PEOPLE RESOURCING

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PEOPLE RESOURCING

• Evaluating resourcing activities
• Norma Heaton
• September 2006

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Why should we evaluate resourcing activities?

• To maximise the contribution of the resourcing
  function
• To establish whether improvements could be made
  (Taylor, 2005)
• To demonstrate that HR activities add value

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Adding value 3 types of contribution

• Delivering business objectives
• Administrative excellence
• Acting as a champion for people management

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Delivering business objectives

• At a time of organisation expansion key
  resourcing activities will be?
• At a time of organisation contraction key
  resourcing activities will be.?

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Administrative excellence

• Add value by ensuring administration of
  resourcing activities is cost effective and of a
  high standard
• Administering recruitment and selection processes
• Administering and recording absence
• Drawing up appraisal documentation

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Acting as a champion for people management

• Organisations that are good at managing their
  staff increase their chances of achieving
  long-term competitive advantage
• PD people need to explain and demonstrate the
  worth of effective people management practices
• See Survival strategy, People Management 28
  October 2004

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Evaluation criteria

• Problems of evaluation
• Outcomes may be intangible
• Payback may be difficult to calculate
• 3 questions to bear in mind
• Are we achieving our objectives as effectively as
  possible?
• How far does a practice achieve what it sets out
  to achieve?
• Are we achieving our objectives as efficiently as
  possible?
• The most effective approach may be expensive than
  viable alternatives
• Are we achieving our objectives as fairly as
  possible?
• Importance of discrimination legislation
• Effect of unfairness on motivation

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Forward and backward looking criteria

• Example of backward looking criteria turnover
  levels
• Future oriented evaluation usually takes the form
  of cost-benefit analysis
• See Bratton (2003) and Taylor (2005) for worked
  examples

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Quantitative evaluation criteria

• Straightforward personnel information on
  resourcing issues
• Candidate acceptance rates
• Number of formal grievance cases
• Creation of ratios
• Recruitment cost per new recruit
• Evaluative tools such as questionnaires
• Proportion of employees satisfied with
  work/manager etc

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Qualitative evaluation criteria

• Provide explanations eg why are objectives not
  being met?
• Provide detail and a richer understanding
• Back up key messages and add background colour

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Evaluation methods

• Benchmarking
• HR auditing
• Survey based evaluation
• Goal based evaluation

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Benchmarking

• The systematic process of comparing your
  business with others, or parts of your own with
  another, to test how you stand and to see whether
  change is needed. Usually you will identify
  examples of superior performance and when you do
  you should set out to emulate and even better
  them (Bramham, 1997, p1)

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Benchmarking

• Internal benchmarking
• Most common in large organisations where several
  units carry out similar types of activity
• Comparison can be made and efforts made to
  establish reasons for differential performance
• External benchmarking
• Less common and more problematic
• Reluctance to share data on behalf of better
  performing companies
• Alternative is to use published data eg CIPD
  surveys, IRS surveys

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HR auditing - features

• Comparison of performance against other
  organisations
• Comparison with standards acknowledged to be
  best practice
• Approach appropriate for organisations seeking to
  be employer of choice
• Uses research linking certain PD practices to
  positive business outcomes

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Survey based evaluation

• Management opinion of HR function
• Tend to focus on satisfaction with key services
  offered by HR
• May be an opportunity for managers to have a go
  at HR
• See Cooper (2001) and Buyens and De Vos (2001)
• Surveys of employees
• May focus on development needs
• May attempt to measure how people feel about
  their jobs and how they are treated

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Goal based evaluation

• Used to determine how effectively specific
  objectives are being met
• Examples might include target numbers of
  applications from specific groups
• May be affected by changing priorities and
  contexts

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Approaches to HRM audits (Nutley 2000)

• Systems audit
• Identify system controls
• Assess adequacy against best practice guidelines
• Example recruitment and selection
• Compliance audit
• Systems audit may be combined with a test of
  whether practice complies with requirements of
  internal control
• Example investigate a sample of selection
  decisions
• Performance audit
• Appraising value for money in the HR area
• Examples absence management, turnover and
  retention rates

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Approaches to HRM audits - 2

• User satisfaction audit
• Management and employee surveys (as above)
• Value added audit
• Cost-benefit analysis
• Certain techniques such as training and
  development are more amenable to this
• Strategic contribution audit
• Tend to focus on senior personnel staff and their
  representation at board level, their input into
  corporate strategy and their role in implementing
  strategy

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Approaches to HRM audits - 3

• Nutley (2000) draws the following conclusions
• Purpose can vary
• Focus on achievement of accountability v
  organisational improvement
• Emphasis on minimum standards v excellence
• Benefits include
• Good evidence based information about the
  practice of HRM
• Weaknesses and problems of implementation are put
  on the agenda
• Independent audit strengthens a weak HR/personnel
  system
• Drawbacks include
• Focus on procedure v desire for local flexibility
• Do benefits outweigh costs?

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Cutting edge approaches to evalution

• Evolving methods involve measuring the impact of
  PD activities on organisation performance in
  financial terms
• Sears Group (USA) exercise is a good illustration
• a 5 point improvement in employee attitudes
  will drive a 1.3 point improvement in customer
  satisfaction which in turn will lead to a 0.5 per
  cent improvement in revenue growth
• See discussion in Holbeche (2001)

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Conclusions?

• A major challenge for HRM researchers is to
  examine not only the value added of different
  strategies but also to predict the magnitude of
  the value added of the HRM function for
  organisational outcomes more accurately and to
  make their research results meaningful to HR
  practitioners (Bratton, 2003)

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CIPD tools for evaluation

• Developing managers for business performance
  managing the return on your investment (CIPD,
  2004)
• Managing the psychological contract taking the
  temperature (CIPD,2004)
• People and performance designing the HR
  processes for maximum performance delivery
  (CIPD, 2005)

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Questions to consider

• What are the forces driving the move to
  demonstrate added value in the field of HRM?
• What are the strengths and weaknesses of the
  various audit and evaluation methods?
• What do you consider to be best practice in
  evaluating HRM?

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References and further reading

• Bramham,J, (1997) Benchmarking for people
  managers, LondonCIPD
• Bratton,J.(2003) Evaluating human resource
  management in Bratton,J. and Gold,J. Human
  Resource ManagementTheory and Practice,
  Hampshire Palgrave Macmillan
• Buyens,D. and De Vos,A. (2001) Perceptions of the
  value of the HR function, Human Resource
  Management Journal, Vol 11, No 3, pp70-89
• Cooper,C. (2001) Win by a canvas, People
  Management, 25 January 2001
• Holbeche,L. (2001) Aligning Human Resources and
  Business Strategy, Roffey Park Institute, Oxford

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References continued

• Nutley,S. (2000) Beyond systems HRM audits in
  the public sector, Human Resource Management
  Journal, Vol 10, No 2, pp21-38
• Purcell,J.et al (2003) The multipack scan,
  People Management, 15 May 2003
• Taylor,S. (2005) People Resourcing, LondonCIPD