a dvanced h uman r esource m anagement prof. dr. armin trost

ADVANCED HUMAN

RESOURCE MANAGEMENT

Prof. Dr. Armin Trost

2Prof. Dr. Armin Trost Advanced Human Resource Management; HFU Business School (2009) www.armintrost.de

English Versionfor

International Business Management

http://www.armintrost.de/


Overview

Retention

Job Motivation and Satisfaction

Employee Survey

Change Management

Knowledge Management

Social Media

HR Organization and Information Technology

HR Controlling


Retention



Retention – Overview

Key terms

Turnover costs

Turnover diagnosis

Turnover prediction

Retention measures

Turnover strategies



Turnover – Definition of Key Terms

TurnoverThe process in which employees leave the organization and have to be replaced

Turnover Rate

Involuntary turnoverTurnover initiated by the organisation (often among people who would prefer to stay).

Voluntary turnoverTurnover initiated by employees

Number of Employees leaving the Company in a Year

Number of Employees at Midyear 100%



Performance Turnover Relation

Performance

Tu

rno

ver

Low Middle High

According to: William and Livingstone (1994). Another look at the relationship between performacne and voluntary turnover. Academy of Management Journal, 37, 269-298.

Poor Evaluation; small pay raises; poor satisfaction

High mobility, opportunities due to high

labor market value

Average

Average turnover underestimates critical leaves

10%

20%



Turnover Costs

Learning Curve of New Hire

Separation

Lost Productivity of Vacant Position

Vacancy

Marketing

Selection

Hiring

Onboarding

Training

Employee Leaves New EmployeeHired

New EmployeeFully Effective

Lost Productivity of

Other Employees


Other Employees

Hidden („Indirect“) Costs


Other Employees

Source: Corporate Leadership Council (1998). Employee Retention

Visible („Direct“) Costs

Lost Productivity of Incumbant

Pre-Departure Vacancy Introduction



The Psychological Contract

Regular Pay

Benefits

Social networks

Challenging tasks

Training

Image

Security

Values

Idendity

Networks

Customers

Performance

Creativity

Capabilities

Knowledge

Talent

Energy

Time

Health

Employer Provides Employee provides



Retention Factors

Which of the following factors are most likely to hinder your company’s ability to retain talented employees over the next three years? Select up to three (Answers in %)

The Economist Intelligence Unit 2008 (Responses of 1.000 executives around the globe)



Major Retention Factors for High Potentials

Board Awareness

Professional Networks

Within

Challenging and strategic

Projects

Executive Trust & Support

Freedom to Act

Retention

Competitive Salary



New Generations require new Ways of Life

10 20 30 40 50 60 70 80

Learn Work Private



Flexible Working Structures

Locationfixed mobile

Timefixed flexible

Structurefixed flexible

Employees go to Work Employees take their Work with them



The common Approach: Turnover Diagnosis

Usage of scientific methods to systematically answer the question: Who leaves why?

88% of all companies survey by Mercer in 1998 conduct exit surveys and/or exit interviews to capture reasons to leave

While results are always of general interest they hardly provide relevant insights for the business line (e.g. female employees leave the company for different reasons than male employees)

Results taken from turnover diagnosis help companies to undertake strategic measures with regards to employer branding

Turnover diagnosis can be seen as a reactive rather than as a proactive measure



Exit Interview (Example: Intel)

What was the main reason that you decided to leave?

Is your new position in a different line of work than the one you where in while at Intel?

How would you characterize your new employer?

Would you say your new employer is better than Intel, about the same as Intel, or not as good as Intel in terms of:

How would you descibe your relationship with your manager while you where at Intel?

How would you describe your experience with Intel?

If a friend approached you and told you he/she was looking for a similar position at Intel, how likely would you be recommend Intel?

Any other comments about Intel or you new position?

Pay

Benefits

Location

Working Conditions

Job Security

Advancement Opportunities

Product Quality

Coworkers

Company Leadership

Company Image



A simple Framework to predict Turnover

1 Would you recommend a friend to work at X1?

2 Do you have everything you need to do your job well?

3 Do you enjoy working with your peers and supervisor?

4 Do you seriousely consider leaving X1 within the next 6 months?

Supervisor Quality

Social embedded ness

Capabilities to do a good Job

EmployeeCommitment

Intention to leave/stay Turnover

1

2

3

4

Four strong questions to be asked regularly

1 X = Name of the company in question



Commitment Capability Matrix clearly indicate Supervisor Quality

1 2 3 4 51

2

3

4

5

Low HighCapability

Low

HighC

om

mit

men

t

John Smith

Garth McGrath

Paul Paulson

Mike McGuire

Russ Rothen

Kelley Clark

Mark Myer John Shark

Paul Cummings

Ed Flaw

Rock Stewart Tom Scott

Linda Anderson

Susan Power

Chris Christensen

Keneth Keith Carlson

Pete Peters



Retention Target Groups

LetGo

Re-Recruit

Don‘tCare

TakeCare

Low HighEmployeeValue

High

Low

TurnoverIntention

Impact of Departure

Risk of Departure



Impact of „Cost of Changing Career“

Benefits of staying

with current

employer

Benefits of working at

other employer

Cost of Changing

Career

Cost of Doing

NothingCost of Doing

Nothing

Cost of Change



Turnover Decision Styles

High Involvement Decision MakingSystematically and carefully taking into consideration current employment, alternative employement opportunities, own strength and weaknesses, long-term expectations and private situation

Opportunity Driven Decision MakingUnderestimation of appealing elements of current employment and consistent overestimation of other employment offers even in times of limited pressure

Fleeing from current SituationFeeling that everything is better compared to the status quo. Negatively perceived elements of actual job are main drivers for changing career

Externally Driven Decision MakingEmployment alternatives including the current one are evaluated according to friends‘ and family‘s attitudes and expectations


Job Motivation and Satisfaction



Types of Theorie

Content TheoryThese theories attempt to explain those specific things which actually motivate the individual at work

