Pic
HR TRANSFORMATION
@Dave_Ulrich: HR Business Partner 2.0

n 1997, Netscape was the browser of choice; Motorola StarTAC dominated cell phone popularity; the Apple PowerBook led in innovative laptops; cordless home phones emerged; Sony PlayStation with a 128k memory card was state of the art; Windows 95 was released. And I published the book Human Resource Champions, the ideas therein helped to define the HR business partner in terms of roles and outcomes within an organization.

Changes over time

In the ensuing 20 years, much has changed in the world of technology; and much has changed in the world of HR. The business partner concept has dramatically evolved (transformed, been disrupted, evolved, or whatever word you choose) from roles and outcomes to a logic of how HR delivers value to employees, organizations, customers, investors, and communities through individual talent (competence, workforce, people), leadership throughout an organization, and organization capabilities (culture, workplace, systems).

In these 20 years, my colleagues and I have published over 25 books and hundreds of articles, chapters, research monographs, and blogs, and have given hundreds of talks on how HR is not about HR but about delivering value to multiple stakeholders.

Often critics of HR compare the 1997 HR business partner 1.0 model with the 2018 business requirements, assuming that HR logic and ideas have not evolved. This would be like saying the StarTAC phone should perform the functions of today’s smartphones. So it is useful to capture the concepts defining business partner 2.0. It is difficult, if not impossible, to summarize all the business partner 2.0 ideas, but the following table highlights thirteen pivots (because they build on the past, but they could be called disruptions or evolutions as well) each of which has been the focus of our (and many others’) thinking, research, writing, and practice.

Evolution in HR

We are incredibly grateful for HR professionals and thought leaders whose work we so readily assimilate, learn from, and build upon. The ongoing evolution of HR to a true value-creation stage comes from so many innovators. We appreciate their work and are grateful to be part of the HR value-creation movement.

HR’s evolution will continue as current business issues place HR center stage (e.g., digital information age, #MeToo movement) and HR needs to continually upgrade to respond; but it is useful to move at this time from business partner 1.0 to business partner 2.0. I should note that each of these thirteen dimensions is the topic of a book, article, webinar, or other public data that is readily accessible on our website (www.rbl.net) or on LinkedIn.

As these pivots continue, it’s a great time to be in HR!

Dimensions and questions of the business partner logicPivots (disruptions or evolution) of our point-of-view on this dimension.
1

HR Value Added:

What value does HR deliver to an organization?

1. The type of value HR delivers has evolved from efficiency to functional excellence to strategic HR to outside-in.
2

HR Context:

What are the contextual factors shaping HR’s business centrality?

2. HR is not about HR but the business. Business requires acknowledging and appreciating:

  • Context: the changes facing our world today (STEPED trends: social, technological, economic, political, environmental, and demographic).
  • Pace of change (VUCA), which is increasing.
  • Individuation and the needs of individuals to find belief and purpose, become better, and belong to a community.
3

HR Stakeholders:

Whom does HR serve?

Who are the “customers” of HR?

3. HR stakeholders have evolved from internal (employees, line managers, organization) to external (customers, investors, community).
4

HR Outcome—Talent:

How can HR help increase employee productivity and experience (well-being)?

4. Improve talent (people, experience, workforce) through:

  • Competence (flow of people into, through, and out of the organization).
  • Commitment (employee value proposition, sentiment).
  • Contribution (meaning, purpose).
5

HR Outcome—Organization:

How can HR help build a more competitive organization?

5. Organization has four times the impact on business results than that of the individual talent! Organization thinking has evolved through these stages:

  • Morphology (roles, reengineering, downsizing).
  • Alignment/systems (STAR, 7s, Health).
  • Capability (known for and good at doing).
  • Ecosystem capability (building capabilities within the ecosystem not just organization).
6

HR Outcome—Leadership:

How can HR build better leadership throughout the organization?

6. Leadership matters, and understanding leadership evolves from:

  • Leader (individual) to leadership (collective).
  • Inside to outside (Leadership Brand).
  • Leadership Code 1.0 to 2.0 (emerging competencies such as navigating paradox, risk without recklessness, meaning maker, etc.).
7

HR Strategy:

What is the strategy of the HR department?

7. An HR function or department requires a strategy that answers three questions:

  • Who we are (partners, allies, experts).
  • What we deliver (talent, leadership, organization).
  • Why we exist (create value by responding to context or serving stakeholders).
8

HR Organization:

How should the HR department be organized?

8. The structure of the HR department is built on three principles:

1. Separate HR essential/transaction work (increasingly delivered with technology) from strategic work (delivered by HR professionals and line managers).

2. The HR organization should match business strategy and organization:

  • Single business—functional HR.
  • Multiple businesses—decentralized HR.
  • Diversified/allied business strategy with matrix structure—HR as professional services (centers of expertise, shared services, embedded HR).

3. In most large firms, businesses have a matrix or diversified/allied strategy and structure, so HR operates as a professional services firm within the organization.

9

HR Practices:

How should HR design and deliver HR practices?

