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Perspective: Human Capital Metrics that “Matter”

By: Tanya Harris, SHRM-SCP, PMP

How often have you sat in a “strategic planning” session and have heard the phrase, “Measure what is measurable and make measurable what is not so?

Many HR professionals and business leaders have heard and even reference the quote penned by Galileo. The truth is that if your organization is expecting to win in terms of the triple bottom line (people, profits, planet) and to have a sustainable competitive advantage, your leaders must find a way to measure what counts. Simply, Human Capital Management involves the quantification of the economic value of people in both your financial accounting and management terms.

From a strategic and tactical perspective, your organization’s Human Capital Management strategy should focus on connecting people-management policies to the unique way your organization creates value. By doing so, it becomes a key to strategy creation and execution. The complexity of accurately measuring value has led to a proliferation of performance metrics, often leading to confusion, duplication, and HRIS reporting nightmare.  Those responsible for determining goals, objectives, and metrics, should participate in a calibration or consensus-building process that identifies key performance goals focusing on outcomes that enhance value. Once the primary targets have been defined, metrics that measure these goals can be established.

Organizational and HR Strategy

Strategy drives all allocation of resources, people, processes, and technology acquisition or usage; as well, should determine what projects your organization select and execute to accomplish its strategic objectives.  Your organizations’ Human Capital (people system) is the most vital asset that your organization have or can acquire to deliver successful strategy execution.

What does this mean for your human resource partners? Unfortunately, despite the increased involvement in executing and developing organizational strategy, the perception of the HR partner as administrative still exist. This perception will continue until human resources business partners (HRBP) steadily focus on initiatives that place them in full strategic partnership with other key decision makers within the business. Therefore, by creating an HR strategy that parallels and facilitates the implementation of the organizational strategy, HR can assure its position as one of the drivers of strategy by using measures that matter to support key performance drivers and drivers of financial outcomes.

What is an HR strategy and how is it formulated?

An HR strategy refers to the processes, decisions, and choices organizations make regarding how they manage their people system. HR strategies are often formulated to align with the organization’s strategy, by creating the capacity in the workforce (human capital) and how it is organized that is necessary to achieve the organization’s strategic objectives. An article from the Society of Human Resource Management (SHRM), provides a checklist to help HR professionals measure their behavior as an HR strategic partner in the formulation of strategy. A few questions to consider are:

How do you engage in strategic business activities?

Do you:

  • Help identify or design strategy options
  • Help plan implementation of the strategy
  • Help identify new business opportunities
  • Assess the organization’s readiness to implement strategies
  • Help design the organizational structure to implement a strategy
  • Assess possible merger, acquisition or divestiture strategies
  • Work with the corporate board on business strategy

Research findings by Cascio & Boudreau (2014) suggest that an HR strategy requires a focus on planned major changes in the organization and on critical issues such as the following:

  • What are the HR implications of the proposed organizational strategies?
  • What are the possible external constraints and requirements?
  • What are the implications for management practices, management development, and management succession?
  • What can be done in the short term to prepare for longer-term needs?

If as an HR leader, you and your team are not engaged in the activities indicated, it may be time to re-evaluate your value proposition to the organization.

The HR Scorecard—The Link Between Business Strategy and HR Practices

“What gets measured gets managed.”

According to the Balanced Scorecard Institute,

The Balanced Scorecard (BSC) was originally developed by Dr. Robert Kaplan of Harvard University and Dr. David Norton as a framework for measuring organizational performance using a more BALANCED set of performance measures.”

The balanced business scorecard links measures in four perspectives: (1) Financial or Stewardship, (2), Customer & Stakeholder, (3) Internal Process, (4) Organizational Capacity or “Learning & Growth.” Therefore, an HR scorecard approach may be a significant task for many HR organizations because the people system is relegated to “Organizational Capacity” or “Learning and Growth” when looking at the four perspectives of the balanced scorecard, at least that’s the position of many HR leaders.

To overcome this challenge, the HR executive must determine the performance drivers that when implemented and executed successfully develop effective and efficient work processes. Then your HR leader must decide what steps and deliverables should be performed to create value. For example, you may have to include changing reporting relationships, clarifying employee roles, initiating new compensation and reward systems or create performance evaluations and career planning aligned with the direction of the business. Cascio & Boudreau (2014) proposes that the “HR strategy flow directly and naturally from the strategy (“it [strategy] ends up meaning everything – the people you hire, who gets promoted, what you discuss in meetings.”).

Therefore, they argue that the HR strategy requires an emphasis on critical perspectives such as the following:

  • What are the HR implications of the proposed organizational strategies?
  • What are the possible external constraints and requirements?
  • What are the implications for management practices, management development, and management succession?
  • What can be done in the short term to prepare for longer-term needs?


As an HR professional, you must know your organization’s business thoroughly and have strong business acumen in terms of financial, environmental, economic, and technological forces impacting it. The HR function must be assessed on its deliverables, and how those deliverables correlate to outcomes of value to the strategy. An HR scorecard aligned with the organization’s strategy will not only bring HR “to the table,” but allow collaboration with decision makers, participate in the management team, and share accountability for organizational results provides the foundation of a legitimate framework for strategic partnerships.


Cascio, W., & Boudreau, J. (2014). HR strategy: Optimizing risks, optimizing rewards. Journal of Organizational Effectiveness, 1(1), 77-97


group of people sitting in chairs

Using CliftonStrengths to Bridge Generational Gaps at Work


Everybody loves working for Gary.

He’s been a manager at the same manufacturing company for 20 years. He knows every detail about his employees’ lives — from their favorite teams to their kids’ names.

He delivers honest, unflinching feedback that makes people carefully examine their performance. And he makes people laugh — often in the same conversation.

Gary has coached and mentored every person on his team for decades. Without a doubt, many of his coworkers have stayed at the company because they love having Gary as their leader.

This year Gary decided to retire, and the site leadership thinks they have the perfect person to fill his role: Shanna. She is a conscientious, methodical and an extremely reliable supervisor. Shanna’s team has been the plant’s top performers since she arrived five years ago, and she has developed many cost-saving and safety-improving initiatives. Site leaders are eager to promote Shanna to expand her leadership skills and keep her engaged.

There’s just one problem: Shanna is nothing like Gary. They have completely different leadership styles, personalities and — although nobody says it out loud — Shanna is 30 years younger than Gary. What’s going to happen when millennial Shanna gets thrown in with a team of baby boomer “lifers” with more experience and longer tenures? Honestly, even Gary was secretly skeptical.

Getting Honest About New Generations in Management

Gary’s and Shanna’s situation is increasingly common in workplaces today as the baby boomer generation retires and Gen Xers and millennials take on more supervisory and leadership roles. Traditional organizations that worked desperately to attract millennials are now having to navigate an intergenerational workplace.

Millennials make up 38% of the workforce, and that percentage is only increasing. But as millennials enter management roles, only 39% strongly agree that they know the strengths of the people they work with regularly, which is lower than all other generations.

A major component of managing changes in leadership is easing individuals’ anxieties and worries. Strengths-based education and dialogue are valuable tools for doing this:

  • CliftonStrengths focuses on future potential. When people think about their strengths, they focus less on how things could go wrong and more on how they can make things go right.
  • CliftonStrengths is universal. All people — regardless of generation — have talents that contribute to their team’s success. A strengths-based approach shifts the conversation from “us vs. them” differences, stereotypes and biases.
  • CliftonStrengths is personal. In times of change, people want to know that somebody is paying attention to them personally. Having strengths-based conversations lets each person know that they are seen and respected as an individual and a contributor.
  • Strengths-based conversations focus on the positive. Having conversations about CliftonStrengths help individuals think more about why differences are good rather than bad.

Not Bad, Just Different Strengths

When Gary’s team filed into the conference room, the skepticism was obvious. Here were Gary, Shanna and Joan from site leadership who were going to tell everybody to “get along and give Shanna a chance.”

Joan began by talking about Gary’s top CliftonStrengths themes: Woo, Significance,Restorative, Relator and Maximizer. She asked the team to talk about how Gary used his strengths in his management role. Everyone shared what made Gary so beloved and irreplaceable. It was clear that this recognition meant a lot to Gary.

Next, Joan presented Gary’s bottom CliftonStrengths themes: Achiever, Adaptability,Arranger, Command and Competition. She asked everyone to talk about Gary’s bottom themes. With a lot of good-natured laughs, most of the team agreed that these areas of lesser talent were “no big deal” because Gary was good at so much else.

