Module 1
Module 1
6/ G
310 DE4d.6 Human
Module No. 1: HR Decision-making and HR Analytics 10
Resource Analytics
Introduction – HR decision making – importance and significance of HR
analytics – benefits of HR analytics – Steps to implement HR analytics –
HR analytics and changing role of HR managers
– aligning human resources to business through HR analytics – HR
analytics framework and
models – LAMP Framework.
What is HR Decision Making?
Strategic
Alignment
Data-Driven
Approach
Continuous
Improvement
Ethical
Considerations
Key Aspects of HR Decision Making:
Improved Business
Performance
Enhanced Employee
Satisfaction
Competitive Advantage
Reduced Costs
Importance of Effective HR Decision Making
Improved Business
Performance
Well-informed HR decisions can significantly impact
an organization's bottom line. By attracting and
retaining top talent, improving employee engagement,
and optimizing HR processes, organizations can
enhance productivity, innovation, and overall business
performance
Importance of Effective HR Decision Making
Enhanced Employee
Satisfaction
Effective HR decision-making can lead to increased
employee satisfaction and engagement. When
employees feel valued, supported, and empowered,
they are more likely to be productive and committed
to their work.
Importance of Effective HR Decision Making
Competitive Advantage
Reduced Costs
Data Collection
Decision Data
-Making: Analysis:
Insight
Generation:
How HR Analytics Works?
Gathering data from HR
systems, surveys,
Data Collection performance metrics,
attendance logs, and
payroll systems.
How HR Analytics Works?
Gathering data from HR
systems, surveys,
Data
performance metrics,
Analysis: attendance logs, and
payroll systems.
How HR Analytics Works?
Deriving actionable
insights from analyzed
data (e.g., identifying
Insight
attrition risks or skill
Generation: gaps).
How HR Analytics Works?
Deriving actionable
insights from analyzed
Decisio
n- data (e.g., identifying
Making
:
attrition risks or skill
gaps).
Importance of HR Analytics
Enhanced
Improved Decision-
Cost Optimization Recruitment and
Making
Talent Acquisition
Improved
Employee Performance
Employee
Retention Management
Engagement
Enhancing
. Strategic Diversity and Learning and
Workforce Planning Inclusion (D&I) Development
(L&D)
Measuring ROI on
HR Initiatives
Importance of HR Analytics
Improved Decision-Making
Cost Optimization
HR Analytics eliminates reliance on
Enhanced
Recruitment and
Talent Acquisition
Employee
Retention
intuition by providing data-driven insights.
Improved
Decisions regarding hiring, promotions, or
Performance
Management
Employee
Engagement training are backed by factual data.
. Strategic
Workforce
Diversity and
Inclusion (D&I)
For example, companies like Google use
Planning
Cost Optimization
Enhanced
HR Analytics identifies areas of inefficiencies,
Employee
Recruitment and
Talent Acquisition
Retention such as high turnover, excessive overtime, or
Performance
Improved underutilized training budgets.
Employee
Management
Engagement By analyzing this data, companies reduce costs
. Strategic
Workforce
Diversity and and optimize resource allocation.
Inclusion (D&I)
Planning
Example: IBM Watson predicts employee attrition,
Enhancing
Learning and
Development
Measuring ROI on
HR Initiatives
allowing the company to implement retention
(L&D)
strategies and save turnover costs.
Importance of HR Analytics
Enhanced Recruitment and Talent
Acquisition
Enhancing
suitability for a role by analyzing attributes like
Learning and
Development
Measuring ROI on
HR Initiatives skills, personality traits, and experience.
(L&D)
Example: Unilever uses AI-driven analytics to
streamline candidate assessment, improving both
speed and quality in recruitment
Importance of HR Analytics
Employee Retention
HR Analytics helps understand why employees
leave (attrition) and predicts who is likely to
leave.
Improved
Organizations can address these issues
Performance
Management
Employee
Engagement proactively through better engagement, career
. Strategic
Diversity and
development, and compensation strategies.
