Human Capital Management Analytics
Since the early days of the modern finance function, when barely comprehensible financial reports were sent to managers and then left largely unread, making management analysis relevant to non-finance professionals has been a major issue. The same is true of Human Capital Management analytics – data needs to be relevant and presented in a context […]

Since the early days of the modern finance function, when barely comprehensible financial reports were sent to managers and then left largely unread, making management analysis relevant to non-finance professionals has been a major issue. The same is true of Human Capital Management analytics – data needs to be relevant and presented in a context that line managers can readily understand.

Working out what data should be sent is a two-way process that requires fairly ruthless management. It’s important to encourage feedback from across the organization, but choice needs to be limited to keep the process manageable – asking users what kind of reports they’d like can easily lead to unwieldy wish lists. Building a business case for analytics adoption in part rests on replacing today’s ad hoc reporting (where it occurs) with more efficient, less resource-hungry alternatives. Ultimately, HR managers will be treading a delicate line between distributing data according to generalized role definitions and providing tailored information.

Information dissemination has become far easier with the emergence of corporate intranets and more recently, employee portals. As the portal evolves into the daily focal point for individuals – the place where they log on to software applications and access their own choice of internal and external information feeds – it becomes the logical place to present analytical data relevant to their roles. By doing so, analytics come to be seen as a core part of day-to-day operations, not a separate activity – and the more that analytical data is woven into operations the better.

This approach has long been prevalent in call centers, where real-time data on call response activity is presented in graphical format to employees as an incentive to improve team performance. In the people management field, some companies are taking similar steps for absence management, presenting employees with up-to-date information on how much holiday they have taken and how many days they’ve been off sick. In some cases, the value is less in the information than in the broader message: if employees know sickness is being monitored closely, they’re less likely to abuse the system.

At a management level, dashboards are becoming an increasingly common fixture, providing everyone from board-level directors to line managers with up-to-date, graphical information on the key metrics that interest them, along with the ability to click on summary findings and drill down for more detailed information. Again, what sets these tools apart is partly the quality of the user interface, and partly the relevance. It must be made easy for managers to configure their own dashboard so that it displays the information they need, from real-time operational data to longer-term trends.

Finally, while the software framework is a significant component of the analytical framework, organizations also need to foster a learning culture, where performance analysis is carried out to enhance overall capability, not merely as a means of appraising or rewarding individuals. This requires a shift in culture away from a blame mentality towards an environment where poor results – or mistakes – are seen as the basis for learning and moving forward. For some companies, making this mindset shift may be as big a challenge as introducing the analytical tools and processes that support management of purchase orders.

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