Finally, Joan brought up Shanna’s top CliftonStrengths themes: Consistency, Relator,Discipline, Achiever and Restorative. Joan asked Shanna in what areas she used her strengths as a manager. To everyone’s surprise, Shanna had two of the same top strengths as Gary — they just showed up a little differently.

One team member mentioned that he had the same strengths as Shanna. Another said that she had some of Gary’s other strengths and could help out if Shanna needed it. Soon people were sharing their strengths and letting Shanna know how they worked best.

By the end of the meeting, the team was buzzing with anticipation. The question on everyone’s mind had shifted from, “What does Shanna lack?” to “What is Shanna amazing at, and how can we best work with her?”

The facts of the situation had not changed: Shanna wasn’t Gary. She would never be Gary. But Shanna had unique talents too. The team didn’t need another Gary to survive. In fact, Shanna might be just the person the team needed to solve some of its most intractable problems.

Joan noticed by the end of the meeting that Gary was beaming.

“I’m just so glad to see that the team I built is going to do just fine without me,” said Gary afterward. “Shanna is going to be great.”

Gallup can help you bring the power of CliftonStrengths to your organization:

Nate Dvorak is a Researcher, Predictive Analytics, at Gallup.

Ryan Pendell is a writer at Gallup.



Training & OD: Separated at Birth?

By: Allison Rossett

I PUBLISHED THIS ARTICLE IN TRAINING magazine 20 years ago. But wait. Stop. Before you pass it over as old news, consider the title and topic. Consider the global move towards talent management. While my experience today reflects siblings who are not at peace, training and organizational development do sometimes work together, though not always with grace and enthusiasm. There is more to be done to assure alignment and results.

Sandy Quesada, who appears early in the original article, thinks the relationship has grown more positive. Back then she was at Amoco. Now she is Vice President, Organization Effectiveness, Leadership and Development (OELD) at Amtrak. Sandy put it this way:

Today, there is full understanding that all of the human capital specialty areas (talent acquisition, compensation, organizational development/effectiveness, benefits, training, and so on) must be integrated and aligned. Amtrak’s OELD department has incorporated key organization development and effectiveness specialty areas to ensure employee quality (pre‐hire and post training assessments, risk management), business needs/requirements (workforce planning/analysis), talent management (performance management, succession planning development, professional, technical, and leadership training), and successful implementation (change and project management methods). Businesses are now understanding that the attraction, development, and retention of high‐performing talent results in high business success.

For all their similarity of interests, training and OD are like feuding siblings who don’t speak. It’s time they started. On an airplane somewhere between Denver and San Diego, an executive mused about why his training people and his organization development people couldn’t seem to work together. He thought he was encouraging collaboration, but what he saw instead was foot‐dragging.

“Is it something about our organization?” he wondered. “Is it something I’m doing? Is it the individuals involved? Or is this typical?” His questions forced me to admit that I think a gulf indeed exists between training and organization development (OD), at least more typically than not.

I first noticed the chasm more than a decade ago. During a consulting project at a manufacturing company, the training staff complained at length about a manager they considered unreasonable. Without exception, they attributed her faults to her background in OD.

Not long after, I suggested to a group of colleagues that we all attend an American Society for Training and Development (ASTD) luncheon presentation on the topic of organization development. Several of my training associates chose to pass, observing that OD wasn’t particularly relevant to training.

Yet another example presented itself about five years ago. I was teaching a class on needs assessment for some training professionals in a computer company. One of the messages was that the data one gathers in assessing a performance problem will often point to solutions other than training—solutions like team‐building, culture change, strategy alignment, or feedback systems. One gentleman objected, arguing pretty much as follows: “I have a problem with this because we don’t know about all those approaches. We aren’t the people who handle any of that. We don’t work with them. They aren’t even located anywhere near us.” There were nods all around. In a room with about 30 managers, nobody disagreed.

Such has been my experience of the relationship between the training world and the OD world. So the phone call from Sandy Quesada not long ago came as a surprise. Quesada was then a training manager at Amoco Corp. in Houston. She remembered that I’d been tracking the peculiarities between training and organization development and wanted to know if I’d play a role in getting Amoco’s training and OD units to work together more closely. (Didn’t I think that their shared commitment to analysis might be a good place to start?) Within the month, someone at another company, this time in financial services, called to chat about a similar initiative.

Suddenly people are interested in collaboration between training and organization development. Why now? Maybe it’s the quality movement with its belief in cross‐functionality. Maybe there’s growing recognition that what counts is results and that business results depend upon alignment between what people are taught and what organizations actually practice and applaud. Maybe it’s a newfound inclination to use systematic assessments to define solutions to performance problems. Maybe it’s renewed customer focus. Maybe “performance technology” is finally shifting from idea to reality. Or maybe it’s the collective impact of years of wasted opportunities. Whatever the causes, there is growing enthusiasm for aligning OD and training.

How might we go about that?


Just what is organization development? Plenty of definitions can be found among practitioners and in the literature. (Lee Bolman and Terrence Deal’s Reframing Organizationsand Michael Harrison’s Diagnosing Organizations are two favorite sources.) But the only way to achieve much agreement on a single definition is to sketch very broadly and, consequently, not very usefully: OD involves attention to diagnosis, strategy, roles, systems, processes, and measurements that enable organizations and people to achieve their goals.

A more useful question is: What do OD professionals do? Here we can draw a more robust picture. Some create high‐commitment work teams, an effort that often involves rethinking leadership and power relationships. Others participate in projects that transform organizational structures, beliefs, values, cultures, and systems. OD people use a wide array of interventions, including leadership development, team‐building, organizational design, culture change, strategic planning, facilitation of meetings and groups, conflict resolution, enhanced participation programs, and performance management.

What, then, is training? Webster’s defines it this way: “ … to make a person or animal efficient in some activity by instruction and repeated practice ….” Somehow that fails to capture the richness of the field I know and love.

So what do trainers do? Most analyze needs. Some build training courses. Others deliver courses. Some coordinate people and facilities. Many create instructor‐led programs; some create self‐study programs in print and technology‐based formats. Trainers conduct evaluations, create job aids and electronic performance support systems, build multimedia products, serve as performance consultants, select and coordinate training vendors, coach employees in the workplace, establish on‐the‐job development programs, and more.


Trouble is, every time I assign an activity to training or to organization development, I can think of an example that contradicts the classification—a training manager whose life is devoted to team‐building or an OD person who is a skilled course developer or instructor. In many ways, training and OD professionals are siblings:

Both traffic in change. Training and OD practitioners agree that they have responsibility for growing their people and organizations, for playing significant roles in transformation. Amoco has now established an entity called the Organizational Capability Group (OCG), charged with coordinating efforts to bring about corporate change. Training and organization development are but two of many specialized units formally linked to enhance initiatives aimed at performance improvement. Says Katie Smith, practice area leader for instructional systems development (ISD) at Amoco: “When it first happened, I didn’t have a clue about how it could work. Since OCG, many of our OD consultants are now in long‐term productive relationships with a single client, and they are right there and positioned to leverage training and the other OCG service units.”

Both are driven by clients’ needs for improved performance. Whether the request is for a course on Lotus Notes or a curriculum to update the skills of auditors or assistance with strategic planning, training and OD professionals perceive themselves as responding to and serving their customers’ articulated requirements.

Both acknowledge responsibility for customer education and business partnership. While being responsive to the needs that customers express, most trainers and OD people agree to some responsibility for developing the customer’s understanding of performance improvement and, therefore, the accuracy of customers’ perceptions of their own needs. In other words, professionals in both fields believe that the customer is not always right. More, they believe that ethical practice often forbids giving customers exactly what they ask for. Instead, the professional is supposed to probe and study the nature of the performance problem and sometimes to disagree with the customer’s proposed solution. (“Yes, I know you want a team‐building course, but the problem here seems to be fuzzy goals, not poor teamwork.”) As Jeff Lickson of The Consortium, a Houston consulting firm, puts it, both trainers and OD specialists are supposed to “Just say whoa” to hasty requests.

Both are committed to assessment and measurement. OD and training professionals espouse allegiance to searching analyses, continuous measurement, and basing their recommendations on solid data. Most trainers and OD people would hesitate to admit that they based an intervention on a hunch, or on a personal preference (for multimedia or visioning or whatever), or because the boss likes it. Practitioners in both groups take pride in diagnosis. There are, of course, cases that demonstrate that this is sometimes more a goal than a description of actual practice.

