Third party Compensation Market Survey Reports : what is there in it for HR?

The purpose that often get stated for participating in Compensation Market Surveys, is the need to benchmark ones wage payouts with global trends/competitors/industry leaders so that one does not lag behind or overpay; at the same time capitalise the results to enhance ones image/brand. For employees, Market Survey results makes little sense. Often what gets benchmarked are 'What' and 'How much' are being paid and not 'How' it is being paid; the latter is a major factor for dissatisfaction and attritions. Often the best paymasters do not pay 'much' but pay 'better'. More importantly they pay for performance; maintaining transparency and trust. Employees internally often assess quality of payment practices and externally on payment elements prevailing in Industry. Hence attractive or different compensation elements available in other companies often catches attention. Survey results hardly reveal finer details like for eg the way it is packaged or its tax advantages. From an employer standpoint, in a survey, one assumes that all participating companies fully disclose its pay outs. In reality closely guarded elements hardly gets revealed; especially if such a perquisite is effective in retaining talent from migration to ones competitor. Coming to Basic Pay, that also cannot be benchmarked with precision, as Basic Pay is a multi-variable function. Industries or Competitors reveals just a range. Surveys paint a climate but not the day's weather forecast for you, and hardly helps HR either to lever c&b function to sharpen business competence nor to guage employee expectations in this area. In fact joint forums and networking of HR leaders within the Industry is a much more effective method.

Gender sensitivity : emerging challenge for HR

With the emergence of more women in work place, corporate environments needs a closer look to make it safer, encouraging, positively charged that can promote healthy relations between genders. The moderator role is cast on HR function, the ensure that the climate is always healthy minimising conflict between employees over gender sensitive issues. The Tehelka episode is a pointer on the failure side of it. There could be similar issues in many corporates many waiting to explode, casting a shadow over the corporate image itself. Legal remedies, harassment systems apart, HR needs to overhaul the existing policies ; from hiring to seperation, ensuring safety and security of women in work place. Foremost is to encourage more women to enter the environment into positions that are not threatening to them . Identifying those positions, making them sustainable from a career growth perspective is also essential to retain talent and encouarge growth. Identifying Male Mentors who have trust of women employees; Forums - virtual or real- for women to log in private concerns annonimously; empower them with tools and assistance for networking, instant connectivity, safe travel modes, privacy and space besides help them better balance of family and work needs are al essential. Policies to work from home, where ever feasible can be a great motivator. There are endless possibilities for HR Heads to intervene and initiate steps to ensure respectable corporate image on this front these times. A must KPI for all HR Heads in India.

Measurements, Metrics and now Analytics ?

Supplementing the article reproduced in the earlier post : I feel, data derived insights is a scientific research method that always existed. The methodology includes measurement and metrics, inseperable, rather are integral for statistical accuracy for predicting correlations, causal relations or variable tests. They are often necessary though may not always be sufficient for accuracy in "analytics". Since HR decisions are often business needs" driven, scope for driving those decisions through data analytics may not always be present as it needs time. However, for effective policy decisions , this could be used as effective methodology. Perhaps more effective is to analyse those hr related indices that have proven relationships with business results. If it is not visible one can look for it, or build them and then apply statistical analytics aided by accurate measurements and metrics. eg In OIl aand Gas , largely technology intensive, hr utilisation is critical. Correlations carry high business impact , so sensitive, and variables are closely scrutinised. Once relationships and causal relationships are established, integrity of measurement and metrics becomes critical. Also Integrity of Index is critical. eg. If employees resign stating personal reasons, causal relationsips can get skewed. 

