Thursday, November 26, 2009

HR Software and the “Halo Effect”

As I am reminded of all I have to be thankful for this Thanksgiving, including the ultimate sacrifice made by the Turkey situated before me, I am also reminded of the old axiom – “one man’s meat is another man’s poison.” So how on earth does this relate to the Halo Effect?

Here’s how …

The Halo Effect, or when positive traits are over-emphasized to the point of not being objective about negative traits, is one of the potential pitfalls of the HR profession. Recruiters who get caught-up in a candidate’s positive physical appearance, energy level or even specific competencies might have a tendency to look beyond certain gaps the candidate also presents, or decide not to aggressively try to surface those gaps. In this situation, the Halo Effect helps the candidate (meat) but can very easily hurt the organization (poison).

There is perhaps another set of circumstances impacting the HR profession that has this quality of duality, namely, the Halo Effect that often applies to procuring HR Solutions. For decades we have witnessed customer organizations generously ascribing business benefits to the virtues of particular HR Technology solutions, when in-fact HR data and process standardization, well defined transaction processing rules, and any reasonably robust “System of Record” might be accounting for many of the business benefits they are enjoying.

Throw-in providing real-time access to data over the web, employee / manager self-service, reporting tools and the 4 “abilities” being adequately represented … i.e., configurability, scalability, usability and inter-operability … and one could argue that 70+% of the benefits of HR Technology investments will be achieved irrespective of the particular HCM solution being deployed!

So, on this Thanksgiving … the 388th Thanksgiving since the autumn of 1621 when the Pilgrims and the Wampanoag celebrated the colony's first successful harvest … the purveyors of HR-ERP’s and Talent Management solutions should maybe pause to exercise some humility … realizing there may not be that much difference in “business impact” generated by one proven solution over another.

Arguably, a lot of the business benefits customers derive from their HR Technology offerings (e.g., cost savings or efficiency gains, better data for workforce decisions, improved employee productivity, retention and engagement) may have less to do with incremental features and functions of the solution than with the foundational work the customer does to usher in its new technology investment (process, data and business rules standardization) – coupled with the business and technology foresight already reflected in the vendor’s early releases.


Sunday, November 22, 2009

Those employing Workforce Modeling tools should be good “onion-peelers”

While flexible workforce modeling tools and forward-thinking modeling frameworks are major determinants of whether an organization crashes, copes or creates business value during significant workforce re-alignment events, don’t underestimate the importance of “peeling the onion” before converting modeling outcomes into decisive actions.

Case in-point from the world of HCM-BI (Human Capital Management-Business Intelligence):

- An organization determines their turnover is lower than their competitors – good news.

- Same organization looks further and determines their turnover is lower, but they are losing more people to their direct competitors than their competitors are losing to them --not good news.

- Peeling the onion further … it is determined that very few of those employees leaving for direct competitors are determined to be upper quartile performers --- back to good news.

Workforce re-alignments, consolidations and other transition scenarios are ripe for flexible HR solutions offering “what-if” modeling capabilities. Optimize execution during these critical exercises and generally ensure the future health and success of the business.

Modeling examples from the world of M&A include making informed decisions about who to keep when there’s a workforce redundancy (e.g., consider multiple data points including relative value in the context of the new business), determining the best retention, incentive and engagement hooks for different classes of key employees, balancing cost savings from possibly accelerating the timing of terminations with the need to avoid escalating business risks (e.g., unsatisfactory customer service or product quality).

Another re-alignment scenario that will be more prevalent over the next few years is “baby boomer exit planning and associated risk mitigation” … where the same core issue will be on the table as in most other workforce re-alignment situations, namely, determining whether it’s best to address key skill/competency gaps through training, re-deploying, hiring a regular employee, hiring a contractor, or doing nothing.

Peeling the onion further on game-changing workforce planning and modeling scenarios reveals other key nuances that should be considered:

- Understanding the impact of factors such as management style, work schedules, team-based vs. individual work models, and formal vs. informal work environments on employee productivity, engagement and retention

- Predicting which employee's performance would be most adversely impacted by uncertainty and extensive organizational change ... perhaps even formalizing “copes well with uncertainty and change” as a foundational competency for the business

- Including “Y” factors (i.e., motivation, attitude and personality) when evaluating internal/external candidates for positions … “Y” factors are now considered by many to be as important as the existence of certain skills or competencies

- The dimension of “latent competencies” … when workforce capabilities exist but are not obvious or being leveraged by the organization, since they are not relevant to performing within assigned positions / roles ... another reason to track competencies at BOTH the person and position level!

- The modeling of “cascading gaps” caused by re-deploying internal employees to address workforce gaps

- Including the cost of downtime when modeling the cost of training vs. other options to address a workforce / competency gap

- Including the cost of hiring manager time in screening, selection and/or training activities to address workforce / competency gaps

"TRV" -- or Total Realized Value -- on HR Technology Investments

[Blog written by this author and originally posted on Starr Tincup]

There's no denying that HR technology solutions continue expanding in both sophistication - and intended usage by a broader community of diverse stakeholders. Consumers and purveyors of transactional HR systems have transformed themselves into consumers and purveyors of strategic HCM solutions used to effectively acquire, deploy, assess, develop, reward and engage talent. If it weren't for the worst economy in 70 years, this might have been a good time to be an HR or HR Technology professional.

Notwithstanding the various industry studies over the years that found higher than expected dissatisfaction rates and lower than expected utilization rates of major brand HR-ERP's and Talent Management suites, many if not most HCM solutions in the market do what they say they do ... namely automate, enable and (in some cases) link HR processes, transactions and events, while also improving and (in some cases) optimizing workforce-related decisions and outcomes.

The bottom-line reason why "HR basics" ... like truly knowing actual and potential workforce costs, impending HR risks, and the supply and demand for certain competencies and skills under different business scenarios ... have been shortchanged among some of the "higher-order" benefits of HR technology is perhaps aptly framed by a new concept that may be the answer to finally getting HR basics right --- Total Realized Value or "TRV."

"TRV" on HR technology investments, simply defined, is the degree to which the broad potential value that a robust HCM solution can deliver gets translated into a more narrow range of tangible value, due to such factors as system underutilization, improper utilization, ineffective change management (causing lower system adoption) and other "value inhibitors or dependencies" ... such as the need to painstakingly maintain standard job families and competencies when leveraging a particular talent management suite, or the need to account for different data models across the spectrum of HCM systems in use.

The "TRV' concept might be just what the doctor ordered to replace the long beleaguered "ROI" metric in HR technology circles, a metric which has perhaps outlived its usefulness. Indeed, TRV = ROI - Reality.

Saturday, November 21, 2009

Functionality vs Usability Trade-Off

I would unflinchingly do without 25% 'additional functionality' for a 25% uptick in HCM solution usability any day of the week.

This position relates to HR-ERP's, but is even more applicable to niche Talent Management Solutions (e.g., LMS, Compensation Management, Recruiting, Performance Management, Succession Planning) ... because the latter class of solutions are geared for a broader and more diverse user community. Also, since HR-ERP's are leveraged mostly as data repositories/systems of record and administrative processing engines, usability expectations have historically been quite modest.

Presumably, any HR/HCM solution on the market for years is commercially viable -- often measured by whether core business requirements are accounted for within a fully tested product. Commercial viability of an HCM enterprise solution is rarely based on a usability (or even utilization) metric, even though low marks on usability will always undermine broad-based solution adoption, ROI achieved, and the leveraging of that extra functionality you are likely paying for.