Module 11

Strategically Managing the HR

Transformational

Traditional

Transactional
 Customer-oriented Perspective of
the HR Function
Customers
•Line managers
•Strategic partners
•employees

Technology
Customer Needs
•Staffing
• committed
•Performance HR Function employees
Management
•Rewards •competent
employees
•Training &
Development
 Measuring Human Resource
Effectiveness: Why Do It?

• Provides critical information for its

• Audit approach
– reviews outcomes of HR functions
• Analytic approach
– determines whether program had
intended effect
– estimates costs / benefits of program
• human resource accounting
• utility analysis
 Auditing Examples of Key Indicators and
Customer Satisfaction Measures for HR Functions
Key Indicators Customer Satisfaction Measures
Staffing
- Average days to fill position - Anticipation of personnel needs
- Ratio of acceptances to offers - Timeliness of referring qualified
- Ratio of minority / women to candidates to supervisors
representation in labor market - Skill in handling terminations
- Treatment of applicants - Adaptability to changing labor
- Per capita recruitment costs market conditions
- Average years of education
per job family
Equal Employment Opportunity
- Ratio of EEO grievances to - Resolution of EEO grievances
employee population - Daily assistance provided by HR
- Minority representation by department in implementing AA
EEO category - Aggressive recruitment to identify
- Minority turnover rate qualified women/minority applicants
 Auditing Examples of Key Indicators and
Customer Satisfaction Measures for HR Functions
Key Indicators Customer Satisfaction Measures
Compensation
- Per capita merit increases - Fairnesss of existing job evaluation
- Ratio of reclassification to total systems in assigning grades & pay
employees - Relationship between pay and
- Competitiveness in labor market performance
- Percentage of overtime hours to - Employee satisfaction with pay
straight time
- Ratio of average salary offers to
other firms in community
Benefits
- Average unemployment compen- - Promptness in handling claims
sation payment - Fairness in application of policies
- Average workers’ compensation - Communication of benefits
payment - Assistance to line managers in
- Benefit cost per payroll dollar controlling unnecessary claims
 Auditing Examples of Key Indicators and
Customer Satisfaction measures for HR Functions
Key Indicators Customer Satisfaction Measures
Training
- % of employees participating - How well programs meet needs of
per job family employees and company
- % receiving tuition refunds - Communication about available
- Training dollars per employee training opportunities
- Quality of orientation program
Employee Appraisal
and Development
- Distribution of appraisal info. - Assistance in identifying potential
- Appropriate dimensions on - Organizational development activities
appraisal forms provided by department
- Ratio of promotions to employees - Number of promotions from within
- Ratio of openings filled internally - Counseling provided to employees
to externally in career planning
 Example of Cost- Benefit
Approach for a Selection Test
Cost-Benefit Information Test Information
Current employment 4,404 Number of applicants 1,236
Number separating 618 Testing cost per applicant $10
Number selected 618 Total test cost $12,360
Average tenure 9.69 years Average test score .80 SD
Test validity .76
SD (per year) $10,413
Computation
Quantity = Average tenure x Applicants selected
= 9.69 years x 618 applicants
= 5,988 person-years
Quality = Average test score x test validity x SDy
= .80 x .76 x $10,413
= $5,331 per year
Utility = ( Quantity x quality ) - costs
= (5,988 person-year x $5,331 per year) - $12,360
= $37.9 million
Improving HR Effectiveness

• Restructuring
• Outsourcing
• Process Redesign
 The Reengineering Process
STEP 1

Identify
the
process to
be
reenginee
red
 The Reengineering Process
STEP 1

STEP 2
Identify
the - can jobs be combined?
process - can employees have more autonomy?
Understand - are all the steps needed?
to be the process
reengineer - is there redundancy?
ed - how many exceptions are there?
- are steps in proper order?
- what is the desired outcome?
 The Reengineering Process
STEP 1

STEP 2

Identify STEP 3
the process Understa
to be - develop models
nd - test models
reengineered the - choose
process Redesign
prototype
the
- integrate
process
prototype
 The Reengineering Process
STEP 1

STEP 2

Identify STEP 3
the process Understand
to be STEP 4
the process
reengineered
Redesign
the
process Implement
the
new process
 The Reengineering Process
STEP 1

STEP 2

Identify STEP 3
the process Understand
to be STEP 4
the process
reengineered
Redesign
the
process Implement
the
new process

feedback
 Using New Technologies to
Improve HR Effectiveness
 Interactive Voice Technology
 Internet
 Networks & Client-Server Architecture
 Relational Databases
 Imaging
 CD-ROM & Laser Disc Technology
 Expert Systems
 Groupware
 Software Applications for HRM
 Staffing
 applicant recruiting & tracking
 EEO & AA reports
 Developing a master employee
database
 Human Resource Planning
 work-force profile analysis
 work-force dynamics analysis
 Performance Management
 Training & Career Development
 Compensation & Benefits
 payroll
 job evaluation
 salary surveys & planning
 international compensation
 benefits management