9. A host of HR practices exist around people, performance, information, and work. The criteria for HR practices are:

  • Integrated by offering HR solutions not isolated HR practices.
  • Aligned to the strategy inside the organization, and customers and investors outside the company.
  • Innovative by looking for new ways to design and deliver.
  • Simple by making HR solutions easy to access and use.
10

HR Competencies:

What are the required skills for HR professionals?

10. The required competencies of HR professionals have evolved over the last 30 years. In response, HR professionals have dramatically increased their competencies over this timeframe. It is not just about competence but matching HR competencies to the desired outcomes:

  • Personal effectiveness: be a credible activist.
  • Stakeholder value: be a strategic positioner.
  • Business results: be a paradox navigator.
11

HR Technology (Digitalization):

How can HR use technology to leverage digital information?

11. HR plays two roles in the digital space:

1. It helps create a digital business strategy.

2. It applies digital information from technology to better deliver HR. There are four stages of HR digital work:

  • Efficiency (do HR better).
  • Innovation (do better HR).
  • Information (access ideas).
  • Connection (connect people).
12

HR Information or Analytics:

How do we define HR analytics?

12. HR analytics is accessing and using information to improve HR value creation. This work has evolved through four stages:

  • Scorecard (HR activities).
  • Insights (general data).
  • Interventions (specific actions).
  • Impact (business results).
13

HR Work Style:

How do HR professionals work with each other in HR and with others in their organization?

13. While HR structure matters in assigning roles and accountabilities, HR professionals need to build relationships with each other inside HR and with those outside HR. Relationships require:

  • Sharing a common purpose.
  • Respecting differences.
  • Governing, accepting, and connecting.
  • Showing empathy/care for others.
  • Sharing experiences.
  • Growing together.


Pic
HR TRANSFORMATION
How to Measure HR Effectiveness

How do human resources organizations measure their efficiency, effectiveness and impact?

• • • • • • • • • •

W

hat human resources measurement and analytics features are most associated with HR leaders’ ratings of the function’s organizational effectiveness and performance? Do organizational effectiveness and performance tend to be associated with measuring HR departmental efficiency and the quality of its services? Are they associated more with measuring “strategic” or “outside-in” features, such as improving the decisions of non-HR leaders?

In this article, we will report some of the findings from our 2016 survey of HR leaders in more than 100 large U.S. corporations. The full report will appear in our forthcoming book, “Human Resource Excellence: An Assessment of Strategies and Trends,” which will be published in 2018. We will also compare the findings of our 2016 survey, with the findings from our 2004, 2007, 2010 and 2013 surveys. Our focus will be on HR metrics and analytics. We will examine the extent to which HR organizations measure their efficiency, effectiveness and impact, as well as the effectiveness of the metrics and analytics systems for HR operations and strategic outcomes.

Note: Response scale: 1 = not meeting needs, 10 = all needs met. Empty cells indicate that the item was not asked in that year. Bold numbers are scale means. 1,2,3,4,5,6,7,8 Significant difference (p ≤ .05) between years. Significance level: t p ≤ .10, *p ≤ .05, ** p ≤ .01, *** p ≤ .001.

The best way to examine HR’s progress is to compare across time how HR leaders rate the extent of its activities and the effectiveness of HR system features, such as the time spent as a strategic partner and the comprehensiveness of their information systems. In our prior surveys going back a decade or more, we’ve found that the level and effectiveness of HR features has not changed dramatically. For example, the relative time spent on strategic partnership vs. HR administration has stayed constant, although the proportion of leaders saying they have at least an input role or a leadership role in organization strategy has increased somewhat, as we wrote in our 2015 book, “Effective Human Resource Management: A Global Analysis.” 

It is tempting to conclude that because the level of strategic HR features has remained so constant, then there has been little change in HR effectiveness. However, we did observe an interesting pattern when we examined how different HR features are correlated with HR effectiveness and organizational performance. These correlations indicate where improvements in HR features are associated with these important outcomes. They provide important clues regarding the potential impact of improving different elements of HR and insight into where being highly rated is associated with higher HR effectiveness and organizational performance. 

The results we report next suggest that although the absolute level of HR measurement practices and effectiveness has been historically stable or slow moving, over time there is evidence that some of the more “strategic” features are increasingly associated with key HR outcomes. Yet some more traditional features also remain strongly associated with key HR outcomes, suggesting where organizations benefit less from the evolution toward a more strategic HR approach. It also appears that the HR function’s effectiveness may have benefited more from this shift toward the greater impact of strategic features, while organizational performance remains associated with more traditional and “internally focused” measurement and analytics features and outcomes.

How We Measured HR Effectiveness and Organizational Performance

Our survey included the 12 HR effectiveness items shown in Table 1. They were rated on an effectiveness scale of 1 to 10. We calculated an overall effectiveness index by taking the sum of these 12 items. The table shows the average ratings of each item on our surveys for 2004, 2007, 2010, 2013 and 2016. As noted earlier, the absolute level of the items has remained relatively stable over the years, they range from 5.3 to 7.8 on the 10-point scale.

