HR Metrics: From Data to Results

Today I had a really nice lunch with a friend who is a Director of Human Resources.  We ate at Mahoney & Sons, right down by the water at the edge of Coal Harbour.  It’s a sunny day today; perfect for enjoying lunch on a patio with views of Stanley Park and the north shore mountains.

Among the many things we talked about, we discussed some of the merits and pitfalls of “HR metrics”.  For the benefit of those readers outside of HR, HR metrics are often toted as the means by which to show the relevance and legitimacy of the HR function.

As a bit of background, HR continues to languish in this struggle to achieve the status it aspires to, among other areas of the organizations of which the functional group is a part.  Common complaints include:

  • HR’s lack of understanding of “the business”
  • A focus on transactional administration, rather than providing strategic leadership and advice to the business
  • A reactive, rather than proactive stance
  • An inability to communicate how what HR’s costs do to drive top line and/or bottom line financial performance

A popular article on this topic can be found on the Fast Company website: Why We Hate HR.

So, during the conversation with my friend she shared some stories of her experiences implementing HR metrics when she first assumed her role as the leader of the HR function.  As the Director of HR, she reports into the Chief Operating Officer and wanted to demonstrate her team’s ability to be a value adding partner to the organization.  A truly great idea!

However, she quickly realized that while the metrics she was able to capture and report were interesting, there was very little that could be done by HR to impact these measures.  This brought me to share my thoughts on the trajectory from data to results with her – and I thought I would take a moment to share them with you here as well.

Here’s how I see it…

1.  You start with DATA

This is the raw material you are working from.  You need to consider what data to capture, why this data matters and what it might tell you, who and how it will be captured, stored, and kept clean.  This could be qualitative or quantitative, however, the goal is typically to have quantitative HR metrics.

2.  You then analyze the data to arrive at INFORMATION

By looking for trends and patterns, doing statistical analysis, and comparing to other data sets you can start to arrive at new insights.

3.  You can use this information to make different DECISIONS

In most cases managers are looking for information that will allow them to make better decisions.  Or a cynic might suggest, managers are just looking for information that will justify the decisions they’ve already made.  Either way there is an opportunity for the data to tell a story when it becomes information – a story that can (1) increase the effectiveness of a decision or (2) decrease the effectiveness of a decision.

4.  Your decisions are sometimes followed by ACTION

Robert Kegan, Harvard Professor and author of Immunity to Change was in Vancouver recently to speak at a BC Organization Development Network event.  He started his talk, which you can see here (Video: An Evening with Robert Kegan and Immunity to Change), with a question: “If 14 frogs are sitting on a log and 3 decide to jump off, how many are left?”  Dr. Kegan encouraged us to resist the temptation to respond, “11!”  His point being that there is a big difference between deciding to do something and actually doing it.

In an organizational setting this is extremely common.  This issue is often labeled as an “inability to execute strategy” or a “failure to implement change”.

5.  Your actions will lead to RESULTS

Your actions will definitely lead to some kind of results.  Let’s hope they’re the kind of results you were hoping for!  When they’re not, we kindly call them “unintended consequences”, but really the outcomes may be disastrous in some cases – many executives have lost their jobs based on the results achieved being different than the results desired.

Linking this back to the topic of HR metrics specifically… if you are gathering HR data (e.g., turnover ratios, absenteeism rates) you should be aiming to be able to do two main things:

(1) move the needle on the HR results – to influence them in the desired direction

(2) demonstrate the link between moving the needle on these HR results and moving the needle on business results (e.g., revenue, profit) in the desired direction

How do you see it?


Gen Y’s Audacity of Hope

In July of 2009, Tammy Tsang, Founder of My Loud Speaker, and I were discussing an interesting topic: the experience of the Gen Y’s who at that point were just starting to leave university and enter the white collar workforce.

We are now 3 years further along and this topic is still getting a lot of attention.  By way of example, Tammy is also the Executive Director of XYBOOM, a conference that “raises awareness about the importance of intergenerational dialogue and collaboration in the context of youth unemployment and the baby boomer exit”.  Here is a XYBOOM Conference 2012 commercial (video) for the inaugeral conference held on January 20th, 2012.

My July 2009 response to a post on Tammy’s blog may have collected 3 years worth of digital dust, however, when I stumbled on it today, I found the ideas were still indicative of my current thinking.  So, for your perusal, here it is…

It’s certainly an interesting topic, Tammy. 

I think that one consequence often missed during discussions in this area is ‘lost opportunity’.  Many ambitious NewGens do have audacious hopes and dreams, as you pointed out.  These hopes and dreams represent an enormous reservoir of untapped potential energy and talent.

It’s unfortunate that the cultures of so many organizations are extremely efficient at crushing the spirit of those with the ‘audacity of hope’.  We often hear, “don’t try to motivate people, focus on what already motivates them.”  Perhaps there is some relation between people’s hopes and dreams and their motivation…  perhaps at least a slight chance there’s a connection between the two? 

If energy is analogous to motivation and talent is about ability, we can setup an equation to look at performance potential.  Degree of motivation + degree of ability = performance potential.  [Motivation + Ability = Performance]

It doesn’t take a degree in mathematics to understand what happens to the performance of young professionals who find themselves on the teams of older experienced managers that are unreceptive to their hopes and dreams.  A decreased degree of motivation among young workers is equivalent to lost individual and organizational performance – and destruction of stakeholder value. 

But can it be recovered? 

The research says that the most resilient people possess (1) good self-esteem, (2) a sense of control over one’s destiny, and (3) a strong dose of optimism.  Many NewGens are entering the workforce with all of these, from the way you have described them. 

Some ‘OldGens’ (?) that are encountering these resilient NewGens believe that these dreamers need a dose of reality.  To know that nothing comes easy.  That there’s no such thing as a free lunch.  That an expectation of immediate gratification is not socially, environmentally, or economically sustainable.

And they would have a point…