7 People Results - HR performance and perception measures

7 People Results – HR Perception
and Performance Indicators
http://www.flickr.com/photos/blyzz/2530816698/sizes/l/

The EFQM Model –
7 People Results
International Human Resources Management, Dr. Jörg
Klukas 2

SUMMARY OF THE LAST
LECTURES – WHAT DID
YOU LEARN?
Klukas 3

What we have learnt.
• Overview of the EFQM Model
to be applied for HR- • Criteria 5
Departments • Process Oriented Management
• Criteria 3 System, Roles
• HR Planning • HR Processes, Sub-Processes,
Procedures
• HR Marketing, Recruiting
Marketing Recruiting,
Integration • Indicators and Improvement of
Processes
• Succession Planning
• Maturity Levels of Process
• Employee Survey
Peformance
• Strategic Competency
Management and Blended
Learning • Criteria 4e
System • Learning Organization
• Annual Employee Feedback • People, Places and Objects
p , j
Interviews and Target Appraisals Approach
• Empowerment and Internal
Communication
• Feedback (360°) and Motivation, • Intercultural Management by
Total Reward Lixiu
Li i
Klukas 4

The EFQM Model –
7 People Results
Klukas 5

The EFQM excellence model
Q

Enablers Results

People
People Results

Policy and Customer Key
Leadership
p Strategy Processes Results Performance
Results

Partnerships Society
& Resources Results

Innovation and Learning

Klukas 6

Q
People
People
Results
Key
Customer
Leadership Strategy
Strateg Processes Performance

Partnership
Results

Society
Results
7. People R lt
7 P l Results
& Resources Results

a. Perceptions
These are the people’s perceptions of the organization.

b. Performance Indicators
These are the internal measures used by the organization in order
to monitor, understand, predict and improve the
organizations people.

Klukas 7

The EFQM excellence model –
People Results
p

In practice, excellent organizations
Topics
op cs
• D
Develop and agree a set of performance indicators and related outcomes to
l d f f i di d l d
determine the successful deployment of their strategy and supporting
policies, based on the needs and expectations of their people. • Performance
Indicator Theory
• Set clear targets for Key Results based on the needs and expectations of • Strategic
their people, in line with their chosen strategy. alignment (BSC)
alig e t
• Demonstrate positive or sustained good People Results over at least 3 • Leading/lagging
years. indicators
• Target Setting
• Clearly understand the underlying reasons for and drivers for observed trends • Approach
and the impact these results will have on other performance indicators
and related outcomes.
Linkage with
Cause analysis
• Anticipate future performance and results. • Driver analysis
(correlation
• Understand how the Key Results they achieve compare to similar organizations,
and use this data, where relevant ,for target setting.
analysis)

• Segment results to understand the needs and expectations of specific groups
within their organization. Klukas 8

Why are People Results important?
y p p
• People are the
resource that
makes the
difference
between
organizations 
motivation and
satisfaction are
essential to
success
• People provide
P l id
the
organization’s
inspiration,
creativity, vision
ti it i i
and motivation

Klukas 9

Why are People Results important?
y p p
• People
provide the
organization
organization’
s skills and
competencies
• People need
to be
t b
satisfied with
their job,
motivated to
do their b t
d th i best
and to be
convinced
that the
organization
i ti
acts in their
best interest

Klukas 10

INDICATORS

Klukas 11

Indicators…
• …a numerical measure of the degree to which the
objective is being achieved
achieved.
• …item of information collected at regular intervals
to track the performance of a system.
• …defines the measurement of a piece of important
and useful information about the performance of a
program expressed as a percentage index rate or
percentage, index,
other comparison which is monitored at regular
intervals and is compared to one or more criterion.

 How do you know what you are achieving?

