Measuring

Performance with HR
Analytics
2 Primer

 The core of HR Analytics is the "metric“

 Metrics can be said as data that conveys meaning in a given
context
 Metric is to be distinguished from numbers
 Example:

- Employee turnover is 13.5% p.a. Data

- There is a 4 percent point rise in attrition rate on a year to Metric
year basis
- Inappropriate Leadership styles of select managers Analytic
resulted in higher attrition of 3% on a comparable
basis
3 Primer – Contd.

 Checklist, Dashboard, HRIS

- All of these are tools to collate and display information

 Hypothesis: u0 & u1

 Variables: Dependent and Independent

 Statistical Models

- E.g. Regression, ANOVA

https://www.youtube.com/watch?v=iHWFua7gmx8

https://www.youtube.com/watch?v=gdqQfTQOLaE
4 HR Analytics

 Analytics is not so much about numbers, as it is to do with logic and reasoning

 Analytics is different from Analysis, which is the equivalent of number
crunching. Analytics uses analysis but then builds on it to understand the 'why'
behind the figures and/or to predict decisions. Analytics is the methodology of
logical analysis
 Analytics requires the use of carefully constructed metrics
 HR Analytics is data based; it uses past data to predict the future
 It is not about the quantity of data churned; it is about the logic used to link
metrics to results

 https://www.youtube.com/watch?v=B4EqhvSuv4o
5 Core concepts and terminologies

Analytics
= Business
Intelligence

Decision
6 Core concepts and terminologies
Business intelligence (BI) is a set of theories,
methodologies, processes, architectures, and
technologies that transform raw data into meaningful
and useful information for business purposes.

Business analytics (BA) refers to the skills,

technologies, applications and practices for continuous
iterative exploration and investigation of past business
performance to gain insight and drive business
planning.
7
Past to future

Tera bytes of data of

Analytics is shifting emphasis
information being generated every
from trend analysis based
single day which is being used to
purely on internal data to
answer, fairly accurately, what
presenting scenarios of
will probably occur in the future
the future
Identify the importance of measuring HR’s
effectiveness
• Define and understand the purpose of an HR
Dashboard/Scorecard
• Identify the Key Performance Indicators (KPIs) based
on the audience
• Leverage technology to create and build the Dashboard
• Communicate Effectively – Tell HR’s Story

HRMATT’s 9th Biennial Conference – May 13th & 14th, 2013

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HRMATT’s 9th Biennial Conference – May 13th & 14th, 2013
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Work measurement and workforce
analysis is not new
Measurement of employee productivity
and effectiveness can be traced back to
the days of Scientific Management
(Taylor, 1911)
Quantitative analysis and its use in
decision making were developed during
the 1940s
Common HR metrics in existence today
were first developed during the 1970s

HRMATT’s 9th Biennial Conference – May 13th & 14th, 2013

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Interest in HR performance and
measurement has increased over
the past twenty years
Evidence-based management has
produced a rapidly growing
interest in HR metrics and
workforce analytics
Integrated Human Resource
Information Systems (HRIS) have
been a driver for workforce
analytics
Shift from labor intensive
processes to electronic processes

HRMATT’s 9th Biennial Conference – May 13th & 14th, 2013

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Demonstrate linkage between
business objectives and HR
initiatives
Improved organizational
awareness
Influence leadership behavior and
managerial decision making
Improved organizational
performance
HR ROI - Quantifying HR’s
Impact on the bottom line
https://
www.youtube.com/watch?v=
wcs-wlkTJlc
HRMATT’s 9th Biennial Conference – May 13th & 14th, 2013
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When Scorecards Educate, Facilitate and Motivate, they help
to:

Focus the organization on, “What we have in Common,

not what we have in Conflict.”
Drive accountability into the conversations
Establish a common business language that defines
mutual success
Equip leaders with a tool to make timely, informed
decisions
Create a shared format to recognize and reward
exceptional performance HR

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• Identify the importance of measuring HR’s effectiveness
 Define and understand the purpose of an HR Scorecard
• Identify the Key Performance Indicators (KPIs) based on
the
audience
• Leverage technology to create and build the Dashboard
• Communicate Effectively – Tell HR’s Story

HRMATT’s 9th Biennial Conference – May 13th & 14th, 2013

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A simple and concise tracking tool designed to
create a common business language throughout an
organization – Cost, Quality, Productivity, Customer
Satisfaction, and People/Safety.

