The New HR Analytics: Predicting the Economic Value of Your Company's Human Capital ...

369 Pages·2010·3.6 MB·English

by  Dr. Jac Fitz-enz

AdvancePraiseforTheNewHRAnalytics
‘‘Dr.JacFitz-enzandhisassociateshavedoneitagain!Asthearchitectofthehuman
capital movement, he has now defined and shaped predictive analytics that define
moreclearlyhowtoday’smetricscanpredictandleadtotomorrow’ssuccesses.The
book both synthesizes and extends the measurement movement with outstanding
essayswhereideasareturnedintoaction.HCM:21willbethestandardforhowto
goaboutscanning,planning,producing,andpredictingorganizationprocessesina
predictive and rigorous way. Those of us who care about the HR profession are
gratefulthatpeoplelikeFitz-enzcontinuetoapplytheirknowledgetoproblemswe
careabout.’’
—DaveUlrich,Professor,RossSchoolofBusiness,UniversityofMichigan,
andPartner,TheRBLGroup
‘‘Dr.JacFitz-enzisalwaysoutontheleadingedgeofHRthoughtleaders.He’sdone
itagainwithTheNewHRAnalytics.AnybodywhoaspirestoadvanceanHRortotal
rewardscareerinthenextdecadeshouldreadthisbook!’’
—AnneRuddy,CCP,CPCU,President,WorldatWork
‘‘Theconceptofmanagingpeopleasanassethasbeenaroundfordecades,butuntil
nownoonehasbeenabletotranslatethatcompellingideaintoreal-worldpractice.
BothHRprofessionalsandlinemanagersstruggleallthetimewith‘peoplemanage-
ment’issues.Balancingtherealitiesofgettingtoday’sworkdonewiththeveryreal
needtoanticipatefutureneedshaseludedmanagerssincethebeginningoftime.
‘‘Thisbookchangesallthat.Dr.JacFitz-enzandanimpressivegroupofprac-
titioners and thought leaders have pulled together both a comprehensive Human
CapitalManagementframeworkandaverypracticalsetofaction-orientedrecom-
mendationsthattogetherenableyoutoleveragetheonethingthatmakesyourorga-
nization truly unique: your human talent. HCM:21 is by far the most effective
approachtostrategichumanresourcemanagementandhumancapitalplanningI’ve
seenanywhere.’’
—JamesP.Ware,ExecutiveProducer,WorkDesignCollaborativeLLC
‘‘Inaworldwherebusinessintelligenceasappliedtohumancapitalisontheverge
of becoming as oxymoronic as ‘militaryintelligence,’ Dr. Jac Fitz-enz continues to
providethethoughtleadershipbusinessesneednowmorethaneverwhenitcomes
tohumancapitalmanagement.Toomanybusinessestodayconfusecorrelationwith
causation, and Dr. Jac’s four-phase human capital management system is a true
antidote and the injection of innovation that businesses need to apply. As Dr. Jac
succinctly puts it, there is nothing more powerful for a business than ‘managing
tomorrow,today’byproperlyapplyinganalyticstoitshumancapital.’’
—ShyamPatel,COO,PeopleReport
‘‘Onceagain,Dr.Jachasledthewaywithcriticalresearchthatenablesorganizations
tocreatesustainablevaluethroughpeople.’’
—KentBarnett,CEO,KnowledgeAdvisors
‘‘Onceagain,JacFitz-enz,akaDr.Jac,hasbroughtenlightenmenttotheenlightened.
He’sevolvedhisbodyofworkandtheenormityofunderstandingoftranslatingdata,
toinformation,toknowledge,tosuccess.
‘‘Jac’slatestendeavorhasplacedthequestionsquarelybeforealldecisionmak-
ers,‘Howdoweknowwhatweknowbeforeweknowit?’
