week 7 – strategic value measures/ management tools

Human Resource Strategy

What are some examples of measures that can demonstrate the strategy is successfully being implemented?

Measuring individual performance.

Measuring organizational performance through the use of two performance measures (the balanced scorecard and performance audits): Return on investment Cost-benefit analysis Break-even analysis Financial statement analysis

Four key perspectives

Financial measures

Customer needs and satisfaction

Internal effectiveness and efficiency

Learning and growth

Financial Value Internal CustomerHuman Capital InterventionsHuman Capital Management

How might the HR Scorecard help your organization?

• It reinforces the distinction between HR doables and HR deliverables.

• It enables you to control costs and create value.

• It measures leading indicators.

Methodology and tools to remove all non-value-added time and activity (waste) from processes.

Lean’s roots trace back to Frank Gilbreth (time and motion studies to streamline and standardize) and Henry Ford (assembly line).

Lean greatly matured by Toyota.

Described by James Womack

An unrelenting focus on providing customer An unrelenting focus on providing customer value.value.

Value-added Value-added 1.The customer must be willing to pay for the he customer must be willing to pay for the activity.activity.

The activity must transform the product or The activity must transform the product or service in service in some way.some way.

The activity must be done correctly the first The activity must be done correctly the first time.time.

Using more material than necessaryUsing more material than necessary

Using more space than necessaryUsing more space than necessary

Spending more money than necessarySpending more money than necessary

Using more equipment and tools than necessaryUsing more equipment and tools than necessary

Involving more people than necessaryInvolving more people than necessary

Having incorrect or incomplete information or Having incorrect or incomplete information or instructionsinstructions

Waste of Waiting Waste of Overproduction – Producing items

earlier or in greater quantities than needed Waste of Defects/Rework Waste of Unnecessary Movement Waste of Transportation Waste of Overprocessing or incorrect processing Waste of Excess Inventory Waste of Intellect – unused employee creativity

Six Sigma was developed at Motorola in the 1980’s as a method to improve process quality in manufacturing processes.Six Sigma was then applied to business processes. In 1988 Motorola wins the Baldrige Award.

Other companies that adopted – GE, IBM, KodakGE savings in 1997 attributed to Six Sigma - $320 million; In 1998 - $750 million.

• In 1998 Commonwealth Health initiated Six Sigma.

We can’t do what we don’t know

Know what is important to the customer (CTQ)

We won’t know until we measure

If we can’t control it, we are at the mercy of chance.

Reduce variation