Creating Credibility and Organizational Value
Launching and Managing your Strategic HR Scorecard
Saratoga
Special Thanks
Jeff Hackel Veridian Homes
Laura Jaggi North Central Management
Vicki Kampmeier TDS
Lee Wiersma UW Credit Union
Diane Rivers Berbee Information Services
Jodi Chandler First Business Financial
Claudio Diaz Wipfli LLP
Jane Lindebak Home Savings Bank
Scott Pollak PwC – Saratoga
Jim Ellis PwC – Saratoga
“It is with great gratitude and humility that I thank
these leaders and organizations for their
faith, dedication & sacrifice.
Without it, this project would not have succeeded.”
Dan Loichinger, CMC
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Saratoga
Today’s Agenda
I. Introductions / Background 10 Minutes
II. Readiness Assessment 10 Minutes
III. Tools & Methods 30 Minutes
IV. HR Value Proposition 15 Minutes
V. Lessons Learned 15 Minutes
VI. Questions & Answers 10 Minutes
VII. Presenter Biographies
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Saratoga
Background
• Eight Madison-area organizations worked on a Strategic HR
Measurement and Development project with executives in their
respective organizations
• Today we will use the experiences from that project to discuss
launching and managing a Strategic HR scorecard, covering:
– How the project was conceived, formed and executed
– Key concepts from initial GMA SHRM presentation
– Methodologies and tools used in the project
– Participant reactions and key points to share with peers
– Lessons learned
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Saratoga
Background – Project Development
• The Strategic HR Measurement and Development project began
with a GMA-SHRM presentation on human capital measurement
• Concurrently, a local Human Capital Alliance (HCA) was
established with the charter of better understanding strategic HR
metrics
• After further discussions, a few key HCA members agreed to
become Steering Committee members to launch the Strategic HR
Measurement and Development initiative
• An orientation session was held to gain interest and commitment of
additional participants
• Three workshops were designed and executed over a three month
period in early 2006
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Saratoga
Background – Multi-Client Challenges
Company
X
Results
Industry Benchmarks
“Target”
25
Percentile
Median
75th
percentile
HR Headcount Ratio 122:1 60:1 92:1 111:1 Median
HR Expense per FTE $1,359 $1,253 $1,610 $2,211 Median
HR Labor Cost per
HR FTE
$ 91,028 $66,180 $80,143 $92,288 Median
• Varied metrics that are important to each organization
• Differing strategies and people drivers
• Multiple perspectives on target setting and additional layers of
intended audiences
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Saratoga
Background – Line of Sight: Strategy to Metric
Develop a nimble
workforce with
reach
Develop a
succession plan for
sustainable
workforce
Become an
Employer of Choice
and improve
employer reputation
Metrics
Revenue per FTE
Poor Quality Hire
Rate
Human Capital ROI
Voluntary Separation
Rate
Compa Ratio
Average Tenure
People
Drivers
Business Strategies
Increase Worker
Productivity
Drive World Class Hiring
Practices
Align Workforce To Goals
Develop the Leaders of
the Future
Invest in Employee
Training
Control Expenses
Engage Employees
Pay Employees
Appropriately
Develop Culture
Bench Strength
Training Cost Factor
Labor Cost As a
Percent of Revenue
People Strategies
To Meet Requirement
Grow the Business
Improve Profitability
Greater Market
Agility and
Responsiveness
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Saratoga
Background – GMA SHRM Presentation:
The Role of HR Measurement
• Provide a common language to:
– Develop working relationships w/business partners
– Set expectations
– Communicate results
• Provide an objective means to:
– Communicate financial impact of investments organization’s
human capital
– Quantify return on investments in the Human Resources function
• Provide comparisons:
– Over time
– Best practices internally
– Gives an idea of what is and what may not be possible for your
organization
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Saratoga
Background – GMA SHRM Presentation:
The Benefits of Effective HR Measurement
• Enables HR to address ways to deliver services that are better,
smarter, faster, cheaper
• Provides details executives want to know on where you stand relative
to peer group
• Allows HR to gain support for strategic value-added services
(succession planning, performance management, leadership
development etc.)
