The HR Expert-Generalist

AdobeStock_91768118In one of my regular recent blog reads, The HR Capitalist Kris Dunn, recently wrote about how Warren Buffet’s most trusted business partner, Charlie Munger, attributes his success managing Berkshire Hatheway’s stock market portfolio by “knowing a little about everything.”  Basically, being a generalist.

Here is the article about Munger from The Hustle.

Dunn, being an HR Blogger, of course related Munger’s successful philosophy to the HR Generalist function compared to the HR Specialist.

Dunn’s definition of an HR Generalist is the following:

HR Generalist – a HR pro at any level who is in charge of a client group of employees -meaning they provide HR services to a location, a business unit, a functional area or geographical area.  As part of this role, they provide counsel, service and insight across the HR Body of Knowledge – comp, benefits, recruiting, employee relations, legal, etc.

An HR Generalist can exist at the individual contributor level or manage people, as well as exist at the HR Rep, HR Manager, Director, VP and CHRO level.

As Dunn noted in his post, many attribute HR Generalists as more of an entry level HR position. It’s not. As he defines it, it exists at the individual contributor, Manager, Director, VP, and CHRO levels.

Back to Munger, his work-ethic theory is known as expert-generalism which is the opposite of the Gladwell’s famous 10,000 hour rule.  What Munger does is to focus “on studying widely and deeply in many fields, including microeconomics, psychology, law, mathematics, biology, and engineering, and applied insights from them to investing.” rather than just focusing all of his time on investment theory.

The originator of the term expert-generalist, Orit Gandish, chairman of Bain & Co defines the term the following way:

Someone who has the ability and curiosity to master and collect expertise in many different disciplines, industries, skills, capabilities, countries, and topics., etc. He or she can then, without necessarily even realizing it, but often by design:

  1. Draw on that palette of diverse knowledge to recognize patterns and connect the dots across multiple areas.
  2. Drill deep to focus and perfect the thinking.

In addition,

Research shows EG’s have:

Hmm, sounds like the world could use a few more EG’s.

I enjoyed both Dunn’s and The Hustle’s articles because I’ve had the most success in my career as a Generalist. First as an award-winning General Manager for Macy’s (The Bon Marche’) and as an HR Director and HR Consultant.

As a matter of fact, at Macy’s (The Bon Marche’), I regularly told my Department Managers that I expect them to be the experts/specialists in their area of responsibility because I joked told them that there was no way that I could know as much as they did – I was the General Manager.

I literally said the same thing as Munger,  “I have to know a little bit about everything” in the store. This meant knowing a little (but enough) about each department’s assortment, staffing, employee capabilities, and merchandising; customer service performance; current and upcoming sales events; sales and profit performance; local and national economy; store operations; capital improvements; customer, community, regional & corporate relationships; etc.

The philosophy worked (*self promotion alert!*) because my store earned the Store of the Year award twice during my 13 year stint as a General Manager.

Dang! I just remembered how hard (but rewarding) it was to be a General Manager!

I’ve also always proudly worn the moniker “HR Generalist” when I transitioned from running a Department Store to doing HR. But I often felt a little uncertainty reading articles and blogs touting how the future of HR is specialization.

After researching and writing this post, I now officially call myself an HR Expert-Generalist. I like it.

Dunn closed his post with the following wise and comforting words:

If you’re an HR generalist at any level, be proud.  You’re a trusted adviser that understands that the world is gray, and you also know how important you are in helping those in your client group navigate all the complexity and chaos that comes with managing a workforce.

Simply put, HR Generalists are the most important cog in the HR world.  Be proud, because you are irreplaceable.  

As always, it’s nice having a little confirmation bias every once and a while!

Oh, and just I added “HR Expert-Generalist” to my LinkedIn profile headline.

Introducing the Steps on How to Develop an HR Strategic Plan

AdobeStock_103199139The HR function in any organization has a great opportunity to connect to and add measurable value to the bottom line of the business. Developing an HR Strategic Plan is a difficult and complex undertaking but one that will be well worth the effort in establishing HR as an important and valuable function of the organization.

Since the ability of an organization to establish and maintain a competitive edge depends almost entirely on the quality of their workforce and the people management processes, being able to develop an effective HR Strategic Plan is crucial to the financial success of the organization.

There are six steps involved in developing an HR Strategic Plan that I’m listing below and will review much more in-depth in the following several weeks/months.

