can hr standards mitigate risk?

CAN HR STANDARDS MITIGATE RISK?

Xolani Mawande, COO: SABPP

3rd Annual HR Conference

2 June 2016

@xolani_mawande@SABPP1

The role of HR …

Global HR trends• Strategic HR as foundation for HR success

• HR business partner role

• Talent management

• HR Governance – making better and ethican

decisions about people

• HR Risk Management

• HR Technology + social media

• Innovating the HR function and business

• OD focus in HR work – employee engagement

• HR measurement – big data & metrics

• HR competencies and standards

HR Risk Management: It is all about

people factors

Top facts about HR

• Human Capital is the biggest concern for

CEOs (PwC).

• Only 18% of CEOs feel confident that they

have the right people in place to execute

strategy (CEB).

• Human Capital is the biggest risk in

business (HCI Africa).

• Skills crisis is the top obstacle to economic

growth.

• Strikes cost SA R 200 million+ per day.

More facts about HR

• SA losing R12 billion a year due to absenteeism.

• Only 19% auditors feel they use HR optimally (CG

Index – Institute of Internal Auditors)

• Only 5% employees understand business strategy.

• World-wide 13% of employees actively engaged.

• Companies with engaged employees outperform

others by 202% (Dale Carnegie).

• Companies with good HR Practices outperform

others by treating HR as critical business function,

these companies are 105% more profitable.

• Average ROI on wellness programmes: 300%.

HR Professionalism Priorities

What are standards really?

• A level of acceptable quality

• Good enough in terms of professionalism

• What is good or normal or usual

• A guideline for practice

• A foundation for reasonable expectations

and sound judgement

• A framework for managing risk

• A basis for measurement (M&E)

468 HR Leaders developing

HR Standards for South Africa

BUSINESS STRATEGY – HR BUSINESS ALIGNMENT

StrategicHRM

TalentManagement

HR RiskManagement

HR ARCHITECTURE

HR VALUE & DELIVERY PLATFORM

Work-force

planning

Learning&

Deve-lopment

Perfor-manceMana-

gement

RewardWell-ness

ERM OD

HR Service Delivery

HR Technology(HRIS)

Prepare

Imple-ment

Review ImproveHR MEASUREMENTHR Audit: Standards & Metrics

E T E N C

I E SSABPP HRM SYSTEM STANDARDS MODEL

Risk / Readiness Profile

HR RISK MANAGEMENT

STANDARD

DEFINITION

HR Risk Management is a systematic

approach of identifying and addressing people

risks (uncertainties and opportunities) that can

either have a positive or negative effect on the

realisation of the objectives of an

organisation.

SABPP (2013)

Do you manage HR risk?

HR Risk Management

OBJECTIVES

3.2.1 To increase the probability and impact of positive events and decrease the

probability and impact of negative events caused by people factors on the

achievement of organisational objectives.

3.2.2 To align HR and people management practices within the governance, risk

and compliance framework and integrated reporting model of the organisation.

3.2.3 To ensure appropriate risk assessment practices and procedures relating to

people factors are embedded within the organisation.

3.2.4 To ensure appropriate risk controls are designed and applied to HR activities

and interventions.

3.2.5 To contribute in creating and sustaining a risk culture in an organisation

which also encourages innovation and creativity.

SABPP (2013)

181 babies died in state hospitals last year.

Human errors, faulty equipment & cover-up by senior medical staff were key factors.

Infection-control nurse retired, and her post not filled.

Critical shortage of nurses & clinical engineers who are responsible for maintaining ventilators.

Senior doctors presented inaccurate stats to their bosses to cover up poor management practices.

Doctors failed to alert DoH to the crisis, even though a few nurses had raised the alarm to management.

Public sector case study

HR RISK MANAGEMENT PROCESS

Assessment of risk tolerance for each risk

Identify and evaluate impact of

HR risks

HR practices, programmes, metrics to

manage risks

HR Risk Map

HR Risk Register

Organisation’s risk management

structures and processes

HR Risk Register

HR Risk Management

HR Risk Map

MONITOR & EVALUATE

H R R I S K S – 8 African countries

• Safety - accidents

• Skills shortages/gaps

• Incompetence

• Employee disengagement

• Strikes & poor employment relationships

• Fraud/corruption

• Stress

• Staff turnover

• Low staff satisfaction –impact on customer satisfaction

• Cyber security

• Conflict/disputes

• Diversity problems

• Sexual harassment

• Expatriate issues

• Non-compliance

HR Risk?

HR Standards Files

13 standards (2013) 19 standards (2014)

HR Professional Practice Standards• Absenteeism management

• Career management

• Coaching & mentoring

• Collective bargaining

• Disciplinary procedure

• Dispute resolution

• Diversity management

• Grievance procedure

• Leadership development

• Learning design

• Learning evaluation

• Learning needs analysis

• On-boarding

• Organisation design

• Performance appraisals

• Recruitment

• Remuneration benchmarking

• Selection

• Succession planning

StrategicHRM 5.0

TalentManagement

HR RiskManagement

FUNCTIONAL & CROSS FUNCTIONAL HR VALUE CHAIN

Work-force

Planning 4.4

Learning5.7

Perfor-mance

Reward4.7

Well-ness 5.5

ERM5.8

HR Service Delivery

HR Technology(HRIS) 4.6

Prepare

Imple-ment

Review ImproveMEASURING HR SUCCESS 3.8HR Audit: Standards & Metrics

E T E N C

I E SSELF RATINGS – OVERALL AVERAGE MAY 2016

400responses

StrategicHRM 6.0

TalentManagement

HR RiskManagement

FUNCTIONAL & CROSS FUNCTIONAL HR VALUE CHAIN

Work-force

Planning 5.8

Learning6.5

Perfor-mance

Reward6.3

Well-ness6.6

ERM6.6

HR Service Delivery

HR Technology(HRIS) 5.6

Prepare

Imple-ment

Review ImproveMEASURING HR SUCCESS 4.9HR Audit: Standards & Metrics

E T E N C

I E SAUDIT SCORES – OVERALL AVERAGE MAY 201617 audits

Link to risk

• The HR Risk Standard provides you with the

methodology and steps to identify and

manage people risks.

• Any standard scoring less than 60% in an

audit puts the organisation at risk.

• Build robust risk mitigation strategies in all

underperforming areas.

• Create a culture of continuous improvement.

Value of HR Audits

HR Audits as valuable instrument to mitigate

HR risks and to improve HR impact

Email: hraudit@sabpp.co.za

Tel: (011) 045 5400

2015 was our first year of HR

Audits

HR Audit - Certification

What the Auditors are looking for?

Positive trend in

results?

Sustainable?

Targets met?

External benchmarks?

Approach vs results?

Quality of

results

Across whole

organisation?

Up and down the

organisation?

Extent of

application

Sound?

Systematic?

Integrated?

Reviewed & updated?

Quality

approach

RATING SCALE TO ASSESS HR

PROBLEMATIC MEDIOCRE EXCELLENT

High Risk Medium Risk Low/no Risk

HR practice is non-existent, has a low uptake or is applied poorly. Little, no or poor results are evident. Requires urgent attention to move to medium risk over short or medium term.

Some pockets of excellence, but they are isolated, and applied inconsistently in certain parts of company. Some occasional positive results comparable to typical average HR standards. Should be addressed before it becomes problematic.

HR leading practice is well infused, aligned and integra-ted across the company and applied consistently with clear results. Comparable to world-class standards. Should be maintained, reinforced or used as a model for other companies.

SUSTAINABLE PERFORMANCE

“Whether a company sustains exceptional performance depends first and foremost on whether it continues to