CHAPTER 13 Outsourcing Chapter Learning Outcomes After reading this chapter, you should be able to: • Define outsourcing. • List the reasons organizations outsource functions and programs. • Identify the advantages of outsourcing. • Cite the risks and limitations of outsourcing. • Develop the criteria necessary for managing the outsourcing relationship. Chapter Summary Outsourcing refers to the contractual arrangement wherein one organization provides services or products to another. There is a growing trend to outsource HR functions. The advantages of outsourcing include the reduction of costs; the increased energy and time to focus on an organization’s core competencies; access to technology and specialized expertise, all of which result in increased levels of service; and the political advantages of removing a troublesome function or reducing headcount. There are, however, disadvantages: the anticipated benefits may not be realized; service levels may decrease; and employee morale and commitment, as well as the value of the organization, may be reduced. Managing the contractual arrangement with the service provider is the key to optimizing the benefits and minimizing the risks. Class Outline Instructor’s Teaching Notes Students’ Learning Activity Outsourcing Outsourcing: a contractual relationship for the provision of business services by an external provider. • Outsourcing occurs when an organization contracts with another company to provide services of a major function. • Work that is traditionally done internally is shifted to an external provider. Much of the work that is being contracted out is being done offshore (e.g., outside Canada). Outsourcing HR Functions • HR departments are under increasing pressure to produce deliverables, not just complete tasks. • Outsourcing is also a response to the demand from executives that HR reduce its cost for services. • Outsourcing with service providers with international expertise allows HR departments to harmonize employee packages for a global workforce, while complying with local laws. Potential for outsourced functions should increase, given that they satisfy these characteristics: • Rule-based. • Repetitive. • Frequently undertaken. • Predictable. • Able to be fully or party automated with technology. • Able to be delivered by remote sites. The Rationale for Outsourcing • Almost all organizations outsource, and the trend is growing. • IBM outsources its entire HR departments. Financial Savings • Workers can be paid less. • Vendors are most efficient, due to less need to train staff. • Results in cost savings generally between 10 to 20%. Strategic Focus • Decide to focus on specific core competencies, like customer service or innovation. • Core work is transformational and adds value. • Move secondary functions (or non-core work), like benefits administration, to firms that do these things well (they are core competencies for the outsourced firm). How is core defined? There are four meanings: • Activities traditionally performed internally. • Activities critical to business success—core work contributes directly to the bottom line; non-core work does not. • Activities creating current or potential competitive advantage. • Activities that will influence future growth or rejuvenation. Non-core work is transactional work that is routine and standard and can easily be duplicated and replicated; core work is transformational and adds value to employees or customers. Advanced Technology • Technology has been a main driver of outsourcing. • Organizations want to improve technical service. If they cannot find technical talent or need quick and reliable access to technology, outsourcing enables them to reduce transaction time (the time it takes to handle a request). Improved Service • Quality improvement. • Outsource to those who are excellent performers. • Improvement in flexibility, response, and performance. • Improved confidentiality. Specialized Expertise • “Outsource when somebody can do it better than you.” • Experts understand the complex laws and regulations required in HR; • Use of experts reduces the risks and liabilities for organizations; • Access to best practices. Organizational Politics • Outsourced functions are not as visible as in-house departments. • Outsource to eliminate troublesome departments (e.g., employees who are underperforming). Benefits to Canada • Outsourcing to foreign countries (offshoring) can be viewed negatively as it often results in the loss of jobs in Canada. • Offshoring accounts for one-tenth of our GDP growth. • Lowers costs of consumer goods. Risks and Limitations of Outsourcing Projected Benefits versus Actual Benefits • One survey showed about 80% of outsourced customer service agreements do not reduce costs. • Many report problems with higher costs than forecasted. • Over 30% of outsourcing arrangements were not renewed because the cost savings were not achieved. Service Risks • Businesses lose ability to make changes easily since they are reliant on outsourced processes. • There might be disruptions of service. A strike at Heathrow