Friday, 14 March 2008

I4CP: HR Metrics

I've just attended I4CP's webinar on HR metrics.

There was some good stuff in here. I agree with a lot of it. I agree that measurement needs to be contextualised and interpreted:

"It's not about the numbers, but the story they tell. In fact, I tell a lot of people: just because you can measure it, doesn't mean you should be. Satisfaction / engagement surveys: one of the companies we studied: they weren't really executing the strategy. The department that was blocking them had the biggest satisfaction and engagement scores. They were satisfied but not engaged in the right thing - they were engaged in the wrong strategy. So it's about the story it tells... numbers only provide you with a common language."

I agree that measurement needs to focus on impact rather than efficiency, although, as I've previously posted, I think Boudreau's analysis of efficiency, effectiveness and impact measures (also referred to by Chris Parkinson at American Express during his presentation at the CIPD's talent management conference recently), whilst being one of the best measurement models around, is still intellectually flawed.

I agree that an outside in approach (focused on the business strategy) is better than an inside out approach (focused on HR activities) although I think we tend to go too far on this. So, for example, I prefer a lot of Ulrich's earlier work on organisational capabilities (based upon a inside-approach to strategy) to his latest thinking on leadership brand, where I think he overstates the need to focus from the outside-in. I reconcile these two approaches by explaining that to create value, organisations need to focus not on activities nor just the business strategy but on human capital.

The most interesting slide in the presentation to me was this one looking at the alignment of strategy, people and process, simply because it is very similar to one I've posted on myself, which I use to explain that organisational capability is an emergent property arising from the effective alignment strategy, people and HR / management processes. But I like I4CP's build on this, comparing the time perspective of the three constituent elements.

I4CP note:

"Change is happening so fast and product lifecycle is so fast. This is where HR can have the biggest impact - I think - is on really getting people in organisation more aligned to executing strategy fast. If HR can show everything HR does is improving that alignment and speed of execution, you've got a home."

I draw additional inferences to this. To me, the main issues arising from these different time perspectives (also highlighted by Lynda Gratton in Living Strategy), emphasise that we need to treat people in a different way from the rest of the business. HR's constituents are very different to those of Finance - and this is why we can't deal with numbers the same way.