We measured organizational performance by taking the sum of the responses to the question, “How would you gauge your company’s performance, relative to its competitors” in these three areas: “Societal and environmental sustainability performance”; “HR function performance”; and “Overall company performance” on a scale from 1=much below average to 5=much above average. Note that we began asking the question about organizational performance in 2010, so the tables of results for this outcome show only the survey years since 2010. Next we examined the correlations between different features of HR organizations and HR performance and organizational performance.

What HR Measures: Efficiency, Effectiveness and Impact

Organizations can collect and make use of three types of HR measures: measures of efficiency, effectiveness and impact. Efficiency refers to the amount of resources used by HR programs, such as cost-per-hire. Effectiveness refers to the outcomes produced by HR activities, such as learning from training. Impact refers to the business or strategic value created by the HR activities, such as higher sales. 

It is common to recommend that HR measurement focus on business outcomes. This can be incorrectly interpreted to mean that only impact measures are truly strategic. In fact, just as with the functions of finance, marketing and operations, a mix of all three types of measures can be useful, and indeed measuring all three is often required to fully understand how HR investments affect organizational performance. Each calls for somewhat different metrics and analytics. They can complement each other when they’re used together.

aResponse scale: 1 = not currently being considered; 2 = planning for; 3 = being built; 4 = yes, have now.
bBased on total score for all twelve effectiveness items as rated by HR executives.
Empty cells indicate that the item was not asked in that year.
Significance level: t p ≤ .10, *p ≤ .05, ** p ≤ .01, *** p ≤ .001.

HR Effectiveness

The results for the relationship between analytics and metrics used and HR effectiveness are shown in Table 2. The measurement features are shown in the rows, and the columns represent different years of our survey. The numbers in the table are correlations, which can range from -1.0 to +1.0. The higher the correlation, the stronger the relationship between the measurement feature and the outcome measure (in this case the index of HR effectiveness).

Using HR metrics and analytics to drive efficiency, effectiveness and impact are all significantly related to HR effectiveness in almost all years. The pattern over time suggests some evolution in the strength of the relationships from efficiency toward impact. Between 2004 and 2016, measuring the efficiency and effectiveness of the HR function shows multiple decreased associations with HR effectiveness. This includes items such as “measuring the financial efficiency of HR operations,” “measuring the cost of HR programs,” “cost-benefit analysis of HR programs” and “using HR dashboards or scorecards.” Over the same period, the corresponding correlations have increased for “measuring the specific effects of HR programs” and measuring the “business impact of HR programs,” “quality of non-HR leaders’ talent decisions,” and “business impact of high versus low job performance.” Over time, measuring the efficiency and effectiveness of the HR function and its services are less associated with HR functional effectiveness, while measuring the pivotal impact of talent, as well as leadership decision quality, are more associated with effectiveness.

Organizational performance has had its strongest association with HR metrics focused on functional efficiency, benchmarks and HR program effects.

Organizational Performance

Table 3 shows the associations between the use of efficiency, effectiveness and impact measures and the ratings of organizational performance. Organizational performance shows a different pattern than we saw above for HR effectiveness.

Historically, organizational performance has had its strongest association with HR metrics focused on functional efficiency, benchmarks and HR program effects. Over time, organizational performance is less strongly associated with measuring the quality of leader decisions and the pivotal impact of job performance. 

Despite frequent calls for HR measurements to engage users and drive decisions outside of the HR function, such activities haven’t shown an increasing association with organization performance, yet they do show an increasing association with HR effectiveness. Perhaps measuring decision quality and the impact of pivotal performance are just emerging and reveal their effects first as differentiators of the quality of the HR function. Their impact on organizational performance may require more evidence of their effects or a more sophisticated understanding of them by non-HR executives such as corporate boards and investors.

aResponse scale: 1 = not currently being considered; 2 = planning for; 3 = being built; 4 = yes, have now.
bResponse scale: 1 = much below average; 2 = somewhat below average; 3 = about average; 4 = somewhat above average; 5 = much above avg.
Significance level: t p ≤ .10, *p ≤ .05, ** p ≤ .01, *** p ≤ .001.

HR Metrics and Analytics Outcomes: Strategy vs. Functional Contributions

The previous section looked at what is included in HR measurements. In this section, we examine the outcomes of the HR measures, contrasting effectiveness in supporting the HR function and its operations with effectiveness in supporting more strategic contributions.

HR Effectiveness

Table 4 shows the correlations of elements of HR measurement outcomes with the index of overall HR effectiveness.

Effectively supporting HR functional and operational contributions showed decreasing associations with overall HR effectiveness between 2004 and 2016, while effectively supporting strategy contributions either held constant at high levels or increased. Notably, effectiveness in every measurement outcome is consistently associated with HR function effectiveness, so it’s important to emphasize that more effective measurement supporting HR functional and operational contributions does distinguish effective HR organizations. Still, the notable increase in many of the items reflecting effectiveness of strategy and decision support suggests that HR effectiveness will increasingly associate with these categories.

aResponse scale: 1 = very ineffective; 2 = ineffective; 3 = neither; 4 = effective; 5 = very effective.
bBased on total score for all twelve effectiveness items as rated by HR executives.
Empty cells indicate that the item was not asked in that year.
Significance level: t p ≤ .10, *p ≤ .05, ** p ≤ .01, *** p ≤ .001.

