Lecture 2:

The HR Analytics Frameworks

Tina Sahakian
 Today’s Plan

I. Frameworks
• What are they?
• Why do we need them?
• What are the challenges?
II. HR analytics frameworks
• Crunchr Maturity Model for People Analytics
• LAMP Framework
• The People Analytics Effectiveness Wheel©

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Course and Lecture Learning objectives

Learning Objective 6:

• Develop critical thinking and logic – how to develop testable models from theory and understand how
such models can be tested (e.g., descriptive, t-tests, regression analysis), and what software can be
used (e.g., SPSS)..

1. Understand why we need frameworks in HR analytics.

2. Explain various HR analytics frameworks and their key
components
3. Assess how data need to conform to certain ethical guidelines

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I. FRAMEWORKS
Key Objective of HR Analytics

Show that insights from HR analytics

can:

➔ improve people-related
decisions across the organization

➔ contribute to achieving strategic

objectives

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 Case Example: 35$ million mis-investment

Problem
Solution
Employees felt
Outcome
 undervalued 15% salary raise
 unappreciated for everyone = Problem Solved?
35$ million
 dissatisfied with
compensation

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What are frameworks?

• Models that provide the logical

connections between decision about
a resource (human resource) and the
strategic success of the organization

• Identify the resources and

capabilities you need to turn data into
insights that can be used to achieve
strategic success

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Why use Frameworks?

• To demonstrate the value of HR analytics

o Develop insights to support better, more data-driven decisions
o Align your work, the data you collect, with the organizational
strategic objectives
o Ensure you collect relevant data linked to the organizational
problem/decision
o Avoid solving problems without understanding the true causes

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Challenges of using Frameworks

• Little use of frameworks in organizations

• Frameworks used do not align with

research in HR and organizational
behavior at work; theory-practice gap

(Rynes et al., 2002; Rynes et al., 2007) 17

Challenges of using Frameworks

• HR traditionally not a decision science

o Roots of HR measurement come from accounting
o Lacking link to organizational strategy
• HR professionals’ knowledge of frameworks, and comfort with numbers
• Approaches to measuring HR programs and their impact
o Difficulty measuring employee motivation and behavior
o Wide array of options of models and approaches
o Many HR and organizational behavioral theories to choose from

No one size fit all, depends on the issue and the context

(Boudreau and Ramstad, 2007) 18

II. HR ANALYTICS FRAMEWORKS
 Crunchr The People
Maturity Model LAMP Analytics
for People Framework Effectiveness
Analytics Wheel ©
Crunchr Maturity Model for People Analytics

REPORTING ANALYTICS • How to move HR analytics

Operational HR People Function function from reporting to
SYSTEMATIC

analytics
2 4
o Where are you?
o Where do you want to
be?
OPPORTUNISITC

o How can you get there?

1 3
What challenges will you
face? What capabilities
Tactical HR Strategic HR
do you need?
COMMERCIAL MINDSET
Khan & Millner (2020) 21
Reporting: “Translating” data into information
REPORTING ANALYTICS
Operational HR People Function

SYSTEMATIC
2 4

OPPORTUNISITC

1 3

Tactical HR Strategic HR

COMMERCIAL MINDSET

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Opportunistic Reporting

REPORTING ANALYTICS • Problem/Challenge:

Operational HR People Function ▪ Local
SYSTEMATIC

▪ Numbers that underpin this

2 4 specific local problem
• Data: Compiling, integrating,
synthesizing, and reporting involves
OPPORTUNISITC

manual spreadsheets & calculations

• Issues of accuracy
1 3
▪ No reporting standards
Tactical HR Strategic HR ▪ No harmonized definitions,
metrics and measures.
COMMERCIAL MINDSET
• HRIS link is problematic
Case Example: Turnover of Project Managers

Problem
Solution
Newcomers struggling to
perform  Recruitment relies too much on
 hired on credentials and previous expertise & experience
experience  Quality of hire (QqH) metrics
developed
 infrastructure in place for
= Avg job performance of new hires
onboarding & training
+ % of new hires reaching
acceptable performance levels in six
months
+ % of new hires retained after 12
months
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Case Example: Turnover of Project Managers