Klukas 12

Aspects for Performance Indicators.
p

…analyze based on
…monitor areas of
relevant segmentations
risks/success
for interest groups

Performance
Indicators…

…predict whether
…check whether
strategic targets can be
operational process
achieved
objectives are achieved
(Balanced Scorecard)

Klukas 13

Example Performance Indicators.
p

…analyze for all business
…monitor long term units and hierarchy levels
commitment and employees,
freelancers, trainees

Fluctuation
(employee turnover)

…check we have the …predict achievement
right people, at the of End of Year
right time at the right Headcount
place (acc.
(acc to HR Plan)

Klukas 14

Q
Quality of Performance Indicators.
y
• Guess? Systematically retrieved?
• Sometimes necessary to make educated guesses
guesses,
because of pure data availability
• But an educated guess is better then no indicator
g

• Example: Estimation Methods
• Number of Applicants per Year
• Count applicants in January, March, August  divide by
3 and multiply by 12

Klukas 15

Leading Indicators vs. Lagging Indicators.
g gg g
• Lagging Indicators: Retrospective monitoring
and evaluation of a process or an activity
activity.
Target: Allow indications for improvement and
learning.
• Leading Indicators: Indicators that predict the
change of lagging indicators.
Target: Allow to make conclusions and
T t All t k l i d
presumptions about performance and quality of
future processes.

Leading Indicator Lagging Indicator
(time t) (time t+x)

Klukas 16

Lagging g
gg g gets sometimes Leading.
g

Leading Lagging
Indicator Indicator
(
(time t)
) (
(time t+x))
Fluctuation Commitment Customer
(measured (measured Satisfaction
monthly) annually in (measured after
employee survey) each
project/service)
j t/ i )

Leading Lagging
Indicator Indicator
(time t) (time t+x)

Klukas 17

Leading & Lagging Indicators
g gg g
Market / Customer (outside)

Growth
Organization (inside)
New
Products & Profitability
Innovation
Questions
Q ti Customer
C t
Internal Satisfaction
of Strategy
Processes Loyalty
employee
survey Service
Leadership
Quality

Career Behavior
opportunity of employees
Growth Attitude of Customer
driver employees Re at o
Relation

direct
Teamwork
leadership
Performance/
Feedback Empowerment
p
Culture

Klukas 18

Leading/Lagging Indicators
g gg g

Increase/growth

Clear
Expectation,
Responsi-
bilities learn
Values
Commitment
Feedback
F db k
Targets and Engagement
Strategy Confidence Consequences
Tasks Trust

encourage
Requirements
of
f Motivation
Performance Recognition,
Promotion
Tech-orga. See and Satisfaction
Performance
work understand fair? with Results
(Results) Material
environment results and System
Conse-
quences
Skills,
Skills learn
Knowledge

improve

Klukas 19

Correlation Analysis.
y
• single number that describes the degree of
relationship between two variables
• Common used method: Pearson Product Moment
Correlation (Pearson's correlation)
• Correlation coefficient:R2
 measures the degree of relationship (and
direction) between t
di ti ) b t two variables
i bl
• -1 < R² < 1
R
R² = 0 no relationship
R² = 1 perfect correlation
R² = -1 as one variable increases, the
other decreases
Klukas 20

Spurious Correlation.
p
• false presumption
that two variables are
correlated when in
reality they are not
• result of a
third factor that is not
apparent at the time
pp
of examination
• example: correlation
between stork
population and birth
rates (Matthews,
2000) ) Source: flickr.com
Klukas 21

Example of strong correlation
p g

Employee
Return on Sales
motivation
index 86 points
R n

Employee
motivation
i i
index 46 points

Source:Kundenstudie
Emotional customers connection Handelsfilialen;Mitarbeitemotivation
International Human Resources Management, Dr. Jörg sindex auf einer Skale vom 0-keine
Klukas Motivation bis 100- maximale 22
Motivation

Strategic Focus  Indicators of a BSC
g
• Many 100 Performance Indicators for
• Processes
• Approaches
• Risks/success areas
• Special segmentations ( g employees, freelancers, trainees)
p g (e.g. p y , , )
• …

• Strategic indicators embedded in a BSC are those few that
have a strategic focus in the current year by means of:
• These indicators must change strongly (hire 100 people,
decrease sickness level by 50%)  indicators of change
y ) g
• There are particular risks or success areas predicted that must
be monitored carefully (new competitor in the same region
looking for 100 new hires  keep commitment high) 
indicator f
i di t of sustainability
t i bilit
Klukas 23

Target Setting
g g
• Targets for indicators are based on the needs and
expectations of interest groups
• Hence, there a the following sources for target
setting:
• The trend is your friend
• Benchmark by Best-in-Class Organizations
• Interest Group
Interest-Group Surveying about their expectations
• Strategic Possibilities in long-term