ARE WE WINNING OR LOSING?

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HR Scorecard….
An enriched reporting tool which provides a customized and
repeatable presentation of HR performance
A visual display of key HR Metrics and Analytics
Current snapshot of HR organizational performance
Scorecards also contain business unit analyses
Permits managers to drill down to examine
metrics
Helps business leaders to make informed
decisions

HRMATT’s 9th Biennial Conference – May 13th & 14th, 2013

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 Mastering human-capital metrics is a
complex undertaking. Linking people
measures to KPIs in a reliable way can
require massive amounts of data,
and most efforts are technology-
heavy.
They require a good bit of trial and
error, and a heavy dose of patience.
And more often than not, a
human- capital metrics initiative
requires a good partnership
between HR and finance.

HRMATT’s 9th Biennial Conference – May 13th & 14th, 2013

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 Identify Organization's Challenges & Opportunities

Identify Appropriate Metrics

Present Metrics in Context

Interpret and Relate data to Manager's Decision(s)/Situation(s)

Facilitate Business Decisions

Calculate and Communicate Return on Investment

HRMATT’s 9th Biennial Conference – May 13th & 14th, 2013
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 Time

Performance
Cost
Management

Workforce
Metric Quality
Categorie
s

Return on Customer
Investment Satisfaction

Volume

HRMATT’s 9th Biennial Conference – May 13th & 14th, 2013

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• Identify the importance of measuring HR’s
effectiveness
• Define and understand the purpose of an HR
Dashboard/Scorecard
 Identify the Key Performance Indicators (KPIs)
based on the audience
• Leverage technology to create and build the
Dashboard
• Communicate Effectively – Tell HR’s Story

HRMATT’s 9th Biennial Conference – May 13th & 14th, 2013

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HRMATT’s 9th Biennial Conference – May 13th & 14th, 2013
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HRMATT’s 9th Biennial Conference – May 13th & 14th, 2013
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HRMATT’s 9th Biennial Conference – May 13th & 14th, 2013
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HRMATT’s 9th Biennial Conference – May 13th & 14th, 2013
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 ROI/Impact Cost Effectiveness Volume
Revenue per Employee Benefit Cost as a Percentage of Time to Fill Jobs HR Headcount Ratio (HR
Revenue Employees: Company
Employees)
Expense per Employee Benefit Cost as a Percentage of Time to Start Jobs Absence Rate
Expense
Compensation as a Benefit Cost as a Percentage of Ratio of Offers Involuntary Separation
Percentage of Revenue Compensation Made to
Acceptances
Compensation as a Retiree Benefit Cost per Retiree Voluntary Separation
Percentage of Expense
HR Dept. Expense per Retiree Benefit Cost as a Voluntary Separation by
Company Employee Percentage of Expense Length of Service
Supervisory Compensation HR Dept. Expense as a Percentage
Percentage of Company Expense
Workers’ Compensation Cost as a
Percentage of Expense
Workers’ Compensation Cost per
Employee
Workers’ Compensation Cost per
Claim
HRMATT’s 9th Biennial Conference – May 13th & 14th, 2013
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HRMATT’s 9th Biennial Conference – May 13th & 14th, 2013
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• Identify the importance of measuring HR’s
effectiveness
• Define and understand the purpose of an HR
Scorecard
• Identify the Key Performance Indicators
(KPIs) based on the audience
 Leverage technology to create and build a
Scorecard
• Communicate Effectively – Tell HR’s Story
HRMATT’s 9th Biennial Conference – May 13th & 14th, 2013
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HRMATT’s 9th Biennial Conference – May 13th & 14th, 2013
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HR Dashboard
Summary for year 2004 Total employees Compensation distribution by department, 2004
Total Salaries Total $ 2,815,500
Bonuses Total $ 235,675 100 Salary Bonus Overtime Commission
Overtimes Total $ 65,305
80
Commissions $ 453,000
Sales
Total Compensations $ 3,569,480 60
Total Employees 45 R&D
Average Salary $ 62,567 40 Marketing
Total Sick Days 239 I
Average Sick Days per 5.3 20 T
Emp.
0 Human
2000 2001 2002 2003 2004 2005 2006 2007 2008 Resources
Finance
Employee count, R&D Employee count,
Los Angeles Customer Support