Both are committed to systematic approaches. Embedded in the literature and customs of both groups is a demand that practitioners go about their business systematically instead of “winging it.” They are supposed to use defined processes and orderly approaches. They should have clearly articulated goals. Their activity should be data‐driven.

In addition, another mantra is enjoying rekindled allegiance—systems thinking. The systems paradigm commits the practitioner to analyzing causes, using these root causes to define strategies, and establishing cross‐functional and wholistic approaches to improve performance. In the training world, systems thinking has roots in classic books and teachings by people like Robert Mager and Joe Harless. Today, readers in both the training and OD camps are embracing works such as Peter Senge’s The Fifth Discipline: The Art and Practice of the Learning Organization and Geary Rummler’s Improving Performance: How to Manage the White Space on the Organization Chart.


Though there are many similarities between them, OD and training professionals tend to be keenly aware of their differences. The distinctions that follow are generalizations, valuable for the discussion they encourage, not for their application to any one setting or person:

Focus of Attention. Historically, trainers have prided themselves on what they can do for individuals, while OD specialists have looked more toward the entire organization. More recently, members of both groups have been talking about the need to expand their views to encompass the work, the worker, and the workplace. Though alliterative and appealing, this enlargement of perspective is far from a done deal and is complicated by the emerging importance of teams. Who serves teams? While the obvious answer is that we all do, teams present opportunities for both collaboration and conflict between trainers and ODers.

Nature of the Customer. There is a perception that the customers associated with organization development tend to reside at higher levels in the organization. In a mixed group of training and OD professionals, one OD specialist pointed to what she saw as a difference between them: “We work with the executives, and I don’t think you do.” While the number of exceptions to this statement is probably growing, the trainers in the room didn’t disagree. This perception doesn’t encourage trust, according to Cora Pendergast, a San Diego consultant with master’s degrees in both educational technology and organization development. She notes that trainers are sometimes reticent with OD people, who tend to earn more money than trainers and whose role is to assess the organization and share information with an executive.

Perception of Role and Power. Another perception is that OD professionals are more typically found in strategic roles while trainers labor in tactical arenas. When pressed on this, both sides do some breast‐beating, with trainers acknowledging the need to be more strategic and OD people admiring the trainers’ tangible tactical successes and the customer appreciation that comes from them.

An incident during a class on how to conduct a needs assessment illustrated how the differences in perspectives can play out. The group was working on a case in which an executive sought help with what was initially described as “messed‐up performance appraisals.” We talked for 15 minutes or so about diagnostic strategies to ferret out the nature of the problems with the appraisals, and how to determine a good solution. We were, I thought, appropriately skeptical about training as the sole solution to this appraisal problem. But then an OD specialist in the class challenged our complacency: “I think we’re jumping into fixing the appraisals too quickly. Before we look at randomly pulled appraisals and model appraisals, and before we interview supervisors and so on, shouldn’t we be talking to management about whether the organization ought to reconsider its approaches to hierarchy, appraisal and performance review? You’re assuming the leadership knows what it’s doing with its performance management strategy.” And we were. Few trainers are naturally inclined to challenge the basic assumptions underlying organizational practices, to push hard at the wisdom of a request, or to provide leadership in discussions of strategy and alignment. OD people are more likely to describe that as their role.

Where we Live. At Amoco and elsewhere, most organization development consultants are entrenched in long‐term relationships with clients, while training professionals tend to be peripatetic, engaging in more and shorter interventions for several corporate units. One effect of this is that trainers may spend more of their time on project management and documentation, since unfamiliar clients are more likely to demand a formal rationale for any intervention and to insist on seeing some concrete evidence of success. The positive side is that these demands encourage the kind of analysis and measurement that trainers say they want to do anyway.

Areas of Comfort. Suppose a needs assessment reveals that the main cause of a department’s performance problem is that its manager is inconsistent and capricious. How comfortable are you about going where that data wants to take you? If you’re a trainer, the answer probably is, not very. This is a rather sweeping generalization, but more OD professionals than trainers are at ease in the realm of conflict, climate, and feelings.

Computer‐training manager Dawn Hall of Hunter Industries in San Marcos, CA, is forthright about it. “I didn’t know what organization developers did,” she says, “so I couldn’t figure out how to coordinate with them. Now I’m getting them involved in conflict resolution and team facilitation. They’re better at it than I am.” Consultant Pendergast agrees, noting that OD specialists “take more interest in personal change and attitude, while trainers tend to focus more between the ears, more on skills acquisition.”

Event vs. Process Orientation. While both training and OD professionals get tagged with reputations for analysis paralysis, OD people suffer much more from that image. Valid or not, the perception is that ODers love process and resist closure. Trainers, on the other hand, get credit for consummating their projects. But here’s the rub: These trainers are then charged with being satisfied with educational events instead of pursuing the more elusive but higher‐value systems fixes.


The executive on the airplane isn’t the only leader interested in improving the relationship between training and organization development. Now, finally, some companies are moving to blur conventional distinctions between the two. Like Amoco, they see it as a strategy for performance improvement.

Andersen Consulting Education. This St. Charles, IL–based group has received national awards for its commitment to training. But where once Andersen Consulting hired primarily instructional designers and technologists, the company now makes sure to select some people with formal training and experience in organizational design and strategic planning. It’s a business decision, says Larry Silvey, a partner and managing director at Andersen; the firm isn’t doing education for education’s sake. The purposes are change, performance improvement, and business outcomes. For that, Andersen needs a bigger and more cross‐functional toolkit.

AT&T Universal Card Service. Linda Swanson, vice president of human resources at this 1992 Baldrige Award–winning company, says her unit is shifting to a more consultative role, where OD people, human resources people, and trainers perceive themselves first and foremost as business partners to each other and their customers. Bob O’Neal, director of training at Jacksonville, FL–based UCS, puts it like this: “In the past, training would do performance analyses and come up with training and non‐training solutions. Then we’d beg to put solution systems in place. The new organization formalizes all this.”

The new collaborative goals are reinforced by the measurements the HR unit now uses to gauge its success. Instead of counting bodies in classes or the number of team‐facilitation gigs it runs, the new organization will be judged by its ability to contribute to business results. O’Neal is laboring to link services to real problems in the organization and then to measure the improvements that occur.

The United States Coast Guard. The Coast Guard has been moving in this direction for several years, as indicated by the “Training Division’s” name change to the Training and Performance Improvement Division. According to Lt. Cmdr. Terry Bickham, commanding officer of the Pacific Area Training Team, this is much more than a change in the letterhead. In July 1994, the Coast Guard commandant issued the equivalent of an executive order (COMDTINST 1500.23) articulating a new philosophy of training, education, and development. The document recognizes the limitations of training without root‐cause analysis and presses the organization toward systemic solutions. An attachment to the actual Coast Guard document demonstrates a much broader philosophy of performance, referring to a wide array of “job performance influences,” like job aids, achievable criteria, policy, feedback, worthy tasks, confidence, strong leadership, timely training, coaching and more. The order ensures that trainers and OD specialists will cooperate in the effort, no matter their place in the organizational hierarchy.

Bickham cites the topic of leadership as a recent success. Historically, the Coast Guard offered formal leadership training in several locations and formats, each associated with the rank or enlistment status of trainees. Henceforth, all offerings, including those provided to midlevel enlisted people, will occur at the Coast Guard Academy in New London, CT. The idea of bringing together many levels of Coast Guard people at the academy represents a significant cultural change, says Bickham. “It says very strong things about the importance of leadership in our organization, top to bottom. It was the right thing to do, and it wouldn’t have happened without the big‐picture collaboration of trainers and organizational developers.”


The relationship between training and organization development may be evolving, but it’s certainly not happening everywhere. When pressed to describe the connection between training and OD in his company, a training executive at a large technology firm dropped his voice and admitted to managing it so that he and his people “didn’t bump into the organizational development group.” This executive is a strong advocate of shifting training’s focus away from educational events and toward systemic solutions based on good needs assessments, and he was slightly embarrassed about the gulf between his people and the OD unit. He acknowledged the oddity of the rift, given his belief in cross‐functional performance support, but he hadn’t done anything about moving toward either acquaintance or alliance.