Klukas 24

Cause Analysis –
Identify the right improvement measures
y g p

Enablers Results

People
People Results

Policy and Customer Key
Leadership
p Strategy Processes Results Performance
Results

Partnerships Society
& Resources Results

Innovation and Learning

Klukas 25

Analysis Possibilities.
y
• Root-Cause Analysis to identify improvement
measurements (question 7 times why to find the real cause)
• Tools: Fishbone Diagram

causes main problem
to be improved (indicated by indicator)

Sub problem

• Impact Analysis to prioritize improvement
measurements (you can’t do all improvements at once)
Effort to change

Cause B

Cause C Cause A

Klukas 26
Impact to improve main problem

Root-Cause Analysis.
y
• Identifying systematically the “root causes” of
problems or incidents
• Root Cause: fundamental breakdown or failure of
a process  prevents a recurrence of the problem
when resolved

Klukas 27

Fishbone Diagram.
g
• Displays potential causes for a certain problem or effect
• Created by Kaoru Ishikawa
• First used in the 1960s
• Steps:
1.
1 Problem identification
2. Identification of major factors involved
3. Identification of possible causes
4.
4 Analysis

causes main problem
to be improved (indicated by indicator)

Sub problem
Klukas 28

Fishbone Diagram.
g
• Fishbone Diagram - Example

Klukas 29

Other Tools Used in Root Cause Analysis.
y

Brainstorming
5 Why’s
Pareto Chart
Gap Analysis
etc ….

Klukas 30

Impact-Analysis.
p y
• Assessment of the pros and cons of pursuing a
course of action in light of its possible
consequences, or the extent and nature of change
it may cause
nge
Effort to chan

Cause B

Cause A
Cause C

Impact to improve main problem

Klukas 31

7A PERCEPTION
MEASURES
Klukas 32

Q
People
People
Results
Key
Customer
Leadership Strategy

Partnership
Results

Society
Results
7. People R lt
7 P l Results
& Resources Results

a. Perceptions

These are the internal measures used by the organization in
order to monitor, understand, predict and improve the

Klukas 33

People Results.
p

People’s P
P l ’ Perceptions of the Organization.
ti f th O i ti
In practice, excellent organizations
• D
Develop and agree a set of performance indicators and related outcomes to determine the successful
l d f f i di d l d d i h f l
deployment of their strategy and supporting policies, based on the needs and expectations of their
people.

• Set clear targets for Key Results based on the needs and expectations of their people, in line with
their chosen strategy.

• Demonstrate positive or sustained good People Results over at least 3 years.

• Clearly understand the underlying reasons for and drivers for observed trends and the impact
these results will have on other performance indicators and related outcomes.

• Anticipate future performance and results.

• Understand how the Key Results they achieve compare to similar organizations, and use this data,
where relevant ,for target setting.

• S
Segment results to understand the needs and expectations of specific groups within their
t lt t d t d th d d t ti f ifi ithi th i
organization.
Klukas 34

People Results
p

Perceptions.
P ti
• These are the People’s perceptions of the organization. They may be obtained
from a number of sources, including surveys, focus groups, interviews and
structured appraisals
appraisals. Topics
op cs

• These perception should give a clear understanding of the effectiveness , from the • Employee Survey
people’s perspective, of the deployment and execution of the organization’s people • Applicant Survey
strategy and supporting policies and processes.
• Image as
• D
Depending on the purpose of the organization, measures may focus on:
di h f h i i f attractive employer
tt ti l
(media resonance
• Satisfaction, involvement and engagement analysis) (8a)
• Pride and fulfillment • Internal Customer
Survey of HR
• Leadership and management Department (6a)
• Target setting, competency and performance management
• Aggregated View
of Employee
• Competency, training and career development Feedback Talks
or 360°
360
• Effective communications
Feedbacks
• Working conditions International Human Resources Management, Dr. Jörg
Klukas 35

HOW TO MEASURE
PEOPLE RESULTS?
Klukas 36

Examples.
p
• Employee Survey (internal evaluation)
• Employee Survey (external visibility of results) à
kununu.de; GreatPlaceToWork;…
• Employee Survey in sense of an internal customer
survey of HR
• Surveys about Cooperation with partners (Employees
Council, Labor Union, Buying Department,…)
• Surveys of candidates about expectations of an attractive
employer versus survey of employees about delivery of
expectations