Airport, leaving 70,000 passengers stranded, was the result of labour relations problems with catering. Employee Morale • When employees are disrupted, they become resentful and retaliatory. • About one-third of HR professionals resist outsourcing due to worries about their jobs or being forced to work for a vendor. • Outsourcing can lead to the disintegration of an organization’s culture. • Outsourcers “de-skill” employees. Security Risks The Privacy Commissioner of Canada has said that PIPEDA (the Personal Information Protection and Electronic Documents Act) does not prohibit the use of foreign-based service providers but warns companies that some foreign governments may access their confidential information. Reduced Value Extreme levels of outsourcing hollow out a company. There may be unintended negative consequences to the knowledge, skills, and morale of an organization due to outsourcing. Selecting the Vendor Management of Outsourcing • Companies managing outsourcing effectively is critical. • Must conduct a cost‒benefit analysis of outsourcing versus keeping functions in-house. Selecting the Vendor Request for Proposal: describes the responsibilities to be outsourced and invites potential providers to present their proposals for carrying out the job. 1. Inform the staff of the affected function. 2. Prepare a request for proposal (RFP), which describes the responsibilities to be outsourced and invites providers to present proposals. 3. Invite internal and external bids. 4. Establish a team to evaluate bids. Negotiating the Contract Monitoring the Arrangement Most frequent causes of outsourcing problems are: 1. Poor service definition. 2. Weak management process. Policy Options to Limit Outsourcing • Product labelling that identifies the country of origin may help. • Tax incentives to manufacture in Canada. • Longer-term policies that increase investment in education to increase Canadian intellectual capital (i.e., Canadians can compete on ideas not labour costs) may work. • Invest in research and innovative ways to manufacture, which should result in lower costs. ¬ Review the chapter-opening vignette, “Outsourcing HR at Canadian Banks.” Ask Students: Why was this decision made? Ans. Workers can be paid less than Canadian staff here. See HR Planning Notebook 13.1—The Impact of Offshoring in India. Review HR Planning Notebook 13.2—Ranking HR Activities. Ask Students What type of tasks are outsourced? Ans. Level 1: Ancillary activities—food service, grounds maintenance. Level 2: Routine activities—benefits administration. Level 3: Economics of scale—administering personnel tests. Level 4: Specialized knowledge—conducting HR surveys, delivering a training course. Level 5: Specific organizational knowledge—succession management. Level 6: Highly confidential activities—layoffs, restructuring. Level 7: Management decision activities—HR strategy, structure HR activities in the first few levels are suitable for outsourcing; those at the higher levels, completed by managers, are not. Review HR Planning Notebook 13.3—HR Functions That Are Outsourced. Compensation: • Payroll, benefits, compensation administration, and pension. Recruitment and Selection: • Advertisements, screening of applications, testing, reference checking, preliminary interviews, executive salary negotiations, and exit interviews. Training: • Program delivery, program design and development, training consulting, training needs analysis, program evaluation, strategic planning, administration, and developing training policies. Health and Safety: • Employee assistance programs and wellness programs. Review HR Planning Today 13.1—Outsourcing at CIBC. Review HR Planning Notebook 13.4—Small Business and HR Outsourcing. Ask Students: What are the benefits for a small organization to outsource HR for small businesses? Ans. • Lessens the handling of routine, transactional HR work (payroll) by in house staff. • Offers access to experts who may provide advice in atypical situations (employee fraud). • Provides the management of one-off services (such as computer training). • Ensures that the company is complying with current legislation. • Allows access to technology platforms that are too expensive to develop in-house. Review HR Planning Notebook 13.6—Response Requirements to a Request for Proposal for Outsourcing. Ask Students: What are some of the important characteristics of an RFP? Ans. • Explain how the provider is qualified to accomplish the measurable objectives. • Describe the current situations; how the provider is getting services. • Explain how these challenges will be met and present a proposed timetable. • Describe the economic model proposed for the operation. • Specify the fee that the provider believes is reasonable compensation. See HR Planning Today 13.3—Criteria for Evaluating Potential Outsourcers. Ask Students: What are some of the HR functions that CIBC outsources? What benefits does CIBC realize from outsourcing these functions? Ans. Some functions outsourced: • Payroll processing. • Benefits administration. • Call centre for employment enquiries. • Occupational health and safety. • HR technology. Benefits realized: • Improved service. • Increased automation. • The HR department was able to focus on the strategic issues of making a contribution to the company. Review HR Planning Notebook 13.5—Preparing for Outsourcing. Ask Students: What three tasks should be completed to prepare for outsourcing? What implementation models can be used? Ans. 1. Develop meaningful benchmarks and data. 2. Develop change management skills. 