Throw away your typical HR audit checklists that ask if you have your posters up and your I-9 forms in order.  Ok, now that I have your attention…

Yes, those things are still important, but all those issues fall under the big heading of “HR Basics” and let’s face it.  We have been doing the basics for years….we should know how to make sure time-sheets and applications are in order.

So besides the basics, I am thinking we need to add some strategic components to our HR audits.  Here are just a few topics I think should be analyzed during a COMPLETE STRATEGIC HR audit:

1) Is HR linked and aligned to the overall organizational strategy and by the way, did HR participate in the planning portion of the strategy?
2) What does your HR Scorecard look like?  Are the metrics balanced using efficiency, effectiveness and value metrics?
3) Does the organizational structure support the delivery of HR services that are linked to the organizational strategy?
4) If a structural redesign is necessary do you have the needed competencies to fill the new “boxes?”
5) What do HR customers think about HR services and delivery?
6) What does the C-Suite think about the way HR solves problems and impacts the strategic plan?

So, if your audit process did not cover the items above…you have some more work to do.  What does your audit process look like?  Do you have a best audit practice…do tell!

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As the economy recovers and companies are examining all areas of the business under an efficiency lens, HR is no exception.  There are many blogs, articles and keynotes on the topic of what will HR 2.0 look like.  You hear answers from it should be “blown up” to it should “not even exist” and all iterations in between.

I read a really good article by Dave Zielinksi in August 2010 HR Magazine entitled, “Building a Better HR Team.” Zielinksi discusses Google’s “three-thirds” HR staffing model.  Below is the premise for Google’s model:

1) 1/3 of the HR team have HR background s and bring expertise in employee relations along with other specialist expertise like benefits and compensation.
2) 1/3 of the HR team has little or no HR background and come from strategic consulting firms or internally from Google’s sales and engineering departments.  These individuals are embedded in the business as consultants.
3) 1/3 of the HR team are the quant jocks.  They are statisticians, PhD’s in finance and organizational psychology.  Their jib is organizational analytics especially the predictive kind.

Not all organizations have Google’s resources and the ability to have PhD’s on staff, but the theory behind this model is one that I love.  Here is why:

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There is a reason why two-thirds of all strategy fails…IT’S EXECUTION.

After the strategic planning session is over and the t-shirts and coffee mugs are passed out, the strategy just gets stuck.  In our experience it gets stuck somewhere between Director level and the line level employee.  Here are the reasons we find when we do some digging:

1) The strategic plan is so complicated and no one understands it
2) Employees do not know what to do different in their jobs

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It’s good to see that McKinsey Quarterly article that focuses on training outcomes rather than the “input metric” tracking that is usually the focus of L&D initiatives. And happy that I had articulated similar thoughts on impact of training in 2004

Some excerpt from the article titled Putting a value on training

Picking the right metrics is the key to creating real value from training. Most for-profit organizations have a longer list of quantitative business-performance metrics than BGCA does. A retailer pursuing better customer service and sales growth, for example, could train employees by getting its managers to provide real-time coaching and to role-model best-practice customer-engagement techniques. Rather than just measuring the managers’ time allocation or employee-engagement data—as most would do now—the retailer should measure the impact of its programs through hard business metrics, such as sales, basket sizes, and conversion rates in critical categories or departments. Similarly, a manufacturer might try to improve its operations by teaching plant supervisors lean-manufacturing and coaching skills, but rather than tracking only how many managers have been trained, it should track metrics such as downtime, the overall effectiveness of equipment, or fill rates.

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I speak and consult a lot on the topic of HR Metrics and it is one topic that I have been passionate about for a long time.  I always begin every one of my discussions with the business case for metrics.  Undoubtedly, I still get the question, “Why should I (HR) be concerned about metrics?”

Here are my top 10 reasons to why HR should be using metrics:

10.  Because Dave Ulrich and Jac Fitz-Enz says so
9.  Measuring stuff is “in” this year
8.  My boss is the CFO and he told me to
7.  I heard, “what measures gets done” at a conference
6.  I like those scorecards with all the pretty graphs and colors

And now, for my serious reasons….

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My business partner, Barbara Hughes and I were discussing last week’s blog topic, “Performance Management is a Tool and not a Chore” when she asked me a very good question:

“How will HR professionals design a performance management system with the changing workforce?  Now, that we have more 1099’s, project workers, and consultants instead of regular full-time employees.

This trend was discussed in a recent BusinessWeek article and one that needs consideration around this performance management topic.

My first reaction was that, with the “flexible” workforce, it would be easy to conduct performance management as it will be the truest form of pay for performance.  Either you meet the project deliverables and deliver on-time or you are not renewed, continued or called back.  End of story.

Then I thought, well why should that be different from our “regular” workforce?  I know what you are going to say, we need to use our progressive discipline program and we need to coach and counsel, we need to do X, Y and Z.  But, we don’t do that for 1099’s or temporary workers.  We are very quick to say, “Next” with that group.