Klukas 37

EMPLOYEE SURVEY

Klukas 38

Excellent Organizations use people surveys and other forms of
employee feedback to improve people strategies, policies and
plans

Aims of employee feedbacks:

• alignment of views between staff and managers to conduct
performance, goals and potentials
• Optimal exploitation and expansion of the potential of employees
• Feedback for the leader
• promotion of job satisfaction and motivation

Klukas 39

Excellent Organizations use people surveys and other forms of
employee feedback to improve people strategies, policies and
plans

Aims of employee feedbacks:

• early recognition and overcoming of possible conflicts and
difficulties

• professional development opportunities for the employee
• no call for caution or warning the employee
• no call to action coordination on specific individual projects
Klukas 40

Employee Survey – a process
p y y p
• After retrieving the
questionnaires they have to be
evaluated regarding, last targets,
strengths and weaknesses.
• These results have to be
communicated to all employees,
prioritized and cross – functional
focus groups analyze reasons,
suggests actions and target
i d
values for the next survey

Klukas 41

Participation Rate.
p

Klukas 42

360 DEGREE FEEDBACK

Klukas 43

360 Degree Feedback.
g
• Systematic collection and
feedback of performance data
on an individual or group
derived from a number of their Boss
stakeholders in their Team
performance
f Peers Members

• Measures the behaviors and
competencies shown by the
individual
i di id l or group ini Custo-
achieving goals Self mers
• Assessment by the boss, staff,
team members,
b Staff
S ff
internal/external customers,
suppliers, family, friends and
self assessment
Klukas 44

360 Degree Feedback - What does it
measure?
• Not only the results achieved by people, but also how the results
were achieved
• The increasing emphasis by organizations on measuring employee
opinions on a number of issues, such as communication or morale,
achievement of corporate standards of behavior or values
• Assessment of teams and departments and their group-
communication, decision-making-processes

Boss

Peer Team Members

s

Custo-
mers
Self

Staff

Klukas 45

The IT Survey Group Worldwide.

I like my work 80

roductivity, Innovation & Learning
g
Easy to get information
needed for my work 69

I am participated
in decisions of my work 60

My team looks for possibilities
to optimize processes 74

I am encouraged to suggests
70
innovations and improvements
My team recognizes different views
of people 69

My team cooperates with other teams
79

Know, what kind of competencies
66
are needed in the future

Could develop in the last
62
Pr

12 monthth

Problems are discussed openly
73
in my team

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Yes% ITSG 2004

Klukas 46


My leader recognizes good performance 60

Leadership
p
Leader gives feedback to improve performance 56

Clarity how my performance is evaluated 65

Leader is available and supports me 80

72
arket
My team knows customer needs exactly
Ma

Our processes are designed to fulfill customer’s
customer s 51
needs

Know strategy and could explain 46
to someone else
ategy

See clear connection between my work and strategy 68
Stra

My leaders explain strategy 51

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Yes% ITSG 2004

Klukas 47

y p

Klukas 48

Perception Measures for Interest
p
Groups.
HR Customers
(leaders, employees, departments)
( , p y , p )

Applicants Employee
E l
council

Employees Partners

Society
Klukas 49

Perception Indicators - Examples.
p p
Satisfaction with their development opportunities (Surveying)
• How satisfied are the employees with their development
opportunities?

Ø Deviation from Personnel Planning in %
• Degree of deviation of the number of actual employments from
planned employments

Placement in the BestPersAward
• How good is the organization’s HR in comparison to other
companies?

Evaluation of People-Competencies (Customer Surveys)
• How do the customers (Employees) evaluate the competencies of
the HR Department?

Klukas 50

People’s Perceptions of the Organization

COMMITMENT

Klukas 51

Commitment.
•People with high commitment are people:

– who are prepared to go the extra mile for their employer,
– who care about the future of their company and
– who are ready, willing and able t
h d illi d bl to:
• exert the maximum effort,
• deploy maximum intelligence,
• and apply the maximum creativity

in their work for the benefit of the o ga a o as a whole.
e wo o e e e o e organization w o e.