15 12 Administration
10 Accounting

10 8 $
Compensation distribution by location, 2004
6 0

5 4 $
New York
2 1
0 0
0 2000 2001 2002 2003 2004 2005 2006 2007 2008 Chicago 0
2000 2001 2002 2003 2004 2005 2006 2007 2008 ,
0
Los Angeles
0
Employees by department, 2004 Employees by location, 2004 $
Miami 0
Accounting 2
Boston 0
Administration
Boston 0
Customer Support ,
$0 $200,000$400,000$600,000$800,000$1,000,00$01,200,00$01,400,00$01,600,00$01,800,000
Finance Miami 0
0 Commission Overtime Bonus Salary
Human Resources Los Angeles $
IT 0
Chicago Employee count by base salary brackets, 2004
Marketing 3
R&D
New York 0
0
>$100,000
Sales ,
$90,000-$100,000
0
0
$80,000-$90,000
$
$70,000-$80,000
0
$60,000-$70,000
4
0
$50,000-$60,000
0
$40,000-$50,000
,
0
$30,000-$40,000
0
<$30,000
$
0 0
Employee Information Employee total 5
0 2
compensation
Name Corine M. Henderson 0
, 4
Hire Date Overtime $100,000
0 6
Location Commission 0
Term. Date Total Comp. $50,000 $ 8
Empl. Type Department 0
6 1
Year
HRMATT’s 9th Biennial Conference
PTO Days
– May 13th & 14th, 2013
$- 0 0
Base Salary
Bonus
Sick Days
Perform. Score
200020012002200320042005200620072008 0
,
1 29
2
0
0
• Identify the importance of measuring HR’s
effectiveness
• Define and understand the purpose of an HR
Dashboard/Scorecard
• Identify the Key Performance Indicators
(KPIs) based on the audience
• Leverage technology to create and build the
Dashboard
 Communicate Effectively – Tell HR’s
Story
HRMATT’s 9th Biennial Conference – May 13th & 14th, 2013
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 Organization‘s Mission & Vision

Strategic Priorities & Business Objectives

HR Mission & Vision

HR Strategic Priorities

HR Initiatives

Measuring HR Performance

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Reporting – who, what, when and how
Benchmarking – comparative analysis to gain
insight
Data Mining – patterns and correlations
Predictive analysis – predict outcomes based on
leading indicators
Quantify – how much was earned or saved

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Data points become useful when the decision maker can attach
some meaning to them
Reporting trend information for metrics provides context
Comparative analysis and benchmarking adds context to
measurement data
Industry specific comparison among peers

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Interactive Exercise

HRMATT’s 9th Biennial Conference – May 13th & 14th, 2013

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A. ROI/Impact Metrics
B. Effectiveness Metrics
C. Customer Satisfaction
Metrics
D. Volume Metrics
0% 0% 0% 0% 0%
E. Cost Metrics

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A. ROI/Impact Metrics
B. Effectiveness Metrics
C. Customer Satisfaction
Metrics
D. Volume Metrics
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E. Cost Metrics

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HRMATT’s 9th Biennial Conference – May 13th & 14th, 2013

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A. ROI/Impact Metrics
B. Effectiveness Metrics
C. Customer Satisfaction
Metrics
D. Volume Metrics
0% 0% 0% 0% 0%
E. Cost Metrics

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HRMATT’s 9th Biennial Conference – May 13th & 14th, 2013

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 Maintain solid
Identify
partnerships with
organizationa
your Finance
l pinch
and IT
points…
departments.

If you’re not Measuring is a

measuring, start journey-not a
tomorrow!! destination….

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Summary Video:

https://www.youtube.com/watch?v=-
qiwfYx2IFA
HRMATT’s 9th Biennial Conference – May 13th & 14th, 2013 41