The six steps are:

  1. Determine and communicate a Vision, Mission Statement, and Value Statement for the HR function. These three things will assist the HR function in identifying and distinguishing itself to the organization’s leadership and employees.
  2. Conduct an external and internal environmental scan of the organization in order to identify opportunities and threats that might affect the organization in the future. Understanding how these opportunities and threats might affect the organization in the future is critical to creating an effective strategic plan.
  3. Establish and align HR strategies and goals in order to provide the direction that will guide the organization towards achieving its long term objectives.
  4. Develop action plans and assign accountabilities designed towards moving the planning process from the long term to the shorter term goals necessary to achieve the strategic goals.
  5. Execute the plan and monitor its progress in order to ensure that the plan stays on track. HR is responsible for developing, communicating and supporting the HR strategy implementation with the responsibility of actually implementing it residing with the line managers. Changes may be necessary with shifts in the business environment.
  6. Evaluate the plan’s results by measuring the success of the HR initiatives and identify things that worked or didn’t work. The evaluation establishes the foundation for additional HR strategic and business plans.

An organization’s HR strategy should never be separate from its overall business strategy. It should always be an integral part of all the organization’s strategies that require people to implement them, obviously. It requires HR’s thorough understanding of the organization’s business. With that understanding, HR programs and practices can be identified that will help the organization successfully execute its strategy.

The HR strategy must be externally aligned with the business plan in addition to being internally aligned for the HR programs and practices to support and complement one another. And in order for any HR strategy to be successful, HR must build relationships with, and gain the support of, the line managers who will ultimately be responsible for carrying out the HR practices and ensuring the success of the HR strategy.

That’s this week’s brief introduction of the steps on how to develop an HR strategic plan. In the coming weeks, I am excited to explore each of these steps much more in depth.

Speaking the Language of Business for Strategic HR Professionals

AdobeStock_101865782This week I’m returning to discussing strategic HR and am going to define some important business terminology Strategic HR Professionals must know in order to be taken seriously by their organization’s leadership.

This is not a comprehensive list but simply some basic business terms that relate to developing an effective HR strategic plan.

The first term is Business Strategy.  Business strategy as defined by Michael Watkins of the Harvard Business Review is the following:

A business strategy is a set of guiding principles that, when communicated and adopted in the organization, generates a desired pattern of decision making. A strategy is therefore about how people throughout the organization should make decisions and allocate resources in order accomplish key objectives. A good strategy provides a clear roadmap, consisting of a set of guiding principles or rules, that defines the actions people in the business should take (and not take) and the things they should prioritize (and not prioritize) to achieve desired goals.

The definition implies that a business strategy can be looked at from the perspective of creating shareholder value, competitive market position, and creating a strategic advantage within the constantly changing business environment.  

This constantly changing business environment is influenced by things such as national and local politics, regulatory agencies, the economy, customers, suppliers, competitors, technology, economic trends and current and potential markets.

The second term is Strategic Intent. The business strategy, described above, is built upon the strategic intent and is defined by the website Simply Strategic Planning as the following:

Strategic intent is a statement of the course that the management of an organization plans to take the enterprise in the future. As many people as possible should understand these intentions. Then everyone can work consistently to achieve the corporate purpose.

Statements of intent aim to be more explicit than the usual directional statements. Most mission and vision statements point the way forward only in general terms. Sharp statements of intent can provide more clarity about what to do in the near future to achieve the vision and/or mission. Such statements convey the flavor of the strategic decisions taken through the planning process

In order to determine an organization’s strategic intent, the following questions must be answered: who we are and what we are trying to accomplish, what business are we in, what is our mission, what is our vision, what are our core values, how do we compete, and how do we add value to the marketplace.

The third term is Strategic Focus. A good description of strategic focus comes from Ann Latham at Forbes where she writes the following:

A good strategic framework provides focus by limiting the number of directions the organization runs. You’d be foolish to try to extend all your products while simultaneously expanding all your markets while also ramping up capacity or shifting your business model to include new types of production, sourcing, sales, delivery, and partnerships. This isn’t just an issue of capacity. It is also an issue of risk, learning, complexity, and credibility.

A great way to identify an organization’s strategic focus is to take a close look to the classic Generic Strategies by Michael Porter where he identified three strategies that address the question of how value is added by an organization.

These three approaches are cost leadership, differentiation, and focus as described in this article by the Institute for Manufacturing:

Cost Leadership

In cost leadership, a firm sets out to become the low cost producer in its industry. The sources of cost advantage are varied and depend on the structure of the industry. They may include the pursuit of economies of scale, proprietary technology, preferential access to raw materials and other factors. A low cost producer must find and exploit all sources of cost advantage. if a firm can achieve and sustain overall cost leadership, then it will be an above average performer in its industry, provided it can command prices at or near the industry average.

Differentiation
In a differentiation strategy a firm seeks to be unique in its industry along some dimensions that are widely valued by buyers. It selects one or more attributes that many buyers in an industry perceive as important, and uniquely positions itself to meet those needs. It is rewarded for its uniqueness with a premium price.