■ Maslow’s Hierarchy of Needs■ Job Characterstics Model of Hackman & Oldham■ Herzberg’s Theorie

Process Theory These theories attempt to identify the relationship among the dynamic variables which make up motivation

■ Maslow’s Hierarchy of Needs



Job Characterstics Model by Hackman & Oldham

Skill Variety

Task Identity

Task Significance

Autonomy

Feedback

ExperiencedMeaningfulness

ExperiencedResponsibility

Knowledgeof Results

Motivation

Performance

Satisfaction

Job Characteristics

PsychologicalStates

Desired Outcomes

The relationship is moderated by thestrength of an employee‘s need for growth



Two Factor-Model by Herzberg

7

18

14

6

11

8

17

3

4

15

20

20

31

11

6

1

41

33

26

23

20

6

15

6

4

4

3

3

3

1

1

1

05101520253035 0 10 20 30 40 50

Achievement

Recognition

The work itself

Responsibility

Advancement/Growth

Self Actualization

Compensation

Subordinate

Status

Supervisor

Colleagues

Leadership

Company Policies

Working Condition

Private

Security

In „bad“ Situations in „good“ Situations

Relative Frequencies of reported eventsM

otivatio

n F

actor

Satisfaction

/No S

atisfaction

Hyg

iene F

actor

Dissatisfaction

/No D

issatisfaction



Expectancy Theory by Vroom

Force – the motivation or the force to show a specific action

Expectancy – the possibility of achieving a certain outcome through certain actions

Valency – the preference an individual has for a particular outcome, the worth placed on a particular result

F = (E V)

V E E x V E E x V

Not loosing face 3 0,9 2,7 0,1 0,3

Health & Safety 8 0,1 0,8 0,5 4,0

Keeping warm 2 0,8 1,6 0,4 0,8

Success story 4 0,6 2,4 0,2 0,8

Force 7,5 5,9

Jump Don't Jumb



Types of Job SatisfactioinBy Bruggemann

Vergleich Soll - Ist

ProgessiveZufriedenheit

StabilisierteZufriedenheit

ResignativeZufriedenheit

Pseudo-Zufriedenheit

FixierteUnzufriedenheit

KonstruktiveUnzufriedenheit

Verfälschung der Situations-wahrnehmung

Ohne neue Problem-lösungs-versuche

Neue Problem-lösungs-versuche

Senkung des Anspruchs-

niveaus

Beibehaltung des Anspruchs-

niveaus

Erhöhung des Anspruchs-

niveaus

Beibehaltung des Anspruchs-

niveaus

StabilisierendeZufriedenheit

DiffuseUnzufriedenheit



McGregor’s Theory X and Y

Theory X

The average person is lazy and has an inherent dislike of work

Most people must be coerced, controlled, directed and threatened with punishment if the organization is to achieve its objectives

The average person avoids responsibility, prefers to be directed, lacks ambition and values security most of all

Theory Y

For most people work is as natural as play or rest

People will exercise self-direction and self-control in the service of objectives to which they are committed

Commitment to objectives is a function of rewards associated with their achievement

Given the right conditions the average worker can learn to accept and to seek responsibility


Employee Survey



Employee Survey – Overview

Purpose and approaches

Employee survey operation

Commonly used content

Result interpretation

Limitations of traditional employee surveys

Strategic employee survey



Employee Survey Objectives

II

Identification fo strengths and weaknesses

Evaluation of former actions

Induction of discussion and initiatives

I

Insights into naturally hidden subjects

– Employee Satisfaction

– Corporate climate, culture, values

– Commitment and capabilities related to strategic challenges

– …

III

Improvements

– Working conditions– Productivity– Employee retention– Culture– Meeting strategic

goals– …



Employee Surveys can adress the Needs of different Clients

Top-Management

Middle Management

Employees

Internal Service Provider



Survey-Feedback

SurveySurvey

Analysis and Reporting

Analysis and Reporting

Feedback Results to all Employees

Feedback Results to all Employees

Problem Identification and

Action Setup

Problem Identification and

Action Setup

Improvement Activitiy

Improvement Activitiy



Survey Follow-Up

Employee Survey Project Steps

Survey Administration

Survey Administration

Report GenerationReport Generation

Feedback/Communication

Feedback/Communication

Action PlanningAction Planning

ImplementationImplementation

EvaluationEvaluation

Preparation

Project Planning & Setup

Project Planning & Setup

PrestudyPrestudy

Survey Development

Survey Development

Prior Communication

Prior Communication



Survey Development

Topics

Indicator

Questions

Pretest

Operation & Evaluation

Adjustment



During the past year, have you been bothered by pain in your abdomen?



Q12 (Gallup)

1. I know what is expected of me at work

2. I have the materials and equipment I need to do my work right

3. At work, I have the opportunity to do what I do best every day

4. In the last seven days, I have

received recognition and praise for doing good work

5. My supervisor, or someone at work, seems to care about

me as a person

6. There is someone at work who encourages my development

7. At work, my opinions seem to count

8. The mission/purpose of my company makes me feel my job is important

9. My associates (fellow employees) are committed to

doing quality work

10. I have a best friend at work

11. In the last six months, someone at work has talked to me about my progress

12.This last year, I have had opportunities at work to learn

and grow



A Typical Way to Present Results

Frequencies (%)

N Averagestrongly agree

agreepartly-partly

dis-agree

stronglydisagree

1 2 3 4 5

Sales Germany 35 36 29 45 2,92 12 23 36 19 10

Global Sales Organization

48 28 24 287 2,63 19 29 28 18 6

I have the materials and equipment I need to do my work right

35

48

36

28

29

24



Survey Results (Example)

1,7

2

2,3

1,4

2,3

2,8

2,5

2

3,1

2,5

1,7

2,8

1,6

1,5

2,6

1,6

2,1

2,8

2,4

1,8

3,2

2,6

1,8

2,2

1 1,5 2 2,5 3 3,5 4 4,5 5

Region South-West

Germany

Tasks and Duties

Work Environment

Empowerment

Colleagues

Direct Supervisor

Communication

Work Flexibility

Work-Life-Balance

Compensation

Benefits

Commitment

Career Development

Region South-West (32 Employees) is part of Germany (186 Employees)

