TM - June 2008 - (Page 14) [leading edge] by Dr. Jac Fitz-enz T T Benchmarking: What Is the Right Number? he first things people ask when they start onto the metrics path is, “What should we measure?” and “What is the right number?” The answer is, “It depends.” Actually a best answer is, “That is the wrong question.” There is no universal right thing to measure or right numbers to collect. Measurement is a tool, not a solution, and certainly not a panacea for all ills. In its best form, metrics can be an enabler. Measuring things that are important to your organization will help you make better decisions about investments in human capital. If you monitor data trends, you should be able to identify problems. For example, as you dig into the total turnover rate and ask, who is leaving, why, at what point in their tenure and so forth, you should see not only where in the organization a problem is occurring, but also what is causing it. Measuring your work is useless if you don’t analyze it. The worst thing you can do is report HR data to senior management and not be able to explain what it means, what is driving the trends and what should be done about them. Emerging From a Fog In 1978, we started training people how to measure human resources’ work quantitatively. In 1984, I wrote, How to Measure Human Resources Management. Those training events bracketed the first generation of HR metrics. In 1985, we published the first benchmark report to answer the question, “How do we compare?” This launched the second generation of metrics. That was a real eye-opener for many in HR. Until then, they had no idea where they stood, and in most cases they didn’t even care. Many HR practitioners had their heads in the sand, focused only on their processes with no regard for the effects on their organizations or how they compared to their peers outside. It was a major step forward for the profession and even SHRM, under Mike Losey’s leadership. He supported the work and co-branded the report with my Saratoga Institute. This had a very positive effect in that it caused many in HR to think beyond their processes. They realized they could track changes over time and see how efficient they were in comparison to others. longer a strategic tool because organizations have changed so dramatically in recent years, they are largely incomparable. Look what outsourcing is doing to company structures. Consider the effects of deregulation and globalization. How do you compare companies whose revenue is as much offshore as onshore against companies who operate largely only in North America? All banks are no longer alike. Neither are utilities. Consumer goods manufacturers operate plants everywhere in the world. Call centers are spread from India to Russia. Comparability is dead, and benchmarking is in a terminal state. Third Generation If past data is ambiguous, what can you measure? It is absolutely clear the opportunity is in the future. We The worst thing you can do is report HR data to senior management and not be able to explain what it means, what is driving the trends and what should be done about them. Benchmarking became a stimulant. You heard people in meetings talk about what they were learning and how they were changing their view of human resources management. This was a strategic-level advancement. The bad news is many people never went beyond basic work monitoring. They still are stuck in efficiency. Thirty years after the introduction of metrics and 23 years after the first benchmarking, I am still asked, “What should we be measuring?” and “What is the right number for (fill in the blank)?” Given the massive changes in the marketplace in the past decade, HR needs to move beyond benchmarking. Frankly, in my opinion, benchmarking is passé. It is no About the Author Dr. Jac Fitz-enz is founder and CEO of the Human Capital Source and Workforce Intelligence Institute. He can be reached at editor@ talentmgt.com. have to manage for tomorrow and do it today. The game has changed from lagging to leading indicators, from tangibles to intangibles. Today, instead of monitoring HR costs, time cycles and numbers hired and trained, we should be tracking leadership, engagement, culture, readiness, commitment, employer brand and other intangibles that foretell our future. Send me an e-mail at source@ netgate.net, and I will give you the definitions of the new metrics, along with a white paper on the development of a new human capital management model and operating system designed for managing the future. 14 June 2008 talent management magazine www.talentmgt.com source@netgate.net source@netgate.net http://www.talentmgt.com