3. Develop contract and performance management skills. Implementation models that can be used are: • To engage suppliers for a long time period for a number of areas. • To use outsourcing for functional areas. • To create licensing agreements. • To contract a specific task (i.e., labour for hire). Advantages of Outsourcing HR are: • Ability of the HR department to focus on the strategic issues of making a contribution to the company. • Freedom from routine transactions. • Avoid capital expenses of updating its computer systems. • Standardize the quality of service. • Introduce best practices. Review HR Planning Today 13.2—Outsourcing Backlash. Review HR Planning Today 13.3—Criteria for Evaluating Potential Outsourcers. • Customize and negotiate the outsourcing contract. • Set performance standards or penalty clauses for the outsourcing company. • Establish benchmarks for service expectations. • Document baseline services currently provided, using criteria such as response time, cost, and customer satisfaction ratings. Review HR Planning Notebook 13.7—Issues Companies Face with Outsourcing Providers. Ask Students: What are problems with health and safety in outsourced locations? Ans. • The standard response is that companies do not know suppliers are taking incorrect actions and therefore are not responsible. • Opponents say it is part of any organization’s corporate social responsibility to know its products are made in safe and fair conditions. • As a step toward improvement, some companies like Loblaws, seller of Joe Fresh clothing manufactured in Bangladesh, have signed a legally binding document to improve safety. • This will be effective only if Loblaws completes regular unannounced in-person inspections. Ask Students: In the public service, outsourcing has come to be used as a simplified hiring process. What can be done when government wants to use contractors instead of its own HR department? Ans. • If workers are needed for short periods, they can be hired as “casual” employees. • This may circumvent transparency, geographical, bilingual, and nepotism checks. • Ask students if they think the government has a duty to provide good, full-time, stable employment as an example to other organizations. From David Macdonald, Canadian Centre for Policy Alternatives, “The Shadow Public Service: The Swelling Ranks of Federal Government Outsourced Workers,” March 2011. https://www.policyalternatives.ca/sites/default/ files/uploads/publications/National%20Office/ 2011/03/Shadow_Public_Service.pdf See HR Planning Notebook 13.5—Preparing for Outsourcing. Review HR Planning Today 13.4—Negotiating Service Outcomes. Ask Students: What are the three main deliverables that SaskCentral expected? Ans. 1. Accuracy 2. Compliancy with legislation 3. Responsiveness to complaints, requests CHAPTER 14 HR Assessment and Analytics Chapter Learning Outcomes After reading this chapter, you should be able to: • Understand the importance of measuring the effectiveness of HRM activities through workforce analytics. • Outline five aspects of HRM that can be evaluated using the 5C model for measuring effectiveness: compliance with laws and regulations, client satisfaction, culture management to influence employee attitudes, cost control of the labour component of the budget, and the contribution of HR programs. • Discuss methods of assessment, such as cost‒benefit analysis, utility analysis, and auditing techniques. • Identify the challenges in measuring HR activities and determine the metrics that are important to the stakeholders in organizations. Chapter Summary The chapter attempts to close the loop in the strategic HR planning process by examining evaluation; when managers implement a plan, they need to know if the plan was successful. In addition, it is important to measure the impact of HRM to prove the value of HR and to improve its performance. The 5C model for measuring HR effectiveness has five areas: compliance with laws and regulations, client satisfaction, culture management, cost control, and contribution. Methods to measure the impact of HRM include cost‒benefit analysis, utility analysis, and audits. Benchmarking is a valuable tool that provides comparative data on key ideas and stimulates discussion about better ways to operate. However, there are challenges in measuring HR effectiveness: overall organization goals may not be applicable to all branches or subsidiary companies; it is difficult to relate cause and effect; and some HR professionals do not see the benefit in such measuring. Class Outline Instructor’s Teaching Notes Students’ Learning