RPC HR Performance Digest
Improving HR’s Performance: It’s more than just HR–It’s about “Getting the Numbers”
It’s about improving business performance. How do we do that in HR? We improve our performance by helping our senior leaders accomplish the bigger picture objectives. How exactly do we do that? We do that by aligning what we do everyday with what matters…the bottom line in a for-profit, or key metrics if we’re a non-profit, such as fund raising.
Here is an example, using workers’ compensation, as a way to improve HR’s performance–by focusing on improving business performance:
- How many workplace accidents have you had in the past year? Get the number.
- What did it cost you? Get the number if you don’t have it.
- How many widgets did your company have to produce to = what you spent in comp cost? Get the number.
- If you’re a non-profit, how much did that loss cost you in operating dollars? Get the number.
- Create a strategic, SMART goal, such as , “Reduce workers’ compensation expense from $X to $X by December 31, 2010 (or relevant date).
- Create a project team to discuss why accidents are happening and what you can do about it.
- Create an action plan with “who is going to do what and by when” and schedule follow up meetings. Be clear about who is in charge of the team and which senior leader is the champion. Otherwise… you won’t get any traction at at all.
- Share your action plan with a senior leader champion and get support to make organizational/operational/departmental changes to drop the comp expense #, by virtue of reducing workplace accidents.
- Measure the reduction in workplace accidents. Have a process to track this data. If you don’t have a process, get one.
- Calculate the cost savings from the reduction in accidents. If you don’t know how to calculate it, get with a Finance person to help you. Get the numbers.
In summary, it’s about getting the numbers.
If you are not a “numbers person”, you might want to consider becoming one–your career is depending on it. The more you progress up the ladder, whether it’s in HR or any organization, the more you’re going to have to worry about numbers. Currently, if you’re working in a business in which it is “hard” to get accurate data, you need to first address that problem. You’re going to have a hard time showing your value in HR if you don’t have accurate data to work with in the first place. It’s like trying to reduce your weight–without currently knowing how much you weigh. You may diet and lose weight, and you sort of “feel” lighter, but how successful were you at losing the weight? The answer is–you don’t know, because you didn’t have a number to start with to measure your success.
So, HR professionals–go get the numbers!
Natalie Ivey, MBA, SPHR
Natalie Ivey is President & CEO of Results Performance Consulting, Inc. www.rpchr.com
December 2009 / January 2010
WHAT WILL THE NEW YEAR BRING–AND WHAT WILL HR BRING TO THE NEW YEAR??
For some HR professionals, the New Year will bring a new outlook on the economy and a much needed shot of energy. Most HR professionals I interact with are, quite frankly, tired. They’re tired of putting out fires with employees, (such as squelching the rumors of layoffs) having to develop and execute reductions-in-force, prepare and administer severance packages, deal with the increase in EEOC charges and workplace investigations, etc. Most HR professionals are simply tired of 2009! It has been a really tough year–but it’s a year that has taught many in the profession a lesson: HR MUST be aligned with organizational metrics and have a clear understanding of a company’s financials. Without that understanding, HR can’t show its value to senior leadership. Why? Because the initatives HR gets involved in aren’t creating a direct correlation with bottom-line. And, without correlating HR’s value to the bottom line…HR department headcount is subject to a lot more scrutiny by senior leadership during labor cost reduction conversations.
As I travel the country and teach continuing education within the HR profession, I am still amazed at the lack of focus on organizational metrics–specifically the financials. When I ask class participants this question: “how many of you know how to read your organization’s annual report, or at least read the P&L, Balance Sheet, and Statement of Cash Flow?” The “yes” responses are less than 20 percent!! Usually, the more senior professionals such as Directors or VP’s are the ones in attendance who have the financial knowledge and answer, “yes.” However, when I ask them if they’ve ever done any development with their own staff to increase their knowledge of financials, the answer is always,”well…no, actually.” What this means is that a good portion of HR professionals are operating in their roles with little knowledge of how their job impacts the bottom line. And, it also means that without the knowledge of how to read the financials–they are completely unaware that their own job may be in jeopardy due to declining revenues or shrinking margins. Lastly, it means that senior leaders in HR are not doing a good enough job of developing their own staff in order to increase departmental effectiveness.
So, what does HR need to bring into the New Year? A strong focus on financial management education. If you are a senior HR leader reading this digest, what this means is that <span style=”text-decoration: underline;”>you</span> must take the initiative to partner with your HRD/L&D and/or Finance group to develop financial educational curriculum in 2010.
After the rough year we’ve had, it just makes sense to ensure HR is aligned with the numbers-”gurus” over in Finance. In the process, HR shows a stronger commitment to supporting the organization through cost reduction measures, gaining efficiencies, driving profitability, etc.
In summary, 2009 taught HR how quickly–and how hard–companies can fall. And, it taught HR professionals a lesson about personal performance and the need to align HR initiatives with organizational goals and measure HR’s impact on the bottom line.
Time will tell, but this author believes 2010 is going to be the Year of HR. We’re going to increase our financial knowledge, align what we’re doing with the big picture, measure and quantify our effectiveness through the use of metrics, and validate that HR is a key player.
HAPPY NEW YEAR, HR!!!
Natalie Ivey, MBA, SPHR
HRD Consultant/Principal
rpchr.com
