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METRICS FOR MEASURING HR

EFFECTIVENESS

Why measure HRAgenda


effectiveness

In HPCL Context
How does HR Add Value to Business
(alignment with business)
How is effectiveness of HR measured

AlignmentHR
of HR
with Business
Why measure
effectiveness
Strategy
What are our strategic
and business
objectives?
Distinctive Competence
To achieve our strategy, what are
the key things we need to do
exceptionally well in order to
achieve our competitive advantage.
Workforce Capability
What are the key capabilities that our
workforce needs to excel in order to
achieve our business strategy?

HPCL Model for alignment with business

Strategic partner

Change Agent

(Management of Strategic
Human Resources)

(Management of
Transformation
and change)

Administrative expert

Employee champion

(Management of
Organisation infrastructure)

(Management of
Employee contribution)

Day-to-day operational focus

The Dave Ulrich Model

People

Processes

Future/strategic focus

HR as Change Agent

Future/strategic focus

(Management of
Transformation
and change)

People Focus

Change Agent

Project ACE as a Change Initiative

Project ACE Achieving Continuous Excellence


( An Organizational Transformation Initiative)
A comprehensive exercise of co-creating a vision and
cascading it across all levels (based on principles of Learning
Organization propounded by Peter Senge)
Series of ACE (visioning) workshops conducted starting from
Top Management down to Regional levels.
Learning Organization workshops being conducted across all
the levels including staff (introduction to five disciplines and its
application)

Project ACE as a Change Initiative

Project ACE Achieving Continuous Excellence


( An Organizational Transformation Initiative)
Leadership Workshops
People involvement in Strategy
Involvement of front line officers witnessing the moment of
truth in the strategizing process.
Strategies formulated for Retail and LPG SBUs and HR with
the involvement of over 500 front line officers.

HR as Strategic Partner

Processes Focus

Future/strategic focus

Strategic partner
(Management of Strategic
Human Resources)

Balanced Scorecard as a Strategic Initiative


Strategic tool for translating vision into clearly
articulated strategy and cascading the same to
different SBUs and levels through scorecards.
Financial
Customer

Internal Processes
Learning and Growth

Improved Profitability

Satisfied Customer
CURRENT REALITY
Customer Centric Processes

Improved People Competencies

Competency
Mapping
and
Development as
Why
measure
HR
effectiveness
Strategic Initiative

A Strategic process to build people capabilities in


line with international benchmarks to meet future
business challenges.
Competency Frameworks developed in line with international
standards
Behavioral Competency Framework for all levels
Technical Competency Framework for all job families
Development Centers for assessing individuals against
competency profile for the position.
Trained and Certified Internal Assessors

Behavioral Competency Framework

GRADES AT HPCL

LEADERSHIP FRAME
I

Creating Customer Delight

Leading Change and Creativity

Building Collaborative Partnerships

Promoting Synergistic Teamwork

Demonstrating Business Savvy and Decisiveness

Driving Results and Excellence

Building Global and Strategic Perspective

F
E
D

INDIVIDUAL CONTRIBUTOR FRAME


C

Dynamic Customer Focus

3 Enduring Commitment
and Initiative

4
Active Learning and Agility
5

Drive for Excellence

Cooperative Teamwork

Competency Based Training

TRAINING NEED IDENTIFICATION


Individual
Development Plans
(competency gaps)

As spelt out by SBUs


in line with business
requirements

Behavioral

Technical

Concurrently address Behavioral and Technical Competencies


Junior Management

Weightage to

Middle Management

Behavioral and

Managing

Top Management

Technical Competencies

Leading

Six Sigma as a Strategic Initiative

A Strategic initiative to review the critical business


processes and initiate continual improvements to the
same basis scientific methodology.
Critical Business / Technical Processes identified for
improvements.
Six Sigma Projects were selected to address these critical
processes in Refineries / LPG Plants / Terminals.
General Electric Experts are mentors for all the projects to
monitor progress till completion.

Processes Focus

HR as Administrative Expert

Administrative expert
(Management of
Organisation infrastructure)

Day-to-day operational focus

HR as Administrative Experts - Initiatives

Leveraging Information Technology


Enterprise Resource Planning (ERP) leveraged for prompt
employee service.
Leveraging technology to provide access to employee
information through intranet.
Finger touch Kiosks at major locations to help nonmanagement employees access their personal information.

Leveraging IT for creating a Learning Organization


Experience Sharing enabled through intranet.
Knowledge database created on different portals on intranet.