Organizational Performance

Table 5 shows the correlations of HR measurement effectiveness with ratings of organizational performance.

It shows a pattern that is similar to the one for HR effectiveness. Three of the four strategy contribution outcomes increased their association with organizational performance from 2010 to 2016, while two of the three HR functional and operational contribution outcomes decreased their association with organization performance over the same time period. The results for organization performance reinforce the view that measurement effectiveness in strategy and decision support is emerging as having stronger associations with success than traditional measures of functional and operational outcomes have.

aResponse scale: 1 = very ineffective; 2 = ineffective; 3 = somewhat effective; 4 = effective; 5 = very effective.
bResponse scale: 1 = much below average; 2 = somewhat below average; 3 = about average; 4 =somewhat above average; 5 = much above average.
Empty cells indicate that the item was not asked in that year.
Significance level: t p ≤ .10, *p ≤ .05, ** p ≤ .01, *** p ≤ .001.

Conclusions and action steps

Our results suggest that a variety of HR metrics and analytics usage features and effectiveness outcomes relate to both HR effectiveness and organizational performance. Enhancing these HR features and outcomes offer some of the most potent paths to greater HR and organizational effectiveness, especially considering that their historical level is only moderate.

There also is evidence that the strategic use and outcomes of HR metrics and analytics are increasingly associated with HR effectiveness and organizational performance. This is particularly true for HR functional effectiveness, while the results for organizational performance are more modest and mixed.

HR effectiveness and organizational performance aren’t the same thing, and they’re not perfectly correlated. This means HR leaders face a difficult choice with respect to what they focus on. They can choose to enhance the more strategic HR measurement elements to improve the effectiveness of the HR function, even though it may not have as large an effect on organizational performance as more functionally focused measurement improvements. Leaders outside the HR function are likely to encourage HR to improve more traditional and internally facing measurement features and outcomes, because the connection to organizational performance is somewhat greater. 

Because the results suggest that both operational and strategic measurement features and outcomes have some relationship to both HR effectiveness and organizational performance, we encourage HR leaders to push for key improvements in both. Moreover, considering the historically increasing associations between strategic metrics and analytics elements with HR effectiveness and performance, we encourage HR leaders to improve the strategic elements in particular. They’re increasingly associated with HR effectiveness, and we believe it is only a matter of time before that trend extends to organization performance.

John Boudreau is research director at the Center for Effective Organizations and professor at the University of Southern California’s Marshall School of Business. 

Edward E. Lawler III is director, Center for Effective Organizations and distinguished professor of business at the University of Southern California’s Marshall School of Business. To comment, email editor@talenteconomy.io.


Pic
HR TRANSFORMATION
Here’s What HR Must Do To Have The Business Impact CEOs Want

A survey released early this year of global CEOs and board chairmen was conducted by the prestigious Conference Board, and it concluded once again that human capital is the top challenge they face. While some in talent management and HR might feel honored to be at the top of the CEO’s watch list, they should instead view this listing as a failure, because they have been at the top of the challenges list two years in a row.

This means to me that we in HR haven’t done enough to eliminate the uncertainty and the lack of confidence that comes with being labeled “a challenge.” The other top five issues including customer service, operational excellence, and innovation all require well-managed talent in order to be successful.

In my experience, if human capital is to move from the “challenge” list to the “problem-solved” list, we need to move away from our soft, longstanding reliance on building relationships and instead begin the transition to a high-impact business function. A high business-impact HR is where we focus on directly impacting corporate strategic goals like revenue, innovation, and customer service.

And yes, I acknowledge that the soft, relationship-building approach of talent leaders might have been OK in the past. However, it’s now simply not possible for any strategic function to continually improve and innovate without shifting to a businesslike, hard data-based management approach. Executives have in the past been satisfied with what HR has historically provided, but that was mostly because executives were simply not aware that there was a second, more businesslike approach to talent management.

Unfortunately I don’t see HR making that transition as long as we get away with these low expectations from CEOs. So my suggestion is that we challenge our CEOs to demand much more from HR.

HR is a high impact function

You shouldn’t need a survey to realize the importance of talent to a business. Even Jack Welch has stated that HR should be “the most important department of a company.”

 

We have a high impact for a variety of reasons. The first is cost, because employee and HR costs are often the largest single corporate variable cost item (as much as 60% of all corporate variable costs). Second, the talent function has a further major impact because all ideas and innovations come from well-managed employees. And obviously you can’t have great customer service and smooth operations and production without an excellent workforce.

The 8 action steps for becoming high impact

Once you decide to make the change to this higher business-impact approach, the next step is to identify the specific strategic areas within HR that must become more businesslike. Those areas are highlighted below:

1. Accept accountability for improving people-management results — Talent leaders frequently complain that they shouldn’t be held accountable for people-management results because so many people decisions are made by managers. I find that argument to be spurious because most other business functions like finance, planning, and IT also share responsibilities and decisions with numerous managers. The critical thing to remember is that talent management designs and manages all talent processes, so they are in my view “the default owner.”