• Helps to align priorities and resources to directly support the
company’s ever-changing business initiatives & workforce
requirements
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Saratoga
Background – GMA SHRM Presentation:
Optimizing HR’s Role
Optimal HR
Organization
Performance
Requires Strategic
Alignment…
Configuring HR to
deliver high value
services, practices
and programs that
meet business and
human capital needs
HR Service Delivery Strategy
PracticesServices Programs
Human Capital Strategy
Business Objectives
Prioritizes Supports
Drives Executes
Where HR focuses a
majority of its effort
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Saratoga
Talent
Optimization
Workforce Workforce
EngagementEngagement Workforce Analytics
Workforce Analytics
HR Service
Delivery
Effectiveness
HR Customer HR Customer
SatisfactionSatisfaction
Process Efficiency & Process Efficiency &
Cost EffectivenessCost Effectiveness
Survey Metrics
HR Program
Effectiveness Program SatisfactionProgram Satisfaction Total Program CostsTotal Program Costs
By linking opinions to outcomes we can identify the
leading indicators to future outcomes
Background – GMA SHRM Presentation:
Decision Guidance Model
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Saratoga
Workforce Workforce Workforce EngagementEngagement
Survey
Workforce Workforce
AnalyticsAnalytics
Metrics
Turnover drivers in
our organization are
• Supervisor
• Opportunity
• Compensation
Voluntary turnover in
our organization is
22%
And costs us
$17 M
Background – GMA SHRM Presentation:
Decision Guidance Model
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Saratoga
Workforce
Process Efficiency Process Efficiency
& Cost & Cost
EffectivenessEffectiveness
Workforce Workforce
AnalyticsAnalytics
Workers show
• Low Revenue/
Employee
• High Turnover
Rate
Training investment
per employee
Is 25 percentile or
lower
HR Delivery
Metrics
Background – GMA SHRM Presentation:
Decision Guidance Model
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Readiness Assessment
Saratoga
Saratoga
Madison HCA – Measurement Overview
Managing and
Communicating
Results
Gaining
Buy-in
Business Case
for Measurement
Utilizing
Scorecards
• Defining scope of
measurement
• Determining return on
measurement
investment
• Assessing risks to
successful
measurement
programs
• Identifying resources
for measurement
• Confirming
organizational goals
and strategies
• Confirming senior
leadership’s
expectation of HR
• Seeking input on key
metrics
• Beginning stakeholder
change management
process
• Develop line of sight
from business strategy
to HR
• Link Metrics to
Strategy
• Define effective vs.
ineffective metrics
• Evaluate standard vs.
non-standard metrics
• Move to data collection
• Avoiding common pitfalls
• Including analysis of
results along with
metrics
• Setting Targets
• Managing multiple
scorecards
• Considering “next
generation” of metrics
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Saratoga
Opening Thought: All Eyes Are on HR
The average
organization
invests 28¢ in
compensation and
benefits to get $1
in revenue
R
E
T
U
R
N
?
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Saratoga
Conducting Stakeholder Assessments
Stakeholder
Group
Information
Requirements
How Done
Today
What are the
“educational
requirements”
How Can be
done Better
Risks to
Changing
Executives
Line General
Management
Line Users
HR Users
IT
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Tools and Methodologies
Saratoga
Saratoga
Making a Business Case
• Define objective/initiative/issue
• List out assumptions
• Estimate revenue generated/preserved/costs
saved
• Costs to achieve (hard and soft)
• Who will execute
• Timeframe
• Probability of success
Business
Case
Measurement
Return Deliverables ResourcesRisks
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Saratoga
Measurement Return
Workforce and HR Measurement leads to three types of improvements:
HR
Efficiency
HR
Effective
-ness
Workforce
Improvement
M
ag
ni
tu
de
o
f
Im
pr
ov
em
en
t
Li
ne
a
nd
E
xe
cu
tiv
e
In
te
re
st
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Saratoga
Measurement Deliverables
Deliverable Name Purpose Media Frequency Support
Corporate
People Report
Annual
presentation to
Board on
workforce
investment
Hard and Soft
copy report
Annually
Numbers
support text,
analysis and
findings
HR Scorecard
Review at HR
Leadership
meetings
Hardcopy
Spreadsheet
Monthly
Leadership
commitment and
follow through on
results
Hiring Strategy
Review
Assess Hiring
Sources
Tables and
analysis
Ad hoc – as
needed
Support
business
strategies
Workforce
Scorecard
Deliver near-real
time data to line
management
Web-based
portal &
application
Weekly/Bi-
weekly
Technology,
Change
management,
etc.
