Taking HR to the next level - Deloitte

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3. Identify HR’s primary performance leversDevelop HR performance measures that align with business objectives andprovide a baseline to track performance and drive improvement.Implement reporting and analytic capabilities to provide business insight,not just data.To develop HR services that align with the company’s vision, it’simportant to develop performance measures that show how HR cancontribute to business value. In recent years, many companies havemade substantial progress in defining and implementing performancemeasures and scorecards for HR — particularly around cost-relatedmeasures, such as total payroll and total compensation. Theseperformance measures are a step in the right direction; however,there is still much more to be done.As HR becomes more strategic, it must focus on value-relatedmeasures, such as management time spent on managing peopleissues and time to efficiency for new managers and employees 2(see figure 4 ).HR’s performance measures should focus on business impact, notjust on HR operating efficiency. For example, one of the most effectiveways to see if a company is leveraging the value of its people is toanalyze its workforce productivity — revenue per employee dividedby profit per employee — and then compare the result to othercompanies in the industry. Other value-oriented HR metrics includenew hire turnover and promotion rates, bench depth/breadth ratios,lateral mobility ratios, retention rates for critical workforce segments,and pay-for-performance ratios.Figure 4: Value-Related HR BenchmarksWhich of the following benchmarks does your companytrack now, and which are you likely to begin tracking inthe next three to five years?Sectorproductivity ratioTime to efficiencyfor new managersand employeesManagement timespent on managingpeople issuesTotalcompensation0% 25% 50% 75% 100%TodayIn 3-5 yearsResults based on all participantsNot likely to trackDon’t knowSource: “Aligned at the Top” survey, Deloitte Touche Tohmatsu and the Economist Intelligence Unit.2“Aligned at the Top” survey, Deloitte Touche Tohmatsu and the Economist Intelligence Unit, 2007.6
Align HR servicesOnce a strategic direction has beendefined, the company must reviewits HR policies, programs, andpractices to confirm that they alignwith overall business objectives. Thisexercise needs to be data-driven andgenerally involves choosing a smallnumber of HR service offerings froma vast array of options, and thendetermining which stakeholder groupwill receive which kinds of services. Italso involves prioritizing investmentsto focus on business areas that makethe most significant contribution tooverall performance and results.7
Page 1 and 2: ConsultingTaking HR tothe next leve
Page 4 and 5: A roadmap for HR strategyIn the pas
Page 6 and 7: 1. Understand business strategyUnde
Page 10 and 11: 4. Segment stakeholdersDefine and s
Page 12 and 13: 6. Design HR servicesDesign and imp
Page 14 and 15: 7. Establish a delivery model for H
Page 16 and 17: 9. Continuously improve HR operatio
Page 18 and 19: Case Study: Creating competitive ad
Page 20 and 21: Putting it all togetherPeople and t
Page 24: About DeloitteDeloitte refers to on

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