Focus
The generic strategy of focus rests on the choice of a narrow competitive scope within an industry. The focuser selects a segment or group of segments in the industry and tailors its strategy to serving them to the exclusion of others.

The focus strategy has two variants.

(a) In cost focus a firm seeks a cost advantage in its target segment, while in (b) differentiation focus a firm seeks differentiation in its target segment. Both variants of the focus strategy rest on differences between a focuser’s target segment and other segments in the industry. The target segments must either have buyers with unusual needs or else the production and delivery system that best serves the target segment must differ from that of other industry segments. Cost focus exploits differences in cost behaviour in some segments, while differentiation focus exploits the special needs of buyers in certain segments

In order for an organization to be successful and grow, it must have a business strategy that excels in all three of these strategies, not just one or two.  All of the organization’s operating and management systems, which include HR, must support all three of these approaches.

Bottom line, for an HR pro to be seen as an effective business partner, they must fully understand such important basic business elements such as the operations of the organization, its sales/revenue LY and YTD, its profit margin, how those margins compare with competitors and industry, its cash flow, its growth rate, the metrics leadership tracks, and the top initiatives of each of the members of the leadership team.

What is a Strategic Plan?

This week I’m going to talk about what exactly a strategic plan is.

A strategic plan is a written statement about the future direction and goals of an organization or HR department based on an analysis of the organization’s current status, strategy, strengths, limitations, threats, and opportunities in the current and future business environment.  

An effective strategic plan helps the organization understand where it is now, where it would like to be in the future, and how it’s going to close the gap between its current reality and the desired future status in order to get to where it wants to be.

All good strategic plans support the organization’s vision, mission, and values as well as identify its strategic goals and needed resources.

Since I brought it up, let’s take a minute to define vision, mission and values even though most readers probably already know but it never hurts to revisit the definitions.

An organization’s vision statement provides a clear perspective of what it wants to have happen in the future. It includes a description of its operations as well as a compelling explanation of how the organization will look and function once the strategic plan has been implemented.

The organization’s mission statement is a clear description of it’s overall purpose. It identifies the essential reasons the organization exists and the principal products and services it provides to the marketplace.

Finally, the values of an organization represent the key core priorities of it’s culture. It’s what drives the organization’s priorities and how employees honestly behave.  An organization’s values typically remain the same over time.

A complete business strategy is made up of three parts – an operations strategy, a financial strategy, and most importantly IMO a people strategy.  I’m focusing on the people strategy, or HR Strategic Plan, as it provides the foundation of all the other strategies with the ability to identify, build, and reinforce the organization’s capabilities.  

The justifications for creating an HR Strategic Plan are that it provides a solid framework for value-added action, helps establish priorities, allows for the all important measurement of results, and creates a way for reallocating resources from the organization’s low producing activities to its high producing activities.

In addition, it helps increase and improve HR’s credibility within the organization by showing its positive impact on the organization’s bottom line. Which is always a good thing especially since, as I recently mentioned in a previous post, HR is still thought by many business leaders as pretty much an administrative function that operates separately from the rest of the other functions in the organization

In order for HR to take on a strategic role and be a strong strategic business partner, it must be represented in the leadership of an organization and be involved in defining the organizational issues before the strategic decision are made.  HR must be involved in turning those decisions into a set of organizational actions.  

According to my favorite HR thought leader, Dave Ulrich, there are several things an HR professional must do in order to be an effective Strategic HR Business Partner:

  • Understand and communicate that improvements are typically very difficult and complex and will take time to accomplish so watch out for quick fixes as they are typically very seductive but rarely work.
  • Align the HR Strategic Plan with the Business Strategic Plan which will ensure HR being seen as adding value to the organization.
  • Keep the strategic plan top of mind instead of shelving it and forgetting it.  The plan must be executed and managed in order to be effective.
  • Create a Capabilities Focus within the organization.

I want to focus a little more on that last bullet, Capabilities Focus, since the first three bullets are fairly self explanatory.

Capabilities are an organization’s ability to effectively manage its resources in order to gain a competitive advantage in the marketplace. They are anything the organization does well that improves business and creates a competitive advantage in the organization’s marketplace.  

Strategic HR Professionals are able to effectively identify and improve an organization’s capabilities that will help execute the organization’s strategy and leverage new products and services.

Some examples of organizational capabilities include knowledge, innovative designs, adaptability, cost competitiveness, and strong leadership.

Defining deliverables and showing how they can be measured and what actions need to be taken is critical in the strategic planning process. The Strategic HR Professional must focus on the deliverables which are, in other words, value added results.