Samples include
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Saratoga
Measurement Risks
Our
Number
Parado
x
Anyone that’s developed a number views it as
fluid, dynamic, “Works in Progress”
But
Anyone that views a number considers it the
“Rock of Gibraltar”
1. Give yourself enough time to review/reflect on the results
2. Socialize the results in draft form
3. Seek feedback. Work in ever enlarging circles, starting with
“friendlies” and moving toward “influential”
4. Develop the story. The story is what you communicate.
Numbers support the story.
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Saratoga
Measurement Resources
People
Systems
Information
Consultants
Individual contributor, (half time?)
Director and Team
Existing Reporting Team
Running queries on existing systems and export to excel
Develop a cube
Data Warehouse and Implementation
Saratoga or Other subscriptions
Survey normative databases
Associations/Consortiums
Training/Conferences/Events
Project Management
Analysis & Communications
Training/Change Management
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Saratoga
Strategies - Definition
Business Strategies People Strategies Business Strategies
People Strategies
Need to Leverage (. copy) existing language and documentation
The overall plan that drives
actions to achieve business
objectives for an organization
An organization’s overall plan
for its human capital
(workforce) that identifies
areas to execute business
strategies and achieve
business objectives
Select the top two to four
strategies most critical
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Saratoga
Strategies – Sample Business Strategies
Business Strategies People Strategies Sample Business Strategies
Need to Leverage (copy) existing language and documentation
Improve Profitability/
Shareholder return
Grow Revenue
Control Costs
Improve Customer Service/
Satisfaction
Develop New Products
Expand Geographically
Acquire and Merge New
Businesses
Improve Safety
Improve Leadership/ Business
Sustainability
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Saratoga
Strategies – Sample People Strategies
Business Strategies People Strategies Sample People Strategies
Need to Leverage (copy) existing language and documentation
Attract the Right Talent
Retain the Right People
Reward Appropriately for Both
Company and Employee
Develop Talent
Run HR Like a Business
Leadership Development
Develop a Culture
Engage the Workforce
Manage Performance
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Saratoga
People Drivers – The Bridge Between
Strategies and HR Interventions
People DriversPeople Drivers
People Drivers are outcomes of HR interventions (plans,
programs, activities, etc.) that attempt to achieve the strategies
People Drivers are not the intervention themselves
For example “improve communications between staffing and the
line” might be an intervention
to achieve the people driver of “Drive World Class Hiring” practices
Measuring people drivers will let you know if you are achieving
your strategies
• Measuring the strategies is too high level
• Measure interventions themselves is too “in the weeds”
Quite likely your organization may have three or four
interventions underway to support each people driver
While drivers may apply to multiple strategies, please focus on
only the most applicable / critical drivers in your organization
Increase Worker
Productivity
Drive World Class Hiring
Practices
Align Workforce To Goals
Develop the Leaders of the
Future
Invest in Employee Training
Control Expenses
Engage Employees
Pay Employees
Appropriately
Develop Culture
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Saratoga
Measure People Drivers, not Interventions
Develop a nimble
workforce with
reach
MetricsPeople
Drivers
Revenue per
FTE
Increase Worker
Productivity
Poor Quality
Hire Rate
Successful Hiring
Practices
Human Capital
ROI
Align Workforce To
Goals
People Strategies
To Meet Requirement
Intervention
Develop a workforce plan
Evaluate Low Performer
Strategy
Implement a Coaching
Program
Process Map to Improve
Line/ HR communications
Implement Applicant
Tracking System
Optimize Source of Hire
Evaluate Compensation
Strategy
Implement a Performance
Management System
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Participant Feedback
Saratoga
Saratoga
Participant Quotes
“The workshop series presented by PwC & Saratoga on strategic HR measurement and
development has been phenomenal.
The presenters have facilitated a systematic process of assessing the business climate
and strategic initiatives of our company and then delivered the tools to create measures.
The tool has a cascading effect starting with the overall business strategies, moving to the
people strategies, then linking to people drivers, and finally ending with the applicable
measures.
I highly recommend this workshop series to any organization looking to enhance their
measurement practices.”
Jeff Hackel, Vice President, Human Resources
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Lessons Learned
Saratoga
Saratoga
Key Findings – Successful Initiatives
• Align the HR effort with the organizations strategic direction & sponsorship.
• Temporarily set aside your existing data streams and measures.
• Assess the needs and input of each stakeholder, . – risks, info needs, etc.