‘‘It’spartanalytics,it’spartexperience,it’spartintuition,it’spartgoodluck,and
it’sallcommitment.Commitmenttodemonstratingtodecisionmakersthroughout
the organization that a thoughtful process, not usually linear in nature, always
dynamicatthecore,andentirelylogical,canempowerallofustoanswertheques-
tions, with insight and meaning, in a language that can be understood. Jac’s life’s
passionhasbeentotranslatethesimplebutimminentlyeleganttoolsintoalanguage
notonlythatwecanunderstand,butalsothatwecanexecutefrom.
‘‘Predictiveanalyticsiswhatwe’vebeenwaitingforbecauseit’sthenextlevelof
understandingin Dr.Jac’slong andevolvingjourneytoempoweruswiththecore
tools,terminology,andlogictomakeadifference.Thejourneyliveson!’’
—EdKleinert,Administrator,HRInformationTechnology,MemorialSloan-
KetteringCancerCenter
‘‘InTheNewHRAnalytics,JacFitz-enzextendshisdecadesofleadershipinhuman
capitalmeasurement.Itisacalltoactionthatshouldinspireleaderstorethinktheir
assumptionsandimprovetheirdecisions.’’
—JohnBoudreau,Professor,Management&Organization,andResearch
Director,CenterforEffectiveOrganizations,UniversityofSouthern
California
‘‘TheNewHRAnalyticsisthebreakthroughpeoplemanagementplaybookthatwill
transformhowCEOsmanagetheirhumancapitalandtheirhumanresourcefunc-
tion going forward. The HCM:21 model introduces leading-edge predictive tech-
niques that maximize return on human capital investments while energizing and
engagingemployees.OrganizationsthatignoreTheNewHRAnalyticsandDr.Jac’s
HCM:21systemforpredictiveHRmanagementaredoomedtofailintheresurging
economy.Hucametricshasreachedthetippingpoint.’’
—KenScarlett,President,ScarlettSurveysInternational
‘‘EverybodyknowsthatJacFitz-enzisacknowledgedasthefatherofhumancapital
strategicanalysisandhumanperformancebenchmarking.Formeheisalsomuch
more. He is a powerful lighthouse who lights the long way from the old human
resourcesdepartmenttothenewhumancapitalstrategicpartner.AbookbyDr.Jac
isalwaysanimportantmilestoneinhumancapitalhistory.’’
—LuisMar´ıaCravino,CofounderandCodirector,AOConsultingS.A.,
BuenosAires
‘‘Dr. Jac is the pinnacle of vision and leadership in human capital analytics. This
bookpavesthewayforthenextwaveinthefield.’’
—KirkSmith,Founder,W.KirkSmith&Associates
‘‘Dr. Jac’s landmark book contains leading-edge human capital thinking and tools
thatwill enable organizations tomaximizeoperationalimpact byoptimizingtheir
investmentinhumancapital.’’
—JohnMatone,VicePresident,AlignMark
T H E N E W
HR
ANALYTICS
Predicting the Economic Value of
Your Company’s
Human Capital Investments
Jac Fitz-enz
American Management Association
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LibraryofCongressCataloging-in-PublicationData
Fitz-enz,Jac.
ThenewHRanalytics:predictingtheeconomicvalueofyourcompany’s
humancapitalinvestments/JacFitz-enz.
p. cm.
Includesindex.
ISBN-13:978-0-8144-1643-3(hbk.)
ISBN-10:0-8144-1643-8(hbk.)
1.Personnelmanagement. 2.Humancapital—Management. 3.Human
capital—Costeffectiveness. I.Title.
HF5549.F557 2010
658.3—dc22
2009053581
(cid:1)2010JacFitz-enz
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To the two Lauras,
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who take such very good care of me.
