Considerations for Evaulating the HR Function

The following piece was initially suggested by a fellow HR practitioner who was questioning the approach we take in evaluating the HR function. Some good food for thought.

 

The Wall Street Journal had an interesting article on 7/30/12 where they identified and ranked the Top Chief Financial Officers of major companies. Their ranking was reported to have been “ ...created using a combination of quantitative and qualitative analysis”.

WSJ’s initial candidate pool for finance was drawn from the S & P 500 for companies with a market cap of $5 billion or more and in their jobs for at least three years. These companies were reviewed for financial performance and interviews were conducted with financial recruiters and analysts to determine who should be in the final list.

Could we do something like this for the chief human resource officers (CHRO) of a similar group of companies? The author of the article states, "My bias is to say that we could not", for the following reasons:

The CFO operates in a field that is dominated by performance data, which may not be the sole result of the CFO”s job, but he does compile and report it, and therefore has a sense of ownership/responsibility for it. The CFO is also the focal person for reviewing a company’s financial results.

 

However, those of us in the HR field deal with what is primarily a set of intangibles that may be crucial to achieving and maintaining an effective organization, but are rarely measured or visible to the outside world, unless there is a terrific calamity.

While it is true, turnover can be measured, safety and health data is quantitative, attitude surveys can give us data on employee views, recruitment data and success rates for job placements can be measured but is this data considerd as of core importance to the organization?

Maybe, the author continues, we can take another tack and identify what functions, activities, or behaviors should be measured in order to get a handle on what is important to the business so that the effctiveness or even the contribution of the HR functon can be evaluated. For starters, the author suggest the following ideas:

1.    The level of meaningful participation in corporate planning

2.  The degree to which contributions are made to the development of new business strategies

3.    How effective is HR in responding to the board on a variety of topics related to the function such as:

     a) social and economic trends that will affect the character and qualities of human assets

     b) how well executive management team operates, achieves objectives, and is prepared for and

          resolves problems 

     c) How well does the firm's reward and recognition program foster and support the organization's

         mission, goals and objectives?

4.  Does HR help the CEO and other members of management spot new and developing talent?

5.   Are there systems and processes for capturing hard and soft data regarding the building of talent for

     management continuity and succession?

6.  Are the HR functions required by the corporation are effective and up to date?

7.   Is the HR function open to new ideas and is it creating cost effective solutions to new issues and

     competitive pressures?

8.  Is there some form of HR Philosophy to help guide managers in discharging their responsibilities to the

     employees?

9.  Does HR demonstrate the courage and the wisdom to tacfully respond where management is taking

     unethical positions, violating the rights of employees, or taking positions that are in conflict with the

     social policies or cultures of the countries within which the company operates?

10.  Does HR effectively represent the organization in various public forums where the interests of the

      enterprise directly or indirectly may be affected by official and unofficial outside bodies?

11. Does HR take a long but balanced view of corporate practices, plans and policies that affect company

     costs and are relevant to will being of all parties.

 

If you can’t measure it, you can’t manage it, and this old saw is the issue for HR. Therefore, it would be interesting to sharpen this list and make it as complete as possible. Then each of these criteria could be evaluated as to whether it can reflect some form of quantitative measurement. On the other hand maybe relevant scales could be developed illustrating performance targets. However, the question remains, would the results have as much stature as the evaluation of the CFOs?

Rising Cost of Health Care

Posted below are two articles on the cost of health care for employers

Bloomberg Article Warns that Health Care Coverage May Not be Affordable

Posted on November 30, 2012 by AHIP Coverage

An article in Bloomberg examines the affordability of health care coverage as the Affordable Care Act (ACA) is implemented. The article warns that the new coverage may “come at a potentially unaffordable cost.” Here are some key highlights from the Bloomberg article:

·        As the administration spells out the details, many uninsured will be surprised at how much they will have to pay. It may involve “very substantial amounts,” and “there still will be a significant number of people who can’t afford health coverage,” said Ron Pollack, head of Families USA, a consumer group that backs the law.

·        “People are often surprised at how expensive health insurance is once they have to pay for their own,” said Karen Pollitz, a senior fellow at Kaiser Family Foundation. “The subsidies will make that better, but they won’t make the cost disappear.”

·        “While we’re only dimly aware of it, we all pay,” said former Congressional Budget Office Director Robert Reischauer. “There shouldn’t be free-riders.”

·        “What’s more, there are provisions in the law capping the financial burden the requirements will impose on the uninsured. If costs exceed 8 percent of their income, they are exempt from the individual mandate to buy insurance. And people can choose to pay a penalty instead of buying insurance. The fine would be $695, or 2.5 percent of a person’s income, whichever is greater.”

·        “In 2019, some families could see their premiums climb four times as quickly as the help they receive from the government, according to CBO. That means they will have to bare a larger share of the burden of purchasing coverage.”

·        “That will be a major challenge,” said John McDonough, a public-health professor at the Harvard School of Public Health. “It makes the affordability picture far worse.”