1 = Best possible result; 5 = worst possible result



Ways to interpret results

AbsoluteMeans and frequencies of answers related to different items are absolutely compared. The more negative the results by absolut means the bigger the issue

RelativeResults are compared to internal and/or external standards or benchmarks. In most cases results of superior unit are used

LongitudinalCurrent results are compared to results of previous surveys

ObjectivesResults are compared with predefined expectations (objectives)



Rules in Follow-up Processes

All employees get all results of the survey

Feedback of results follows a top-downn approach from to top-management to every single team

All teams get their own results compared to the results of the superior organisational units

Issue, which lay beyond an organizational unit‘s respnsibility will be escalated to the unit on the next level



Shortcomings of Traditional Employee Survey Approaches

Surveys are isolated events not integrated into regular leadership processes

Not every topic is relevant for everybody on every hierarchy level

Objectives are defined after the survey has been conducted based on survey results. But, surveys can‘t change priorities

Required budgets for improvement activities are not defined. Therefore planned actions lead to minimal impact

Focus on satisfaction – missing linkage to business drivers and results

Tremendous efforts through intense reporting and follow-up processes

Comparison with benchmarks means taking the mediocre as standard



Satisfaction versus Strategy

Factors driving competititiveness

Business Indicators

Factors driving employees‘ satisfaction and performance based on a scientific model

Topics

Top-Management Employees, Managers, Internal Service Units

Stakeholder

(Customer)

Results are natural part of top-management agenda and decision making

Objectives are set in advance to the survey

Units on all levels are encouraged to work with results and draw conclusions

Objectives are set after the survey

Follow-up

Up to every month Every 1 to 5 yearsCycle

Random samples, panels, high-potentials

Every employeeParticipants

Pulse Survey Traditional Approach



Commitment & Capabilities related to Strategy X



high

low

low high

Commitment

Capability

high

low

low high

Commitment

Capability

Garth McGrath

Cost Reduction Cost Reduction

Innovation Innovation

SAP Implementation SAP Implementation

Service Quality Service Quality

Garth McGrath Garth McGrath

Innovation

Russ Rothen Russ Rothen

Pete Peters Pete Peters

Kelley Clark Kelley Clark

John Shark John Shark

Ed Flaw Ed Flaw

Schulze-Pübbelkamp Schulze-Pübbelkamp

Mark Myer Mark Myer

Commitment Capability Grid – Example


Change Management



Overview

Large-Scale transformations and related humanreactions and challenges

Change Management – definition and framework

Sponsorship and commitment

Program organization

Employee communication and involvement



Types of large-scale Transformations

ReengineeringChanging the way people work

RestructuringChanging roles and responsibilities of people

Mergers & acquisitionsChanging entire groups of people

Strategic changeChanging the direction of people‘s work

Cultural changeChanging people‘s attitutes, values and beliefs



Response to Disruptive Changes

Time

Immobilization

Denial

Anger

Bargaining

Depression

Testing

Acceptance

Emotional Response

Passive

Active

Stability

According to Kübler-Ross: On Death and Dying (1967)



Resistance to Change

Resistance is a natural human reaction ondisruptive events (fear of loosing control)

Change is seen by different people differentlyaccording to their individual frames of reference

Resistant employees are often seen as notrationally thinking troublemakers

Resistance of informal thought leaders are ofgreater power than those of formal leaders

There is always a mixture of overt and hidden resistance. Overt resistance should be a valuable aspect of any change process

Active involvement is propably the best way todeal with resistance



Response to Positive Change

Time

Pessimism(Perceived Complexity)

Uninformed Optimism (Naivité)

Informed Pessimism

Informed Optimism

Completion

According to: Conner: Managing at the Speed of Change

Checking Out (?)

Level of Tolerance

Hopeful Realism



Why Transformation fail(Kotter, 1995)

Not establishing a great enough sense of urgency

Not creating a powerful enough guiding coalition

Lacking a vision

Undercommunicating the vision

Not removing obstacles to the new vision

Not systematically planning for and creating short-term wins

Declaring victory too soon

Not anchoring changes in the corporate culture



Sources of Complacency

ComplacencyComplacency

Too much happy talk from senior

managementA kill-the-messenger-of-bad-

news, low-confrontation culture

Human nature, with its capacity for denial,

especially if people are already busy or stressed

The absence of a major and visible

crisis

Organizational structures that focus employees on narrow functional goals

Low overall performance

standards

Too many visible

resources

A lack of sufficient performance feedback from external sources

Infernal measurement systems that focus on

the wrong performance indexes

Source: John Kotter (1996): Leading Change



People-related Challenges a any Transformation

Do the people …

understand what the change is about?

agree, that the change is necessary?

see the impact on their daily work?

have required capabilities for the new situation?

get support to make the change happen?

benefit from newly expected behaviours?