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Contents
PREFACE xi
HRasanExpense—TheIntroductionofMetrics—TheEraof
Analytics—TheOrganizationofThisBook—Acknowledgments
CONTRIBUTORS xvii
PART ONE:
INTRODUCTION TO PREDICTIVE ANALYTICS 1
CHAPTER ONE
Disruptive Technology: The Power to Predict 3
WhatIsAnalytics?—IntroducingHCM:21(cid:2)—TheValueof
Insight—ThePlan
CHAPTER TWO
Toward Analytics and Prediction 8
TheLanguageofMetricsandAnalytics—AscendingtheValue
Ladder—ThePowerofAnalytics—TheModelforPredictive
Management
WhyAnalyticsIsImportant 17
MeasuringWhatIsImportant,byLuisMariaCravino
StrategicHumanCapitalMeasures:UsingLeadingHCMto
ImplementStrategy,byStephenGatesandPascal
Langevin
FromBusinessAnalyticstoRationalAction,byKirkSmith
vii
viii CONTENTS
PART TWO:
THE HCM:21(cid:2) MODEL 45
CHAPTER THREE
Scan the Market, Manage the Risk 47
TheBigPicture—TheValueofStatisticalAnalysis—The
ImportanceofRiskAssessment—TheDataSpeakforPredictive
Management—Ready,Aim,Begin
HowtoImproveHRProcesses 56
TheIntersectionofPeopleandProfits:TheEmployeeValue
Proposition,byJoniThomasDoolin,MichaelHarms,and
ShyamPatel
MoreThanCompensation:Attracting,Motivating,and
RetainingEmployees,NowandintheFuture,byRyanM.
Johnson
‘‘BestinBrazil’’:HumanCapitalandBusinessManagement
forSustainability,byRugeniaPomi
CHAPTER FOUR
The New Face of Workforce Planning 85
HumanResourcesVersusHumanCapitalPlanning—Jumping
AheadoftheCompetition
HowtoPutCapabilityPlanningintoPractice 94
ScenarioPlanning:PreparingforUncertainty,byJamesP.
Ware
QualityEmployeeEngagementMeasurement:TheCEO’s
EssentialHucametrictoManagetheFuture,byKenneth
Scarlett
TrulyPayingforPerformance,byErikBerggren
TheSlipperyStaircase:RecognizingtheTelltaleSignsof
EmployeeDisengagementandTurnover,byF.Leigh
Branham
CHAPTER FIVE
Collapsing the Silos 141
AnyProcess:Input,Output,Throughput—ProcessAnalysisfor
HumanResources—ABroaderFutureView—TheIntegrationof
HRServices
HowTheyAreApplyingIt 153
RobertaVersustheInventoryControlSystem:ACaseStudy
inHumanCapitalReturnonInvestment,byKirkHallowell
CONTENTS ix
TheTreasureTroveYouAlreadyOwn,byRobertCoon
WakingtheSleepingGiantinWorkforceIntelligence,byLisa
Disselkamp
CHAPTER SIX
Turning Data into Business Intelligence 182
JustWhatAreMetrics?—AvoidingCommonMetrics
Mistakes—Second-GenerationMetrics:Benchmarking—Third-
GenerationMetrics:PredictiveAnalyticsThatYieldBusiness
Intelligence—BusinessIntelligence:TheUltimateGoal—Atthe
EndoftheDay
HowtoInterprettheData 192
PredictiveAnalyticsforHumanCapitalManagement,by
NicoPeruzzi
UsingHumanCapitalDataforPerformanceManagement
DuringEconomicUncertainty,byKentBarnettandJeffrey
Berk
UsingHRMetricstoMakeaDifference,byLeeElliott,Daniel
Elliott,andLouisR.Forbringer
PART THREE:
THE MODEL IN PRACTICE 215
CHAPTER SEVEN
Impacting Productivity and the Bottom Line: Ingram
Content Group
Wayne M. Keegan 217
CHAPTER EIGHT
Leveraging Human Capital Analytics for Site Selection:
Monster and Enterprise Rent-A-Car
Jesse Harriott, Jeffrey Quinn, and Marie Artim 224
CHAPTER NINE
Predictive Management at Descon Engineering
Umair Majid and Ahmed Tahir 240
CHAPTER TEN
Working a Mission-Critical Problem in a Federal
Agency
Jac Fitz-enz 259