·        “A November 2009 analysis by CBO of a draft of the program provides a rough indication of how quickly the subsidies will ramp down. It shows the government covering 77 percent of the premium costs for single persons earning about $20,600, 42 percent for those earning around $32,400 and 13 percent of the premium costs for those making about $44,200.

·        That means many with modest incomes will be responsible for covering the bulk of their premium costs. About 5 million people required to buy coverage won’t receive any help from the government because they earn too much, CBO projects.”

·        “There may not be sufficient management of expectations,” said Lynn Quincy, a health-policy analyst at Consumers Union, a Yonkers, New York-based advocacy group. Lawmakers should have been telling the public the law promises “lower-cost” — not “affordable” — coverage, she said. “Everybody interprets ‘affordable’ differently — it’s in the eye of the beholder.”

 ARTICLE FROM WORKFORCE MANAGEMENT ON SPECIALTY DRUGS: THE LATEST SYMPTOM OF POCKETBOOK PAIN

An article in December's edition of Workforce Management examines the cost implications associated with specialty drugs  Here are some key highlights from the article:

• Specialty drugs, also called "biologics" are designed to treat serious and complex conditions such as cancer, make up about 17% of employers drug costs. However, only 1% of the workforce takes these drugs.
• Total costs of these drugs are expected to grow to 40% by 2017.
• Specialty drugs are derived from living organisms and have no substitute which are produced chemically
• Many biologics are administered in a doctor's office and requires extensive monitoring which further drives up costs. Furthermore, the proper medication and treatment compliance protocols are critical when it applying biologics effectively.
• With so many players involved with these drugs, the employer, the health plan, the pharmacy benefits manager among others ; it is unclear who should be in charge of controlling the cost...
• You can have an oral oncology pill that used to be an injection, only it cost $5,000 because it is managed as a speciality drug.
• Were not going to reduce the cost of specialty drugs so employers need a good understanding of how the diseases they treat can impact productivity.

           From Michael Salisbury at www.hralliance.biz 

 

 

 

Employee Engagement Ideas

Emily Manke, is an Outreach Coordinator for Online Human Resources, enjoy her guest blog.

Keeping employees engaged and motivated is an integral part of the HR pro’s experience. So instilling all of the elements necessary to help employees stay content and productive, is key. Here are 6 ways you can help your employees become passionate about your organization.

1. Rewards and recognition.

It’s been indicated in a number of studies, that rewards and recognition programs help keep employees engaged. Any number of programs can do the trick, as long as you research, and follow through. Avoid selecting a rewards program with few winners, because it can be discouraging to those who aren’t selected. It appears the more people are recognized and rewarded for their work, the more motivated and engaged they become.

2.  Find out what’s making them unmotivated.

Instead of focusing on ways to impassion employees, attempt to discover what’s holding them back from loving their job. Open communication between staff members is crucial for so many reasons, and this is one of them. If you can solve a problem that is causing a number of employees to be uninspired and thus unproductive, such as removing a problem manager, that alone will work wonders to make your staff more comfortable. They’ll feel heard, and this is likely to make them more loyal, and you got it, engaged.

3. Schedule time that’s just for fun with the staff.

Having personal ties with co-workers opens them up to a side they may not see at work, and leads to a better relationship all around. Setting up a time during work hours where everyone can relax and get to know each other a little better outside of work, can alleviate stress and frustration, and inspire employees to do better and achieve their goals. Whether it be a trip to the mini-golf course, or simply take-out in a conference room with some nice, not work-related discussion, these kinds of small gestures can work wonders to giving your employees that extra umph.

4. Make sure employees know what’s expected of them.

It’s hard for an employee to go for the gold if they don’t know what that means exactly. Even if you think someone’s job duties are clearly defined, give it some second thought. If you have a hard time describing or articulating exactly what’s expected of an employee, chances are they do too. Set clear cut goals for every position so they know what’s expected of them, and they can aim to do better than that.

5. Train management to lead better.

Even if someone is a natural leader, and has management experience under their belt, that doesn’t necessarily mean they know how to keep their team motivated and engaged. If you’re having a large scale problem with productivity and engagement, take a look at who’s in charge. 65% of respondents to a recent survey, said they’d rather have a new boss, than more money. Proof that management, is a powerful motivator. If a manager seems to lack the ability to praise, and lays the criticism on heavy, or even if he is just too hands-off, he may be the problem. An involved and highly capable manager is necessary to encourage maximum efficiency and engagement, that kind of leadership takes training.

6. Let your employees have lives.

The subject of work life balance has been a hot-topic in HR for years, and for good reason. Companies with flexible schedules, and who support employees in their pursuit of out of work activities and health, tend to have a more engaged, productive workforce. Seems strange, but the more research is done, the more it seems to suggest that loosening your employees reins, in turn ends up reining them in.

Conclusion: Employees are individuals and need to be treated as such. Bad management, a lack of rewards, and poor communication are all contributing factors to why employees become disengaged. By establishing good relationships through recognition programs, good communication, and general respect, we can repair relationships and build an engaged workforce.

From Michael Salisbury www.hralliance.biz