Activities Workforce Analytics HR analytics is an evidence-based approach for making better decisions about employees and HR policies, using a variety of tools to report metrics and predict outcomes of HR programs. • Focuses managers and employees on what is important to the organization. • Motivation to measure is driven by the need to improve results. • Allows review of turnover and employee engagement. The Importance of Evaluating HRM • HR managers need to be able to talk about the contribution and value of HR activities in the numbers and language of business. • The HR department is like an operational unit and is subject to questions about its contribution to organizational performance. • Some HR managers resist measuring their work because outcomes such as employee attitudes or managerial productivity seem difficult to calibrate meaningfully. • Another reason is that some HR professionals have limited knowledge of measurement models and limited skills in measurement design. • The challenge is to develop measures that are important to the organization, not just to the HR function. Resistance 1. Only 6% of HR managers interviewed felt that they were effective using data to make decisions. 2. Measurement can be expensive but can save costs afterward. 3. The need to measure is fuelled by: 1. Business improvement efforts across organizations. 2. Attempts to positioning HR as a strategic partner. 3. The need for objective indicators of success. Rationale 1. Labour costs are often a firm’s largest controllable cost. 2. Managers recognize that employees make the difference between success and failure. 3. Organizations have legal responsibilities to ensure compliance with laws governing the employer‒employee relationship. 4. Evaluations are needed to determine which HR practices are worth measuring and benchmarking. 5. Measuring and benchmarking HR activities will result in continuous improvements. Performance gaps can be eliminated. 6. Audits will bring HR closer to the line functions of the organization. 7. Data will be available to support resource allocations. 8. Investors want this information. Why? The market-to-book ratio suggests that for every $6 of market value, only $1 appears on the balance sheet. The 5C Model of HRM Impact 1. Compliance. 2. Client satisfaction. 3. Advantages of measuring Client Satisfaction. 4. Methods of measuring Client Satisfaction. 5. Problems with measuring Client Satisfaction. Compliance Ensure that organizational practices comply with the law in areas such as: 1. Employment standards 2. Employer/employee relationships 3. Health and safety 4. Employment equity 5. Industrial relations Client Satisfaction • Stakeholders include external and internal clients who interact with HR. • Surveys are used to get feedback. Advantages of Measuring Client Satisfaction • Measuring client satisfaction reminds the HR department that it provides a service to the clients and must meet their expectations. • Surveying clients about their unmet needs increases the credibility of the HR function. • When change takes place, it is important to survey the stakeholders before, during, and after a change program. Methods of Measuring Client Satisfaction Information can be gathered from clients in several ways including informal feedback; surveys; and the critical incident method. Problems with Measuring Client Satisfaction • High expectations of clients—if clients in one business unit have extremely high expectations, their dissatisfaction scores will be high. • Conflicting expectations—the employee group might desire extensive counselling, while senior managers might focus on maximizing productivity. • Professional affiliations—line managers might value faster job filling, while HR might value the creation of a valid selection test. Culture Management Attitudes: perceptions or opinions about organizational characteristics. • Effective organizations seek to influence employee attitudes through an appropriate culture, to support optimum performance. • About 80% of Canadian organizations measure employee engagement, and the majority of organizations report scores between 60% and 80%. Cost Control The 3 ways to reduce labour expenses by reducing the size of labour are technology, outsourcing, and downsizing. Increasing Efficiency Efficiency: results achieved compared to resource inputs. Measures of efficiency include: 1. Time (e.g., time to process a claim). 2. Volume (e.g., number of people interviewed). 