The HR strategic plan is developed from looking, listening, questioning, clarifying and knowing what needs to be done.

The plan must include ways that HR can help the organization add value to its key stakeholders (employees, customers, and investors), improve organizational capabilities, improve employee competence, fulfill regulatory compliance, determine processes and activities that can be retained or outsourced, and align HR programs with organizational goals.

My next post in this series will discuss how the strategic HR Professional must be able to speak the language of business and define a few important strategic business terms that will need to be understood. Then after that, I’ll get into the steps of how to actually develop an HR Strategic Plan.

Why You Need to Create a Strategic Plan for Your HR Function

So why have an HR Strategic Plan?

In today’s highly competitive business environment, success is often determined by how well an organization and Human Resources can manage change.  Organizations have to constantly monitor their place in the external business environment as well as evaluate and improve their organizational capabilities, or intangible assets, in order to effectively compete in the marketplace.

The strategic planning process is the most effective way for organizations to identify and address all of the various external and internal forces that have an impact their business. This process moves the organization from their current place to their desired future.  And more importantly, brings value to all of the stakeholders of the organization.  

But what value is the strategic plan without the people within the organization being ready, willing, and able to execute the plan? None. The organization’s employees must understand and be fully engaged in and willing to follow the strategic plan in order for it to be of any value to the organization.

This is where HR comes in.  

HR’s value lies in being able to build and maintain the organizational foundation and infrastructure to help drive the necessary changes that will accomplish the organization’s strategic goals.  

Regrettably, HR is still thought by many business leaders as pretty much an administrative function that operates separately from the rest of the other functions in the organization.  Sadly, this reinforces the opinion that HR isn’t that important to the success of the organization. HR is also not typically held accountable for business results, as the other functions are, and because of this, HR considerations are typically ignored and viewed as a cost center rather than a profit line contributor.

There are some leaders, however, who recognize that an organization’s human capital is a key strategic resource for increasing organizational capability and achieving a competitive advantage over competitors.  Being able to attract, retain, motivate, and develop the best employees in the organization’s industry are critical to its success in the marketplace.

The ability of an organization to execute it’s strategic plan rests solely on its effective utilization of its human capital.  

Smart business leaders are recognizing this and have turned to HR to help them positively impact their business results.

In order for HR to have a positive impact on an organization’s business results, we must focus on and engage in both the long-term strategic and the short-term administrative and operational planning.

There are three roles that HR has in an organization that need defining before we go any further:

First is the administrative role. This is the traditional role most people think about HR. It’s things like regulatory compliance, policy & procedure interpretation, record keeping, HRIS management, benefits administration, onboarding & offboarding activities, etc.

Second is the operational role. These are the HR activities that relate to the day to day operations of the organization.  These are the tactical activities such as recruiting, filling job reqs, handling employee relations issues, employee communication, compensation program management, etc.

These two HR roles aren’t the high-level exciting things many of us in the upper levels of HR like doing any more but they are absolutely essential to the organization and the reputation of the HR function. HR must be 100% technically competent in the administrative and operational roles and execute their HR services flawlessly.  

HR’s reputation is built on the employee’s perceptions of competence and has to be flawless in these two roles in order for to build a solid foundation of building on the higher level strategic role.

Third is the strategic role. This is the role where HR can really make a difference.  It requires HR participating in the strategic planning process, improving the organization’s performance, ensuring effective leadership, redesigning organizational processes, and ensuring financial accountability for HR results.  

Business literacy is required in order for HR to be effective in the strategic role. HR must know and fully understand who the organization’s stakeholders are as well as the organization’s markets, products, customers, and competitors.  Fully understanding financial terminology, speaking the language of business, and knowing how to read and interpret the organization’s financial statements – income statement, balance sheet, cash flow statement, etc.- are absolutely necessary.

I believe that the most effective strategic HR professionals are those who have real-life business experience outside of HR. (Self-promotion alert) I’m, of course, biased having successfully led and operated, with full P&L accountability, an award winning full line Macys department store for 13 years.

By having a solid business background and experience, HR can develop effective value-added strategies of staffing, performance management, total rewards, employee relations, and employee development. This puts the organization’s employees in the best possible position to execute it’s strategic plan and contribute to its financial success in the marketplace.

Strategic HR is my favorite topic and the role I enjoy most as an HR professional. I’ve touched on it a bit in my Metrics and Analytics series but I’ve been focusing on writing/podcasting mostly on the operational side of HR.  I had to build a foundation first, you know!

Now I can start exploring more strategic HR topics here at HHHR!  

Next week, I’m going to continue with strategic HR and explain exactly what a strategic plan is.  

The Problem with Performance Appraisals

Oh yeah, another article about it...