SupportFunctions

ManagementFunctions

Change Management Framework

Initialization

Setup

Design

Change

Stabilization

Sponsorship/CommitmentSponsorship/Commitment

OrganizationOrganization

ControllingControlling

HRM IntegrationHRM Integration

CommunicationCommunication

Training & Support

Training & Support

StakeholderInvolvementStakeholderInvolvement

Scope & Vision



Levels of Support

Time

Ch

ang

e S

up

po

rt

Attention

Understanding

Acceptance

Commitmentvisible, rationale und emotional

Investmentpersonally, financially, timely

SponsorshipLongterm support

No Idea

Sponsorship/Commitment

Acceptance

Preparation

According to: Daryl Conner: Managing at the Speed of Change (1992)



Roles in a Change Program 1/2

Sponsors– Have the power to sanction and legitimize change and

to make decisions about change– Create an environment that inables change to be made

on time and within budget– The sponsors make up the steering group

Change Agents– Responsible for making the change happen on an

operational local level– They directly deal with employees and managers,

which are impacted by the change (targets)

Target– The group who must actually change attitudes and

behaviour



Roles in a Change Program 2/2

Project Team– Operationally drives the entire change program

– The project team is led by the project lead, who isresponsible for the overall success of the program

– The project team reports to the steering group

Sounding Board– Key-players with a good sense of the company‘s culture and

the actual mindset of the employees

– Provide feedback to the project team about acceptance andresistance on side of the target

External Advisors– Give advice to the project team from a neutral standpoint



Target

Typical Organizational Structure

Steering Group

Project TeamProject Lead

Sponsor

External Advisor

Project Lead (Consulting)

Partner

CA

SB

SB

LM

MA

MA

CA

SB

CA

Sounding Board

SB

ChangeAgent

LM

Line Manager



Relationships between different Roles

SponsorSponsor

AgentAgent

TargetTarget

Linear Structure

SponsorSponsor

AgentAgent

TargetTarget

Triangular Structure

SponsorSponsor

AgentAgent

TargetTarget

Square Structure

SponsorSponsor

Source: Daryl Conner: Managing at the Speed of Change (1992)



PositioningWhat do you do for whom why?

What‘s the problem (in terms of figures)?

Who has the problem?

What does the problem cost if not solved?

What‘s the solution?

What will be the difference after the solution hasbeen implemented successfully?

What are the costs of the solution?



Communication Measures

Employee Newspaper E-Mail Newsletter

(Meassage from the CEO) Intranet

(with F&Qs) Town Hall Meeting

Available Media

New Media

On

e-d

irec

tio

n Interactive

efficient

effective

Broschures

Posters

Videos, webcasts

PPT-Presentations

Intranet, Social Media(with forums and chatrooms)

Departmentmeetings

Individual employee meetings

Open Space Events

„Ask-the-CEO“-Meetings

Workshops, Conferences

Hotline



Communication Strategy

When?

Who informs – CEO, HR ..?

How – Media usage?

What is the message?

Why – What to achieve with communication?

Whom?



The Communication Dilemma

Time, Progress

Unsecurity/Need for Information

ClarityHigh

Low

EarlyCommunikation

LateCommunikation?



Employee Involvement

Open SpaceInvolvement of many people in a one to two days event, where no content is predefined. The event is srongly facilitated

Focus GroupsGroups of selected employees (capable, ambitious, highlyaccepted) work on solutions regarding clearly definedissues

Sounding BoardsMembers of the target group provide regular feedback toprogramm plans and directions and how people react

Employee SurveysEmployees are asked for their opinions individually or ingroups by using quantitative or qualitative data collectionsmethods

Nominating thought leaders into the programorganization



Open Space (Bar Camp)

Up to 1000 participants

Participants determine content to be discussed

Major objectives are:– Involvement of many people in a

short period of time– Collective motivation and

commitment– Identification and prioritization of

issues

Intense and strong facilitationthough facilitator andtechniques

Work in groups with rotatingconstitutions

Public presentations of results

Duration is between 2 to 3days



Stakeholder Analysis

Impact

Power

strong

weak

low high

Resistance

Support



Knowledge Management – Overview

Knowledge Economy

From Sign to Wisdom

Traditional Approaches in Knowledge Management

Implicit versus explicit Knowledge

Modern Approaches in Knowledge Management



The changing meaning of Knowledge



Challenges

Employees‘ knowledge as key factor for competitiveness and corporate success (knowledge economy)

Complex tasks require combination of the knowledge of multiple players

New and relevant knowledge appears in increasingly shorter time periods

Knowledge is located in people‘s mind and hard to be retained to the company (knowledge worker)

Growing need to collect and transfer knowledge across the globe



People versus Technology

People who own their knowledge

Subjectivity and creativity

Significant corporate value

Hard to be retained

Data

Information

Knowledge

Wisdom

Technology (e.g. data bases)

Objektivity through documentation

Limited corporate value

Information and data are owned by the company



From Signs to Competitiveness

+Syntax

Data+Meaning

Information+Combination

Knowledge+Task related

Capability+Commitment

Action+Doing the right things

Competence+Unique/Different

Competitive-ness

Signs

IT

Solutions

Knowledge Organization

Knowledge Leadership

Source: Klaus North: Wissensorientierte Unternehmensführung, Gabler Verlag (own translation)



What people know

ProductsProducts CustomersCustomers

ProcessesProcesses

PartnersPartners

Tools/Technology

Tools/Technology

CompetitionCompetition

(Informal) Networks

(Informal) Networks ProjectsProjects

SolutionsSolutions

MistakesMistakes

Peers/organization

Peers/organization

CultureCulture

(Hidden)Rules

(Hidden)Rules



Classic #1: Central Knowledge Database

Employees are encouraged to document their knowledge on a central database

A facilitator takes care for quality of all documents

There are general standards for creating knowledge material

Downside

Employees neither are motivated enough to document their knowledge nor find enough time to do so

Within a short period of time masses of never used documents emerge



Classic #2: Yellow Pages

Employee maintain and commend their major fields of expertise in a few words

All employees find peers with certain expertise using simple search options

Expertise is documented on databases with web-access or on printed booklets

Overall goal is to bring people with certain expertise and demand for expertise together

Downside

Detailed meaning of expertise remains unclear

Limited opportunity to immediately learn from what is documented



Knowledge Generation Modelby Nonaka

Tacit Tacit

Socialisation

Tacit Tacit

SocialisationTacit Explicit

Externalisation

Tacit Explicit

Externalisation

Explicit Tacit

Internalisation

Explicit Tacit

InternalisationExplicit Explicit

Combination

Explicit Explicit

Combination

Source: Nonaka & Takeuchi (1995), The Knowledge-Creating Company



Implicit Knowledge – Example

Source: Gerd Gigerenzer (2007). Bauchentscheidungen



McKinsey Approach

Employees publish specific knowledge through webbased documents not longer than three pages