3. Cost (e.g., per training hour). Results to be compared to interpret accurately. Cost of Employee Behaviour Employers should carefully track and compare the rates of absenteeism, turnover, and occupational injuries and illnesses. The cost can be significant. Learning time for new employees to become productive is estimated at between 6 and 18 months of the employee’s annual compensation. Contribution • The effective management of people makes a difference in how well an organization functions. • Studies have shown that HRM practices have a positive effect on employee performance and organizational performance. How HR Contributes to Organizational Performance Financial Measures Survival • Survival is the first measure of effectiveness. • If an organization does not go bankrupt, it is a success, called a life-or-death index. • Most employees desire a relative measure of their own performance. Profits or Return on Investments ROI—return on investment ROE—return on equity Any HRM practice that contributes to ROE related to expenses relative to sales or other financial ratios will often be supported by senior management. • Ratios measure the relative success of an organization in meeting its goals. • HRM contributes to these measures of impact in training or performance appraisals. They help HR to have rational ways of making decisions, as shown in HR Planning Today 14.1. Measures of Managerial Perceptions of Effectiveness • Sometimes the best method is to ask managers to assess their organization’s performance relative to the performance of competitors. • These perceptions have been found to correlate positively with objective measures of a firm’s performance. Approaches to Measuring HRM Practices 1. Activity-based measures 2. Costing measures 3. Client satisfaction Cost-Benefit Analysis Cost-benefit analysis: the relationship between the costs of a program and its benefits Direct costs: the hard costs that can be measured by expenditures Indirect costs: the soft costs that have values that can be estimated but not easily measured by financial expenditures. Utility analysis: a method of determining the gain or loss that results from different approaches. Benchmarking Audit: a measurement method that assesses progress against a plan. Benchmarking: a process that can enhance organizational performance by establishing standards against which processes, products, and performance can be improved. Benchmarking employs this tool. The organization can check against a plan, e.g., have they maintained the goal of employee satisfaction at 4/5 on employee satisfaction scales? Can use four different sources of comparison: 1. Stimulate 2. Motivate employees 3. Provide compensation data 4. Raise questions and stimulate Four sources of benchmarking partners: 1. Internal (compare previous year’s recruitment to this year’s). 2. Competitive—compare exact functions of a competitor. 3. Sector associations establish HR benchmarking subcommittees. 4. Best-in-breed organizations—many organizations are willing to share this information. The HR Scorecard Balanced scorecard: a balanced set of measures to show contribution to organizational performance. A balanced scorecard is based on the idea that financial measures alone do not capture true performance, and that these measures reflect past performance, not that of the future. The balanced scorecard provides answers to: 1. How do customers see us? (the customer perspective) 2. What must we excel at? (the internal business perspective) 3. Can we continue to improve and create value? (innovation and learning perspective) 4. How do we look to shareholders? (the financial perspective) Measuring the Worth of Employees • Great slogans like “Our product is steel; our strength is people” indicate the importance of employees’ human capital in organizational success. • Human capital typically includes employees’ knowledge, skills, capabilities, and attitudes. • Some attempts have been made to measure human capital using historical costs, replacement costs, and present value of future earnings models. • HR professionals who attempt to measure the worth of employees do so because it demonstrates that HR is strategic and adds to competitive advantage and so must be expressed in credible financial terms. Universality of Best Practices No single best practice works in every situation. Organizational structure and goals vary considerably. What may work in one organization may not be effective in another. HRM impact must be measured against unit goals, not against some generality such as profit or growth. Separation of Cause and Effect It is difficult to determine what causes organizational success. There is a lack of confidence in the explanation of causal links between HRM practices and organizational performance. The culture of the organization may have a greater impact on employees than specific HRM practices. Successful Measurement All measures should have the following characteristics: 1. Alignment 2. Actionable 3. Trackability 4. Comparability 5. Drill deep 6. Report and communicate a limited number of measures Measures can also be put in a hierarchy: Utility Analysis Level 1: Basic data—headcounts, number of positions. Level 2: Operational data—training days, number of grievances. Level 3: Employee data—levels of engagement, absenteeism, turnover. Level 4: Organizational data—the correlations between turnover and sales; between engagement and unit performance. Reporting to Boards of Directors and Shareholders External stakeholders want to know the human capital number because they know that these are often linked to the future performance of the organization. The Future of HR Analytics As seen in the chapter, HR