Problem
Solution
Newcomers struggling to
perform  Recruitment relies too much on
 hired on credentials and previous expertise & experience
experience  Quality of hire (QqH) metrics
developed
 infrastructure in place for
= Avg job performance of new hires
onboarding & training
+ % of new hires reaching
acceptable performance levels in six
months
+ % of new hires retained after 12
Local = focused on one months Numbers were collected
position in a service line Info was used for reporting
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 Systematic Reporting

REPORTING ANALYTICS • People information becoming increasingly

important to the business
Operational HR People Function
SYSTEMATIC

• HR more efficient and systematic e.g.

dashboard with KPIs
2 4
• Harmonize definitions and consolidate
data
▪ Specialized software regionally or
OPPORTUNISITC

globally e.g. Oracle Fusion, Workday,

1 3 SAP Success Factors
• Business-led ad hoc request can be
Tactical HR Strategic HR
provided quickly

COMMERCIAL MINDSET
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• HR should be able to answer questions as:
▪ What is the age profile across our workforce?
▪ How many employees are aged 65 or above?
▪ What is the average pay of male and female employees?
▪ How much is budgeted and spent on employee training?

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Analytics

REPORTING ANALYTICS
Operational HR People Function • Translating from information into
SYSTEMATIC

insight
2 4 • Move from reporting to analytics is
the most difficult
• Make better informed data-based
OPPORTUNISITC

decisions linked to organizational

strategy
1 3
▪ Incorporate data from other
functions, not just HR
Tactical HR Strategic HR

COMMERCIAL MINDSET
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 • Key questions
REPORTING ANALYTICS
Operational HR People Function
▪ Why is the attrition in business-
SYSTEMATIC

critical roles increasing?

2 4 o Why has that happened?

o What can we do about it?
o What is the impact on business
OPPORTUNISITC

performance?
1 3 o How we can quantify the
challenges and the opportunities
that his issue has created?
Tactical HR Strategic HR

COMMERCIAL MINDSET
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Opportunistic Analytics

REPORTING ANALYTICS
• More complex analytics questions
Operational HR People Function
SYSTEMATIC

• But still opportunistic

o HR does not have all the necessary
2 4
data available to immediately answer
the question
o But will be required to gather data
OPPORTUNISITC

from different sources and make

sense of the challenge
1 3

Tactical HR Strategic HR

COMMERCIAL MINDSET
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Case Example: Turnover of Project Managers

Problem
Solution
Business leaders realized data could
provide more comprehensive insights
and inform better decision-making. Way Calculate Employee Value
to identify:
(EV) =
 individual’s capability
 individual's value to an organization Capability (talent score)
 individual's development needs
/ employee costs
 difference between individuals in
capability and development x 100

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• Recent graduate (lacking experience) • Experienced project manager,
• Has lowest salary and low benefits/bonus considered an industry expert
• But has made a significant impact • High salary
considering tenure in position • Low contribution/impact
• Potential retention risk • Mobility in the organization

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• Key Outcomes
▪ Quality of dialogue
▪ Clear data base regarding the entire workforce capability providing insight into
• Individual development
• Skill development gaps in relation to perceived future client demands (technology).
• Workforce and succession planning to be taken forward using tangible data and
analytical insights.
• Retention had significantly increased, with vacancies falling from 11 per cent in
year 1 to 4 per cent in year 2 > savings of 1.1 millions pounds in recruitment and
wasted training costs.

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Systematic Analytics

REPORTING ANALYTICS • More complex analytics questions

Operational HR People Function
▪ Requested by different business
SYSTEMATIC

leaders
2 4 • Systematic because the HR can
answer them relatively simply and
quickly
OPPORTUNISITC

• Technological advancement is key

here
1 3
▪ Systems that bring together
information from across
Tactical HR Strategic HR different functions
COMMERCIAL MINDSET
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Journey from Reporting to Analytics

REPORTING ANALYTICS
• You need

OPPORTUNISITC SYSTEMATIC
Operational HR People Function
▪ capabilities of HR
▪ quality of the data 2 4

▪ sophistication of the technology

platform being utilized
• Challenge: No silver bullet
1 3
▪ Data – Insight – Story model.
Tactical HR Strategic HR

COMMERCIAL MINDSET

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Journey from Reporting to Analytics
Capabilities, Data, & Technology

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 Crunchr The People
Maturity Model LAMP Analytics
for People Framework Effectiveness
Analytics Wheel ©
 HR from a Decision Science Lens