Workforce
Planning
Inclusion (D&I)
Example: IBM uses predictive analytics to identify
Enhancing
Learning and Measuring ROI on employees at risk of leaving, saving costs and
Development HR Initiatives
(L&D) reducing turnover rates.
Importance of HR Analytics
Performance
Management
HR Analytics helps track employee performance
using Key Performance Indicators (KPIs).
It identifies top performers, enables timely
recognition, and highlights employees needing
Improved
Employee
Engagement
additional support.
. Strategic
Example: Analytics tools analyze team
Diversity and
Workforce
Planning
Inclusion (D&I) productivity to recognize employees who deliver
Enhancing
Learning and Measuring ROI on
consistent results.
Development HR Initiatives
(L&D)
Importance of HR Analytics
Improved Employee
Engagement
Enhancing
Learning and Measuring ROI on
Development HR Initiatives
(L&D)
Importance of HR Analytics
Measuring ROI on
HR Initiatives
Importance of HR Analytics
Measuring ROI on HR
Initiatives
Employee Experience
Reactive Designer:
Approach
Change Management
Leader
Operation
Compliance and Risk
al Role Manager:
Changing Role of the HR Manager
Traditional
HR Manager
Role:
Administr
ative
Focus: HR managers traditionally focused on administrative tasks such
as payroll processing, compliance management, and basic
Reactive employee relations
Approach
Operation
al Role
Changing Role of the HR Manager
Traditional
HR Manager
Role:
Administr
ative
Focus: Problem-solving was largely reactive, addressing issues as they
occurred rather than anticipating them.
Reactive
Approach
Operation
al Role
Changing Role of the HR Manager
Traditional
HR Manager
Role:
Administr
ative
Focus: The scope was confined to executing predefined processes, with
limited involvement in strategic planning.
Reactive
Approach
Operation
al Role
Changing Role of the HR Manager
Data-Driven Decision
Maker:
Modern HR managers rely on analytics to guide decisions.
Strategic Business
Partner: For instance, analyzing recruitment metrics can reveal which
channels provide the best candidates, reducing hiring costs
Employee Experience
Designer: and improving quality.
Change Management Predictive analytics helps anticipate challenges like potential
Leader
talent shortages, enabling proactive solutions.
Compliance and Risk
Manager:
Changing Role of the HR Manager
Data-Driven Decision
Maker: Analytics helps HR tailor experiences to individual needs,
Strategic Business
such as customizing career development plans based on skill
Partner: assessments.
Employee Experience
Designer:
By monitoring engagement metrics, HR managers can
Change Management
Leader identify and address pain points in the employee journey.
Compliance and Risk
Manager:
Changing Role of the HR Manager
Data-Driven Decision
Maker: HR managers play a critical role in navigating digital
Strategic Business
transformations, ensuring employees adapt to new tools and
Partner: processes.
Employee Experience
Designer:
Analytics measures the success of change initiatives by
Change Management
Leader tracking adoption rates and employee feedback.
Compliance and Risk
Manager:
Changing Role of the HR Manager
Data-Driven Decision
Maker: HR managers leverage analytics to ensure adherence to labor
Strategic Business laws and minimize risks, such as monitoring data for patterns
Partner:
indicating potential workplace discrimination.
Employee Experience
Designer:
Change Management
Predictive models can help identify and mitigate risks before
Leader they escalate, protecting the organization’s reputation and
Compliance and Risk
resources
Manager:
aligning human resources to business Goals through
HR analytics
HR Analytics serves as a bridge between HR practices and broader business objectives,
ensuring human capital strategies directly contribute to organizational success. This
alignment is achieved through the following key areas:
Workforce Planning and Business Forecasting
Cost Optimization:
For example, predictive analytics can identify future skill requirements, enabling proactive
upskilling or hiring.
Cost Optimization:
HR Analytics tracks the ROI of HR initiatives, ensuring investments align with business priorities.
Enhancing Organizational Performance
For example, analyzing training program effectiveness ensures budget allocations maximize skill
development and performance improvement.
aligning human resources to business through HR
analytics
Agility in Responding to Market Changes:
With real-time data, organizations can quickly adapt to market disruptions, such as shifting focus to
remote work policies during unforeseen events.
