KEY STRATEGIES FOR MANAGING
HUMAN CAPITAL RISK
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Harold Morgan
Senior Vice President Human Resources, CHRO White Lodging Services
Former CHRO, CTA (Chicago Transit Authority), IDEX Corporation, Bally Total Fitness
Corporation, Bally Manufacturing/Entertainment, Director of Employment and Labor
Relations, Hyatt Hotels Corporation.
Jennifer Barton, SPHR
Chief Operating Officer | Willis Human Capital Practice
As COO of the Human Capital Practice for Willis North America, Jennifer has responsibility
for 48 offices throughout the U.S. and Canada representing over $330 million in revenue.
In this capacity she is responsible for defining, creating and deploying best-in-class client
deliverables designed to address human capital risk. Under her leadership, the practice
has grown to consult with over 3,000 clients across the U.S. in areas such as Human
Resources, Communication, Compliance, Health Outcomes and Reporting and Analytics.
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What to Expect
1. Overview of Talent Management/Development
2. Best Practice Review
3. Five specific strategies for managing human
capital risk within your organization
4. Key questions for getting started with your
strategies
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Company Overview
WHITE LODGING OVERVIEW
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Introduction to White Lodging
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Established in 1985 – Headquarters in Merrillville, Indiana (30 miles from downtown Chicago)
Owner, developer and operator of premium branded hotels
One of the largest independent hotel organizations in the U.S.
− 170 branded hotels totaling more than 26,000 guestrooms in 21 states
− Deep talent pool: 10,000 Associates – Full and Part Time
− Manage leading brands: Marriott, Hilton, Starwood, Hyatt, InterContinental, Preferred,
Carlson
Mission: Maximize the value of each and every hotel asset for our owners
The State of the Industry
The Brands
• Own very few, if any hotels
• Manage less than 50% of the hotels bearing their name
Independent Management Model
• Work for the owner instead of the brand
• Offer more accountability, flexibility and ROI versus brands
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Human Capital Risk Practical Implications
HISTORY
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Overview
1. No Chairman of Board / CEO has ever....
2. No CHRO has ever ….
3.
3. Talent
Talent changes all the time
Changes All
The Time
4. CHRO Survey – major issue
Modify Talent Strategy All The Time
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Source: HR Policy Association
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General PhilosophyTalent Development
1.
2.
3.
4.
Right people on bus (80%) + robust on-boarding
KISS
50/50 – no hand holding
Develop those with most impact (more top of
house)
5. 70-20-10 – rule of training
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Elements of Great
Talent Management
1. Right people on bus
2. Business needs generate talent plan
3. Determine how to judge talent
• Competencies
current performance
against competencies
• Testing
future potential
4. Assess Talent
flight risk
5. Produce choices for key roles (outside > 30%)
6. Conduct STR ‘s of Key Leaders
7. Decide on development/coaching approach
8. Move plus manage talent-every move is scrutinized
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Source: HR Policy Association
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Willis
5 SPECIFIC STRATEGIES
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Specific Human Capital Strategies
1. Conduct a Total Rewards Gap Assessment
2. Alignment of Compensation
3. Implementation of Flexible Work Arrangements
4. Utilization of Competencies
5. Identification of High Potential / High Performing Employees
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Specific Human Capital Strategies
1. Conduct a Total Rewards Gap Assessment
2. Alignment of Compensation
3. Implementation of Flexible Work Arrangements
4. Utilization of Competencies
Identification of High Potential / High Performing Employees
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What is Your Employee Value
Proposition?
Drive Business
Success
Employ Top
Talent That Is…
The Company’s
Ability
• Attract
• Motivate
• Retain
Optimal Mix of
Reward
Elements
• Performance
• Results
• Engaged
• Satisfied
•
•
•
•
Compensation
Benefits
Work-Life
Performance &
Recognition
• Development &
Career
Opportunities
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Total Rewards Gap Assessment
Evaluate or Create a Total
Rewards Strategy
o Effectiveness of your rewards
elements
o Alignment to your business
strategy
o Competitive position
Develop an Action Plan
o Resources and
recommendations
o Prioritization and eligibility
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Specific Human Capital Strategies
1. Conduct a Total Rewards Gap Assessment
2. Alignment of Compensation
3. Implementation of Flexible Work Arrangements
4. Utilization of Competencies
Identification of High Potential / High Performing Employees
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Pay for Performance in Theory
Percent
Increase
Percent of
Population
High
High
Low
Low
Does Not
Meet
Partially
Meets
Meets
Exceeds
Far Exceeds
Performance
Employee Population
Merit Increase
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Pay for Performance in Reality
Percent
Increase
Percent of
Population
High
High
Low
Low
Does Not
Meet
Partially
Meets
Meets
Exceeds
Far Exceeds
Performance
Employee Population
Merit Increase
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Merit Matrix Modeling
Distribution of Employees by BOTH Performance and Within Pay Range
1st
Quartile
2nd
Quartile
3rd
Quartile
4th
Quartile
Payout
17%
39%
22%
22%
100%
10%
7.5%
6.5%
5.5%
3.5%
0.59%
Significantly Exceeds
Standards
20%
5.5%
4.5%
3.5%
1.5%
0.79%
Fully Meets Standards
60%
4.0%
3.0%
2.0%
0.0%
1.47%
Does Not Fully Meet
Standards
5%
0.0%