Klukas 52

Key drivers to high commitment.
y g
•Leadership 31%
•Ethical organization
•Equitable reward
E it bl d
•Viable and creditable strategy

•Development 29%
•Provide opportunities to develop
•Regard people as assets to be invested in not cost to be cut
•Investment in people = investment in company’s future
•Support diversification (
pp (individuals)
)

•Empowerment 27%
•=Responsibility + Authority
•Employees are respected for their talents
•Vest authority in their front-line staff
•Employees are reluctant to express their views, or exercise their initiative

High
Hi h commitment = D ’t tell employees what to think, but li t
it t Don’t t ll l h t t thi k b t listen what
h t
employees say.
Klukas 53

Commitment – Model (1).
( )
Commitment = 2 Conditions:

1. Necessary Condition = Retention
– For whatever reason, employees intend to remain with
their
th i current employer.
t l

2. Sufficient Condition = Recommendation
– Employees are not only motivated to stay, but also think
highly enough of it to recommend to others t join

Klukas 54

( )
•4 Clusters (conditions = dimensions)
Recommendation

The cohabiting The engaged

Europe: 14% of workforce Europe: 54% of workforce
Germany: 6% of workforce Germany: 72% of workforce

The separated The separated Retention

Europe: 16% of workforce
p Europe: 16% of workforce
p
Germany: 9% of workforce Germany: 13% of workforce

High
Hi h variation from country to country.
i ti f t t t
Klukas 55

( )

Engaged
Residents Performers
(job security) (drivers)
faction
Satisf

(improver)
(bad influencer)
Distant
The unreached Performers

Motivating Environment
Klukas 56

Commitment and EFQM.
Q
“Top management does a good job of providing
leadership.”
•EFQM Members 40%
•NON-EFQM Members 33%

“I am satisfied with my involvement in issues that affect
I
my work.”
•EFQM Members 62%

“I feel my performance is evaluated fairly.”
•EFQM Members 50%
•NON-EFQM M b
NON EFQM Members 53%

“My supervisor develops people’s abilities.”
•EFQM Members
EFQM 49%
Klukas 57

Commitment and Business Performance.
•Period watched from 1999 to 2001

•Change in operating margin
•High commitment companies +3,74%
•Low commitment companies -2,01%

•Change in net profit margin
•High commitment companies +2,06%
•Low commitment companies
L i i -1,38%
1 38%

Klukas 58

Commitment in the Cycle of Success.
y
KPIs
Value added

Number 1 in Germany
New Media Service Ranking

Customer People
Revenue ROIHR per head
65 m€ 1,19 revenue Stronger Involvement
Greater Loyalty 158T€
Participation Rate in Empl. Survey: 92 %
Customer Loyalty Index:
y y 87 Satisfaction Work Conditions: 99
Recommendation Rate: 90% Top100 Ranking as one of the most Satisfaction Job: 98
Willingness to Reorder: 90% innovative German companies Satisfaction Compensation: 79
Willingness to be announced as
reference: 89%

Average Customer
Satisfaction I d
S ti f ti Index: 90
100 = fully satisfied 0 = unsatisfied

Greater Benefit Stronger Commitment

•Professionaland innovative solutions Employee Commitment : 8,1
based on internet and multimedia Employee Commitment Benchmark:
p y
technologies 7,2
Number of Certificates: 255
Top10% TRI*M: 7,8
•Customer s win awards and rankings • thereof Technology: 126
for there internet sites: • thereof Quality: 50
E-Oscar, iF, Goldene Biene, E-Result • thereof PMI/ITIL/Test: 75

More Experiences
Experiences,
Increased Productivity

Project/Service Expertise
Klukas 59

Commitment.
•International Comparison:

•Europe 70%

•Norway, Denmark, Austria, Spain 76%
•Germany, Finland, Switzerland, Greece 74%
•Belgium 73%
•Netherlands, Portugal 72%
•Turkey
T k 71%
•Italy, Sweden 70%
•Czech Republic 69%
•France
France 67%
•Poland 66%
•Hungary 61%
•UK 59%
•Ireland 55%
Klukas 60

Example TRI*M Commitments (
p (2000)
)

ITI
10,0
10 0

7,9 8,0
7,8
, 7,8
, 7,7
77
7,6
7,4
7,3
7,1 7,1 7,1 7,1
7,0 7,0
6,9
69 6,9
69 6,8 6,9
69 6,9
69
6,7 6,6 6,7
6,4
6,3
6,2
62 6,2
62 6,2
62 Top 10%
6,1 6,1
6,0 Top 30%
Medium
Europe North Central South West- Germany Bottom 30%
Europe Europe Europe Europe
Bottom 10%
(incl. D)
Klukas 61