Workforce Planning and
Data-Driven Business
Decision Forecasting
Making:
Scenario modeling enables HR to prepare for various business conditions, ensuring resilience and
continuity.
WorkforceinPlanning
AgilityData-Driven and Business
Decision
Responding to Forecasting
Making:
Market Changes:
Analytics helps measure the effectiveness of DEI programs and identify areas needing improvement
Enhancing
Strengthening Organizational
Cost Performance
Optimization:
Employee Engagement and Retention
HR analytics framework and
models.
In the realm of modern Human Resources (HR), data
is the new currency. Recruiters and hirers have
transitioned from making decisions based on gut
feelings to harnessing the power of data-driven
insights.
There are 3 types in the models namely – a.
Provided by the technology vendors, b.
Normative ( Professional models of the
organization), c. Empirical ( Designed based
on the research)
the LAMP framework in HR analytics stands tall as a
guiding light. In this comprehensive guide, we will
be exploring what it is, why it matters, and how
recruiters and hirers can leverage it to
transform HR processes.
LAMP Framework
Developed by John W. Boudreau and his
colleagues Ramstad (2004), the LAMP framework
provides a roadmap for leveraging data analytics to
connect HR practices with business outcomes.
The LAMP framework stands for:
Logic
Analytics
Measures
Process
It emphasizes the integration of these four
components to create a coherent and effective
approach to HR analytics.
1. Logic
Definition: The foundational component of the LAMP
framework, logic refers to the theoretical understanding
of how HR practices influence organizational
performance.
Purpose: It involves creating a clear line of reasoning
that links HR activities to key business outcomes such
as productivity, profitability, and customer satisfaction.
Example: Establishing how employee engagement impacts
customer service quality and, subsequently, customer
retention.
Key Elements of Logic:
Identifying cause-and-effect relationships in HR
practices.
Articulating the importance of specific HR metrics.
Using frameworks like the resource-based view (RBV) to
highlight the strategic value of human capital.
2. Analytics
Definition: Analytics involves applying statistical and
mathematical tools to HR data to uncover patterns,
trends, and insights.
Purpose: It enables organizations to move beyond
descriptive metrics to predictive and prescriptive analytics,
providing actionable insights.
Example: Using regression analysis to predict turnover
rates based on employee satisfaction scores and
demographic factors.
Levels of Analytics:
Descriptive Analytics: What happened? (e.g., historical
turnover rates).
Predictive Analytics: What is likely to happen? (e.g.,
identifying employees at risk of leaving).
Prescriptive Analytics: What should be done? (e.g.,
recommending interventions to improve retention).
3. Measures
Definition: Measures focus on the metrics used to
assess HR processes and outcomes.
Purpose: Effective measures are accurate, relevant, and
aligned with organizational objectives.
Example: Metrics such as time-to-hire, employee
turnover, engagement scores, and return on
investment (ROI) of training programs.
Characteristics of Good Measures:
Validity: Metrics should measure what they are intended to
measure.
Reliability: Metrics should provide consistent results over
time.
Relevance: Metrics should align with business goals and
strategies.
4. Process
Definition: Process refers to the way analytics are
communicated and acted upon within the
organization.
Purpose: It ensures that the insights derived from
analytics are effectively integrated into decision-
making processes and lead to tangible improvements.
Example: Presenting analytical findings in a visual
dashboard to help managers make informed decisions
about workforce planning.
Steps in the Process:
Data collection and preparation.
Analysis and interpretation.
Communication of insights to stakeholders.
Implementation of recommendations.
Continuous feedback and improvement.
Application of the LAMP
Framework in HR Analytics
The LAMP framework can be applied to various HR functions, such as:
Talent Acquisition: Identifying the most effective recruitment channels
using analytics and measures.
Employee Retention: Using predictive analytics to forecast turnover
and implementing interventions based on insights.
Performance Management: Linking employee performance metrics to
business outcomes using logical reasoning.
Training and Development: Measuring the ROI of training programs
and aligning them with organizational needs.