Knowledge must have been proven in practise

Access to documents is tracked and reported. Reader evaluate the value of documents

Employees are encouraged to commend on documents and to get in direct touch with experts (authors)

Rankings are published and constantly updated about the success of all documents



Knowledge Transfer Process

Knowledge

EmployeeProject Lead/

Manager

1. Knowledge Documentation

Project

2. Search for Expertise

3. Contacting

4. Cooperation/Support

5. Knowledge development/Enhanced Network



T-Concept

Focus on one field of expertise

Personal commitment to enhance knowledge within that field and to proactively support colleagues where required

Commitment to publish new insights

Doing presentations on internal knowledge transfer conferences and training events

Experts are communicated internally

General Knowledge

Expert-Knowledge


HR Organization & Information Systems



HR Organization and Information Systems –Overview

Global Human Resource Management

HR as Strategic Business Partner

Roles in a global HR Organization

Shared Service Center

HR Outsourcing

HR Information Systems

Focus: e-Recruiting



Global Organizational Landscape

Global HeadquarterCorporate HR managing HR globally;

Regional HR managing regional HR;

Local HR serving Headquarter Staff

SubsidiaryLocal HR serving Subsidiary Staff

Regional HeadquarterRegional HR managing regional HR;

Local HR serving Subsidiary Staff



Types of Organizations

Global

Views the world as a single market; operations are

controlled centrally from the corporate office.

Global

Views the world as a single market; operations are

controlled centrally from the corporate office.

Transnational

Specialized facilities permit local responsiveness; complex coordination mechanisms provide

global integration.

Transnational

Specialized facilities permit local responsiveness; complex coordination mechanisms provide

global integration.

Multinational

Several subsidiaries operating as stand-alone business units in multiple

countries.

Multinational

Several subsidiaries operating as stand-alone business units in multiple

countries.

International

Uses existing capabilities to expand into foreign

markets.

International

Uses existing capabilities to expand into foreign

markets.

Low High

Glo

bal

Eff

icie

ncy

Lo

wH

igh

Local Responsiveness



Perceived Strength and Interests from two Perspectives

“We are more familiar with operational requirements and practices”

“We know our customers better”

“We need our freedom to decide what’s good for our local customers”

“We expect responsibilities to design our own processes and tools”

“It’s all different in our country”

“We are closer to senior management”

“We know better what’s good for the company as a whole”

“We are more familiar with the differences across countries”

“We have the power to decide about strategic directions”

Locally operating HR employee

Globally acting HR employee



Trends in Human Resource Management Responsibilities

Administration

Support

Consulting

Strategy

?



HR Roles by Dave Ulrich

Strategy

Operation

Processes People

Strategic Partner

Defining and executing strategy

Change Agent

Creating a renewed organization

Administrative Expert

Building an efficient infrastructure

Employee Champion

Increasing employee commitment and

capability

Source: Dave Ulrich: Human Resource Champions 1997



Filtering Queries

SelfService

WEB

Service Center / Call Center

HR Generalist

HR Manager

SE

RV

ER

75 20 5

100Queries

Intranet

Internet

Source: Accenture

Database



Screenshot „Abwesenheitsmitteilung“



Virtual Advisor (Lingubot)

http://www.daad.de/deutschland/en/index.html


http://www.daad.de/deutschland/en/index.html


Shared Service Center

Corporate Functions

Divisional Units

Board

internal external

External Partner

HR

HR

HR

HRHRHR

HR

HR-Shared- Service

HRHR



Economies of Scale and Scope through Shared Service Organization

Economies of Scale

Combination of similar Processes

Economies of Scope

Co

sts/

Un

it

Volume

Joint Usage of Resources

t0

t1

Co

sts/

nit

C1

C2

Q2 Q1 Shared

Shared

Volume

t0

t1

decentral

S1

t0

t1

Uti

liza

tio

n

Time

consolidated

S2

Economies of Scale through

Decreasing redundancies

Standardization of IT/HR processes

Learning

Economies of Scope through

Combination of resources and infrastructures

Leveling utilization and capacities



Decentralized Recruiting Organization

Applicant

Branch

A

Preselection

Assessment

Applicationmanagement

Job OfferPreparation

HRMarketing

Job OfferNegotiation

Branch

B

Preselection

Assessment



HRMarketing

Job OfferNegotiation

ApplicationData Base

ApplicationData Base

Definition of Target Profile

Introduction


Introduction



Identifying Duties to be Transferred into a Shared Recruiting Center

Ability to Standardize

Relationshipto Candidate

high low

distant

close

Recording unsolicited Applications in the System

Arranging Interviews

Conducting Interviews

Pre-Selecting Cand.

Writing Job Offers

Maintaining Candidate Information

Feeding back to Candidate

Searching in the Talent Pool

Publishing Job-Postings online

Negotiating Work Contract



Integrated Recruiting Organization with centralized e-Recruiting Technology

Applicant

Branch

A Assessment

Branch

B Assessment

Job Offer Negotiation

Shared Recruiting

Center



HRmarketing

e-Recruiting

Job Offer Negotiation

Pre-Selection


Introduction


Introduction



Central Coordination

Partner-/Supplier Management

Modernd HR-Organization

Employees

Applicants

Customers

Managers

HR Business Partnernear to business

Individual support of managers on HR-

related topics

Shared Service Centercompany wide

Delivery of standardized and regularly demanded services to all employees with

high volume (e.g. payroll)

IT

Hotline

ESS

MSS

Center of Expertisecompany wide

Dealing with complex HR-related Issues



Outsourcing Purposes

CostCost

FocusFocus FlexibilityFlexibility

QualityQuality



Scope of Serices outsourced in the United States

0 10 20 30 40 50 60 70

Source: SHRM 2004 Human Resource Outsourcing Survey Report

…partially

…completely

Relative Frequency (in %)

Health Care

Pension Benefits Admin

Payroll

Recruitment (/wo Mgr)

Relocation

HR Development

Management Development

Compensation Admin

HR Technology

Mobility/Expatriates

Performance Management



Top Factors in Considering HR Outsourcing Vendors

A proven track record

Cost of vendor services

Guaranteed service levels

Flexible contract options

Recommendations from other comp.