People’s Perceptions of the Organization

MOTIVATION

Klukas 62

Motivation – Customer Retention and
Employees Involvement.
p y
• Business Units with moderate involvement of employees and
moderate customer retention are in average financial better than
business units with a high level of one factor.
b i i i h hi h l l f f

High
Partly optimized Optimized
units which are working units which are working
1,7 times 3,4 times
more effective more effective
than not optimized units than not optimized units
p p
Customer
Retention
Partly optimized
units which are working
Not optimized
p
1,7 ti
1 7 times
Business units more effective
than not optimized units
Low
Low Involvement/Motivation
High
Klukas 63

7a People’s Perceptions of the Organization

SATISFACTION

Klukas 64

Satisfaction.
Employees are:
•happy contented and fulfill their desires and needs at work
happy,
•Satisfaction is a factor in:
• employee motivation
• employee goal achievement
• positive employee morale in the workplace
•Factors, which improve employees satisfaction:
• benefits
• company activities
• positive management within a success framework of goals,
measurement and expectations
•Measured by:
• employee satisfaction surveys
• in areas such as : management understanding of mission and
management,
vision, empowerment, teamwork, communication, and coworker
interaction. International Human Resources Management, Dr. Jörg
Klukas 65

What employee want?
A typical example of Survey Studies
yp p y
1. New professional challenges
2.
2 Development opportunities
3. Pleasant working environment
4. Salary
Information &
Communication
Source: Drake Beam Morin, Internationale Befragung 2002
Work
environment
e o e
Understanding
Overall
High correlation with overall satisfaction: Strategy &
Development
Link to Job
• Leadership
Leadership
• Information / Communication
• Understanding and Linking Strategy to Job

The closer two areas,
the stronger the correlation
correlation.

Klukas 66

Satisfaction.

Source: Strategies for survival in the war of talent (2002), in: Career
(2002)
Development International
Klukas 67

Satisfaction.

• Satisfaction of employees in the United Kingdom

Strongly disagree 1
Disagree 2
Agree 3
Strongly agree 4

Data from the ETS Employee Survey benchmark Database,
UK, 2009 International Human Resources Management, Dr. Jörg
Klukas 68

Satisfaction – Absence.

Source: flickr.com
Klukas 69

Satisfaction – Absence-Tendencies.
CCH's Law, Explanation and Analysis of the Patient Protection and
Affordable Care Act

• The rate of absence is on the rise and U.S. employers are losing ground in
their battle against it
• employers are struggling to find effective p g
p y gg g programs that keep healthy
p y
workers on the job because unscheduled absence can cost large companies
an estimated $850,000 per year
• The 2006 survey revealed an absence rate of 2.5 percent—that’s up from 2.3
percent in 2005, 2.4 percent in 2004 and 1.9 percent in 2003
2005 2 4 19
• In fact, the 2006 rate is the highest rate we have seen since 1999, when it
was 2.7 percent
• Similar to the 2005 survey results, this year's survey found that 65 percent
of unscheduled absences—two out of every three absent employees—were
f h d l d b t t f th b t l
for reasons other than personal illness.

Absenteeism Satisfaction

Klukas 70

Satisfaction – Monetary Satisfaction.
y
• Source: payScale

Klukas 71

Satisfaction – Monetary Satisfaction.
y
• Source: http://www.itjoblog.co.uk

Klukas 72

7B PERFORMANCE INDICATORS

Klukas 73

Q
People
People
Results
Key
Customer
Leadership Strategy

Partnership
Results

Society
Results
7. People R lt
7 P l Results
& Resources Results

a. Perceptions

These are the internal measures used by the organization in
order to monitor, understand, predict and improve the

Klukas 74

People Results.
p

Performance Indicators.
P f I di t
• These are the internal measures used by the organization in order to monitor, understand, predict
and improve the performance of the organization’s people and to predict their impact on
perceptions.
perceptions

• These indicators should give a clear understanding of the efficiency and the effectiveness of
deployment and execution of the organization’s people strategy and supporting policies and
processes.