Nearly everybody hates performance appraisals. It’s a topic that has been written about and discussed ad nauseum by just about everyone in the industry.  It seems like everybody is trying to come up with a fancy and shiny new system.

I’ve written about how to do them and how to make them better several times.

And this week I’m going to add one more article into the mix based on a podcast I listened to the other day.

The podcast is Manager Tools (Mark and Mike) and this week’s episode is titled “Don’t Get Rid of Your Performance Review”.  I was fascinated by their take and ended up really studying what they had to say by listening to it several times and studying the show notes (available only to licensees).

Now they are big believers of performance appraisals, but only if done effectively, of course. They think organizations getting rid of them is ridiculous.  And I agree.  

They, like most, think that the system is broken and place a large part of the blame on HR, the owners/managers of the system, because we “regularly talk them (the appraisals) down” in our organizations. I certainly agree with this statement as I hear it at every SHRM meeting I attend.

HR also likes to change the form every couple of years so that they can show a big project initiative accomplished for their annual appraisal. But, unfortunately, changing the system seriously damages the ability for the organization to collect the all important trend data we need to to make important personnel and succession decisions.  

They give a nice bit of history about performance appraisals. Some version of performance appraisals have been around for thousands of years, according to my research, but Corporate America started borrowing heavily from the Army’s system shortly after WWII, according to Mark. The rapid growth of these organizations necessitated a system to help them grow so they looked to the US Army as the model.

In the Army, appraisals were never intended to be seen by the person being evaluated. They were only seen by the evaluator and his superiors. The purpose of the appraisal was for succession planning should the ranking officer be killed in battle. The Army, of course, would need to know who would be the next up to take command, a pretty important thing, right?

There was, frankly, no need for the appraisals to be shared because the Army had the system in place where soldiers received ongoing and constant feedback about their performance and conduct. There was never a question and soldiers always knew where they stood.  

Organizations who adopted the system soon realized, however, that their managers did a very poor job of giving their direct reports regular ongoing feedback so the “obvious” answer was to start sharing the performance appraisal with them. It was felt that they should at least get some sort of feedback at least once a year.

Rather than organizations training and following up with their managers to provide ongoing regular feedback and building relationships with their direct reports, they took the easy path of just requiring the annual performance appraisal.

Now while Mark and Mike put most of the blame of why the system is broken onto HR and only a little on managers, I would say it’s evenly split between the two. I’ve been in both shoes and, honestly, HR can only do so much especially when managers don’t fully support the system. (Maybe because HR has screwed it up so bad? I don’t know)

I would love to have the managers I support give ongoing regular feedback to our direct reports and the performance appraisal simply be an end-of-year summary that won’t be a surprise.

It is my experience that most managers don’t want to do the difficult and time consuming work of building effective professional relationships with their direct reports in order to establish trust and credibility. I wrote about a similar topic with HR having to build a foundation to establish trust and credibility.  Managers need to do this with their direct reports.

Remember the purpose of the performance appraisal is Talent Management and Succession Planning.

While it’s now very trendy these days for HR departments and companies to dump the performance appraisal, ironically, they are replacing them with regular ongoing feedback. They are, hopefully, training their managers to effectively deliver this feedback and building relationships  in addition to monitoring it. This goes back full circle to the Army officers who were trained to give regular ongoing feedback to their soldiers.

The only way to fix performance appraisals is to train your managers to build effective relationships and give effective regular and ongoing feedback to their direct reports. Senior leadership and HR must also monitor and measure that it is happening ( remember – what gets measured gets done). Then conduct the annual performance appraisal as an additional measurement of your talent management and succession planning strategy.   

This was part one of the Manager Tools podcast series on Performance Reviews and after reading the show notes there is a lot of other good stuff I will review and comment on in the coming weeks.

My HR Journey

How I ended up in HR

I was at a tech industry HR event in Boulder a few months ago and we were all asked to talk about our “HR Journey” – what was it that led us to choose HR as a career. Or what was it that led HR to choose us?

The exercise required that we had to get up in front of everybody and tell our story. We didn’t have much, if any, time to prepare as we didn’t even know we were going to do this exercise. The first “drafts” of our stories were a little rough but then we were allowed to get up again and tell our stories again, and this time they were more polished.

I enjoyed the exercise because it forced me to really think quickly of a story that led me to choose HR as a career. My mind was blank but it came to me as I was walking up to the front of the room to tell my story. Funny how the mind works.

So here’s my story…

I started my career right out of college working for a Pacific Northwest based retail department store called The Bon Marche’ (which is now part of Macy’s). I worked my way up the ladder until I reached my desired goal of being a Store Manager. I loved being a Store Manager and in my 13 years as one, I earned the Store/Store Manager of the Year award twice along with a record number of performance awards during my tenure.