A compatible corporate culture

Niche in a specific area

89%

82%

64%

53%

41%

40%

38%

Source: SHRM 2004 Human Resource Outsourcing Survey Report

(n=168 HR Professionals in Companies that currently outsource)



Internal versus external Recruiting-Expertise depend on Positions to be filled

ExecutivesKey FunctionsNon-critical Functions

External Internal

External

Internal External

Internal

Exp

erti

se



HR Information SystemExample SAP HCM



User and Expert Systems



Expert System User Interface



Services can be classified according to the Type of Users and Tasks

EmployeesRare usage

Event-triggered

No training efforts

ExpertsFrequent usage

Limited to intense training efforts

AdministrationStandardized processing

Automatization

Reliable results

Value CreationCreative usage

Personal judgements

Fuzzy output

Master data management

Leave request

Online-Application

Training booking

Employee-/Self-Assessment


Performance Management

Payroll

Accounting

Application screening

Training administration

Talent Relationship Management

Succession planning

HR Controlling

User

Task

* Inclusing applicants, managers etc.



User and Expert Systems Usage

Decentral CentralCentralizationDecentralization

Employees

HR

ExpertSystems

User

UserSystems



e-Recruiting Innovation Waves

Innovators

Early Adaptors

Early Majority

Late Majority

Laggards

WebsiteOnline-

ApplicationBackend/

Integration

200520001995 2010 2015



Typical e-Recruiting functionalities

Search request creation, approval and maintenance

Job-posting on copmany career website and on public job boards

Applicant portal supporting job search, registration and online-application

Application screening and filtering based on selection criteria

Automatic communication with candidates via e-mail

Creation and approval of short-lists through line managers

Interview administration and invitation



Learning Management System (e-Learning)

Lerner Portalpersonalized & intranet-based

LMSLearning Management

System

CMSContent Management

System

ExternalContent

Qualifications

Role

Personalized Training Offers

Learning History

Collaboration

Tests

Training Administration

Learning Strategies

Profile-Matching

Tests & Certificates

Authorization & Accounting

Analytics

Learning Content

Generation

Embedding external Content

Formal Standards

Authorization

Literature Databases

Company Information

Relevant Websites

Communities of Practice


Social Media



Social Media – Overview

Social Media User and Usage

Recruiting und Employer Branding

Learning and Development

Social Media Platforms

Internal Social Media Policies



Forrester Ladders

CreatorsWrite blogs, upload videos, generate content used by others

CriticsReact on others‘ content, edit wikis, engage in forums

CollectorsCollect and sort internet content actively, use tags and RSS, evaluate content

JoinersMaintain relations to others

SpectatorsPasively use web content

InactivesDon‘t use content generated by others



Social Media Activity

Source: http://www.forrester.com/empowered/tool_consumer.html (01.12.2010)US: Forrester Research's North American Technographics® Online Benchmark Survey, Q2 2010 (US), 26,913 respondentsEurope: Forrester Research's European Technographics® Benchmark Survey, Q2 2010, 25,535



Social Media User Types in Employer Branding

Me tooMe too

Spontaneousely share career-

related information and content

Be there

Spontaneousely share career-

related information and content

Be there

Maturity

CommunicatorCommunicator

Intensively share career-related

information in any situation

Be present

Intensively share career-related

information in any situation

Be present

Brand BuilderBrand Builder

Transfer a clear employee value

proposition

Clear employer profile

Transfer a clear employee value

proposition

Clear employer profile

NetworkerNetworker

Actively build networks into relevant target

groups

Reach target group

Actively build networks into relevant target

groups

Reach target group



Social Media/Web 2.0 Platform Usage

Employer Branding

Repu-tation

Carreer-info

Job-Posting

Inter-action

Talent Search

TRM

Blogs

Forums



Social Media RoadmapWay to a Social Media Strategy for Recruiting and Employer Branding

ObjectivesObjectives

Definition of Key and Bottleneck

Functions

Target Group Identification

Setting Social Media Objectives

Definition of Key and Bottleneck

Functions

Target Group Identification

Setting Social Media Objectives

ListenListen

Involve and understand target

group

Consider internal conditions

Involve and understand target

group

Consider internal conditions

Do itDo it

Definition & action on Social Media Activities

Employer Branding

Sourcing


Clarify rules and responsibilities

Definition & action on Social Media Activities

Employer Branding

Sourcing


Clarify rules and responsibilities

Check and Develop

Check and Develop

Constantly check effects of Social Media Activities

Set priorities and develop selected

Social Media Activities

Constantly check effects of Social Media Activities

Set priorities and develop selected

Social Media Activities



MediumMedium

Twitter

IncidentIncident

Witness Tweet Follower Follower‘

JournalistJournalistIncidentIncident

ReaderWitness Interview Article

EditorEditor

Text

Time

Time



Elements of a Twitter Strategy

How will the twitter account be positioned and what will be the relevant content

Who are the target groups?

Who are relevant multiplicators (Follower)?

How will the twitter account be marketed/sold?

What are measurable objectives?

Who/which person will represent the twitter account?

Who decide upon the shared content?