Situations like that serve neither the professionals nor their companies. Here are some suggested strategies for enhancing collaboration between OD and training.

Capitalize on HighLevel Sponsorship. This article began with an executive—not a trainer or an OD person but a client of both functions—who sat on an airplane and wondered why the two didn’t collaborate. It was the Coast Guard commandant, not someone from training or OD, who could employ a directive to make collaboration the rule rather than an exception.

Develop HighLevel Sponsorship. If it doesn’t exist, try to create it. If your organization’s leaders are unaware of the possibilities, educate them. Cite examples of the cynicism generated when employees are trotted off to classes that have nothing to do with the key behaviors the organization really desires or rewards. Nearly every company has examples of unsupported training events. You’ll likely have to look no further than mandated sessions in telephone skills, continuous process improvement, diversity, or teamwork.

Demonstrate the Fit with Existing and Emerging Initiatives Is a quality‐improvement drive under way at your company? That’s a natural. So is the recent interest in “the learning organization.” Peter Senge in The Fifth Discipline and David Garvin in a 1993 article on organizational learning in the Harvard Business Review both lament the cost of organizational boundaries and cheer the benefits derived from more permeable membranes. General Electric CEO Jack Welch identifies “boundarylessness” as a key tenet of GE’s corporate strategy.

Create Pilot Collaborations. Before enacting anything resembling formal reorganization, try some pilot projects. Measure their impact. Publicize the business results they achieve. Establish teams that include OD and training people, and assign them to help key clients solve performance problems. Create ad hoc and visiting relationships so that familiarity can encourage alliances.

Encourage People in Each Specialty to Learn More about the Other. Focus on the commonalities as well as the differences. Use sample requests for training or OD assistance as the basis for discussion about similar and distinct perspectives and approaches. Together, read and discuss the work of Edgar Schein, Chris Argyris, Rosabeth Moss Kanter, M. David Merrill, and Roger Schank.

Analyze What Hinders Collaboration. There are often incentives that create distance and even competition between the two service units. Recognize the rivalry that can emerge in billable contexts, when both groups are trying to achieve their target percentages or recover their costs. Examine the history of the relationship. Work with the leadership of the two specializations to address these obstacles and transcend turf battles.


The fact that it is hard to make any case at all against building alliances between training and organization development doesn’t mean that those alliances are easy to bring about. Many trainers are genuinely sold on the idea of broader analyses and examining non‐training solutions to performance problems, but that doesn’t necessarily inspire them to reach out to OD specialists. The Coast Guard, Amoco, AT&T’s UCS unit, and Andersen, large organizations all, have chosen to bring specialized people together in structured and ad hoc ways. In other places, the trend is toward expanding the individual training professional’s repertoire. One friend in government suggests that this individual‐development strategy occurs because partnerships are perceived as too hard to effect.

OD and training are professions in transition, buffeted by shifts in priorities regarding empowerment, organizational structure, and specialization vs. generalization. The only certainty is management’s desire for higher quality, lower costs, faster cycle times, and overall performance improvement. Eventually, these critical goals will precipitate more leveraging of training and OD through means narrow and grand, formal and informal.

At a training conference last year in Atlanta, Amoco’s Quesada and I asked about 100 people to draw a graphic picture of the relationship between training and OD in their organizations. We got circles. We got squares. We got smiley faces and frowning faces. We got lots of white space. What we didn’t get much of was overlap, proximity, and arrows. What kind of picture would you draw?


This article was first published in Training Magazine, April 1996, 33(4), 53–59, At the time of its writing, Allison Rossett was a professor in the department of educational technology at San Diego State University and the author of Training Needs Assessment and A Handbook of Job Aids. Today she blogs a little, consults some, and works out a lot. Visit her website at and contact her at



Feedback is a Gift – Really?

By: Helene Tracey, M.Ed.

In the sincerest effort to help another, know the complexities associated with feedback. Resist the enthusiasm conjured up by gift giving and the expectation that gifts are met with gratitude. Always provide a gift that is thoughtfully chosen and caringly given. The receiver of a gift sets its value.

An early definition of feedback according to Merriam-Webster did not apply to people, but rather to machines:

“the return to the input of a part of the output of a machine, system, or process (as for producing changes in an electronic circuit that improve performance or in an automatic control device that provides self-corrective action.”

Somewhere along the line, someone applied this idea to people thereby creating one of the greatest interpersonal challenges: how to give feedback that isn’t resisted or rejected. Google “giving feedback” and a myriad of models to effectively give feedback appears. An old time favorite, the “sandwich” model, is recognized by many HR pros to be widely used and vastly ineffective. They explain its flaws: Upon hearing feedback is coming, the recipient braces for it and misses the first “positive” comment. Then, and now teetering between the virtual pieces of feedback bread, the person is told the “critical” piece of the feedback and uneasiness causes the recipient to miss the message, resist it, or worse debate it. Finally, the last “positive” comment is made and is inevitably not heard at all.

Why so many models to bestow a gift? Why isn’t this gift universally and enthusiastically embraced? Clues can be found if we further explore the notion of resistance to feedback. In his article, Managing with the Brain in Mind, David Rock expounds on what happens when we hear: “Can I give you some advice (feedback)?” ( He writes this question puts people on the defensive because they perceive the person offering advice as claiming superiority—a challenge to their status. Rock cites the findings of three researchers whose independent discoveries reveal the powerful neurological effects status has on our health and performance. Rock explains, “. . . we are biologically programmed to care about status because it favors our survival.” So, neurological factors likely drive resistance to receive feedback.

Curiously, numerous examples can be shared by employees, leaders and HR professionals of the benefits they have witnessed or experienced themselves of giving critical feedback according to a model and improvements occurring. What explains these successes? Neuroscientists tell us other factors like caring relationships decrease the resistance associated with getting feedback and increase the effectiveness of the feedback conversation. Consider a best friend providing feedback. Because there is a belief she has her BFF’s back, the BFF likely does not resist the feedback because there is no threat nor is there a challenge to status.

What happens if the relationship is not necessarily a caring one and feedback are given strictly according to a model? Then, a likely result is the erosion of trust and withdraw; perhaps this is a factor in employee engagement rates that have hovered at about 70% for the last few years.  Possibly, the desire to know what to do more of, less of, or instead of is so great that people adopt a “no pain, no gain” attitude towards feedback and report benefits regardless of the neurological side effects including increased stress. (According to the research mentioned above, Cortisol, a stress-related hormone is an accurate biological marker for the threat response, and it is released when we experience feelings of low status.) Maybe truly wanting to improve outweighs the sting of formula-driven feedback and not being able to stomach sugarcoated feedback leaves employees with no choice but to accept model-driven feedback even the kind that comes virtually wrapped in a bow and called a gift.

If model-driven feedback loses its efficacy if not delivered with care, does ratio-driven feedback work better? The Magic Ratio of 5:1 from a Harvard study reports the number of positive to negative comments was the greatest factor affecting the success of teams. If that study is to compare to the Rock article, one wonders if the nature of the comments not the number of them is the actual determinant of success. (All the comments cited in the online article are non-threatening and do not challenge status. (See

Feedback has complexities. Nature has wired us to resist it as a survival strategy. Using those two facts as a foundation, be clear on how your feedback is a gift: will it help? Is it information only you can provide? Is it of great consequence not just the intolerance of an idiosyncrasy? That is, start with questions, then chose thoughtfully and give with care.

evaluation sheet with check boxes

The Reason for the Season

By: Helene Tracey, M.Ed.

As the holiday season appears in the rearview mirror, realize this article’s title, for many, is an applicable phase for the holiday season. Tweak just it a bit to “the reason for the rating” and the phrase applies to the work nearly every manager whose organization still executes a traditional Performance Management process at years’ end is now likely undertaking.

Non-modernized performance processes have managers do a lot of work with ratings behind the scenes to make sure the ratings makes sense to senior leaders and align to a bell curve. (See more about this (See Laszlo Bock’s Work Rules.) Managers also ensure that the budget for bonuses and salary increases has not been overspent. (Non-modernized performance management processes have not unbundled performance management from compensation. Others factors that make the process non-modern include not acknowledging our inability to accurately rate others; underestimating the widespread bias at play at work; under-appreciating the benefit of employees working autonomously; and misapplying the science behind behavior change.)

If you are stuck with a non-modernized process, going rogue by not doing any of the processes or just going through the motions of it aren’t effective alternatives if you want to create conditions for optimal performance.  You can be more effective in your efforts by making a few “in-bound” tweaks.