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Many times in my career I have had to revamp performance management systems.  I have blogged on the topic asking if we should just get rid of appraisals altogether.  Last week,  I was chatting with a friend, he said, “I am dreading doing all my appraisals next week.”  I had to find out the reasons for all this dread.  He then began his list of reasons why he did not like the process:

1) Nothing is ever done with the information
2) They aren’t relevant to his employees jobs
3) They are 8 pages long and it will take all week to do 10 appraisals

WOW, as he kept talking it sounded just like a chore instead of something that could really help this manager out in the long run.

I wanted to know what HR was doing regarding the process.  He let me know this was their brand new and improved process.  YIKES!

I then began to think about another HR VP I spoke to last month.  She said, “I think I am going to change our appraisal form to 3 questions.”  Of course that piqued my interest.  I said. “What are you going to ask?

1) Overall all performance rating _____________
2) Reasons for this rating
3) Areas of further development

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I have noticed an interesting problem with organizational strategy lately.  As companies are clamoring for growth, market share and differentiation, new strategies are all the rage.

I see the same process with strategy over and over:
1) Create new strategy
2) Tell a few people about it
3) Conduct a PowerPoint about it

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Among the excellent essays in The Economist’s special report on Managing Information is one titled Data, data everywhere. And a Talent Management magazine article smartly implores us to Put Data to Work.

But a Taleo Research survey found US HR and Line of Business executives are not receiving access to talent management data that ensures they have the right talent to meet their ever changing business challenges. In fact, LinkedIn and Facebook probably offer more information about a company’s talent assets than their HR technology systems have today. Read the rest of this entry »

I am rereading the book “Roadmap to Strategic HR: Turning Great Ideas into a Business Reality” by Ralph Christensen.  I believe I have read this book about 3 times.  I always learn something new every time I revisit the book.  As I continue to work with HR Departments on strategy and structure,  I have found that no two situations are the same.  I find myself going back to tried and true principles and theory as my foundation when transforming HR departments from transactional to strategic.

Here are some of my lessons I have learned over the last several years working with HR Departments that chose to go through a dramatic change by moving to a strategic “Business Partner” approach to HR:

1) Buy in from the top is absolutely REQUIRED without C-Level support, do not move forward.

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Think about almost any organizational issue you currently have.  I would almost bet that 90% of the root cause of the issue is a “people-related” issue.  Think about these examples:

You (HR VP) are in your weekly executive meeting and you hear that sales are down for the first quarter.  Sales have been creeping up for the last two quarters as the country eases out of the recession.  Your company had forecasted a 3% increase and instead you had a 5% decrease.  You as the HR VP could say, “That is a sales issue.”  Instead, being the business partner you are, you ask some really good questions like:

1) Did customer needs shift?  If so, are the sales people aware of those shifts?  (training and communication)
2) Where in the sales cycle are sales declining?  Leads, proposals, closes, etc.  Has there been a change in sales people or new people added to the team? (training and process)

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There is always so much written on employee appraisals. I read that some individuals think they should be trashed, others think they need a total revamp, and some managers just don’t like the process at all.

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I am honored to introduce Sean Conrad as my guest blogger this week. Sean is with Halogen Software a firm that I have personal experience with. Thanks Sean!

Today’s business climate is forcing a shift in the role HR plays. Instead of providing administrative support, HR is becoming a strategic manager of the organization’s greatest asset – its people. Driven by this shift, the industry is seeing more companies implement integrated talent management processes.

So why has talent management become a strategic imperative for companies?

1. The C-Level is Demanding Succession Plans and Workforce Analytics

Succession planning isn’t just about identifying successors for a handful of leaders. It’s about identifying the key competencies and skills an organization needs to succeed, both today and tomorrow. It’s about identifying the company’s high-potential, high-performing employees across all key functions, and grooming them for advancement. Every company needs to know who their top performers are and work to develop talent pools. These talent pools are your lifeblood, whether you’re growing, looking for a successor for a key role, or downsizing.

Executives also need analytic data on everything from retention to skill gaps to goal alignment/progress, and talent plans that align with strategic plans. This data allows them to make informed decisions on when/where/how to invest in talent to ensure the organization is able to meet its strategic goals.

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But I must admit, I struggle with a couple of things about graphic rating scales that I really wish organizations would address.

First is the issue about what the rating 3 (out of 5) represents.  Most employees think it indicates average performance.  I always say that’s wrong.  It represents meeting the standard.  And since most companies I know have pretty high standards, then 3 is good and maybe even great.  It means you’re meeting the (high) standard.

Last time I checked, there’s nothing wrong with meeting the standard.  If all of our employees met the standard, just think how great the company would be?!

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During a presentation last week on “HR Metrics that Matter, ” I was discussing the importance of using performance data when analyzing turnover and employee engagement. The premise is that we want to make sure we find out why our top performers leave and we also want to know why our top performers are engaged. (or not)

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