Study of Verizon) (SUBMITTED TOWARDS PARTIAL FULFILLMENT OF POST GRADUATE DIPLOMA IN MANAGEMENT) (Approved by AICTE, Govt. of India) ACADEMIC SESSION (2008-10) Under the guidance of: Submitted by: Supervisor Name Your Name Lecturer (college name) Roll: - PGDM-08/012 College Address PREFACE There is a famous saying “The theory without practical is lame and practical without theory is blind.” Alignment of the Human Resource with the overall strategy of the company is a very big and toughest challenge for the company. Human resource is an important part of any business and managing them is an important task. Our institution has come forward with the opportunity to bridge the gap by imparting modern scientific management principle underlying the concept of the future prospective managers. To the emphasis on practical aspect of management education the faculty of College Name has with a modern system of practical training of repute and following management technique to the student as integral part of PGDM. ACKNOWLEDGEMENT “It is not possible to prepare a project report without the assistance & encouragement of other people. This one is certainly no exception.” On the very outset of this report, I would like to extend my sincere & heartfelt obligation towards all the personages...
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...Module III: Financial Analysis Cost of Project, Means of Finance, Estimates of Sales and Production, Cost of Production, Working Capital Requirements and its Financing, Profitability Projections, Break Even Point, Projected Balance Sheets, Muti Year Projections, Basic Principles for Measuring Project Cash Flows, Components of the Cash Flow Stream, Biases in Cash Flow Estimation Module IV: Project Risk Types and Measures of Project Risk, Sensitivity Analysis, Scenario Analysis, Optimal Timing, Social Cost Benefit Anaysis, Net Benefit in terms of Economic Prices, Measurement of the Impact on Distribution, Savings Impact and its value, Income Distribution Impact, Little-Mirrlees Approach, Shadow Prices Examination Scheme Components CPA TP Q/S A ME EE Weightage (%) 5 5 5 5 10 70 References • Chandra P.(2002), Projects: Planning, Analysis, Financing, Implementation & Review, Tata McGraw-Hill Publishing. • Meredith J.R. & Mantel S.J., Jr.( 2000), Project Management: A Managerial Approach, Ed. John Wiley & Sons. • Machiraju H.R.(2001), Introduction to Project Finance: An Analytical Perspective, Vikas Publishing House Pvt. Ltd. • Patel B.M.(2000),Project Management: Strategic Financial Planning Examination & Control, Vikas Publishing House Pvt. Ltd. • Finnerty J. D.(1996), Project Financing: Asset-Based Financial Engineering, Wiley • Newbold C.R.,(1998), Project Management in the Fast Lane: Applying Theory & Constraints, St. Lucie Press • Anthony R.N. & Govindrajan...
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...Introduction Chapter 1 Introduction to Human Resource Management © 2008 Prentice Hall, Inc. All rights reserved. PowerPoint Presentation by Charlie Cook The University of West Alabama Human Resource Management at Work © 2008 Prentice Hall, Inc. All rights reserved. 1–2 Basic HR Concepts • The bottom line of managing: Getting results • What Is Human Resource Management (HRM)? – The policies and practices involved in carrying out the “people” or human resource aspects of a management position, including recruiting, screening, training, rewarding, and appraising. © 2008 Prentice Hall, Inc. All rights reserved. 1. Explain what human resource management is and how it relates to the management process. 2. Give at least eight examples of how all managers can use human resource management concepts and techniques. 3. Illustrate the human resources responsibilities of line and staff (HR) managers. 4. Provide a good example that illustrates HR’s role in formulating and executing company strategy. 5. Write a short essay that addresses the topic: Why metrics and measurement are crucial to today’s HR managers. 6. Outline the plan of this book. 1–3 • HR creates value by engaging in activities that produce the employee behaviors that the company needs to achieve its strategic goals. © 2008 Prentice Hall, Inc. All rights reserved. 1–4 1 Line and Staff Aspects of HRM • Line manager – A manager who is authorized to direct the...
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...reserved. PowerPoint Presentation by Charlie Cook The University of West Alabama 1. Explain what human resource management is and how it relates to the management process. 2. Give at least eight examples of how all managers can use human resource management concepts and techniques. 3. Illustrate the human resources responsibilities of line and staff (HR) managers. 4. Provide a good example that illustrates HR’s role in formulating and executing company strategy. 5. Write a short essay that addresses the topic: Why metrics and measurement are crucial to today’s HR managers. 6. Outline the plan of this book. © 2008 Prentice Hall, Inc. All rights reserved. 1–2 Human Resource Management at Work • What Is Human Resource Management (HRM)? – The policies and practices involved in carrying out the “people” or human resource aspects of a management position, including recruiting, screening, training, rewarding, and appraising. • The bottom line of managing: Getting results • HR creates value by engaging in activities that produce the employee behaviors that the company needs to achieve its strategic goals. Basic HR Concepts © 2008 Prentice Hall, Inc. All rights reserved. 1–3 © 2008 Prentice Hall, Inc. All rights reserved. 1–4 1 Line and Staff Aspects of HRM • Line manager – A manager who is authorized to direct the work of subordinates and is responsible for accomplishing the organization’s tasks. • Staff manager – A manager who assists and...