HR as Employee Champion

(Management of
Employee contribution)

Day-to-day operational focus

People Focus

Employee champion

HR as Employee Champion - Initiatives


DGMs as Mentors to different regions
Role of facilitating effective performance reviews and
feedback.
Act as a management representative to communicate
management philosophy, priorities and initiatives to
employees at large.
Highlight issues of concern at regions to the
management.

360 Degree Multi-rater Feedback System


To provide officers with an all round feedback from
various individuals interacting with them , giving
insights into their managerial/leadership behavior
displayed at workplace

Project Darpan - Gauging Employee Engagement

Employee Survey to understand the dimensions of


employee engagement that drive business
outcomes
Annual Employee Survey across all locations
of the Corporation in partnership with The
Gallup Organization .

Measuring HR effectiveness

Investment in HR processes and initiatives need to


culminate into business results, and therefore the
need to measure HR effectiveness

Meets demands for external accountability


( CEO, Business Heads )

Establishes clear, significant mission and goals

Fosters strong sense of internal accountability

Metric A basic definition

A quantifiable measure (not the measurement itself)


made over time, which communicates vital
information about the quality of a process, activity,
or resource.
Can be subjective, relative or absolute

Characteristics of a good metric

What gets measured is


what gets done
Aligned with Business
Actionable and Predictive
Consistent
Simple, understandable, logical and repeatable
Unambiguously defined
Capable of tracked over time
Capable of comparison (external benchmarks)
MOST IMPORTANTLY It should drive
appropriate action

Selecting
the
RIGHT
METRIC
Why measure HR effectiveness

Selecting the right metric is the key to success


(A wrong metric can destroy value in medium term)

Common Mistakes in design and use of metric include:

Metrics for the sake of metrics (not aligned)


Too many metrics (no action)
Metrics not driving the intended action
No record of methodology
No benchmarks

Measuring
HR
effectiveness
at
HPCL
Why measure HR effectiveness

Balanced Scorecard Methodology


HR Scorecard linked to Corporate Scorecard

Developing
HR
Scorecard

The
process
Why measure HR effectiveness

Define Business Strategy (Corporate Scorecard)


Outline Companys Value Chain
(Activities companies undertake to create value to
Customers)
Identify strategically required organizational
outcomes
Identify required employee competencies and
Behaviors
contd..

Developing
HR
Scorecard

The
process
Why measure HR effectiveness

Identify strategically relevant HR Systems, policies


and initiatives.
Design HR Scorecard Measurement System
Periodically evaluate the measurement system
Periodically review the way HR matrices are
reviewed

THE HRD SCORECARD


HP HR

THE IR SCORECARD

HRD Financial Matrices (examples)

Scoreca
rd Key
F1

Strategic Objectives
Management value
add

Metrics
Value added per
management
employee

Description
Measures utilization efficiency of
employee resource

IR Financial Matrices (examples)

Scorecard
Key

Strategic Objectives

Metrics

Description

F1a

Reduce incidents of
and downtime due
to labour disputes

Incidents of labour
disputes

Measures number of labour disputes in


the period

F1b

Reduce incidents of
and downtime due
to labour disputes

Total man-days lost due


to labour disputes

Measures the total number of man-days


lost due to labour disputes

F2

Resolve IR related
legal cases

Number of IR related
legal cases resolved

Measures the total number of IR related


legal cases resolved during the period

F3

Optimize workmen
productivity

Non-management
employee productivity
index

Index measures the aggregate company


level non-management productivity as
weighted average of SBU level
productivity(throughput per nonmanagement employee)

F4

Optimize legal and


dispute settlement
cost

Overall legal and dispute


settlement cost

Measures the total cost incurred in


resolution of labour disputes through
settlement and legal cases

HRD Customer Matrices (examples)

Scorecard
Key

Strategic Objectives

Metrics

Description

C1

Competent
Management
employees

Management employee
competency levels

Measures overall improvement in


employees competency levels

C2a

Management
employee and Retired
employee delight

Management employee
satisfaction index

Employee satisfaction index measures


the satisfaction levels of management
employees

C2b

Management
employee and Retired
employee delight

Number of unresolved
complaints

Measures the number of unresolved


complaints from retired employees

C3

Reduce employee
attrition

% attrition among high


performers

Measures attrition rate among high


performers in the organization

C4

Inter-SBU
coordination

Number of exceptions
to SLAs

Measures the number of exceptions


agreed to and signed with other SBUs
and departments

C5

Acceptance and
ownership of new
initiatives

Delay in implementation
of new initiatives

Measures the implementation


effectiveness of new initiatives

IR Customer Matrices (examples)


