Why good HR makes good business sense?
Business
Strategy
Leadership
Employee
Engagement
Internal / External
Customer Satisfaction,
Delight and Loyalty
Source: Heskett et al. (2008). Service-profit chain. (Harvard) Parasuraman & Owen
Slide 1 of 9
Business
Performance
The facts…Why it’s Important…
Slide 2 of 9
68%
41%
70%
…of customers
LEAVE because of
poor employee
attitude
…of customers are
LOYAL because of
a good employee
attitude
…of customer
brand perception
is determined by
experiences with
PEOPLE
Source: Parkington and Buxton, Study
of the US Banking Sector, Journal of
Applied Psychology
Source: MCA Brand Ambassador Benchmark
Source: Ken Irons, Market Leader
The linkage analysis with engagement
Employee Attitudes
Customer Impact
Financial Results
Senior management
interest
Challenging work
Employee
engagement
0.65
Customer
focus
0.70
Revenue
growth
Decision-making
Authority
Customer focus
Career advancement
Company reputation
As employer
Cost of
Goods sold
Operating
margin
Turnover
retention
Teamwork/
collaboration
Sales, general &
Admin expense
Resources
Decision-making
input
Senior-management
vision
Positive relationship
Negative relationship
Conceptual relationship
Significance of statistical correlations:
0,25 – 0,3 – Significant
0,31 – 0,45 – Strongly significant
0,46 – 0,65 – High significance
Slide 3 of 9
SOURCE: TOWERS PERRIN
The moment of truth…so where to focus?
Moment of Truth
Business
Strategy
Leadership
Employee
Engagement
Internal / External
Customer Satisfaction,
Delight and Loyalty
The HR Management Process /
Value Chain
Slide 4 of 9
Source: Heskett et al. (2008). Service-profit chain. (Harvard) Parasuraman & Owen
Business
Performance
What the evidence say…
Business
Strategy
Employee
Engagement
Leadership
Human Resources
Management
Quality of HR Value Chain
……………………………………………
……………………………………………
……………………………………………
……………………………..
ccccccccccccccccccccccccc
Internal / External
Customer Satisfaction & Loyalty
Customer Relations Management
Service concept:
employee behaviour
linked to brand promises
Impacted by
level of
employee
engagement
Retention, Repeat
Business, Referral
Service designed & delivered
to provide consistent customer
experiences
Source: Heskett et al. (2008). Putting the service-profit chain to work. Harvard Business Review
Slide 5 of 9
Business
Performance
Financial
/ Profit
Generic Human Resources Value Chain
People Philosophy, Strategy & Policy
Strategic
Research
Organisational
&
Work /
Job
design
HR
Planning
Recruit,
Select,
Place &
Induct
People
Development
Managing
Performance
Recognition
&
Reward
Purpose, Intent, Values
Human Resources Administration
Employment Relations / Employee Relations
Human Resources Management System and MIS
Change Management & Facilitation (Project Management)
Slide 6 of 9
Redeploy
&
Exit
Approach: HR ‘State of Health’ Assessment
Example of assessment of Induction, On-Boarding & Engagement
Answer Range
Totally
Partly
Partly
Totally
Neutral
disagree disagree
agree
agree
Please mark only 1 box, per question, with a X
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
A formal induction and on-boarding policy exist in the company.
Each new employee is taken through an orientation programme.
Each promoted employee is inducted into the requirements of the
new role.
The company has clearly defined values.
The behaviour(s) required to live-up to a value is also clearly defined.
Values and their related behaviour(s) are regularly discussed with
employees.
Employees are proud to be associated with the organisation.
Employees derive satisfaction from performing their jobs.
Employees feel appreciated by the organisation.
Employees enjoy working with their colleagues.
Employees feel their opinions count.
Employees know what is expected of them at work.
Employees have the necessary materials and equipment to do their
jobs well.
Employees often receive recognition for good performance.
Employees feel that their supervisors care about them as individuals.
Slide 7 of 9
1
0
0
0
0
1
0
0
0
0
1
0
0
0
0
0
0
1
0
0
1
0
0
0
0
1
0
0
0
0
0
0
0
1
0
0
0
1
0
0
0
0
1
0
0
0
0
0
1
0
0
0
0
1
0
0
0
1
0
0
0
1
0
0
0
0
0
1
0
0
0
1
0
0
0
5
2
5
3
0
Answer Range
Totally
disagree
0-20
Partly
disagree
21-40
33,33%
13,33%
Neutral
Partly agree
41-60
61-80
Totally
agree
81-100
33,33%
20,00%
0,00%
Predominant
View
HR ‘State of Health’ Assessment (Continue)
Example of collated scoring results
Summary
1
HR Administration
2
Organisational & Job Design
3
Recruitment, Selection & Placement
4
Induction, On-Boarding & Engagement
5
Payroll
6
HR Systems & Analytics
7
Recognition & Reward
8
Employee Benefits
9
Training & Development
10
Performance Management
11
Employee & Industrial Relations
12
Occupational Health & Safety
13
Change Management
Overall state of health of HR
Slide 8 of 9
Totally
disagree
Partly
disagree
Neutral
Partly
agree
Totally
agree
57,14%
0,00%
42,86%
0,00%
0,00%
62,50%
25,00%
12,50%
0,00%
0,00%
70,00%
20,00%
10,00%
0,00%
0,00%
33,33%
13,33%
33,33%
20,00%
0,00%
11,11%
0,00%
0,00%
22,22%
66,67%
100,00%
0,00%
0,00%
0,00%
0,00%
88,89%
0,00%
11,11%
0,00%
0,00%
100,00%
0,00%
0,00%
0,00%
0,00%
55,56%
0,00%
22,22%
0,00%
22,22%
100,00%
0,00%
0,00%
0,00%
0,00%
55,56%
0,00%
22,22%
22,22%
0,00%
83,33%
0,00%
0,00%
16,67%
0,00%
57,14%
0,00%
0,00%
42,86%
0,00%
67,27%
4,49%
11,87%
9,54%
6,84%
HR ‘State of Health’ Assessment (Continue)
Example of high-level recommendations
Preliminary Recommendations
HR Discipline
1 HR Administration
1.1
1.2
1.3
1.4
1.5
1.6
2 Organisational & Job Design
2.1
2.2
3 Recruitment, Selection & Placement
3.1
4 Induction, On-Boarding & Engagement 4.1
4.2
Slide 9 of 9
Task
Determine the overall business strategy and define those elements that makes the business unique
Document the strategy and test same with selected employees.
Compile a HR Policy & Procedures Manual
Ensure that the company strategy and the HR policy is in support of each other
Conduct a communication session(s) and explain the manual contents to employees.
Create/update each personnel file with all required contracts and documentation
Create an organisational job structure: which jobs are there and who reports to who.
Design a Job Description for every job: inclide key KPA's and behavioural competencies
Compile a written Contract of Employment for each employee and ensure that such meets the BCEA and RSD9 standards.
Determin the company values and translate into behavioural descriptors.
Conduct a communication session(s) with all employees and explain the company values and behavioural expectations.
Priority Quantum
1
2
3
1
4
8
5
6
7
1
2
1
1
1
1
4 to 6
±35
1
±35
±35
1
4 to 6
Question:
Based on the science and links into business value,
would you participate in such an assessment
approach?