• Establish a strong alliance with your financial executive
• Determine how to best communicate, display & discuss with others
• Partner with other HR executives outside your company – don’t do it alone.
• Plan the organization effort needed to support & enable the planned changes:
• Key communication vehicles to various stakeholders
• Managing change & dropping non-value added work activities
• Use yourself, or another capable staff person to manage the project
• Allow time & effort to analyze, discuss & learn from data coming in
• Continue improvement efforts on a systemic and team basis – ROI will come.
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Saratoga
Key Findings - Metric Selection Discussions
• Distinguish among context metrics, input metrics and outcome metrics
– Focus on outcome metrics
– Input or context metrics can be used for other purposes
• Down-select metrics
– Determine priority to the organization & management’s definitions of metric
– Assess ability to collect the data & who else can provide relevant data
• Eliminate redundant metrics or choose best fit between similar ones
• Utilize survey measures sparingly
• Do not eliminate certain metrics because the data doesn’t yet exist
• Consider high priority but tough to collect metrics for future versions
– Develop business case for automation / collection efforts
– Develop business processes for gathering data points of interest
*Remember that one metric can address multiple drivers within your scorecard
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Saratoga
Communicating Results - Messaging
Determine the right message to be conveyed with the measurement information that
addresses:
• Background of initiative
• The “story” around the results
• Results – including business impact
• Link to business strategies
• What should be done with the information
• How to interpret comparative information
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Saratoga
Communicating Results - Timing
Measurement should be delivered on a frequency that provides necessary
information to the audience as required. Ideally, this information will coincide with
broader measurement efforts such as:
• Board Meetings
• Quarter-end Reporting
• Executive Team / Leadership Meetings
• Annual Budgeting
• Strategic Planning
• Customer Satisfaction Studies
• Operational Reviews
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Saratoga
Communicating Results – Avoiding Pitfalls
Data
• Data is Wrong
• Multiple Versions of the Truth
• No Link to Impact
Develop a strategy for assessing data quality, accuracy
Work with “drafts”
Find out what data other people use
Calculate the impact
Content
• Dashboard Misaligned to Strategy
• No Time to Analyze Results Too Much
Information
• Too Frequent to Digest/ Review
Assess alignment developed in these workshops with
stakeholders
Get help w/data collection (from finance?)
Continue stakeholder assessments after delivery
No “Story”
• Lack of Causal Analysis
• Lack of Action Plans
• Results are Inconsistent w/Actions
Data should be used as “support” for what you know not an
“aha” -- but watch out for the “aha”
Bring draft action plans to leadership meetings to get their buy
-in
Ask others what they see in the data
Change Management
• Lack of Management Understanding of
Importance
• No Buy in on Dashboard
• Underlying Business Processes Don’t Support
Metrics
Seek buy-in on the dashboard hold an internal session like
the ones we have here
Focus on the business impacts
Stay on Message
Stay on Message
Assess whether there is a case to redesign underlying
business processes
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Saratoga
Presenter Biographies
Dan Loichinger, CMC: loichinger@
Dan Loichinger is a certified management consultant with The Covenant Group, an executive
development and OD firm based in Madison, Wisconsin. Dan serves as a catalyst and executive
advisor when helping to create market-leading organizations with sustainable and profitable growth –
organizations where passion and results naturally co-exist.
Dan’s experience spans over two decades. He has led training and consulting organizations in
several industry sectors, successfully launched a training company, served as a senior organization
effectiveness consultant for professional service firms, and owned his own management consulting
firms.
In addition to his corporate and consulting experience, Dan has led training associations, presented
at conferences across the United States, facilitated programs through UW Madison’s Executive
Education Center, and judged for Corporate Reports Workplace of Distinction process
Jim Ellis: @
Jim Ellis is a Manager with PricewaterhouseCoopers’ HR Services Practice in the Chicago office.
Jim has over 12 years of professional experience in consulting with organizations on a broad variety
of human resource issues. His area of expertise is in HR organization, strategy and delivery.
Jim is a market champion for the Saratoga (formerly Saratoga Institute™) workforce diagnostics
system and strategic human capital measurement consulting, and he has worked with Saratoga's
leadership and succession planning advisory services in the areas of leadership assessment and
assimilation training.
He has also presented to SHRM and a variety of other conferences.
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mailto:loichinger@
mailto:@
pwc
Saratoga