First, don’t be selectively smart. You are very likely aware of the best interactions you have with your team regarding interpersonal effectiveness. You are also likely aware of flawed processes that have the same appeal as aptly described by the following phase from the Grinch song written by Theodor “Dr. Seuss” Geisel: “a three-decker sauerkraut and toadstool sandwich with arsenic sauce.” Executing a sauerkraut and toadstool performance management process can cause some managers to explain to their employees, “HR makes me do this.” (Makes one wonder if someone told those managers to jump off a cliff, . . . .) Flawed execution of this process could also include providing feedback on incidents that happened in the distant past or sharing feedback from non-identified sources. In moments of great clarity and wisdom, managers would never consider executing practices they know to be ineffective regarding performance management; that is, they would not be selectively smart.

Second, imagine alternatives. Try any or all of the following actions.

Tell less. Listen More. If employees have done a self-assessment, have a discussion about it as soon as possible by asking a few open-ended questions. If self-assessments are not an official part of your process, ask your employee capture on paper his/her most significant work or outcomes of the year. Review this information or the assessment before discussing it with him or her so you can reflect on it. Don’t call this first conversation a “performance review”! It’s not. It is an opportunity for you to gain your employee’s perspective on his/her work, accomplishments, and interests. Mine the conversation for nuggets aligned to your employee’s strengths. Ask questions about assignments that hold interest and areas of keen curiosity. Your goal is to make a genuine connection with your employee while looking ahead and agreeing on work that aligns to your employee’s strengths. As the performance management process unfolds over time at your company to conduct “performance reviews,” use this conversation as a foundation for the review. It could help the actual review be less de-motivating for your employee.

Ask yourself questions. Benefit from the interesting work Marcus Buckingham is doing work (See Marcus Buckingham’s blog.”. An interpretation of his work regarding managers executing performance management includes them asking themselves questions like, “Would I assign this major project to the person again?” “Would I hire this person again?” “Would I allocate a great portion of the bonus budget to this person?” Note, the manager is reflecting on his/her actions, not the actions (performance) of others thus avoiding rater bias, which leads to unreliability in ratings.)

Describe the business’ results. Talk about the company’s financial performance and other key metrics based on information that has already been shared or made public. Listen for your employee to respond to your explanation of these results to ensure you are both on the same page. The intent is to set realistic expectations for salary increases without talking out of turn.  (After all, many employees have suffered through poor performance reviews for years and have given up on them being helpful so their keenest curiosity could be about money.)

Be clear on the reason.  Research tells us we retain a part of the brain from prehistoric days that causes us to be threatened when others rate us. More importantly, research also tells us we are not effective when rating others even with mind-blowing spreadsheets that can calculate a rating to the nearest one-thousandth. Thinking the complexity of such a spreadsheet can help you objectively rate someone one is like believing a thousand words can help a color blind person fully appreciate the many shades of green found in an Irish landscape. Express the reasons you view his/her performance was on the mark, off the mark, or beyond it. Then, listen. Likely, key information will be shared and conditions for better performance created. If your perspective of the performance is off the mark and this is a surprise, explain your delay. Apologize and commit to being more regularly available in the future to listen to your employee as he/she reports progress/barriers, and/or requests your assistance or guidance.

Lastly, make the best of a less-than-ideal process by having thoughtful conversations with your employees; connecting with them regarding work that aligns to their strengths; and explaining how you see their work based on reasons you both agree to.  Most importantly, volunteer to partner with HR to make 2018 the last year for non-modernized performance management.

change management

Change Nirvana: It Can Be Done

By: Donna Griggs

CHANGE. MANY PEOPLE get a knot in their stomach when they hear this word. Sometimes, it is for a good reason: the changes they have been involved in were not successful. In fact, the statistics on change failures are staggering. According to Ashkenas (2013), most studies still show a 60–70% failure rate for organizational change projects, a statistic that has stayed constant from the 1970s to the present.

But what if it was different? What if you implement a change, everyone adopts it, and the success is incredible? That is what we all strive for, but it is definitely a journey, not a two‐day training event.

If your organization is facing a change now, or you simply want people to be more “change ready,” read on for the tips and tricks we have used for 30 years to reach “Change Nirvana.” The change is implemented, employees embrace it, the goals are attained, and the change sticks.


We often find competing priorities within an organization. Let’s face it—not every priority is a top priority. Make sure the changes you are trying to implement can

  • Demonstrate the link between goals of the organization and the benefits from making the change.
  • Show measurable benefits.

We often find too many projects within an organization that are not being completed. Why? No one is looking at the holistic picture and asking whether each project or change is critical to the organization’s goals. Therefore, it’s important to make sure that each effort has true priority and even more important, that leaders agree on the priority. This will help prevent the “just one more project/change” syndrome. Warning: There may be some unpopular decisions when someone realizes that his or her project is not getting top priority. We find that it is helpful to have top leaders involved in these discussions; after making the priority decisions, the next step is to agree on the most effective way to explain it to the staff.

After you have the list of priorities, it’s time to get serious about making the change happen.


Think of change as a sport, like football. Any great coach has a playbook that is customized for whatever team they are playing. That is how they start the game, but it changes during the game if needed, even during the lineup right before the quarterback says “hike.” Many changes fail because they don’t start with a solid plan that considers the fact that change happens on an individual basis; it is not one size fits all. That means you will have to use different techniques to get everyone moving in the same direction. We are certified in Prosci’s change management methodology (, 2018). It works for any change, large or small. But there are a lot of sound approaches, so find the one that works for your organization and then embed it in the DNA of your organization so that everyone speaks a common language.

When tackling the change, your playbook should include the following:

  • Leadership support. Demonstrate leadership support for the change in a variety of ways and use a “waterfall” approach to filter it through the organization. It is critical that leaders show visible support for the change. In fact, lack of executive support and active sponsorship constitute one of the biggest obstacles to successful change.
  • Communication. Begin communicating early (usually before you think you need to), and use a variety of communication methods to deliver your messages. Employees want to understand the reason for the change and how it will affect them.
  • Knowledge. Provide the appropriate information to help employees learn the new skill(s) they will need to make the change. When you change processes or introduce new technology, training may be required. In other cases, such as a change to the organization chart, the knowledge can be disseminated during meetings, emails, and so on. The key will be to ensure that each person understands the change. Then, work with each person to ensure he or she understands it.
  • Feedback. Use feedback loops to learn where adjustments are needed to get everyone on board. When it comes to feedback, think “early and ongoing.” This will help you adjust where needed, and it will greatly increase the likelihood of adoption.
  • Accountability. Holding employees accountable for making the change is one of the most powerful ways to ensure success. This accountability starts with the sponsor and flows through the entire organization. Lack of accountability can quickly damage change efforts, sometimes to the point where employees just give up. Very early in the process, we conduct sessions with leaders to help them understand what accountability means, how they should approach it, and what to do when there are issues. Honest dialogue during this session often results in additional sessions in which leaders can discuss their successes and ask for feedback when situations become difficult.


We provide this list to our clients as we start their “Change Nirvana” journey. It is a bit more granular than the playbook, so if they are not already in your playbook, you may want to add them. You’ll find that many of these are intertwined because your change is not linear.

  1. Link the change to the organizational strategy. Otherwise, your change has a likelihood of dying before it gets any traction—or worse, getting canceled during the middle of the change. There should be key performance indicators (KPIs) your change will affect. Decide which two or three are most affected and how and why. You will use this information for communication and measuring results throughout the change.


  1. Tackle bite‐sized projects. Bite‐sized projects are my favorites. Why? Typically, they can be implemented quickly, and only a small group is affected. If you have a project that will affect the entire organization, think about using a pilot phase to test it out. Small projects are a great way to teach people how to make change work. Think about it: if you learn how to make change work on a small project that affects only one department, the stakes are much lower than for a change that affects the entire organization. Since these projects can be implemented quickly, several can be tackled within the same year. The thrill of success does a lot to keep employees energized about the next change.


  1. Get involvement from all levels. Make sure the planning phase for your change involves all levels to get everyone moving in the same direction. Involvement can take many forms, and it can be as simple as
    1. Asking for feedback after explaining what you will be doing.
    2. Showing them how the change will work with their department.
    3. Giving them a visual to help them understand and ask for their thoughts.