We also know that individual operating managers routinely refuse to take accountability for talent decisions, so that leaves talent leaders to accept the “captain of the ship” role. Executives should demand that talent leaders accept accountability for such critical areas as hiring and retaining top talent, for increasing productivity and innovation, for developing and moving talent internally, and for providing rewards in such a manner that they stimulate employee productivity. It’s time to stop shifting the blame and to accept accountability for excellence in talent management, even when we don’t have total control over it.

2. Demand a shift to data-based decision-making — Strategic decision-makers need to demand that talent management shift from its traditional “gut” decision-making to the widely accepted business practice of making all important people-management decisions based on data. That includes using data to identify the most effective hiring criteria, to identify the factors that cause employee turnover, and using data to identify the barriers that decrease productivity and innovation.

An example of database decision-making might focus on performance management. In this area, it is quite common for talent leaders to assume that progressive discipline, coupled with additional training and counseling, will turn a subpar “D level” performing employee into an above-average performer. If you shifted to a metric-driven approach, you would require your performance management person to begin tracking metrics like how long it takes to improve, how much money it costs to improve, and what percentage of these “D players” ever become “A” players.

One final metric area that you should expect your talent leaders to begin developing is predictive metrics. Rather than relying exclusively on historical metrics which tell you what happened last year, these predictive metrics will instead alert you to talent problems and opportunities that will likely occur in the immediate future so that you have sufficient time to act. And add to your predictive metrics your recommended prescriptive actions, so that managers will know what to do to solve their problems. 

3. Measure and increase workforce productivity — Even though measuring and reporting on the productivity of the workforce seems like a basic task, few talent management teams actually calculate or report it. In fact, when you ask talent management professionals who is responsible for measuring and increasing workforce productivity, typically no one will say it’s their role. The most widely accepted measure of talent management effectiveness is known as “workforce productivity,” which is revealed by the average revenue per employee. The two key components required for this calculation, revenue and the number of employees, are usually easily obtained from public data or alternatively, the metric is already calculated on websites like MarketWatch and Hoover’s.

Another more powerful but harder to calculate indication of workforce productivity is revenue per labor dollar spent. This is calculated by dividing your total labor costs into the company’s revenue. 

4. Make managers accountable for great people management — Less than 40% of talent leaders make excellent people management part of the promotion criteria and bonus formula for managers. But since “whatever you measure and reward gets done,” strategic decision-makers must insist that the people management metrics and rewards are large enough to get managers to change their behavior.

Incidentally, only hire managers who are clearly A players. This is because B-level managers have a tendency to protect their job security by hiring C-level employees who won’t challenge their methods or threaten their job security.

5. Build a competitive advantage — Almost every product, business unit, or process views itself as operating in a competitive environment. Unfortunately, talent management all too often considers itself exempt from taking an external perspective, under which it would conduct a competitive analysis and adopt talent-management approaches that would provide the firm with an external competitive advantage.

Under the new approach, talent management would be required to monitor the talent results and the approaches of major talent competitors, in order to ensure that “what we do” in talent is better in every important area than “what they do.” Check with your talent leaders and don’t be surprised to find that they do not conduct side-by-side comparisons between your company and its talent competitors. In a similar light, talent management often fails to capture enough competitive intelligence information on the talent practices of competitor firms.

6. Expect reporting on continuous improvement — Every business function monitors its programs and consequently reports the percentage that they improve each quarter and year. Unfortunately, talent management has frequently failed to measure and report its percentage of annual improvement. At the very least, talent leaders should expect continuous improvement in the quality of hire, workforce productivity, the turnover rate of top performers, the rate of innovation, and the learning and operational speed of the organization. 

7. Measure quality and error rates in people management programs — Talent professionals generally focus on volume and cost, but they routinely under measure and underreport metrics that reveal quality. You should insist that talent leaders implement at least a limited version of Six Sigma quality in the areas of hiring, retention, training, and performance management. Also demand that they conduct a “failure analysis” every time there is a major talent management program or process failure. Some data suggest that hiring has as much as a 46% failure rate, so an error rate that is potentially that high needs to be measured and reported. 

8. Calculate your ROI — Almost every department and program is expected to produce a positive ROI. However, talent leaders routinely make no attempt to calculate or report the talent function’s overall ROI. And in the rare cases when talent leaders do attempt to calculate ROI, they only focus on the cost side, completely ignoring the other side of the equation that covers the business impacts of your investment in talent. When operated correctly, HR should have a higher ROI than finance, operations, and even production.

Final thoughts

Once you begin making this transition to a data-driven high business impact HR, you shouldn’t be surprised when you find that members of your own HR team are not capable or even interested in shifting to this model. If you don’t have the courage to release them, you should at least put these resistors in administrative roles within HR. I also suggest working with supply chain and the CFO’s office to better understand how to increase and quantify the business impacts of HR.


Pic
HR TRANSFORMATION
2019 Trends: FIVE Major Trends in Hearing the Voice of Employees

If you don’t know what this image is... it’s me! 

Actually, it’s a Bitmoji

If you’re confused... I was the first time I saw one as well. 