Table of Contents Feed for the Digital Edition of TM - June 2008 TM - June 2008 Editor’s Letter Contents Human Performance Leading Edge Foundations The New Components of Compliance Candid Culture: Embracing Employee Complaints Transitioning to a New Era: C&B at Nonprofits Three Ways to Build Successful Manager-Employee Relationships Implementing Successful Learning Programs The Succession Fix Fifth Third Bank: Putting People First Zaxby’s: Making Employees’ Jobs as Palatable as Its Menu Workforce Readiness: Preparing Personnel to Meet Business Goals Kelley Blue Book: Writing the Book on Performance Management Advertisers’ Index Editorial Resources Full Potential TM - June 2008 TM - June 2008 - (Page Intro) TM - June 2008 - TM - June 2008 (Page Cover1) TM - June 2008 - TM - June 2008 (Page Cover2) TM - June 2008 - TM - June 2008 (Page 3) TM - June 2008 - Editor’s Letter (Page 4) TM - June 2008 - Editor’s Letter (Page 5) TM - June 2008 - Editor’s Letter (Page 6) TM - June 2008 - Editor’s Letter (Page 7) TM - June 2008 - Editor’s Letter (Page 8) TM - June 2008 - Contents (Page 9) TM - June 2008 - Contents (Page 10) TM - June 2008 - Contents (Page 11) TM - June 2008 - Human Performance (Page 12) TM - June 2008 - Human Performance (Page 13) TM - June 2008 - Leading Edge (Page 14) TM - June 2008 - Leading Edge (Page 15) TM - June 2008 - Foundations (Page 16) TM - June 2008 - Foundations (Page 17) TM - June 2008 - The New Components of Compliance (Page 18) TM - June 2008 - The New Components of Compliance (Page 19) TM - June 2008 - The New Components of Compliance (Page 20) TM - June 2008 - The New Components of Compliance (Page 21) TM - June 2008 - The New Components of Compliance (Page 22) TM - June 2008 - The New Components of Compliance (Page 23) TM - June 2008 - Candid Culture: Embracing Employee Complaints (Page 24) TM - June 2008 - Candid Culture: Embracing Employee Complaints (Page 25) TM - June 2008 - Candid Culture: Embracing Employee Complaints (Page 26) TM - June 2008 - Candid Culture: Embracing Employee Complaints (Page 27) TM - June 2008 - Candid Culture: Embracing Employee Complaints (Page 28) TM - June 2008 - Candid Culture: Embracing Employee Complaints (Page 29) TM - June 2008 - Transitioning to a New Era: C&B at Nonprofits (Page 30) TM - June 2008 - Transitioning to a New Era: C&B at Nonprofits (Page 31) TM - June 2008 - Transitioning to a New Era: C&B at Nonprofits (Page 32) TM - June 2008 - Transitioning to a New Era: C&B at Nonprofits (Page 33) TM - June 2008 - Transitioning to a New Era: C&B at Nonprofits (Page 34) TM - June 2008 - Transitioning to a New Era: C&B at Nonprofits (Page 35) TM - June 2008 - Three Ways to Build Successful Manager-Employee Relationships (Page 36) TM - June 2008 - Three Ways to Build Successful Manager-Employee Relationships (Page 37) TM - June 2008 - Three Ways to Build Successful Manager-Employee Relationships (Page 38) TM - June 2008 - Three Ways to Build Successful Manager-Employee Relationships (Page 39) TM - June 2008 - Implementing Successful Learning Programs (Page 40) TM - June 2008 - Implementing Successful Learning Programs (Page 41) TM - June 2008 - The Succession Fix (Page 42) TM - June 2008 - The Succession Fix (Page 43) TM - June 2008 - The Succession Fix (Page 44) TM - June 2008 - The Succession Fix (Page 45) TM - June 2008 - The Succession Fix (Page 46) TM - June 2008 - The Succession Fix (Page 47) TM - June 2008 - The Succession Fix (Page 48) TM - June 2008 - The Succession Fix (Page 49) TM - June 2008 - Fifth Third Bank: Putting People First (Page 50) TM - June 2008 - Fifth Third Bank: Putting People First (Page 51) TM - June 2008 - Zaxby’s: Making Employees’ Jobs as Palatable as Its Menu (Page 52) TM - June 2008 - Zaxby’s: Making Employees’ Jobs as Palatable as Its Menu (Page 53) TM - June 2008 - Zaxby’s: Making Employees’ Jobs as Palatable as Its Menu (Page 54) TM - June 2008 - Zaxby’s: Making Employees’ Jobs as Palatable as Its Menu (Page 55) TM - June 2008 - Workforce Readiness: Preparing Personnel to Meet Business Goals (Page 56) TM - June 2008 - Workforce Readiness: Preparing Personnel to Meet Business Goals (Page 57) TM - June 2008 - Workforce Readiness: Preparing Personnel to Meet Business Goals (Page 58) TM - June 2008 - Workforce Readiness: Preparing Personnel to Meet Business Goals (Page 59) TM - June 2008 - Kelley Blue Book: Writing the Book on Performance Management (Page 60) TM - June 2008 - Kelley Blue Book: Writing the Book on Performance Management (Page 61) TM - June 2008 - Kelley Blue Book: Writing the Book on Performance Management (Page 62) TM - June 2008 - Kelley Blue Book: Writing the Book on Performance Management (Page 63) TM - June 2008 - Kelley Blue Book: Writing the Book on Performance Management (Page 64) TM - June 2008 - Editorial Resources (Page 65) TM - June 2008 - Full Potential (Page 66) TM - June 2008 - Full Potential (Page Cover3) TM - June 2008 - Full Potential (Page Cover4)
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