Once again, the purpose of involvement is to get everyone on board; in the process, you will learn a lot about their feelings before the implementation. This knowledge allows you to tweak your plan and helps to resolve the concerns.

  1. Set clear expectations. Make your messages and expectations clear. One leader was conducting a company‐wide meeting to announce a large reorganization. I suggested that after the meeting, he send an email with the highlights. He resisted, strongly. He explained that he didn’t want anything in writing so people could hold him responsible for the message. People will not remember everything you told them. If the reason for the change and your expectations aren’t clear and delivered multiple times in multiple ways, it is unreasonable to expect everyone to embrace the change.


  1. Communicate before, during, and after the change. One of the biggest complaints we hear is that employees were not informed soon enough. As a result, they didn’t understand what would change and how it would affect them. To avoid this, communicate early and often. Explain what is happening, why, and how it will affect them. Communication should resemble a funnel: it is very high level at first and becomes more detailed as the change gets closer. The person who communicates is also important. For example, the CEO should explain what the change is and why, when, and what benefits the organization will see. After that, people are interested in having their supervisor provide additional details such as how it will affect them, what benefits it offers, and the implementation logistics. One communication is not Creative methods to communicate also gain attention, which increases the likelihood of your message being received. Email seems to be a “go to” communication, especially for teams in different locations. Think about creative ways to deliver your message. For instance, if your organization typically sends emails to announce information, look for additional methods to deliver messages that are not as common and get your employees’ attention. Think about newsletters, town hall meetings, weekly video updates, messages in breakrooms, and so forth. To stimulate creativity, we typically create a team from different departments in the organization. They will most likely come up with brilliant ideas; since they are involved, they are more likely to embrace the change.


  1. Provide visuals to show progress. When I was growing up, we used to watch the Jerry Lewis Telethon, a television program that raised funds for a charity. When they revealed the new donation levels, the reveal was suspenseful, and when they showed the dollar amount, there was music, applause, and confetti. The enormous amount of pomp and circumstance made it fun to watch. When you have a visual to show progress, you can use the same thought process—make it cool and fun. When the visual shows the progress, it can give a much‐needed boost to those who are going through the change; they can actually see the progress. We have found that it is critical to update the visuals on a regular basis. If you are reporting progress every six months, people will stop looking at the visuals because they don’t change often enough. In addition, if a very large change is involved and you certainly want everyone to notice the progress, use the Jerry Lewis approach and add some zip when revealing the visuals instead of just taping them to the wall in the breakroom.


  1. Create feedback loops. Feedback loops provide a way to gather information, review it, and then act on it accordingly. You will need feedback before, during, and after the change is implemented, and gathering feedback can be relatively simple. Methods we frequently use are asking questions during weekly or monthly staff meetings, conducting focus‐group sessions, or having informal conversations. When asking for feedback, you are more likely to get complete honesty if you say, “I would like to know what you think, what you hear others say, and anything we should know to help make this smoother.” This provides anonymity and has a good chance of getting honest information. The purpose of the feedback loops during each stage of the change is different.
    1. Before implementation: The purpose is to check the pulse of your audience. This will tell you what you need to start, increase, or stop. You’ll definitely want to know what people are most excited about and what is most frightening.
    2. During implementation: Provide status updates, including positive results and what’s next. The positive results are especially helpful for causing others to adopt the change. After providing updates, the feedback loop can be as simple as asking for thoughts on whether the information was valuable and what additional information would be helpful. Knowing what the next steps are helps keep everyone informed.
    3. After implementation: The purpose is to learn what went well and what needs to be improved. This should occur in different timeframes after the implementation. For example, gather feedback immediately after the change and then at specific intervals (e.g., weekly, bimonthly, and monthly) until you feel that everyone is on track. (Note: When you determine what went well and what could be improved, capture the information so it can be used when planning the next change.)
  1. Actively manage resistance. Expect resistance. It is normal and natural. I’m always surprised by clients who complain that their employees don’t like change. One even said, “I like change; why don’t they just get on board.” This was pretty simple; the reason he liked change was that he was the CEO and always decided what the changes would be. How difficult is it to like change under those circumstances?

To manage the resistance, you have to capture it, and that’s why feedback loops are critical. We see a lot of resistance due to fear or loss of power. Try to understand why someone is resisting, then work with them to overcome their resistance. If an employee is losing power (real or perceived) due to the change, you may be able to find a way to replace it and refocus them. Remember, change is individual, and it may take time for some employees to fully adopt it. In the initial planning stages, we like to understand where the most resistance will come from and plan for it.

  1. Commit to completing the change. It is critical to stay the course after you embark on a change. This can be very difficult due to a phenomenon known as “shiny new object” syndrome. A popular movie would call it the “Squirrel!” syndrome: whenever one of a group of cartoon dogs thought he saw a squirrel, he’d yell “Squirrel” and distract the rest of the group from whatever task they were pursuing. Competing priorities, leaders who change direction, or lack of traction are the enemies of commitment. Combat this by making sure the change is linked to the organization’s strategy and can demonstrate measurable benefits. Before you proceed, make sure the leadership team is committed.
  1. Celebrate success. This is my favorite part of any change. However, I am saddened when I hear a team member say, “I can’t remember celebrating success.” When I ask why, I’m told that everyone is busy, there is no time, there is no budget. Think about it. You’ve just implemented a change that helps the organization move forward. It is critical to make sure everyone knows how much you appreciate their efforts. You don’t need a lot of time or a big budget to reward people. In fact, when we ask employees to tell us how they would like to celebrate, one of the top three ways is always “just say thanks.” People want to know they did a good job and helped pave the way for success.


There is no question: change is hard. Hopefully you have found tips in this article that will make your next change more effective.


compensation and benefits

TOTAL REWARD: Fully loaded

By: Jennifer Paterson, Employee Benefits; London

Many diverse elements can be included in an employer’s total reward strategy, adding up to a valuable employment package, says Jennifer Paterson

Total reward has no hidden meaning – it does exactly what it says on the tin. But in some cases, the term is used to describe total reward statements that are used alongside perks such as a flexible or voluntary benefits scheme.

However, a true total reward strategy comprises much more than this, including salary, bonuses, pension and healthcare benefits, plus wider aspects of the employment package such as training and development, the working environment, and an employee’s work-life balance. These can all add up to a total value of everything staff receive as a result of working from their employer.

The concept of total reward began in the 1970s and 1980s, growing out of the term ‘new rewards’, says Peter Reilly, director of HR consultancy at the Institute for Employment Studies (IES). “One of the characteristics of that new reward movement was to take a much broader view of what reward constituted rather than simply concentrating on the tangible, extrinsic rewards,” he says.

In the context of total reward, the employment proposition has historically been split into four categories: pay, benefits, career development, and the work environment. Over time, the boundaries between these have blurred. Julia Turney, head of benefits management at Jelf Employee Benefits, says: “Total reward today encompasses a large range of offerings, broader than the standard four brackets, including the nature of the leadership, corporate social responsibility, and work-life balance.”

There is no single approach to constructing a total reward strategy because different employees will be interested in different aspects of the proposition. The IES’s Reilly says: “A catering assistant or cleaner may be attracted to an organization primarily because of the intrinsic rewards, pay and good working hours, whereas for professional staff, like engineers, the principal issue will be the career offered and CV building. In the public sector more than the private sector, it is the mission or value of the organization. Staff work for [companies like] Selfridges or Virgin because they like the name and what it conveys. Equally, staff might work for a charity like Save the Children or Oxfam because they believe in what it does.”

Andrew Erhardt-Lewis, senior manager at Deloitte, adds: “At Google, total reward would include the fact that staff can wear jeans and can bring their dog into work.”

Career development

The opportunity for career development is an important aspect of total reward for staff looking to add value to their future. Chantal Free, director and head of reward, talent and communication at Towers Watson, says: “Employees are much more self-centric, and it is a lot more about them and their lives. The deal with the employer is that they know they are not going to be together for ever, and what [employees] want to get out of the employer while they are together is fair reward for [their] contribution, but also the right skills and capabilities to make them marketable for their next job.”

During the recession, learning and development opportunities were often among the first things to go, but these have now started to return, says Mark Childs, director of Total Reward Group. “Longer term, as employers have attached more importance to experience rather than qualification, a lot more staff are going through on-the-job training,” he says.

