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Making Metrics Count

Metrics are important, but HR should focus on measurements that can impact an organization's strategy and results, said the closing keynote speaker at the HR Technology Conference. Cool technology tools for HR and streamlining recognition were also part of the closing-day activities.

Friday, October 12, 2007
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John Boudreau, a professor at the Center for Effective Organizations at the University of Southern California's Marshall School of Business, had some sage advice for the overflow crowd that gathered to hear him deliver the closing keynote at this year's HR Technology Conference: "Not everything that counts can be counted, and not everything that can be counted, counts."

The HR profession has evolved considerably during the last 25 years, thanks in part to measurements developed by pioneers like Jac Fitz-Enz, and is considerably more respected by business leaders than it used to be, Boudreau said.

Nevertheless, HR will not achieve its full potential until it can measure its performance in ways that are much more meaningful to its clients -- their organizations' business leaders.

"Just because we can measure it doesn't mean we should," he said, noting that in addition to HR leaders being too focused on mundane measures such as headcount, many CEOs are, too.

"I know of many CEOs who complain that two different HR systems will often deliver different headcount numbers. The question HR should ask the CEO is, 'Would it really make a difference to the organization if those numbers were the same?'"

The problem isn't a lack of measurement, but rather that HR tries to measure too many things that are of limited or no importance to an organizations' strategy, said Boudreau, the co-author of a new book entitled Beyond HR: The New Science of Human Capital.

Boudreau compared HR to two functions that are considered much more strategic: finance and accounting. He noted that those professions are respected because they use measurements that are credible, rigorous and widely accepted.

He added that it's easier for CEOs to appreciate the value of finance, for example, because it focuses on outside capital that the company may be able to acquire, rather than on money the organization already has.

Similarly, HR must expand its purview to talent outside the organization -- where to find the best of it and how to get it -- instead of just managing the talent inside the organization.

As it stands now, he said, a wall exists between what HR currently measures and what the leading indicators are that will actually have an impact on the organization.

"It's a matter of elegance vs. relevance -- we have all these elegant new tools to measure things, but are they relevant to what our business leaders are wrestling with?" asked Boudreau.

He advised HR to change its mind-set from "justification to education."

"We in HR are obsessed with proving that what we do adds value. But I want to propose a higher bar: Do your leaders actually get better when they use your measurement systems? Do they get better at managing people?

"HR metrics should be a force for change to make their organizations effective," he said.

But in order to have that power, those metrics must be based on logic that's accepted and understood by the business leaders who must use that data, he added. "Leaders absolutely believe the competition for talent is critical, but they don't have credible measures for talent."

Boudreau concluded his talk by urging the attendees to diagnose their own HR measures to see whether they:

* Connect to ultimate organization success.

* Identify needed human capital strategy changes in an agile market.

* Reflect your unique competitive situation.

* Identify talent with the greatest potential for strategic impact?

* Support decisions about HR programs before they are implemented -- not just after they are operational.

* Pinpoint HR programs that should be discontinued.

* Identify how talent creates value within the organization in a way that is understandable and motivating to all employees.

New Technology Tools

The value of wikis, blogs, RSS and social networking were the foundation of a session entitled "Great New Technology Just for You!" presented by Jason Averbook and Jason Corsello, CEO and vice president, respectively, of the consultancy Knowledge Infusion.

HR leaders need to know about such emerging tools -- part of what is often called Web 2.0 -- and think about how they can be used to advance an organization's business strategy so they "won't get sacked from behind by not being aware of this technology," said Averbook, using a football analogy.

All of those concepts "mean big, big change for HR," but he noted, "it's not the technology. The technology is the means. The end is we are going to be much better companies."

The key concepts of Web 2.0, said Corsello, are individual participation in the processes, creating or maintaining relationships, harnessing collective intelligence, immediate action or information, and user programmability.

It's especially important when recruiting -- and retaining -- the Millennial generation, Averbook said, because they are "digital natives." There was never a time when that generation didn't know about Google or what dot-com meant, he said. "They were born into the world where everything was already digital."

For others in the workforce, termed "digital immigrants" by Averbook, HR needs to prepare them for the digital transformation -- some generations needing more preparedness than others.