• D
Depending on the purpose of the organization, measures may focus on:
di h f h i i f

• Involvement and engagement

• Target setting, competency and performance management

• Leadership performance

• Training and career development

• Internal communications

Klukas 75

7b Performance Indicator for HR Sub
Processes, e.g. Plan&Find
, g
Measures Main Steps Procedures

HR Planning and Qualitative HR Planning and
Deviations of Quarterly Review as part of Business Unit Reviews
Review; Mgmt. of Budgeting
p
plans
general conditions
l diti Management of general conditions
(policies and quota of hiring, training with prioritizing by means of cost-benefit analysis,…)
#applicants
per open HR marketing and Allocation of internal and external Commission of marketing
position; cost
communication Updating communications planes,
channels; Organizing communication measures and deployment of
of recruiting marketing activities and job posts
per open management and marketing campaigns communication plan
position

Receipt of application,
Pre-selection by HR Manage leaders 1. Decision:
registration and request of
and forward to Leaders responses and follow up decline, recommend, invite
time to hire, missing information
Applicant
pp
success rates
t
of interviews Management
Management of
2. Decision: Prepare offer and
interviews or
decline, recommend/save, offer negotiation
assessments

Creation,
time to
Contract verification, Mailing and administration, Response Controlling,
contract, Creation of personal files
rejection rate Management authorization of Information of leaders Follow ups
contract
fluctuation
(labor Target
turnover) Monitoring integration
Integration Preparation of infrastructur, 1 First Work Interviews,
within Welcome Day
y steps ( g initiation
p (e.g.
employment Management
M t facility, d i i t ti
f ilit administration,… Day
D Probation
P b ti
plan)
probation Talks
period
Klukas 76

Performance Indicators - Examples.
p
Talents-quota in %
• Share of Apprentices/BA-Students/Bachelors/Diploma-
Students/MBA-Students
• Definition: Number of Apprentices/Number of Employees
• How good is the organization’s prevention for being independent of
the market and framework (e.g. stop of employment)?

Rate of labor turnover rate during the trial period of new
employees (l
l (less th a half year)
than h lf )
• Did the organization made the right choice?
• Definition: Number of terminations during the trial
period/Number of Employments
• Are the right People employed and trained on the right way?

ø Organization’s expert knowledge in years
Organization s
• Is the organization able to commit employees in the long run?
Klukas 77

Degree of certification
(
(Human Capital Readiness Index)
p )
Human capital category/objective such as
• Strategy - Strategic competencies
• Leadership
• Talent - Strategic awareness/culture
• Culture - Strategic alignment/motivation

Measure of strategic readiness
• Leadership Gap Employee Survey of leadership effectiveness
• Cultural Alignment Index% Employees understanding strategy
• Goal Alignment (%)
• Incentive Alignment (%)

Source: IPRC, 2010

Klukas 78

Consequences of a high turnover rate.
q g
• High tangible and intangible costs
• Between 50% - 200% of an employee’s annual salary
• Severance costs
• Unemployment insurance premiums
• Outplacement fees
• Advertising costs
• Training costs
etc…

• High turnover rate is often cited as a key barrier to high
quality service.
• Reduction of productivity of an entire work unit/team,
particularly as a result of uncompensated extra workloads,
the stress and tension caused by turnover and, as a result, a
decline in corporate morale.
Klukas 79

Turnover Rate - Impact.
p
• businesses that do not demand so many skills and
knowledge from their workers  turnover impacts
business in a negative way
• Waiters and cooks are valuable “assets” because very often clients are attracted or
repulsed more by the personality of the waiter or by the meals the chef prepares
than by the brand name or the furnishing of the restaurant. In such cases when a
“star” waiter or cook leaves, part of the clientele goes away to the new place where
the waiter or the cook starts work, thus stealing clients in addition to making the
work process more difficult for his or her previous employer.

• for IT companies it might be a bit better
• At least a former employee of an IT company cannot steal customers if there are
long term
long-term commitments from existing customers or if the clauses in his or her
contract forbid working with current company customers but the skills gap left
behind him or her might be absolutely enough. In any case, when people leave in
bulk, this is a symptom and there is food for thought about the (real) reasons that
make them do it.

Klukas 80

Turnover Rate – Industry Average.
y g

Klukas 81

Reasons for Termination.
Types of termination
Termination
agreement Termination by
10% Employer
32%
End of fixed-term
contract
20%

Termination
Initiative for termination of by Employee
employment 38%

…b by
… by employer
employee 44%
49%

Both
7%

Klukas 82

Reasons for Termination.