I was first introduced when my niece sent me one of these via text. Basically, a Bitmoji is a personalized character that looks like you (and that you can change outfits whenever you want, which is why I have my Canada-warm sweater on), that can be sent to others with different messages and emotions. A modern-day emoji! Crazy!


But, I soon realized that this was the only way to communicate with my niece! Gone were the days of phone calls, texts, or even FaceTimes… I had to change.

Long story short, I have a much younger-looking and less gray-haired version of myself as a Bitmoji - it is a part of my life now :)

...I realized that as I typed that smiley-face above, clearly I still date myself with OG-emoticons like that ;)


Why am I telling you this? 

It’s just an example of how the way we communicate and the expectations of others we communicate with is changing. 

This is no different in our personal life, or at work. 

As human beings, we’re the same whether we’re a consumer or an employee (or better Bitmoji versions of ourselves).



It’s time to change

2019 is almost here (can you believe it!), and after working with hundreds of companies to help them hear the voice of their employees in 2018, I wanted to share the main trends that have become prevalent.

First off, change in the workplace is happening in an unprecedented rate - the shift in how companies are understanding the sentiment of their people with the goal of creating a better employee experience is only one of the major shifts that business and HR leaders are facing. It’s clear that the constructs of performance management, communication, learning, talent acquisition and others are shifting with the access to better technologies, insights and approaches.

But more specifically for hearing the voice of employees, it’s quite simple: companies are not seeing value from the current process of an annual employee engagement survey as their only/predominant way to measure and understand the sentiment of employees Why?

  1. It’s too infrequent - our companies move way too fast to understand the sentiment of employees once a year. 
  2. It’s cumbersome… for everyone - with the consumerization of the workplace and HR, employees won’t tolerate filling out a 100-question survey, and the current process doesn’t support HR making real behavioural changes 
  3. It takes too long to get insight - HR, leaders and employees aren’t tolerating getting insights from employee surveys in three months, and only to wait another few months to get it into the hands of leaders that can make an impact.
  4. Very limited ROI (if any) - when you combine the first three, companies are spending a lot of time and effort, and not seeing value from that investment in time and money.


The consumerization of HR

I’ve been writing about this concept for a while, but this is more real than ever. Think about how we can order a coffee on our app and pick it up on the way to work. Or we can order something from Amazon and not only get it next day, but with Prime Now get it in two-hours. Or get vehicles on demand with Lyft… and this list goes on (and quite embarrassingly, yes, I even make coffee in house via an app).

Now think about how in the workplace it’s like pulling teeth to find out how many vacation days an employee has left. 

The expectations of employees are changing, and the workforce is starting to follow suit. But when it comes to hearing the voice of employees, an annual engagement survey isn’t going to cut it to understand the sentiment or our workforce and more importantly, do something about it that has real impact.

I love how this was articulated by Raconteur in a Future of HR 2018 article: “No marketing executive worth their salt would poll their customers once a year, provide zero feedback and then act on the information many months later. Yet, with annual work surveys, this is what HR teams are doing all the time.”

Several organizations have already adjusted their approach so I wanted to share the top five trends I’m seeing in this evolution of hearing the voice of employees.


FIVE Trends in 2019 for hearing the Voice of Employees

I know what you’re thinking… not another TOP 5 TRENDS LIST!!?!?!

I personally like them, actually!! So here it goes.


1. Infrequent Surveys shifting to Active Listening… and it’s more than Engagement

The evolution of hearing the voice of employees has shifted from an annual engagement survey to ‘pulses’ in the last decade. Typically, pulsing employees at a specific cadence (i.e. quarterly) has been conducted with consistent questions each time.

When you look at these questions historically, pulsing traditionally is about ‘employee engagement drivers.’ The Active Listening approach supports supplementing engagement questions with what’s happening in the business in more real-time.

For example, as illustrated above, many companies may still have an infrequent engagement survey, but will start asking similar rotating questions from an engagement survey to trend sentiment more frequently. They’ll also use that cadence to understand what’s on the mind of employees for any other current happenings at the company or to understand the impact of organizational change. The illustration is simply an example. I work with companies Actively Listening every quarter or as frequent as every week with less than five questions - and everything inbetween.

And why are companies shifting?

  1. There is more accountability when insight is more frequent
  2. Companies can dig into issues and see trends more frequently to deal with smoke befor fire and recognize what's working
  3. Employees are seeing an impact and building confidence in offering their feedback
  4. Also, it isn’t 1985 anymore - we have the technology to leverage this insight in a more real-time way and remove the manual intervention of reporting.



2.    It’s all about the Experience

Three ways companies are moving towards improving the EMPLOYEEexperience:

  1. Simplicity - let’s be realistic, no employee wants to spend an hour going through 100+ questions asking them to remember specific details from the previous year. Active Listening makes it simple to provide feedback more frequently, on any device. Also, they are thinking of ways to remove barriers for employees to provide feedback. For example, not requiring employess to download an app or log into an account to ensure feedback can be offered in the 'flow of work.' Also, asking questions about an employee’s demographics (i.e. department) are being eliminated to increase simplicity and improve perceptions around anonymity.
  2. Specific and relevant (and fun) - when questions are more relevant to what’s happening at the moment, employees will tune-in. Companies are also adding custom icons and experiences to make offering feedback less boring.
  3. Responding Anonymously to Employee Comments - many employees are asked open-ended comments in surveys, and most feel as if they go into a black hole and no one is listening. Companies are starting to acknowledge comments or respond to them anonymously. The moment that happens to an employee, the likelihood of them offering feedback in the future increases.