Analytics boost for HR : C Mahalingam: the hindubusinessline.com

Analytics in HR is not about reporting, dashboards or complex math. It is the link that enables leaders to identify top people drivers of business results. The human resourse function has travelled a significant distance in the last three decades to claim its well-earned credibility today. This journey has been marked by many a paradigm shifts. It started as operationally reactive (meeting statutory regulations), became operationally proactive (hiring people as needed by the business) and matured into becoming strategically reactive (participating in strategic priorities). Its maximum potential will become available only when it marches towards becoming strategically proactive. This will call for uncovering strategic options and presenting them confidently before the leadership team. In tune with this, the measurement of HR’s contribution has also seen many makeovers. Efficiency-oriented measurements drew the attention of HR professionals for several decades. From measuring cost of labour, absenteeism, time to hire, recruitment costs, training costs, man days of training and the like, it moved up to include intangibles such as employee satisfaction/engagement, training effectiveness, competency management and such. However, HR measured these intangibles without knowing how to manage them. Scorecarding HR’s Value Over the years, however, the debates revolved around moving from efficiency to effectiveness as focus of measurement. Dave Ulrich and Mark Huselid contributed to our understanding significantly with their seminal book on HR scorecard. Their work raised our understanding of the imperative to measure HR efficiency and deliverables, but even more importantly two other key aspects, such as “high performance work systems” (HPWS) and “alignment” between these HPWS. This helped raise the bar for HR measurement and reported how HR creates value for the business. However, the real wave of value creation from HR is due to moving from compiling and reporting metrics to deeper analytics. HR analytics is not the same as measuring and reporting metrics. Metrics represent past performance. Analytics establish causal relationships and, thereby, help predict future value. Causality is very different from correlation. For example, there may be a strong correlation between some training programs and employee engagement. However, a deeper probe may reveal that these programs may not really be causing engagement. The same often also holds good for a better-than-market compensation and employee engagement — strong correlation, but may not be any causality. Cause and effect relationship is very difficult to establish when it comes to many soft areas with which HR is concerned. However, this is not reason enough not to measure and look for causal relationships. The temptation to measure what is easy to measure or what lends itself for measurement is too high and visible with many HR teams. There is yet another widespread notion that one needs terra bytes of data to be able to do any meaningful analysis and analytics. This is not true. Often every organisation has enough data, and more so if they have implemented a sophisticated HRIS package in the organisation. There is yet another idea among some of us that our organisations are unique, our challenges are unique and, so, measurement and analytics are not applicable. Nothing can be farther from the truth. Statistics are what they are and careful analysis can be done, no matter how unique one’s business may be. HR analytics: The New wave In the absence of meaningful analytics, we may actually miss out on two grounds. One, we may not be able to assess the return on our HR investments; second, and perhaps more importantly, lack of analytics may actually take us in the wrong direction. For example, there are companies that excessively invested in promoting employee referrals as common sense dictated that higher the employee referrals lower the hiring costs and higher the joining rates. This is accurate, but in terms of what an excessive focus on referrals can do to an organisation in terms of quality and its impact on customer satisfaction may tell a different story! It is important to understand the difference between measurements, metrics and human capital analytics. Measurement is data gathered regardless of reason. Metrics involve measurements for specific reason. Analytics are metrics that are analysed to create value. Analytics is information that is not only nice to know, but can be used to make business decisions. HR analytics basically refers to gaining actionable business intelligence and insight from people-related data within an organisation. This becomes feasible by using quantitative methods. While analytics helps generate predictable business outcomes, there is no guarantee that analytics delivers perfect version of the future. Circuit City, one of the companies that figured as ‘great’ in the “good to great” study of Jim Collins, went out of business in 2008 and one of the biggest reasons for it was that it laid off over 3,000 experienced people to cut costs. This was an ‘easy decision’, but a detailed analytics would have given them a wake-up call on the dangers of doing so. Circuit city is not alone. Many companies today resort to mindless retrenchment for short-term gains, only to find out later that it was a disastrous decision. Likewise, cutting down training costs as the first step in cost-cutting has hurt many companies. Analytics in HR is not about reporting, dashboards or complex math. It is about data-derived insights that drive better business results. Since analytics is the missing link that enables us to identify the top people drivers of the business results, three primary statistical methods are used to link people factors and business results — multivariate analysis, correlations and comparison of means/t-tests. Two decades ago, technology leverage was the first wave and outsourcing in HR was the second wave — both of which added tremendous value to HR. Now is the turn for the third wave that has immense potential to catapult HR onto the centre stage and if not embraced it will sweep the HR profession under carpet! (The author is an Executive Coach and HR Advisor.) (This article was published on November 7, 2013)