0.0%
0.0%
0.0%
0.00%
Does Not Meet Standards
5%
0.0%
0.0%
0.0%
0.0%
0.00%
Largest increase to
those who perform
well
and paid low in
Outstanding
their range
2.85%
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Specific Human Capital Strategies
1. Conduct a Total Rewards Gap Assessment
2. Alignment of Compensation
3. Implementation of Flexible Work Arrangements
4. Utilization of Competencies
Identification of High Potential / High Performing Employees
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New Ways to Define When, Where
and How Work Gets Done
Helping Employees Balance
Personal and Professional
Work-Life Demands
100%
10%
90%
80%
70%
50%
60%
•
•
•
•
1 out of 5 cares for an elderly parent
Women comprise 60% of workforce
80% of men would like fewer hours
Priority from Boomers to Millennials
In Practice
50%
•
•
•
40%
30%
40%
20%
Why
10%
High-Performers
Teams establish blueprints
Establish and hit benchmarks**
0%
Weak
Adequate
Excellent
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Specific Human Capital Strategies
1. Conduct a Total Rewards Gap Assessment
2. Alignment of Compensation
3. Implementation of Flexible Work Arrangements
4. Utilization of Competencies
Identification of High Potential / High Performing Employees
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Identify Behaviors and Skills
Critical to Success
CUSTOMER FOCUS
The ability to plan a course of action while keeping customer information and feedback top-of-mind. This
includes how we interact with customers directly, interface with customers online and how we select the
products that we offer.
Developing and / or Low
Performing
Medium Performing
High Performing
 Able to work successfully with difficult
 Provides supports to others in meeting  Oversees highly complex customer
customers and satisfy their requirements. difficult customer requirements and/or
focus initiatives and assignments with
coping with customer care difficulties.
success; makes customer experience a
 Maintains professionalism while
top priority in every aspect of work.
responding with urgency.
 Reaches win-win agreements with
 Acts on feedback concerning products
and services the Company provides.
 Identifies opportunities to improve
company operations.
customers.
 Provides guidance to others in meeting
 Evidences in depth understanding of
difficult customer requirements and/or
coping with customer care difficulties.
the Company’s customer experience;
uses this information to identify better
ways to serve the customer
 Creates opportunities for others to
develop in-depth understanding of the
Company’s customer experience and the
business operations that make this
experience a reality.
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Specific Human Capital Strategies
1. Conduct a Total Rewards Gap Assessment
2. Alignment of Compensation
3. Implementation of Flexible Work Arrangements
4. Utilization of Competencies
Identification of High Potential / High Performing Employees
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Identify High-Potential and HighPerforming
Low Potential
Moderate Potential
High Potential
High
Highly valued, seasoned
professional in current role;
remain at current level
Does extremely well at
current job with potential to
do more, give stretch
assignments to help prepare
for next position.
Consistently performs well in
a variety of assignments,
prime targets for recruitment
by other companies.
Effective
Probably solid performers in
current roles. Could
progress higher in specialty
and become a high
performer.
Current role may still provide
These individuals should be
opportunity for growth /
considered for a bigger job at
development; focus should
the same level if they can
be on helping them improve
deliver better results.
performance
Low
Tight performance
Maybe job mismatch, new
management is crucial,
hire with lots of potential, or
Consider reassignment,
consider helping leader
new assignments. May
reclassification or exit.
manage time more
require coaching to improve
performance.
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Create a Plan to Manage Your Human
Capital
Succession
Candidates
Talent Inventory
HIPOs
Career Growth
Candidates
Key
Contributors
Team
Players
Remember 10% | 20%| 70%
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•
Projects
Taskforce
Job Rotations
Temporary Accountability
Stretch Assignments
Fix-it / Turn-around
Development Plans
Cross-Functional moves
Internal and External Leadership Development
360 Feedback
Non-HIPOs
Problem
Children
Exit
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Not Everything at Once
Action Tool
 Delivering on this initiative would help achieve business objectives?
 Line managers are likely to cooperate, if asked to support this initiative?
 We have the capabilities within our HR team to deliver this initiative well?
 We have the infrastructure (e.g., technology, tools) to deliver this initiative well?
 Results from the initiative can be measured to validate its effectiveness? How?
 Leadership buy-in has been obtained or is likely to be obtained?
 Who will be accountable for the success / failure of the initiative?
 What are the estimated direct and indirect costs associated with this tactic?
 Can we secure the budget necessary to deliver this initiative well?
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Key Take Away
Human Capital is an Asset … Manage it.
Whether a company competes on the basis
of productivity, innovation, customer loyalty,
efficiency, speed, or agility, the workforce
has a make-or-break impact on those results.
It is important to have the right talent, with
the right skills, in the right place, at the right
time, and at the right cost.
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Questions, Final Comments and
Contact Information
Harold Morgan
Senior Vice President Human Resources
White Lodging Services
harold.morgan@whitelodging.com
Jennifer Barton
Chief Operating Officer
Willis Human Capital Practice
jennifer.barton@willis.com
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