Key Terms of Social Network Analysis

Nodes, Relations,

Density, Centrality, Cliques, Clusters, Stars



Career Cluster versus Professional Cluster

Career ClusterCareer Cluster Professional ClusterProfessional Cluster

Purpose is to share career-related contentPurpose is to share

career-related contentPurpose is to share professional contentPurpose is to share professional content

High CentralityHigh Centrality Little CentralityLittle Centrality

Active CandidatesActive Candidates Active und passive CandidatesActive und passive Candidates

Access through HRAccess through HR Access through the lineAccess through the line

Passive approachPassive approach Active approachActive approach



Learning on Demand

Yellow Pages

Wiki, Blogs

Off-the-Job Training

Social Expert Communites

Literature

Education Offerings

YouTube Tutorials

Simulations

Peers

Direct Manager

Podcasts

iTunes U

Conferences

Micro-Blogging

Yammer





Formal versus informal Learning

20%20%

Budget

80%80%

Effect

Formel Learning

Informal Learning

80%80%

20%20%

Cross, J. (2006). Informal Learning: Rediscovering the Natural Pathways That Inspire Innovation and Performance. San Francisco/CA: John Wiley.



YouTube Tutorials



Audio and Video Podcasts

Easy to produce and share with others

Flexible usage anywhere at any time

Short duration

Direct access through mobile Internet

Usage of gadgets (Smartphones)



Principals of informal Learning

Learning content is easily produced, shared and found via Web 2.0 (e.g. YouTube)

Flexible and problem-related usage of content („Learning-on-Demand“ instead of „Learning- just-in-case“)

Learning from others (peers) through Social Media und Communities of Practice

Room and infrastructures allow self-directed learning and knowledge exchange



Internal Talent Markets

TalentsTalents

Experiences

Projects

Expectations

Preferences

References

Experiences

Projects

Expectations

Preferences

References

Jobs & ProjekteJobs & Projekte

Requirements

Challenges

Objectives

Working Conditions

References

Requirements

Challenges

Objectives

Working Conditions

References

According to: Bryan, L., Joyce, C., & Weiss, L. (2006). Making a Market in Talent. McKinsey Quarterly.

HR ConsultantHR Consultant

RulesRules

Internal notice periods

Roles and views

Compensation rules

Internal notice periods

Roles and views

Compensation rules



Social Media Policy at Yahoo!Personal Blog Guidelines

Legal Parameters– Legal Liability. When you choose to go public with your

opinions via a blog, you are legally responsible for your commentary. (..)

– Company Privileged Information. Any confidential, proprietary, or trade secret information is obviously off-limits for your blog per the Proprietary Information Agreement you have signed with Yahoo!.

– Press Inquiries. (..) If a member of the media contacts you about a Yahoo!-related blog posting or requests Yahoo! information of any kind, contact PR.

Best Practice Guideline– Be Respectful of Your Colleagues

– Get Your Facts Straight– Povide Context to Your Argument.– Engage in Private Feedback.


HR Controlling



HR Controlling – Overview

Purpose of HR Controlling

Important indicators in HR

Performance indicator positioning and implementation

ROI of HR investments


Purposes of HR Controlling

Current Situation

FutureSituation

Past investment

Diagnosis PrognosisEvaluation


Indicators in HRM

Employer Branding– % Awareness– # Applications– Reasons to apply– Employer image

Recruiting– Time-to-fill– Cost per Hire– Offer-Acceptance-Rate– Interviews per Hire– New Hire Satisfaction– Hiring Manager

Satisfaction– No-show-Rate

Workforce Structure– Age– Gender– Span of controll– Tenure– % Freelancers– % Female Leaders

Expatriation– # Expatriates– Return-Rate


Indicators in HRM

Training– Training days/employee– Training costs/employee– Training quality

Development– # High Potentials– HiPos ready for promotion– Duration on one level

HR-related costs– Salary/Total costs– Salary/employee– Compensation structure

Productivity– Revenue/employee– Human Capital Value

Added– Verbesserungs-

vorschläge/Mitarbeiter– Employee satisfaction– Commitment

Retention/Safety– Turnover Rate– HiPo Turnover– Boomerang-Rate– Bradford Factor (SxSxD)– # Accidents/

1000 Employees


Classic #1: Cost-per-Hire

Advertising costs

Candidates‘ travel costs

Executive search retainer and contingency fee

Selection tools and measures

Salary of employees involved in recruiting (HR, Line)

Costs for facilities of the recruiting organization

Market Research

Opportunity costs related to involved line employees

Costs of recruiting infrastructure (e.g. e-Recruiting)

Referral bonuses

HR Marketing events

Sign-on-bonuses

Relocation costs

Onboarding costs

Which components make up cost-per-hire and how is cost per hire divided through organizational units involved and new employees?


Cost Elements – Case

AdvertisingAdvertising

Job ads (e.g. in newspapers); Postings in job boards;

Website/Homepage modifications;Marketing material; Image

campaigns

Job ads (e.g. in newspapers); Postings in job boards;

Website/Homepage modifications;Marketing material; Image

campaigns

EventsEvents

Job fairs; College recruiting; Direct mailings; Open days at SAP;

Company visits; Inhouse eventsImage Reports; Labor Market

Research etc.

Job fairs; College recruiting; Direct mailings; Open days at SAP;

Company visits; Inhouse eventsImage Reports; Labor Market

Research etc.

Search AgenciesSearch Agencies

Executive search; Retained search; Contingency search; Direct source

providers; Contractors

Executive search; Retained search; Contingency search; Direct source

providers; Contractors

Referral BonusesReferral Bonuses

Employee Referrals; Candidate Referrals

Employee Referrals; Candidate Referrals

TravelTravel

Travel costs of recruiters and/or candidates

Travel costs of recruiters and/or candidates

AssessmentAssessment

Assessment centers; reference/background investigation;

Assessment tools; tests

Assessment centers; reference/background investigation;

Assessment tools; tests

RelocationRelocation

Estate agents; Removal firms; Visa / Work Permit Application;

Relocation services; Tax service; Temporary housing; Rental car;

Language training

Estate agents; Removal firms; Visa / Work Permit Application;

Relocation services; Tax service; Temporary housing; Rental car;

Language training

Sign on BonusesSign on Bonuses

Operating CostsOperating Costs

Recruiters payroll and trainings; Applicant tracking systems;

Infrastructure costs; IT support; Office costs; Communication costs

Recruiters payroll and trainings; Applicant tracking systems;

Infrastructure costs; IT support; Office costs; Communication costs

Exlusively Recruiting(special accounts)

Related to Recruiting(e.g. cost centers)


?

