Theo Veldsman and Penny Abbott

Context of development of HC Measurement Model: SABPP HR Standards and Audits

Context of development of HC Measurement Model: SABPP HR Standards and Audits

Context of development of HC Measurement Model: SABPP HR Standards and Audits

Through these interlocking initiatives, we can become a talent driven

country

Design team

Anthea SaffyAnglo American Platinum

Deon Pieterse ARMElsabe Bell BritehouseGerhard Olivier HebronGregory Lee WBSIan Rothmann AfriforteIna Rothmann AfriforteMaropeng Sebothma SARSMmabethe Baloyi EOHMpho Magau UJPaul Pretorius HebronPenny Abbott SABPP

Reuphillan KasselmanForte Advisory Services

Rita van Kraayenburg ARMTheo Veldsman UJTracy Harper EOHZia Attlee Knowledge Resources

“Intelligence”

Attaining information of value

Why do we need better Human Capital intelligence?

People play central role in knowledge economy

Disruptive innovation through people is key to sustainable

future

We continue to question return on investment in our human

capital - we need to know if we are a going concern in relation

to people dimension of our organization

Without good intelligence, one cannot make good decisions:

are we improving, are we allocating resources properly, are we

focusing energy and money on right things, how do we

compare?

Having a HC Measurement Model is:

Good practice discipline for all South African employers in same way as financial,

risk management and other such frameworks

Intended to encapsulate “state of the nation” in human capital terms at national,

organisational and operational levels

Based on clearly defined measurement domains

A guiding and aspirational framework, which can be customized/localized to fit

different sectors and/or strategic directions by assigning different weightings to

measurement domains

Intended to enable all employers to measure, and therefore understand, critical

aspects of their human capital in order to implement their organisational strategies

and objectives successfully and effectively

Vision for HC Measurement Model

NATIONAL

Human Capital Confidence Index – is SA “a going concern” in terms of Human Capital?

ORGANISATIONAL/ ENTITY

OPERATIONAL

Three levels of HC Reporting

Board Level Human Capital Report – is our organisation “a going concern” in terms of Human Capital?

Management reporting on core metrics along the HC Value Chain (HR Management Standards)

Value of using HC Measurement Model

Simplifies complexity of measurement components and, over

time allows for establishing connections between them

Enables us to talk same language

Informs HC discussions by explicating mental model and

guides conversation to focus on right things

Enables comparability

Design specification for HC Measurement Model

Each measurement domain should clearly link to performance and enable evidence

based decision making

Reporting should always be on comparative basis, internal or external, against past

periods or against appropriate benchmarks to give “norms” or “targets”

Metrics should be highly focused on few key metrics (80/20 principle)

Metrics reported at higher levels should follow clear “drill down” hierarchy to

metrics at lower levels

Allow for predictions and “What Ifs”, allowing one to take pro-active actions

Follow integrated reporting principles

Five HC Measurement Domains

INPUT

•Human Capital Availability

INPUT

•Human Capital Wellbeing

ACTIVITY

•Human Capital Cost, Investment and

Growth

OUTPUT

•Human Capital Contribution

OUTCOME

•Human Capital Wealth Creation

1

2

34

5

BUSINESS MODEL OF GLOBAL INTEGRATED REPORTING INITIATIVE

(GIRI)

Outcomes measure quality and impact of outputs

Outputs are measurable value added to organisation as result of effective human capital processes and activities (combination of inputs and activities)

Activities convert human capital inputs into valuable outputs through human capital processes and actions

Inputs are basic components of human capital resources measured through fundamental data about workforce

Supporting

excellence in

Human Capital

Management

through sound

measurement

and analysis

Domain Definitions

INPUT

•Human Capital Availability

INPUT

•Human Capital Wellbeing

ACTIVITY

•Human Capital Cost, Investment and

Growth

OUTPUT

•Human Capital Contribution

OUTCOME

•Human Capital Wealth Creation

1

2

34

5Supporting

excellence in

Human Capital

Management

through sound

measurement

and analysis

Right people available at right time to do job, relative to

present and future requirements of organisation

State of work-related health and well-being of

employees.(WHO 7 components of

wellness)

Resources allocated / activities undertaken to build and

maintain employees’ ability to deliver against requirements

People producing measurable value add to

performance, innovation and success of organisation.