Investment
• Efficiency – connection between investment in people and the
Efficiency talent programs and practices being produced
Programs and • How much does a training of communication skill cost per
Practice hour?
• Effectiveness – connection between programs and practices
Effectiveness
and the change in the talent quality

Organization and • Can we say the training increases the communication skills of
Talent our employees?
• Impact – connection between changes in the talent and the
Impact strategic success of the organization

Sustainable • Can we say that change in the communication skills lead to

Strategic Success better customer satisfaction or team performance?
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The Problem in People Management

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LAMP Framework Cascio et al. (2019):

ANALYTICS
Valid questions & results
(design, statistics)

HR Analytics
LOGIC MEASURE
that are a force
Theory driven approach Sufficient data
for strategic
(Competitive advantage) (reliable, timely, available)
change

PROCESS
Effective knowledge
management
(Culture, values)

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 LAMP Framework

• Logic – what are the connections?

The Right LOGIC
Theory driven approach ▪ It is like a “story” behind the connections, numbers, effects and
(Competitive advantage) outcomes
▪ It is impossible to know where to look for insights without proper
logic

• Measures – getting the numbers right

The Right MEASURE ▪ The most solid and advanced part in today’s HR function,
Sufficient data however it lacks connection with logic
(reliable, timely, available)
▪ Paradox – too much data, what to do with it?

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 LAMP Framework

• Analytics – finding answers in the data

The Right ANALYTICS
▪ very rigorous logic with good measures can flounder if the
Valid questions & results
(design, statistics) analysis is incorrect
▪ Know the limitation of your methods or analytical principles!
(e.g., correlation is not causation).

The Right PROCESS • Process – making insights motivating and actionable

Effective knowledge ▪ You need to convince the management to accept that HR analysis is
management possible and informative.
(Culture, values)
▪ Know your audience and present results in a way they make sense to
them!

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 Crunchr The People
Maturity Model LAMP Analytics
for People Framework Effectiveness
Analytics Wheel ©
The People Analytics Effectiveness Wheel© Peeters et al. (2020)

• Framework to establish an effective people analytics team

• Developed based on a systematic review of the literature
▪ 4 different categories of ingredients that a people
analytics team needs to be effective

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“Enabling “Products” the
resources” of a team delivers to
people analytics the organization
team

“Governance “Stakeholders”
structure” required at the receiving
for compliance and end of these
legitimacy products 50
Governance

1. Data Governance

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Data Governance

• Protect people’s privacy, compliance with related legislation (e.g.

the General Data Protection Regulation [GDPR] in Europe).
▪ Procedures and rules on how to collected, maintain, store data,
and accessed (by whom?)
▪ Awareness of the organization-specific agreements as well as
the laws of the country
• Data privacy officer

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Data Governance: Ethics

• Data ethics as the fundamental legal and moral principles about

right and wrong related to the governance of data (Guenole et al.,
2017)
▪ Even if an analysis is possible (legal), it does not make it
automatically right to do so.

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Example: Global Financial Institution

HR analyst could access what

employees ate, what gym
Employee card enables equipment they used, and for
access to non-work-related how long.
facilities such as catering and
gym.
HR analytics team linked this
data to the individual
employee performance. Ideal
profile of meals and exercise
associated with high
performance.
Information for each
employee is stored by the
organization. Made recommendations for certain
employees based meal choices
and exercise programs.

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Governance

2. Governance of the people

analytics function

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Governance of the people analytics function

• Where should the team be?

1. People analytics should be placed inside the HR function as a center of
excellence (CoE).
2. People analytics team would benefit more from being placed outside of
HR and together with other analytical teams (e.g. Rasmussen and
Ulrich, 2015).
• How should the team be structured?
• Split team into specialized sub-teams: reporting and analytics teams (Kaur
and Fink, 2017)
• Who should the products of the team be delivered?

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Governance

3. Governance of external
social legitimacy

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 Governance of external social legitimacy

• To add to the social legitimacy of a

people analytics teams,
▪ collaborating with unions and
workers councils
▪ external parties, such as
consultancy firms and
universities

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Summary

• Different frameworks highlight different components and could help solve

different issues
• There is no “one size fits all” approach to implementing analytics into your
people function, but it is underpinned by capability, data and technology.
• The importance of ethics and governance
▪ Reflect on ethicality vis a vis the material on Canvas
o How Amazon automatically tracks and fires warehouse workers for
‘productivity’
o Bosses are using surveillance technology to spy on workers

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Thank you! Any question?

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