When it comes to LEADERS, well, they’re employees too, so companies are starting to focus on a better experience on how they can leverage feedback. Companies are trending towards getting leaders insights in real-time for their teams/departments as opposed to waiting for reports or information to be sent by HR. This is a game changer and I’ve been enamoured with this. It has been common to see companies offer hundreds or thousands of leaders access to a platform to see insights in real-time. Why? It supports the next trend: a focus on action.



3.   Shift from Measurement to Action by Enabling Leaders *nudge* *wink*

First off… I’m REALLY dating myself with the “*nudge*” and “*wink*” above. Even before there were emoticons, or the interesting ways to depict them using symbols like ;), we used to use *wink* or other words in asterisks to elicit emotions. Sounds far fetched for some, but many of you know what I'm talking about!

Anyways… in order for there to be a true impact on listening initiatives, there has to be action. It’s quite simple: if companies don’t embrace a more frequent listening model, then there is less accountability to act. The accountability or motivation to change behaviours gets lost when there isn’t a check-in on employee sentiment for another 364 days.

I keep hearing people talk about survey fatigue. I work with companies that are actively listening to their employees every two weeks and there’s no issue at all. It’s in fact a ‘lack of action’ fatigue that is the real problem.

This year I saw, more than ever, companies really embrace the idea that it isn’t about measuring a score, it was about changing behaviours. Companies are moving to action in a few ways:

  1. HR no longer being a filter - this involves giving leaders access to insights in real-time. This is becoming one of the biggest and most exciting trends I’m seeing. The reality: engaging employees and building an experience where they can thrive isn’t an HR strategy, it’s a People Strategy. When leaders get access, combined with increased frequency, it breeds accountability.
  2. Leveraging Nudges - with machine learning and A.I., it’s now easier to help enable leaders in more impactful ways. Companies are leveraging this technology to help *nudge* leaders with key content and recommended actions all relative to the feedback from their particular teams and hierarchies.

At the end of the day enabling leaders is critical to get value from your employee engagement or employee voice strategy. Leaders arguably have the biggest influence in engaging employees and impacting performance.



4.  Increased Investment in People Analytics 

Hearing the voice of employees through surveys is just one data point. Companies are starting to do more with these valuable employee insights:

  1. Predictive Analytics - companies are leveraging data to understand and predict what actions will have the biggest impact on improving outcomes. For example, predicting which engagement drivers will statistically have a more positive impact on an eNPS score.
  2. Beyond Feedback - Understanding the Impact to Employee and Business Metrics - unlike the previous point which is looking at a data set from only survey feedback, companies are coupling it with employee data (such as retention) or customer insights (such as NPS) and understanding the level of correlation to external data sets or outcomes.
  3. Natural Language Processing (NLP) on Employee Comments - It’s tough to read hundreds or thousands of employee comments and get out an unbiased view of what the overall sentiment looks and feels like. Companies today are using NLP to get overall sentiment, or derive themes from an unwieldy number of comments to help get more focused and easier insight.
  4. Combining Employee Voice to understand Organizational Networks - Companies are starting to adopt Organizational Network Analysis (ONA) to understand relationships, communication flows, and influence between employees and teams. Layering employee sentiment over this opens up a whole new level of insight that is starting to take form.

With the technology available today, one of the more rapidly growing HR trends is investing more in People Analytics, whether that be internally with Data Scientists, or externally with vendors. It is easier, now more than ever, to integrate technologies and data to help produce actionable insights to help make better people decisions. Companies are starting to invest heavily and will continue to next year.



5. It’s about RIGHT practices, not only BEST practices

For decades, companies would interact with a survey vendor, forced to use the vendor’s questions, and are left with limited, to no ability to adjust the questions and approach to match their specific culture.

A one-size-fits-all approach is starting to leave the workplace. Companies have different visions, language they use, and objectives that adjust with the current needs of the business. I’m seeing a big shift in companies starting to get feedback for things that matter to them, and really focusing feedback on specific internal goals.

For example, I’ve worked with organizations to start with a baseline of recommended questions to understand sentiment around employee engagement, but recently helped a company customize their original baseline to add more focus and insight into three specific components of their 2019 People Strategy (upskilling leaders, improving understanding around mission/vision, and recognition). 

It’s all about customization/personalization. In our personal lives, I have the same iPhone that everyone else has, but the apps I have and the way I leverage it is completely customized to me.


Benchmarking Tradeoffs

What I find fascinating (and quite frankly, relieving) is that companies are starting to accept this level of customization and the tradeoffs that come with benchmarking insights. What I expect to continue more in 2019 is that when companies weigh the ability to benchmark (locked into vendor-driven questions) compared to getting specific about what feedback they want from employees, the customized approach will win.