Another important element of total reward is the working environment and organizational culture. For instance, at private equity firm Apax Partners, staff have access to a free breakfast and lunch every day. Erhardt-Lewis says: “The climate, or the culture, at an organization can engage staff and pays for them in the non-traditional sense.”

Jelf’s Turney adds: “I had a client that moved to a new office with a gym on site, subsidized canteen, plants and a wide, open place to work. It had a lot of feedback from people coming through the office and that was a big thing – to create a pleasant place to work.”

Helping staff achieve a good work-life balance is another part of total reward. This can include flexible working and career breaks. Free says: “This plays to the diversity agenda. If an employer has the right environment and a nice work-life balance, it can look at issues more flexibly and have more diverse talent.”

In the current economic climate, the concept of total reward strategy is coming to the fore, especially as employers widen their packages to include more than traditional pay, bonus and perks. Stuart Hyland, UK head of reward services consulting at Hay Group, says: “Organizations are thinking how to motivate staff and get more return on investment from their people. A lot of the stuff in that intangible bracket can be fairly low-cost development work. This is attractive when budgets are low but an employer is aiming to improve engagement and motivation.”

Total Reward Group’s Childs adds: “Employers will be reluctant to hike up base salaries. Instead, they will try to differentiate themselves through a total reward offering.”

The term total reward is often confused with total reward statements, which are a tool to communicate the value of a package. Mark Carman, director of communication services at Edenred, says: “A total reward statement is the pinnacle of the communications programmed, but it is also worth researching employees’ perceptions of their benefits.”

Total reward statements carry details of salary, pension contributions and the benefits an employee receives, but the concept of wider total reward can be harder to communicate. IES’s Reilly says: “It can be communicated well at the attraction stage, but it is harder to do while in employment.”

A total reward strategy should also be aligned with an organization’s brand and culture, says Hyland. “Many organizations are trying to ensure their reward practice is aligned with company performance.”

If you read nothing else, read this

* Total reward has traditionally been divided into four categories: pay, benefits, learning and development, and working environment.

* It takes account of the fact that no two employees are seeking the same thing from their employment proposition.

* Total reward will see a resurgence as the UK emerges from the downturn.

* A true strategy is very different from just offering total reward statements.

diversity and inclusion

Making the business case for Diversity and Inclusion: Short case studies and research papers that demonstrate best practice in HR

Authors(s): Tracy Morley, (Reed Business Information/XpertHR, New Providence, New Jersey, USA

Over the past few decades, the US workplace has undergone a significant transformation. It continues to become increasingly diverse, and organizations are using this to create a competitive advantage. More than simply acknowledging differences, organizations with successful diversity and inclusion programs are embracing the different qualities in their workforce and learning how to leverage them to support organizational objectives.

It is important to understand that diversity and inclusion are two different concepts:

  1. Diversity generally focuses on the full spectrum of differences and similarities between individuals. It goes beyond equal employment policies and includes other things such as work experiences, values and beliefs, life experience and personal preferences and behaviors.
  2. Inclusion is what an organization does – the actions it takes – to ensure that individuals feel welcomed, supported and valued as a member of the team.

Becoming a diverse and inclusive workplace requires a commitment of time, energy and resources on behalf of the employer. Securing approval for those resources requires making a compelling business case demonstrating that the business results are greater than the resources needed to invest in the initiative.

Determine the business need and engage executives

The first step in making a business case is to identify the business problem, need or opportunity to be addressed. This is a critical step and should be given careful thought as it sets the tone for the project and, if done correctly, provides a clear picture as to how the solution to the problem impacts the organization’s needs.

The next step is to assemble a team to research the costs, benefits and challenges of the proposed initiative. In addition to HR, it is important to have representation from various departments such as Operations, Finance and IT, as well as other departments and individuals that may be stakeholders in a diversity and inclusion initiative.

Implementing a diversity and inclusion program requires buy in and support from the organization’s executive leadership. According to Deloitte Consulting’s (2017) Global Human Capital Trends: Rewriting the rules for the digital age, diversity and inclusion are now a CEO-level issue. CEOs view having a diverse and inclusive workforce as important because it affects the organization’s brand, reputation and performance. This is good news for HR professionals.

Quantify the benefits and costs

The benefits and costs of a diversity and inclusion program should be quantified as accurately as possible and are usually categorized as either tangible (measurable in monetary terms) or intangible (subjective and not measurable in monetary terms).

Both have a different but significant business impact and can help organizations overcome some of the business challenges they currently face in an increasingly global workforce.

Tangible benefits

Tangible benefits are usually measurable in monetary terms. For example, diversity and inclusion initiatives can minimize financial and reputational costs associated with employment discrimination claims. Other examples of tangible benefits related to having a diverse workforce include:

  • Increased market share. Having a diverse workplace allows organizations to more effectively market, better serve and communicate to consumer groups from different cultures, races and religious backgrounds, which in turn may lead to increased sales and profits and access to a more diverse market.
  • Productivity and innovation. Diversity widens viewpoints and takes different ideas and perspectives into account. This can translate into creating richer solutions, obtaining better results and maximizing productivity, innovation and creativity.
  • Employee attraction and retention. Recruiting from a diverse pool of candidates increases an employer’s chances of finding the best person for the job. Once on board, employees that feel valued and respected and that are part of an inclusive work environment are less likely to leave. Doing both of these successfully can help reduce expenses related to recruitment and retention.

Intangible benefits

Intangible benefits are subjective and not measurable in monetary terms. For example, diversity and inclusion initiatives can potentially increase employee satisfaction, but how would that be quantified? Other examples of intangible benefits related to having a diverse workforce include:

  • Improved employer brand and reputation. Fair treatment is important to employees, and a diverse workforce can make an employer more attractive to investors and improve the organization’s public image.
  • A positive and healthy work environment. Diversity can lead to an atmosphere of respect, mutual understanding, tolerance and enhanced teamwork.
  • Opportunities for employee growth and development. Employees may be challenged when exposed to new ideas and perspectives and when personal growth is encouraged.

Costs of the program

The costs of implementing a diversity and inclusion program should also be quantified as accurately as possible. It is important to identify all the resources and associated costs of the resources required to implement the program, such as costs related to:

  • the use of consultants;
  • training and educating the workforce;
  • hiring independent contractors;
  • potential policy changes and related implementation costs; and
  • communicating the program.

It is also important to note potential costs associated with “execution risk” which is the risk of a plan not working or taking longer than anticipated to implement. Execution risk is prevalent when implementing programs affecting organizational change, such as initiating a diversity program.

Measure the return on investment

Once the costs and benefits have been calculated, forecast the return on investment (ROI) of the program. ROI is calculated as the benefits (or gain) from an investment, minus the cost of the investment, divided by the investment costs and multiplied by 100:

ROI = (Benefits (or Gain)from Investment−Cost of Investment)/(Cost of Investment) × 100ROI = (Benefits (or Gain)from Investment−Cost of Investment)/(Cost of Investment) × 100

The forecasted ROI can make or break a business case for a project.

Here is a practical example to illustrate

Through employee survey results, Acme, Inc, determined its employees did not feel the organization promoted a diverse and inclusive workplace. HR conducted follow-up focus groups and determined the organization should implement a diversity training program for all employees and forecast the annual benefits and costs of the program as $336,418 and $61,700, respectively. Using this information, the ROI is:

ROI = ($336,418 − $61,700)/$61,700×100 = 445%ROI = ($336,418 − $61,700)/$61,700×100 = 445%

This means Acme can expect to see a net return of $4.45 for every $1 it invests in the diversity training program.

Make the business case

The last step is to present the business case for why implementing a diversity and inclusion program makes good business sense. When presenting the business case to stakeholders, make sure to:

  • identify the business problem, need or opportunity being addressed by the diversity and inclusion program;
  • list the benefits, tangible and intangible, of addressing the business problem, need or opportunity;
  • describe the alternative actions considered and the reasons why certain options were selected or rejected;
  • describe comparable diversity programs implemented by competitors or industry leaders and their business results;
  • discuss the required investment and timeline needed to implement the diversity program;
  • share the ROI analysis for implementing the diversity and inclusion program;
  • list actions that should be taken subsequent to introducing the program to ensure the initiative is implemented as planned;
  • plan for measurement of the actual business results generated by the HR initiative and the timeline for the measurement; and
  • plan for reporting the business results of the program to decision makers.