Why do employees leave the company?

• 33,3 % working atmosphere
• 23,4 % lots of employer terminations in organization
• 17,6 % career opportunities
• 11,2 % job has to be changed after 3 5 years
3-5
• 7,6 % job has to be changed after 5-10 years
• 6,7% private reasons

Commitment?

Source: Focus Money 2006
Klukas 83

The role of employee satisfaction and
the costs of turnover.

Satisfaction Turnover Rate Commitment

Career opportunities, including: Availability of training, including:
• Perceived opportunity for advancement • Opportunity to learn new skills/develop new talents
• Presence and/or clarity of development plan. • Corporate commitment to training and development
Enjoyment of the work, including: • Keeping up with latest technology.
• How well work utilizes skills Compensation/rewards, including:
• “Fit” with job • Base/variable pay
• Work/life balance. • Benefits
Corporate leadership, including: • Recognition of contributions
• Communication regarding performance
performance.
• Clarity and strength of vision and mission
• Management style
• Overall perception of leadership
• Level of respect and support received.

Klukas 84

Number of applications for each vacancy.
pp y
• poll of employers by Association of Graduate
Recruiters in 2010 (over 200 firms including
Cadbury, Marks & Spencer, JP Morgan and
Vodafone):
• Highly increasing number of applications f each
f for
vacancy (today: 68,8)
• In hotly contested sectors (makers of fast-moving
consumer goods): 205 applications f each j b
d ) l for h job
• number of available positions: predicted to fall by
nearly 7%

Klukas 85

Work related illness.
• higher prevalence in a body of workers (e.g.
department) than in the general population
• Different types
• Stress
• Climatic conditions (e.g. offices with air conditions,
geographical region with high humity etc.)
• Radiation (for workers in nuclear industry)
• L
Lung di
disease ( i workers)
(mine k )
• Skin disease (hairdressing, printing)

Klukas 86


 Costs?
Commitment?

Klukas 87

• Since 2000: working days lost per
worker with a statistically
significant fall of nearly 30%
• Statistically significant falls over
the period for both injury absence
and days lost resulting from work-
y g
related illness
• Average working days lost per
worker as a result of work-related
ill health fell by 28% over the
h lth f ll b th
decade

Source: HSE: The Health and Safety
Executive Statistics 2009/10, Great
Britain

Klukas 88

Time-To-Fill.
Sign up of the
Need for employees labour contract

Start HR marketing End of onboarding

Selection of candidates End of trial period

Permission for position First working day
g y

Time to fill
Klukas 89

Media Resonance Analysis.
y
• Shows the media presence of a company, e.g.
• number of contributions
• contact coverage
• distribution across media types and regions
• level of awareness of the corporate messages (mentions
f f
per article, presence in headlines and on pictures etc.)

Source: flickr.com

Klukas 90

Employment Costs.
p y
The Employment Cost Index
•quarterly report of compensation costs in USA
quarterly
•presents the relative changes in wages, bonuses and benefits
•provided by the U.S. Bureau of Labor Statistics
Employment cost
Index, 3-month percent
change, seasonally
adjusted, civilian
j ,
workers, compensation,
Sep. 2008-Sep. 2010,
source: BLS News
Release 10/2010

Klukas 91

Driver for Success market leader in Germany

Example T-Systems MMS
a p e Syste s S 1. 1. 1. 1. 1.

5.
65
56 M€ turnover
46
10.
34
customer satisfaction
32 index
89 91
24 88
employee commitment
17 86 (TRI*M )
86 8.3 8.1
8.1 7.9 LEP AwardWinner
82 EEA +
Prize Winner EEA
80 7.7
77 + Prize Winner
LEP +
7.6 PriceWinner 2. Platz
EEA BestPersAward
+
Finalist
3. Platz
BestPersAward
EEA
Recognized for
g
7.1
71 Excellence

EEA
Recognized for
Excellence
International
Best Service Award

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Klukas 92

Contact me!
Dr. Jörg Klukas
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• Email: joerg.klukas@pludoni.de

International Human Resources Management,
Dr. Jörg Klukas 93

7 People Results - HR performance and perception measures

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