In my opinion, even if you provide all the benchmarks to me for other companies, it’s definitely interesting, but it shouldn't impact action. The reality is that every company is different, and no vendor has a complete data set available to them. If I’m a 49% and everyone on my benchmark is a 48% I’m not patting myself on the back and packing it up for the year. Companies are putting more focus on continuous improvement based on what they can actually control.



Now what?

It’s been promising seeing the HR and business community starting to shift their approaches from the annual engagement surveys they’ve been leaning on for a long time.

The more I speak to HR and business leaders, for them it becomes more of a mindset shift more than a huge change management initiative. Many leaders are so scarred by the antiquated processes still used today, because it takes a lot of effort, time and money, but not much of a return. They fail to see that reasonable changes are in reach that can yield a lot of impact. When I sit with companies implementing this change, they realize that it’s much easier than anticipated. And if you don’t believe me, just ask me to speak to companies that have gone through it.

I’ve also focused many of these trends on what’s happening the most out there today. There are definitely other things happening in this space. For example, companies are dabbling with listening to the voice of employees in other ways such as scraping content from email and communication channels (i.e. Slack), or recording audio using speech to text to offer insights, all the way to using wearables to monitor abnormal levels of stress. There are many examples like this that are happening, but have very limited adoption. I hope the trends I've shared are within reach for you, as I’ve seen many companies go through this journey in 2018.


Pic
HR TRANSFORMATION
The CMO of People

This post is submitted by Joyce Maroney, Executive Director of the Workforce Institute.

I recently had the pleasure of interviewing David Creelman and Peter Navin, authors of the new book The CMO of PeopleManage Employees Like Customers with an Immersive Predictable Experience that Drives Productivity and Performance. David is a longtime Workforce Institute board member, speaker and author focused on leadership and HR. Peter is Chief Human Resources Officer at Grand Rounds, a leading provider of employer-based technology that connects members and their families to high-quality healthcare. Peter joined me for a podcast in 2017 to talk about why more executives should consider the role of CHRO as a career path.

In this book David and Peter propose a new model for HR leaders to consider that borrows heavily from marketing disciplines and urges them to think about talent management in terms of maximizing the lifetime value of employees. Just as the CMO thinks in terms of the acquisition and lifetime value of customers, Peter Navin’s Talent Funnel “cocktail napkin” chart here summarizes the analogous concepts for how CHROs can think about talent. 

Talent Funnel Model
Peter Navin’s Talent Funnel Model

In our wide ranging conversation, we talked about:

  1. How HR leaders can use this model to up their brand from Personnel Department to strategic partner.
  2. Why HR should approach curating the employee experience the way a Chief Marketing Officer does the customer experience.
  3. Why the “predictable and immersive employee experience” is so important and what tools an HR leader can use to achieve this.
  4. The need to find unconventional people to staff this unconventional model.


You’ll learn a lot more by listening to the podcast below, and even better, by reading the book. And please consider adding your own thoughts by commenting on this post.


Pic
HR TRANSFORMATION
Effectiveness Audit for Your HR Department

For the last 30 years, HR transformation centered around a simple theme: HR is not about HR but about delivering value for employees, customers, and investors. Many who focus on HR transformation (also called disruption, re-imagination, renewal, or the latest term) almost exclusively emphasize how to organize the HR department. We believe that upgrading the HR department goes far beyond HR design.

My colleagues (www.rbl.net) and I have performed empirical research with over one hundred thousand respondents, trained 1,000 of HR professionals, and provided advisory services to dozens and dozens of Senior HR leaders. We have distilled nine dimensions of an effective HR department.

Nine Dimensions of an Effective HR Department

1.    HR ReputationWhat is the HR department known for by all stakeholders?

2.   HR Success: What and who defines HR success?

3.   HR StrategyWhat is the purpose, mission, or strategy of the HR department?

4.   HR Design: How is the HR department organized?

5.   HR and Organization CapabilityHow does HR create the right organization capabilities for the business? 

6.   HR AnalyticsHow can HR access information through digital HR to make better decisions?

7.    HR PracticesHow does HR design and deliver HR solutions?

8.   HR ProfessionalsWhat do HR professionals need to be, know, and do to be effective?

9.   HR Work StyleHow does HR go about doing its work?

These nine criteria for an HR department may be seen as delivering value at four stages (see Victory Through Organization book):

1.    Foundational/Administrative: HR focuses on efficiency.

2.    Functional: HR focuses on best practices.

3.    Strategic: HR focuses on delivering strategy.

4.    Outside-In: HR focuses on stakeholders outside the organization.

These nine dimensions and four stages result in a matrix (see figure) that can be used to audit the overall effectiveness of your HR department.

Figure: The Stages of HR Departments

© 2019 Dave Ulrich, The RBL Group, Inc. All Rights Reserved.

Using the nine domains by the four stages of HR departments matrix, you can assess where your HR department is today by putting an “X” in the cell in each row that represents your HR Department. This assessment helps you know where you currently focus and where you can improve by moving more to the higher phases. For HR departments to live up to their potential to deliver value to customers, investors, and business, they can use this assessment to guide their transformation.