I learned that I loved building consistent high-performing cultures filled with employees who loved doing what they did in a tough, low-paying work environment. In retail, HR is a very important and vital element. It was what I enjoyed the most and I was very good at it and thought I’d do it for the rest of my career.

But there was a particular incident that occurred that led me to seriously consider leaving and focusing on HR as my next career direction.

It was Sept or Oct and a young pregnant woman came in for an interview for the Holiday season. As a Store Manager I always enjoyed participating in the interviewing and hiring process. She interviewed well, I saw that she had potential, and I decided to hire her. I didn’t care that she was pregnant. I only cared that she was smart, enthusiastic, and cared for customers. She would be a great addition to the store team.

Years later, she reached out to me via Facebook and told me how much she appreciated me hiring her that day. I had changed the direction of her life. Nobody else in town would hire her because she was pregnant. To make matters worse, she was single and pregnant and her life was a mess. I had no idea at the time but my believing in her and hiring her gave her new hope.

My team at the store was just that, a team that cared about each other and helped each other. The team took her in and she became part of the store family. She was surrounded by people who cared and she responded by giving us everything she had and became fantastic sales associate.

I’m very proud of the teams I build and how they always cared for and loved each other. That is what I enjoyed most about my job. Building strong high performing cultures of people that loved (or at least liked) their work.  That is why I went into HR so I can help leadership build strong, high-performing teams.

Today, this woman owns her own retail business, has her life together, and is doing very well.  She is also is the proud mom of a beautiful daughter.

Bottom line, the main reason I moved into HR was to use my talent and skills to help organizations create positive, high-performing cultures where people really enjoy coming to work. We spend huge amounts of our time at work and I believe our workplaces should be happy and supportive places where we enjoy being every day.

The ability to create and provide a high-performing culture where people want to be, directly helps accomplish the importance of business goals in any organization. The overall company performance improves, productivity increases, and financial performance improves – all of which produces greater shareholder value.

I want to be able to be a positive influence on employees and, by extension, their families by creating a positive work culture where the employee is happy and feels like they are accomplishing meaningful work.

Frankly, it’s the right thing to do.  And I’m glad I’m able to do it.

Building an HR Foundation

Establish your credibility, competence, and trustworthiness

HHHR Photo

The most important thing an HR professional who’s moving into a new job or department can do is to build and establish a rock-solid foundation of credibility, competence, and trustworthiness. Today, I’m going to discuss how to do this.

There are two things an HR pro typically does when starting a new job at an organization or transferring to a new department.

  1. They come in with “guns a blazing” and immediately start changing the way everything is done and immediately start introducing HR initiatives. They focus on quickly making a big splash introducing HR initiatives and impressing senior leadership.
  2. They come in and take the time to get and know the employee’s, their team, processes, and culture. They focus on providing outstanding customer service to their client base and getting a good lay of the land and culture before making significant changes and introducing big HR initiatives.

Yes of course, sometimes you have to come in with “guns a blazing” and get things fixed quickly. The situation, and leadership, demands it because they need things to be fixed, and fixed yesterday. While it seems to make sense at first, it’s not. It will mostly cause significant chaos and business disruption. It certainly does not establish the credibility, competence, and trustworthiness for the new HR pro!

The best and most effective way for the HR pro to establish their credibility, competence, and trustworthiness in the eyes of their new company/department is to take the time to get to know and understand the team, processes, and culture before making any drastic changes. Build that important and critical foundation.

Remember, Human Resource pro, you are dealing with humans and, as such, you need to build a foundation of relationships first before you will be able to accomplish anything with any credibility and trust. Everybody in your organization is watching what you are doing and how you are doing it.

Start building a solid foundation so that you will be seen as a credible HR expert. Make sure there are minimal mistakes made with the basics like payroll, benefits, answers about polices, etc.

Here are the steps I recommend to build a strong and stable foundation that will establish your credibility and ability to effectively manage the HR function in your new organization. I think we all know this but often forget as it is the blocking and takleing.

  1. Most importantly – get to know the team. Get out of your office every single day and CIRCULATE around the office(s), store, plant, etc. and chat with your fellow employees. Learn your employee’s names and what’s important to them both personally and professionally. This helps them see HR as a part of their team, not the Grim Reaper that only makes an appearance when something bad is about to happen.
  2. Study and know the employee handbook (I know, zzzzzzzzzzzzzzzz) and other policies and procedures. You’ll need to be able to answer policy and procedure questions from employees as you circulate and as they come by your office/desk.
  3. Dig into the HRIS and make sure all the data in there is complete and accurate. It often isn’t. Make sure it is so that everything that feeds from the HRIS (payroll, benefit integration, etc) will also be accurate.
  4. Become the expert in the health and retirement benefits your organization offers. Make sure enrollments are completed with 100% accuracy. Build great relationships with your brokers and ask lots of questions.
  5. Respond quickly, accurately, and politely to all manager and employee requests and questions. Remember, you are a service organization supporting the other functional areas of the organization. Don’t ever be condescending because you think they should know the answer. You are the HR expert, not them and they are coming to you for your expertise – the reason you have the job!

