Actually, you’ll already find these perspectives in a couple of places, including this podcast and this webinar, but I’ve probably never posted on them in detail before.
The perspectives rest on the value triangle, as a lot of my thinking and consulting does. As you’ll probably know, at least if you’re a regular reader of this blog, this suggests HR can create value in three ways: value for money or efficiency, added value or effectiveness, and created value – new value.
At the base of the triangle, HR provides value for money by improving the quality of HR processes (reducing cost or time taken, or improving customer satisfaction). Technology has a key role in providing opportunities for this level of value. As an example, a performance management system will allow you to enter and capture performance reviews. Doing this doesn’t change the quality of the reviews but it does mean they can be compared with those of other staff, and with reviews from different time periods, more easily. This can therefore improve the quality of calibration.
You can identify opportunities for increasing value through money from technology by thinking about your HR processes and how technology can best support them, or by looking at new technologies, and thinking about how these can be incorporated within your HR architecture.
The next level is adding value. This is about helping the business achieve its strategies by supporting these requirements through people management activities, again often supported by technology. For example, a business may want to enter into a new market. A performance management system may be able to enable this if it can help identify who are the high performers in the organisation who also have certain capabilities linked to the new requirement. The value available from technology has been increasingly rapidly at this area. Integrated systems and tools being developed in new areas are providing HR teams with new opportunities that can provide significant amounts of extra (added) value.
You can identify opportunities for adding value from technology by focusing on the needs of your organisation and thinking about what functionality would enable you to meet particular objectives. Would new systems allow you or your talent managers to make better decisions or take more appropriate actions?
In creating value, value comes from the organisation’s employees, rather than how these people can be managed to meet existing business needs. Technology can create value by pointing to particular potentially valuable capabilities, but it is more likely to have this impact by helping employees to increase the value they can provide.
This is why I’m so interested in social and mobile technologies – they get beyond HR’s system of record and the line manager focused talent management system to actually increase employee contribution. So for example, a social performance management system can help employees get feedback from the people they work with, to share the reviews with these people and to participate in a review of a whole team. It helps them take ownership of their own review and hence is likely to have more impact on their performance. Of course, social technologies aren’t the only way of doing this – for example, I was involved in a self rostering system for train operating company staff a good ten year ago which had much of the same effect.
You can identify opportunities for creating value from technology by focusing on the people in the organisation – their engagement, capabilities and other aspects of their human and social capital – and thinking about how these capabilities can be extended.
This is why I’ve been commenting on the need to focus on people and behaviours, not on technologies or tools.
Of course, it’s also possible to see technology creating value through itself, rather than by how it leverages human capital. This is what was behind my comment on the jam – that web 1.0 often did create new value through new business models and commercial opportunities, but I don’t think there is a similar opportunity for web 2.0. Social applications lead to value creation by leveraging human – and more importantly, social – capital which is what then creates value. It doesn’t create this value by itself.
So – what’s the overall impact of this analysis? Well, the main thing is to emphasise that value does occur at three levels, and each of these types of value are useful to have. But secondly, note that the source of value changes at each level. To maximise the value that an organisation achieves, it needs to be looking at activities, business impacts and human / social capital outcomes – and how each of these three levels in the organisation’s value chain can be supported by technology most effectively.
However, this post is written with an eye on HRevolution, and there is an evolution from the base to the apex of the triangle. Fully evolved HR teams will want to ensure that focus on making direct improvements to the contributions of their employees through the provision and support for social, mobile and other tools, not just that they themselves have adequate HR MIS and in addition to ensuring that their business colleagues the information they need to support decision making.
This is Jon Ingham's entry into the 2011 Nobscot HR Evolution Scholarship Competition. Nobscot Corporation is an HR technology company specializing in key areas of employee retention including exit interviews, onboarding surveys, and corporate mentoring programs.
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