"The workforce today isn't on one page," he said. "They are on a whole lot of pages."

And in another way, those pages will multiply because the digital world today deals with "folksonomies," Averbook said.

In the past, there would be a taxonomy to provide navigation through an application, but today it's more "folksonomies," which he defines as "the folks actually design how [they] use the applications."

Thus, he and Corsello noted, Facebook is being used by some people for recruiting or for searching for knowledge, while wikis -- a collaboration tool that can be used internally or externally and allows individual users to update or edit information -- can be used for project management or for knowledge management; to head off the potential of a "brain drain" because of retirements in the workforce.

Blogs, which are Web logs that can be used individually or as a group, and which often permit readers to comment on the postings, are more becoming more common for recruiting. Some companies also use them to maintain the culture of the organization.

While controls or standards need to be established should a company open up a blog for employees -- one HR leader reads every post before it goes live to accept or reject it -- Averbook warned that HR would need to give up some control if the initiative is to succeed.

Social networking, either internal systems or external ones such as Facebook or LinkedIn, can also be used for recruiting, career mobility, onboarding or facilitating a search for knowledge.

RSS, which stands for Really Simple Syndication, is another tool that can be used to deliver HR content as well as recruiting. Individuals can subscribe to a "feed" from many websites, and the feeds are automatically delivered to their "reader" of choice, an tool offered for free by sites such as Yahoo! and Google.

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To be effective, HR leaders need to take their current e-HR strategy "and break it," Averbook said. They need to blend the new technologies with the older applications, such as employee self-service.

To make it work, though, it needs to provide value to the employee. "If you show that you are using it and show value, people will keep going back to that page and contributing," he said.

Streamlining Recognition

Before New York-based ACNielsen revamped its U.S. recognition program, the system was haphazard and siloed at best; ineffective and confusing at worst.

"We had different awards given for similar work, so people across our company were getting mixed messages," said Jay Schedler, vice president of human resources for the global information and media company, at his session entitled "How ACNielsen Rates Outsourced Rewards."

The program prior to the 2004 transformation created confusion and isolated groups of employees.

"For the same job well done, one associate might get a trip; the other might get a 'thank you.' These programs were all over the place," Schedler said.

Worse still, the majority of Nielsen employees weren't even being rewarded at all because their functions in the organization somehow never fell into the categories deemed worthy of recognition year in and year out.

With the help of Globoforce, based in Dublin, Ireland, the company streamlined and centralized the way it says "thank you." Through an entirely new program, Recognition@Nielsen, a much more congruent process now reaches 5,000 workers in the United States and will soon be rolled out to the organization's more than 43,000 employees in more than 100 countries.

Now, inconsistencies and lack of participation have gone from less than 2,700 awards granted annually to about 9,000 granted per year.

Through an automated "Nomination Wizard," all managers have at their fingertips the same criteria to follow for accomplishments in five different categories: innovation/change, collaboration/teamwork, client focus/business partner, expertise/executive excellence, and mentoring and development.

Thirty percent of all awards are now cross-functional, as in marketing thanking IT or HR thanking customer service.

"I truly believe in associate engagement and rational recognition," Schedler said. "We wanted to build a culture of recognition, so at the end of the day, it would be commonplace to turn to someone who had carried out a job well done and say 'thank you.' This move is truly bringing us together into one program design, with the right alignment between organization success and behaviors rewarded. There's also now consistency and equity across the organization."

Moreover, rewards are immediate and instantaneous, in essence a mouse click away, with consistent approval and reporting guidelines for managers.

Eric Mosley, CEO of Globoforce, stressed that alignment under one strategy is the key to reaching everyone and that only a handful of organizations, including Dow Chemical and General Electric, are really taking that on.

"You need to revamp all existing engagement and recognition programs under one umbrella strategy," Mosley said. "Use best-practice program design. Consolidate, communicate and deliver via a single, companywide solution.

"If a recognition program designed to affect the culture of an organization doesn't touch everyone in the culture, then it's not a culture by definition, is it?"

Read the report from the opening day of the HR Technology Conference.

Read the report from the second day of the HR Technology Conference.

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