By doing these five basic steps, you build the foundation of a successful HR function in your new organization. These are the basics that will establish you as a credible and trustworthy HR professional in your employee’s eyes.

Yes, I know every senior HR professional, and leadership team, wants to do the exciting strategic stuff but without that important foundation, the strategic HR initiatives will fall flat because you will not have the credibility and trust from the very people who need to buy in to those initiatives.

You absolutely must have a solid and effective foundation in order to effectively build the strategic framework that your leadership, managers, and employees will embrace. This will ensure your success in your organization and allow you to more easily have your strategic HR initiatives be successfully adopted.

The Three Types of Analytics

Third Entry in the Metrics and Analytics Series

We still have a little bit of work to do before we get into the real nuts and bolts of metrics and analytics.

Last week we discussed the five steps of  analytics and this week we are going to cover the three different types of analytics, Descriptive Analytics, Predictive Analytics, and Causation. Again, I am taking all of this information and summarizing it from the Jac Fitz-Enz book titled The New HR Analytics.

The first type of analytic is the most basic, Descriptive Analytics. This type of analytics takes a look at data and analyzes events that happened in the past to help us understand how to approach the future. With this data, we can look for reasons behind past success and failure. Most management reporting uses this type of data.

As HR professionals, we all know that there are many different groups and subgroups within our workforce. With Descriptive Analytics we can really take a deep dive into our workforce and really analyze each of the different groups. It allows us to discover and describe many types of relationships and differences between the groups and show past and current behavior among the groups. It’s important to remember that this type of analytic is not a prescription or solution, but rather just the exploration of past and current data.

Descriptive analytic models quantify relationships in data into group classifications or characteristic. We can take almost any group characteristic and use it to build descriptive models to understand our workforce. The characteristics can be things such as performance appraisal ratings, skills, education, rank, title, age, etc. Fitz-Enz equates this to what the marketing department does with customer segmentation and calls it workforce segmentation with the purpose of improving the return on investment, or ROI, of our HR services.

The second type is Predictive Analytics. This is where we take data and turn it into valuable and actionable information. It uses data to determine the possible outcome of a future event. It gives us meaning to the current patterns that we see in Descriptive Analytics to identify risks and opportunities in helping us see what might happen in the future.

It will give us a good probability of what might happen in the future. We won’t be able to predict the future with 100% accuracy but we can increase the probability that we will be right by reducing as many variabilities as possible.

A great example in the Fitz-Enz book is building a model for selecting employees to hire, train, and promote for a particular position. The model is based on traits, skills, and experience of your very best employees in that particular position. You will increase the probability of making a successful selection by applying the model to all of the candidates for the job.

The third and final type of analytic is called Causation. This is a combination of Descriptive and Predictive Analytics and is considered the most sophisticated level of human capital analysis.

Causal modeling is used to find the hidden root cause of a problem or to make a business proposition for a human capital project investment. Fitz-Enz cites Dr. Nick Bontis as the most prominent expert of causal modeling and uses an example of the perceived value of a training program by the trainees.

In his model, he wants to determine the trainee’s perceived value of the training program so he adds the perceived value of training by the trainees to their rating of the course materials and delivery.

By surveying the trainees, we can determine the business value of the training program by asking them to rate their perceived value of the training on a scale of 1 to 100, the course materials from 1 to 5, and the delivery from 1 to 5. Throw these into an equation and you get something like this:

Perceived Value Course Materials Delivery Total
.80 X 4 X 5 = 16

And you get a total score of 16 out of a possible maximum of 25. We can now track the training’s effectiveness over time, the value of the training to the organization, etc.

When discussing HR Analytics, we can’t simply rely on the past to predict the future. We have to have knowledge as our base in order to do so. Fitz-Enz puts it this way:

Being able to foretell what is likely to happen with a high degree of probability depends on four things:

  1. Comprehension of past and current events.
  2. Understanding not only trends but also the drivers behind them.
  3. Being able to see patterns of consistency as well as change.
  4. Having tools to describe the probability of something in the future.

HR Analytics takes HR metrics and looks to the future by taking past and current strategic and operational data and adding leading indicators.