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...HR Analytics According to a 2004 Workforce Management (formerly Personnel Journal) article, “In 1978—in this publication—Jac Fitz-enz proposed a radical, anti-establishment idea. Human resources activities and their impact on the bottom line could—and should—be measured. The reaction was apathy, disagreement and disbelief” (Caudron, 2004). For the past three decades Fitz-enz has, along with a growing band of kindred spirits, campaigned tirelessly to improve the state of HR measurement and to help both HR professionals and senior executives understand its importance. These efforts started out at the nuts and bolts level—creating definitions for basic HR metrics such as compensation, staffing, hiring and retention. This work laid the foundation for gathering comparable data across organizations, which in turn, enabled the benchmarking of HR metrics. Over the years, a number of scholars and practitioners expanded the benchmarking of HR metrics to include investments in training and developing employees, as well as in a broad array of other HR policies and practices. Refining and improving the benchmarking of HR metrics remained a primary area of focus throughout much of the 1980s and 1990s. This benchmarking focus, while helpful in informing HR professionals about how their organization’s HR metrics stacked up to comparable or best-in-class organizations, provided little by way of actionable business intelligence on how to gain competitive advantage...
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...specific task b. recruiting prospective employees c. training and developing employees d. developing rules and procedures e. all of the above (d; moderate; p. 2) 5. Celeste spends most of her time at work setting goals and standards and developing rules and procedures. Which function of management does Celeste specialize in? a. planning b. organizing c. motivating d. leading e. staffing (a; easy; p. 2) 6. Which basic function of management includes delegating authority to subordinates and establishing channels of communication? a. planning b. organizing c. motivating d. leading e. staffing (b; easy; p. 2) 7. When managers use metrics to assess performance and then develop strategies for corrective action, they are performing the ___________ function of management. a. planning b. leading c. staffing d. controlling e. organizing (d; difficult; p. 2) 8. What specific activities listed...
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...The New Metrics Analysis, Workforce Scorecard Zuhour Sarsour Globe University/Minnesota School of Business Masters Business Administration MG545, Human Capital Instructor: Holly Tapper, J.D., M.B.A October 13, 2012 Introduction The article, “The new metrics: how to develop your own workforce scorecard” clearly identifies an organizations need for a workforce scorecard. The article itemizes the process to create a workforce scorecard which is the measurement of intangible assets, specifically, human capital within an organization. The author was clear and concise in the presentation of the related concepts. Managerial Style of the Author My impression of the author’s presentation throughout the article was that he was easily understood. The author was very clear in introducing the reasons for the needs of scorecards. The author began the article by identifying the key reasons that scorecards are needed within an organization. He explained that scorecards contribute to the accuracy of a company’s Human Resource operational and cost efficient matters. The author goes on to clarify HR metrics and its importance on the execution of a business’s strategic goals as well as the CEO’s decision making. Strengths Throughout the article the author was clear. I felt that the author’s main strength was the way that he organized the article. The brief explanation of what a scorecard is and its functions gives the reader insight on the entire HR concept. He follows the explanation...
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...Travel Agency HR Plan Eleanor Thomas HRM/552 02/09/2015 Instructor: Rosie Cordova Introduction One may think running an HR department is a very comfortable and years ago it may have been, but in today’s organizations, the HR department has changed in so many ways. In order for the travel agency to achieve their goal of hiring 50 new employees and someone to assist with the recruitment they will have to fine-tune the plan that is in place now. This paper will address the functions and the challenges in the HR department and how it will fulfill the strategy of the department. The paper will speak on the purpose of HR and the metrics, and how it can affect senior managers. The paper will give some information on HR planning process and how it can be applied throughout the company. The HR department can then can determine what plan will work best for the business. They will be used to provide the recruitment strategy and method that will be use to hire the new 50 employees. The paper will provide references that the reader can use to help him or her receive a clearer understanding of the HR department plan for the business. The functions and challenges in the HR department in fulfilling this strategy Before they can satisfy the need of the travel agency, they must have a clear understanding of the function and challenges of the business, in order to hire new employees. The challenges HR department is faced with is trying to recruit and retiring employees. They...
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...Analysis of LMB hotel in HR metrics perspectives Introduction The raising importance of human resource in organizational operation has increased the needs for contemporary HR to become a strategic partner as finance and marketing do (Lawler III, Levenson and Boudreau, 2003). Therefore, rather than just understand and introduce HR activities and practices, it is more vital for organization to test all aspects of them (in efficiency, effectiveness and impacts). Regarding to the LMB case, if LMB want to go through this difficult period, rather than only adopt HR practices, they should also conduct a comprehensive HR metrics system to facilitate the performance evaluation. This essay will firstly briefly introduce the HR metrics and discuss the importance of HR metrics theoretically. Then, it will identify problems LMB confronts with and propose policies to improve the LMB’s approach to HR metrics. Before giving a conclusion, evaluation of the proposed solution will be presented. Definition and Importance of HR metrics HR metrics, according to Stone (2014), ‘involves a systematic analysis and evaluation of the efficiency and effectiveness of the HRM function and its contribution to the achievement of the organization’s strategic objective’. In a broader view, there are three types of HR metrics—efficiency, effectiveness and impacts—that companies could adopt to evaluate the impact of HR practices on business strategy and organizational performance (Boudreau and Ramstad, 2003)....
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