HR and fairness

www.thehindubusinessline.com · Engagement of employees and retention of top talent require HR to be fair towards its employees. Unfair practices are seen as a top motivating factor for people leaving companies. Great article. It is true that credibility of HR is at stake these days. Employees look at jargons like 'employee engagement' suspiciously for its ulterior motives. Often HR leaders lacks courage or shy away in taking decisions based on values and ethics that can help them earn trust of employees. They on the other hand take blind sides of commercial interests of the organisation giving a colour of productivity , profitability, sustainability etc.. Perhaps the young management graduate is not a fault. What is taught and visible these days are decisions that reflect 'people' are for business and not the other way round. Most find it safe to go with the statement that if there is no business then life will become stand still. It is important for HR managers , unlike others, to state and act repeatedly based on a firm belief that 'business is always for people' , be it employees or local community outside the company gate. It will be a struggle, no doubt and perhaps HR managers have to forget some little promotions or pay rises for that as well. But in the long run and people , employees especially will adore HR managers for their timely stand.

human resource architecture

architecture of HR function is a new area and not explored fully. architecture as a science is heavily influenced by design besides structural engineering, mechanics of components, environment, besides ones values and culture as mentioned earlier. coming to hr function in an organisational context, what then could be the starting point perhaps is the business strategy that becomes the seed or genesis for architecture design for holding together its vital resource ie HR. Once we take up design as an area for examination next, there are two aspects to it to look into. one the physical aspects and two the process part. both together completes the background for designing.

1. Physical aspects:
The physical aspects are important in the sense that it holds together the HR processes between people. To a certain extent that is dependent of strategy as i mentioned above. eg: for Knowledge intensive strategies or operations,  the communication technology that binds the employees daily is a critical factor. For an operation with low knowledge intensity, one can relax the concern for committment and can go for long term low cost employment contracts. you also get the flexibility to contract out in such cases. however where you need knowledge intensive employees for short durations and also for a specfic buisness phase, a collaborative framework of employment will become necessary . eg during mergers or acquisitions. such collaborations and utilisation of people from the partner can be an option. In short the matrix lies between talent source on one axis and knowledge intensity of other axis and the four quadrants can vary from high to low in term of knowledge intensity against the source of talen - internal to external .

So you have
Top right : High Knowledge intensity; own employees ; core functions; critical.
Bottom right: Low knowledge intensive operations, long term low skill employees which can be outsourced to
Bottom Left: external contractors/outsourced talent/low criticality; unless such outsourcing or dependence is for short duration for specefic buiness purpose or life in which case you need to move to 4th quadrant ie
Collaborative strcuture : with partners.
The axes could be y axis ; high to low on knowledge intensity
x axis; source of talent ; from internal, adjacent to low knowledge intensity to external contractors towrads left.
and above bottom left ie top left quadrant : Collaborative HR.

I will touch the Process side for these later.

Analytics of values

Analytics gives insight into relationships, interdependence between elements and its combined influence on outcomes. at least that is what i have learned in my maths classes.

low cost organisation model

Architecture principles in building often suggest to have a cost effective structure, sustainable and environment friendly and infusing warmth and positive energy to its inhabitants. Somewhere it points out that there is a link between structure and life within. Even in single cell amoeba the structure of cell is supportive of life. The soul of an organisation is reflected in its values. Values stated and reflected in each of its actions. If talent is attracted based on those values, mutual acceptance between employees will come in on its own. and will be visible through trust and open sharing of  responsibilities. This will help the need to avoid  having multiple layers, hierarchies and levels and grades. This can also help avoid the need to define and design 'compensation' and 'rewards' for owning and endorsing those values. mutual trust can replace need for having formal power levels and resultant delegations and performance gauging mechanisms. However such a value based culture cannot be built in isolation. One need to be conditioned for appreciating the value of values. one need to be conditioned to think beyond the way success and failures are defined in current business model in terms of profit and loss. I think a deeper understanding of indian vedic teachings need to be the philosophy for an unique indian business model. fortunately there is a growing realisation of late on the value of eastern cultures.