We now have a basic understanding of the three types of analytics which will help us understand many of the topics in this series I will cover in future posts and podcasts.

The Five Steps of Analytics

Second Entry in the Metrics and Analytics Series

Next in my series of metrics and analytics, I feel its important to discuss some more of the foundational elements, or the “first steps” as Jac Fitz-Enz calls it in Chapter 2 of his book, The New HR Analytics, in order to better understand the topic.

One of the first things to remember is that it doesn’t make a lot of sense to spend time on metrics that are of very little value to a business. Value comes from the knowledge of things that actually matter and what matters most is a business question, not an HR question. Those of us in Human Resources have to decide what actually does matter to the business and for what purpose.

To help decide what matters, Fitz-Enz introduces five steps of analytics which I will review here:

Step 1 – Recording the work (hiring, paying, training, supporting, and retaining). This is the most basic of HR metrics and were we measure how efficient our organization’s processes are and how we can improve them. This step indirectly creates value for the organization by saving money and/or time, improving production capacity, or improving customer service by coming up with better procedures.

Step 2 – Relating to the organization’s goals (quality, innovation, productivity, service). These four elements, known as QIPS, cover all of the basic goals of most organizations. Goals related to these elements are set by the senior leaders who regularly review the organization’s results as compared to the organization’s goals.

It is important to align the results of our employee’s work to these goals which are related to QIPS. It shows the value of each employee’s work and how it aligns to the organization’s goals.

Step 3 – Comparing results to other organizations (benchmarking). This step compares the organization’s results to those of other comparable organizations. Some examples are comparing the turnover rate between branch stores in a large department store chain, or comparing sales results with organizations within your organization’s industry.

Of course, the more detailed data available from that comparable organization or group, the better the value of the benchmarking as there can be a great deal of variance between the different branch stores or other companies within your industry.

Step 4 – Understanding past behavior and outcome (descriptive analytics). This step is where the actual analysis begins to happen. This is where we start to look for and describe relationships among the data. It doesn’t, however, give meaning to any patterns. We start to see trends from the past but it’s important to remember that its very risky to accurately make predictions about the future from these trends as the marketplace is always volatile and rapidly changing.

Step 5 – Predicting future likelihoods (prescriptive analytics) This step compares what happened in the past to what will probably happen in the future. This is predictive analytics. This is were we start to see meaning to the patterns we see in the descriptive analytics described above. Some examples are when banks predict credit worthiness and insurers predict patterns of accident rates. HR can apply prescriptive analytics to decisions on things like the expected return on hiring, training, and planning of human capital.

As you probably already guessed, these five steps increase in value going up from Step 1 to Step 5. Step 1 is where organizations typically start by collecting basic data like cost, time, and quantity. Step 2 is an easy next step where we simply relate that basic data collected in Step 1 to the organization’s goals. Step 3 is where we compare the data from Step 1 to a comparative organization or group to see how we stack up.

Steps 1 through 3 deal with what are known as metrics as I defined here last week:

…metrics are informational and focus on tracking and counting past data. Metrics look at tangible data that are easy to measure and usually of lower value. Metrics tell us what happened.

Steps 4 and 5 are where the actual analytics begins to occur. I defined analytics here:

Analytics, on the other hand, are strategic and look at both past and present data using mostly intangible data that are difficult to measure and of higher value. Analytics are very helpful with gaining important insights and predictions. Analytics tell us why it happened.

In order to be able to negotiate resources for your HR department’s programs and projects, you need to know and be able to explain why, what, and how your department contributes value to your organization. You need to be able to defend and explain the value that you produce to the organization in order for them to justify the funding you want and need. If you can explain the value by using the language of the business, metrics and analytics, you will have a much better chance of earning the funding and/or keeping your programs and projects.

That’s smart business and HR must learn to think this way. That’s why I love Jac Fitz-Enz’ books and that’s why I’m working on this Metrics and Analytics Series. HR needs to fully embrace metrics and analytics and learn how to comfortably speak the language of business. That’s the only way we will be taken seriously by senior leadership and have a positive impact on the organization’s financial and business objectives.

A simple and common example would be to look at the quality of a hire measurement once we fully understand the cost per hire and time to fill data. The question is, however, how do we measure the quality of a hire?

Another great example is with training programs and how relevant is training to an organization? Are the trainees doing a better job because of the training they received? How do we measure this?

We have to be able to figure out how measure these things because putting value on work without any supporting data is ineffective and dangerous. Training programs are often the first programs to be cut when there is an economic downturn because there was no data supporting their value to the organization.

That concludes this week’s entry in the series. As I continue this series I will explore the methods measuring things such as quality of hire, quality of training, and many more that are important and relevant to HR.