Impact of Human Capital outputs on stakeholders

Context matters

Cycle of measurement and reporting takes place within internal and external context

Internal context is shaped by organisational strategy and design

External context is shaped by various drivers, e.g.:Legislation

Governance standards

Socio-economic-political-cultural trends

Research driven evidence in the HR Management profession

Therefore metrics chosen must be appropriate for context. Set of metrics in this framework need to be appropriate to South Africa

However, domains of measurement remain constant across contexts

National Human Capital Confidence Index

Human Capital Availability (Input)

• What is match of supply and demand of economically active people (skilled and unskilled) in country?

• Where are specific under-supply and over-supply situations?

Human Capital Wellbeing (Input)

• What health and wellbeing issues impact on general productivity potential of economically active population?

National Human Capital Confidence Index

Human Capital Cost, Investment and Growth (Activity)

• What are we doing in terms of learning and development in school and post-school education system?

• How much are we spending on whom for what in post-school education system?

• What are we doing and how much are we spending on job creation efforts?

• What health and wellbeing interventions are having positive impacts on productivity?

Human Capital Contribution (Output)

• How productive is employed population?

• What is level of innovation?

Human Capital Wealth Creation (Outcome)

• How do different sectors of the employed population share in wealth created in the country?

• How attractive is country to international talent?

Board level Human Capital Index

Human Capital Availability (Input)

• Do we have the skills we need to execute our strategy?

• Do we have people who can fill critical roles in the planned future?

Human Capital Wellbeing (Input)

• What is the state of health and wellbeing of our employees?

• Have we identified and are we dealing with critical health and wellbeing risks among our employees?

Board level Human Capital Index

Human Capital Cost, Investment and Growth (Activities)

• What are we prioritizing in terms of the human capital value chain relative to our strategic priorities?

• What are we spending/investing on these activities and how is this allocated across various employee groupings?

Human Capital Contribution (Output)

• What is the level of performance overall of employees and of different employee categories?

• What impact do learning and development interventions have on the overall competence of the workforce?

• Do employee innovations add value & support/challenge our strategic direction?

• How does our human capital contribute to our customer satisfaction levels?

• Do we comply to legislation – for example, Occupational Health and Safety, Employment Equity?

Board level Human Capital Index

Human Capital Cost, Investment and Growth (Activities)

• What are we prioritizing in terms of the human capital value chain relative to our strategic priorities?

• What are we spending/investing on these activities and how is this allocated across various

• employee groupings?Human Capital Contribution (Output)

• What is the level of performance overall of employees and of different employee categories?

• What impact do learning and development interventions have on the overall competence of the workforce?

• Do employee innovations add value and support/challenge our strategic direction?

• How does our human capital contribute to our customer satisfaction levels?

• Do we comply to legislation – for example, Occupational Health and Safety, Employment Equity?

Board level Human Capital Index

Human Capital Wealth Creation (Outcome)

• How have we grown our intangible assets?

• What is our image/reputation as an employer?

• How fulfilled are our employees?

• Do the stakeholders feel that they share fairly in our wealth creation?

Where to from here?

VALIDATE MODEL

OPERATIONALISE– SET UP DATA

COLLECTION AND REPORTING

MANAGEMENT SYSTEM

BUILD TECHNOLOGY

PLATFORMROLL OUT

Where to from here?

POTENTIAL TIME LINES

• FIRST NATIONAL HC CONFIDENCE INDEX REPORT

JANUARY 2017

• BOARD LEVEL REPORTING PACKAGE MID 2016

• OPERATIONAL REPORTING PACKAGE MID 2016

• BENCHMARKING SYSTEM ON STREAM JANUARY

2017

Conclusion

An effective HC Measurement Model

will give us an accurate, timeous

people intelligence to become world

class in human capital management at

national, organisational and operational

levels