Classic #2: Time-to-Fill

When does it start? When does it end?

WorkforceDemand

Start HRMarketing/

Search

Signed JobOffer

End ofOnboarding

Vacancy Selection First Day at Work

End of Probation

Period

?


Performance Indicator Positioning

What?Which Indicator?

For whom?Who benefits

from the indicator?

Why?To which objectives

is the indicator related?

How?Which sources and methods are used to collect the data when?


BalancedScorecard

Source: Robert Kaplan and David Norton, “Strategic Learning and the Balanced Scorecard, 1996

Financials

Objective KPI

People

Objective KPI

Customer

Objective KPI

Processes

Objective KPI

Vision &Strategy


Performance Indicator Framework

ClientCEO, HR Head, Manager

Objectives

ObjectEmployee, Org. Unit, HR Function

Topic

FunctionDiagnosis, Prognosis, Evaluation

Positioning

MethodSurvey, Statistics

SourcePeople, Systems

OwnerDecentral/central, HR Controlling

Timing

Operation

ReportingOnline/ Paper, Views, Roles

TrainingInterpretation, Presentation, Usage

UsageAction planning, tracking, monitoring

Usage


Implementing an HR Controlling SystemExample: Turnover Early Warning

Definition of Scope/Objectives

Definition of client, objectives and function

Setting budgests, timeline and project structure

Approach definition

Analysis

Systematic analysis of turnover reasons and possible early indicators

Develpment of a model to explain and predict turnover behavior

Method Definition

Definition of methods and tools to track/measure turnover drivers and predictors

Defining ways to analyse and report data and results

Implementation

Development and installation of controlling system and related technical infrastructure

Identification and training of employees (clients) impacted

Operation

Tracking data and report to clients

Data usage and related actions

Evaluation

Determination of validity and acceptance

Defining fields for improvements

Meeting with client/steering group and project lead

Interviews with managers, former employees, experts

Workshop with experts, clients and HR managers

Validation study interviews with client, user tracking


Traditional ways to evaluate Investments in HRM

Investment Costs Objectives Success Indicators

Management development program (200 participants)

1.000 k€ Improvement of customer and market orientation

Higher customer satisfaction

Responses to the training by the participants

Customer satisfaction

Employee survey (20.000 employees)

1.000 k€ Improvements of employee satisfaction, working conditions and processes

Response rate

Amount of defined actions as result to the survey

Implementation of a performance management system (5.000 employees)

1.000 k€ Performance improvements

Better linkage between operational work and strategic directions

Relative amount of performance management meetings

Responses of managers and employees


Return on Investment (ROI)

ROI = 100%Benefit - Costs

Costs

Time

Operating Costs

Investment

Cummulated Benefits

Cummulated Costs

Start Operation

Profit

Break-Even

Project start

ROI


From Problem to ROI

Problem

Cost of doing nothing

Solution

Cost of solution

Impact of solution

ROI


P&B40

OE160

P&B180

OE20

R220

R220

Döner Shop Design Office

Human Capital Value Added (HCVA)

FTE = 1 FTE = 1

220 – 160

1= 60

220 – 20

1= 200

Human Capital Return on Investment (HCROI)

220 – 160

40= 1,50

220 – 20

180= 1,11

Value Added and ROI of Human Capital

P&B = Pay & Benefits

OE = Other Expenses(Total expenses minus Pay & Benefits)

R = Revenue

FTE = Full-Time Equivalent

R – OE

FTE=

R – OE

P&B=

Source: Jac Fitz-Enz: The ROI of Human Capital.


Measuring Employee Performance

Revenue 200.000 k€Employees 2.000 FTE

Revenue/FTE 100 k€

Total Expenses 180.000 k€Personnel Exp. 140.000 k€Workdays/Year 220

Company Example Indicators

Profit/FTE 10.000 €HCVA* 160.000 k€

Human Capital Value Added Revenue – (Total Exp. – Personnel Exp.)=

Human Capital ROIHuman Capital Value Added

Personnel Expenses=

HCROI** 114 %

× 100%

*

**

*/** Source: Jac Fitz-Enz (2000). The ROI of Human Capital. Amacon.

HCVA/FTE 80 k€


How much does a Top-Perfomer add more Value than an average Employee?

Source: Corporate Leadership Council (2003)

Reponse by HR Directors


Added Value in Key Functions compared to Other Functions

Performance

Added Value

1 2 3

0,5 1 1,5

C B A


Differenciated Added Value Estimation

Key Function

Others

10%

90%

C 10% B 70% A 20%

FTE 20Factor 1

Per FTE (k€):HCVA 69P-Exp. 80Benefit - 11

FTE 140Factor 2

HCVA 139P-Exp. 100Benefit 39

FTE 40Factor 3


FTE 180Factor 0,5

HCVA 35P-Exp. 60Benefit -25

FTE 1.260Factor 1

HCVA 69P-Exp. 70Benefit -1

FTE 360Factor 1,5


Per FTE (k€): Per FTE (k€):

Per FTE (k€): Per FTE (k€): Per FTE (k€):


Training ROI CalculationExample

A Revenue (T€) 7.772.361

B Expenses (T€) 6.652.523

C Pay & Benefits (T€) 3.549.686

D FTE 28.797

E Human Capital Value Added (HCVA)/FTE (T€) 162 (A-(B-C))/D

F Productivity Increases 1%

G Impacted FTE (prop.) 1%

H Impacted FTE (abs.) 288 D*G

I HCVA Increase/FTE (T€) 1,62 E*F

J Increase of Operating Income (T€) 467 H*I

K Costs of Training Measure (T€) 420

L Training ROI per Year 11% (J-K)/K

a dvanced h uman r esource m anagement prof. dr. armin trost

Documents

armin trost slide

business line

globe slide

employees number of

academy of management

work private slide

new employer

proactive measure slide