Scorecard
Key

Strategic
Objectives

Metrics

Description

C1a

Satisfied and
flexible
workmen

Non-management
employee satisfaction
index

Metric measures the satisfaction levels of nonmanagement employees through annual survey
carried out by an external agency

C1b

Satisfied and
flexible
workmen

Instances of vacancy
filling by existing
manpower

Metric measures the number of nonmanagement vacancies that are filled up by redeploying existing manpower

C2

Constructive
employee
unions and
association

Net positive unions

Measures the net number of positive unions


(unions for which number of issues taken to
conciliation stage as percentage of
memberships is less than benchmark number)

C3

Inter SBU coordination

Number of exceptions
to SLAs

Measures the number of exceptions to SLAs


agreed and signed with SBUs and other
departments

C4

Enlightened
line managers

Pre and post training


evaluation

Measures the effectiveness of IR training progg.


through pre and post training progg. evaluation
of line managers

HRD Processes Matrices (examples)

Scorecard
Key

Strategic Objectives

Metrics

Description

P1

Organisation Design
Alignment

Delay in implementation
of changes to the
organization structure
beyond scheduled time
frame

Measures the delay in implementation


of changes to organization structure
that have been proposed to, and
accepted by Management

P2

Manpower Planning

Percentage shortfall or
excess manpower

Measures the efficiency of manpower


planning process by determining
deviation of actual number of
employees from required manpower
strength

P3

Job evaluation &


competency fit

Average competency gap

Measures the effectiveness of human


resource allocation by comparing the
competencies required for position
with competencies exhibited by
incumbents

P4

Talent attraction and


retention

Average CGPA of
applications received
during campus
recruitment

Measures the attractiveness of HPCL


to best talent

IR Processes Matrices (examples)

Scorecard
Key

Strategic
Objectives

Metrics

Description

P1a

Legal
Management

Percentage of
disputes at
conciliation stage
that go into judicial
process

Metric measures the effectiveness of preventive


legal management as percentage of cases that
got resolved prior at conciliation stage

P1b

Legal
Management

Number of
exceptions to legal
management
process

Measures the violations made to the internal


documented legal management process

P2

Statutory
compliance
management

Number of
exceptions to IR
related regulations

Measures the number of exceptions to IR related


statutory laws and norms

P3a

Proactive union
management

Measures the
number of strong
union leaders
converted from
negative to neutral
or positive bias

Measures the effectiveness of union


management as a number of strong union
leaders converted from negative bias to neutral
or positive bias (polarity to be defined by ED-IR
based on parameters like number of disputes
raised with third party, agitation and aggressive
behavior etc

HRD Learning & Growth Matrices (examples)

Scorecard
Key

Strategic Objectives

Metrics

Description

L1

Quality of HR talent

Competency score of HR
department

Measures overall score of HR


employees on identified competencies

L2

IT integration of HR
processes

Number of online HR
processes and
procedures

Measures the number of HR processes


and procedures that can be accesses by
employees online

L3

Knowledge
Management

Knowledge Management
system set-up

Milestone metric measures the setting


up of a Knowledge Management system

L4

Strategic thinking

HR strategic thinking
score

Measures average score of HR senior


management on strategic thinking

Value Creation Example - HRD

Financial

Management Value Add

Customer
Competent Management Employees

Internal/business process Competency Development Processes


Learning and growth

Quality of HR Talent
(to design appropriate competency development initiatives

Value Creation Example - IR

Reduce incidents of and downtime


due to labour disputes

Financial

Customer

Constructive employee unions and association

Internal/business process Proactive union management


Learning and growth

Strategic Thinking
(to anticipate implications of present actions and
take proactive steps)

Payoffs
of
measuring
HR
effectiveness
Why measure HR effectiveness

Show contributions of selected HR projects


Earn respect of senior management
Gain the confidence of clients
Improve support for human resources
Enhance HR processes
Identify processes for mid term corrections
Identify successful HR projects
Forecast HR project success

Finally
,
create
a
Value
System
for
HR
Why measure HR effectiveness

Values co-created and adopted by HP HR Team

Respect the individual


Honor your commitments
Work in Teams

Why measure HR effectiveness

If were not keeping


score, were just
practicing.
Vince Lombardi
20th century football coach

Thank You