Measure outcomes and communicate success

Measuring and effectively communicating the short- and long-term successes of the diversity program can help improve employer brand and recognition. To help understand what is, or is not working, consider comparing year-to-year figures for the following:

  • hiring statistics to see if there is an increase in hiring for minority or other identified groups of employees;
  • employee survey results to see if employees see improvements in diversity at the workplace;
  • turnover to determine how many minority or other identified groups of employees leave the organization; and
  • retention to see if there is improvement in retaining minority or other identified groups of employees.

It is important to demonstrate the ROI of the diversity program and how important it is to the business. There are a number of different ways to communicate the program such as town hall meetings and community presentations, press releases, brochures, infographics and pamphlets. Regardless of the method used, make sure that your communication tools represent the diversity and inclusion the organization is trying to promote.

talent analytics

Human capital analytics: The Winding Road

By: Morten Kamp Andersen. Journal of Organizational Effectiveness; Bingley

This paper will explore the question: human capital analytics (HR analytics) – are we there yet? It will seek to clarify what is meant by “being there yet” and it will argue that the most positive proponents for this field are way too optimistic about the current state and what impact it will have on HR in the short to medium term but that the long-term outlook remain positive for the field.

  1. Where is the finishing line?

At a point in Lewis Carroll’s book Alice’s Adventures in Wonderland, Alice is lost and asks a cat which way to go. The story continues: “That depends a good deal on where you want to get to,” said the cat. “I don’t know where –” said Alice. “Then it doesn’t matter which way you go,” said the cat.

As with Alice, there has been much debate about where HR analytics is going. And without knowing where we are going and what to aim for, it is difficult to assess if we are there yet.

About five years ago, the first of many HR analytics conferences started to see the light of day and today it is near impossible to attend any respectable HR conference without analytics being the center of attention. The main message from these conferences is the same; HR analytics will transform and revolutionize not only what HR does but also the impact HR will have on organizations. HR analytics will bring HR to “the table” as is the common phrase. The finishing line is set quite ambitiously.

Looking outside of HR the view is quite different. When CXO’s are surveyed about their thinking about HR they all agree on three things: talent is on top of the agenda (although not as high as HR leaders tend to think), HR analytics is potentially value-added (although most leaders do not really know what they will get) and finally HR is if anything moving further away from “the table” than closer (due to the higher relative importance of technology). With them, the finishing line is more ambiguous and overall less ambitious.

Whichever of the two finishing lines is used it is fair to assess that we are not there yet. A few very large multinational companies have set up large HR analytics division and have embarked well on the journey. Many of their cases and results point to interesting and not least value-added findings. Some industries also appear to be further than others with banks and technology being particularly advanced especially in the USA and UK. Outside of the few large companies the situation is different. Here the challenge is to get out of the starting block. Indeed, outside the exclusive few, HR analytics is fairly immature. The next section will explore why.

  1. Multiple reasons behind the problems

There are multiple reasons why HR analytics by and large is still in its infancy, which is also why there is no quick fix. Before the reasons are explored in more detail, it is worth remembering that HR analytics is a young field and therefore by its nature is in its infancy. However, I believe that HR analytics are further behind what is reasonable to expect and where it should be. These reasons can be divided into four categories, which will be elaborated below.

2.1 Maturity

Maturity covers reasons, which will be solved over time but are necessary steps to improve the quality of HR analytics. Such reasons include lack of the implementation of good software solutions, bad data/lack of proper data, too few resources as well as lack of organizational wide buy-in.

All those issues are important but especially bad data is a big problem. Many studies have shown that bad data quality cost a lot for organizations. This is true in all parts of the organization but for some reason this is in particular true for HR Data.

There are four reasons behind why bad data happens:

Lack of a coherent data strategy. Having a purely operational approach to your data is probably the biggest reason behind bad data.

Assume that analytics software is the answer. HR analytics software is great, but it is simply just another data collection tool, albeit one with more potential than most. To get the most out of HR analytics you must go through a strategic data process and decide what data are of strategic importance to you and how they ideally look like.

Garbage in, garbage out. This one is often overlooked although it should be clear to everyone. Your data are only as good as the component inputs.

Lack of critical data sources. While the quality of the data is critical, what data sources you incorporate is equally important.

Many good HR analytics projects have failed from the beginning due to bad data as analysis – and decision making – based on bad data is meaningless.

2.2 Mindset

The mindset issue is really about a lack of strategic thinking, but not in the traditional way. It is recurring issue that HR must be more strategic. This has been highlighted in books, research and studies for more than 25 years. In relation to HR analytics this is, however, a twist.

HR analytics can deliver as many facts as it is even possible to conceive. HR analytics can also deliver a lot of interesting information – i.e. converting data and facts into information. But the most difficult thing – and the most value-added on any data journey – is to find and convert the right information into strategic actionable knowledge. And the only way you can generate this knowledge is to truly understand the business and strategy of the company, know what the primary workforce drivers are behind delivering on this strategy and finally understand how to get information and convert it into strategic actionable knowledge. This ability – or mindset – is not always present.

2.3 Organization

Many HR analytics functions have been moved around in HR departments in re-organization initiatives as organizations have tried to understand where HR analytics is best fitted within HR. There has even been a lively debate within the HR analytics community itself about whether the function should be located within our outside of HR.

The proponents for moving HR analytics outside of HR advocate that HR analytics will lose its strategic potential as HR in many organizations are more operational and tactical rather than strategically focused, HR does not have the right capabilities (data analytics skills) and will struggle to attract the right ones as talents with those capabilities look to work within BI functions, HR does not have ownership of all the relevant data as many reside in finance (payroll), IT, legal and sales and that efficiency gains in having one big analytics/BI function are greater than having people sitting in HR, marketing, finance and operations all doing the same thing.

The proponents for keeping HR analytics within HR say that nobody else care about HR data and insights (as much as HR do), it takes HR knowledge to interpret and convert HR data to knowledge and information, it may make HR more data driven and improve HR impact on business, data ownership sits naturally in HR and finally it will increase the likelihood of the analytics actually being used.

But even within HR the function has moved a lot within many organizations. In one particular case, the organization had HR analytics report to compensation, talent and engagement at various times within an 18-month period.

This debate is not complete and while it is good that organizations think hard about how best to utilize the skills and output of HR analytics, the downside is that it creates confusion, lack of permanent ownership and identity issues for the people involved.

2.4 Competencies

HR analytics is complex, and the range of competencies needed to do it well reflects this. They are unlikely to be found in one or two individuals, which is why the team must have a broad composition or be assembled on a project basis. I therefore propose that you assemble a team with a range of competencies. Specifically, I suggest six competencies (in random order):

Excellent statistics and numbers skills: good analytics requires excellent statistics and numbers skills. You can get far with simple regression-, factor- and t-test analysis skills but at other times, you will need skills in more advanced statistics.

Strong data management skills: you will quickly get stuck if your data are not clean, good and have a strong governance structure around it. Those and many other data management issues are essential for good analytics.

Captivating storyteller: analytics – even predictive – will only add value if a decision is made on the back of it. It sounds trivial, but data does not speak for itself and to move a decision making into a decision you must create a compelling story around it.

Visualization techniques – Ability to visualize your results: studies on cognitive load and other such issues show that if you give decision makers too much data, they will either not make any decision or make the wrong one.

Strong psychological skills: there are many reasons why strong psychological skills may be the most essential of all six. It is partly because you will deal with your data better if you truly understand terms such as bias and overconfidence. Partly because you will understand how to make more impact with your data but also, because your data have not meaning if you do not understand how to convert information to knowledge, which requires an understanding of psychology.

Understand the business: a final skill, which is most often not present as much as it should be, is the simple but powerful skill of understanding the business. This requires you to fully understand what the customer value proposition is is, what the strategy is, key differentiating factors, financial situation and more.

One of the reasons why HR analytics is not there yet and has been slow to progress has been the lack of varied competencies at hand. It requires a significant sized department to have many of all the above competencies. The answer is instead to build around them by building internal coalitions.

  1. Final thoughts

HR analytics is on a great journey and there is no doubt that the field is much further now than four years ago. The difference will be even more impressive in four years from now. HR analytics will, however, do itself a great service if the finishing line is not to “transform HR” or to “revolutionize the impact of HR,” but instead to “improve the quality of decisions around people in the organization.” While the latter may seem less ambitious it is in my view closer to what is going to be a reality. Instead of feeling like a failure it will set HR analytics up for success and will lead to potentially large shareholder value creation.