professionals generate data to assess the effectiveness and efficiency of corporate HR programs. The current trend is to use the data to maximize how HR initiatives drive programs to meet organizational objectives. Review the chapter-opening vignette, “Keeping Score with the Scorecard.” In the case of Enbridge Gas Distribution. Ask Students: What happens if the company’s workforce is highly motivated and actively engaged? Ans. • Lower absenteeism and “presenteeism.” • High levels of employee engagement and satisfaction. • High levels of alignment to company goals and objectives. • Effective development of succession candidates to ensure leadership continuity. • Enhanced levels of innovation and creativity in response to business challenges. Review HR Planning Notebook 14.1—Some Basic Definitions. Learning Activity Working in pairs without the text, have students identify why they believe it is important to measure the effectiveness of HRM programs and practices. Record one idea from each pairing. Ask Students: Why are investors interested in HR metrics about a company? Ans. • Can assess stability of company. • Know that business observes the laws. • May consider fair treatment of employees. • Know how HR compares to that of other businesses. Review HR Planning Notebook 14.2—What Is a Fad? 1. What are the three stages that a fad will undergo? 2. What are some of the ways in which an HR professional can protect his or her decisions from being influenced by a fad? Ans. 1. Stage 1− Ascendency 2. Stage 2—Maturity 3. Stage 3—Decline HR professionals should seek evidence that the technique actually works and is not a fad that is temporarily useful. They should also be cautious and slowly implement a plan in segments rather than all at once. Review HR Planning Notebook 14.3—HR Role Assessment Survey. Ask Students: Human Resources used to be called Personnel, and was composed of staff who managed administration of records. If HR wants to truly be part of the business strategy, it is important to avoid the perception that it exists only to “police” company policies. How can this be done? Ans. • Try to get to know employees and managers all the time, not just when issues arise. • There are many demands in HR. Remember that HR is part of management. While staff can recognize an employee’s perspective, they are not always on their side. • Research to confirm answers. HR is rife with regulations―the firm’s policies, the industry, provincial acts, and federal law. All of these change frequently. It is essential to keep up to date and know how to access current resources. Learning Activity An important step in measuring client (employee) satisfaction is determining the purpose of any tool. For instance, if implementing an employee survey, some questions can ask about employee satisfaction with their work, relations with their co-workers and supervisors. Other questions, however, can be about how employees rate the conditions that enable them to deliver quality service to customers. Ask Students: What questions should be asked that relate to how employees can deliver good service to customers? Ans. • Are employees empowered to make decisions in order to satisfy upset customers? • Are they given time and resources to prepare properly before meeting potential clients? • Do their supervisors support creative ways of meeting customer needs? • Do employees feel their performance appraisals are partly based on good client relations? Ask Students: How do they think HR affects culture and morale? Ans. • Facilitates it through new-hire orientation and training. • Influences company policies. • Assists when employees or managers are concerned. • May implement employee assistance programs. • Helps demonstrate the worth the firm credits to employees. • May meet employees and managers one on one. See Figure 14.1—How Engagement Data are Used Ask Students: How the items listed might assist employees. Ans. • Increase incentives to motivate employees. • Increase preventive maintenance performed by employees. • Decrease downtime repairs– employees will notice damage, need for fixing. • Increase customer satisfaction— since employees interact with customers. • Increase repeat business—offer good service. Review HR Planning Notebook 14.4—Measuring Employee Attitudes. Ask Students: What are some of the terms used in surveys that measure employee attitudes? Ans. • Activity-based measures, i.e., trained and hired. • Costing measures, i.e., cost of training program and cost per hire. • Client satisfaction, i.e., managers problem solve. • Satisfaction. • Motivation. • Commitment. • Advocacy. • Engagement. Learning Activity In groups of four, have students list ways of implementing cost controls including decreasing expenses. Ans. • Wellness programs can decrease benefit costs. • Reduce absenteeism. • Audit HR. • Perform a job analysis to see if work can be performed more efficiently. • Eliminate temporary staff. Ask Students: Historically, measurement of practices has not been a strength of human resources professionals. Do they think it is vital that this change? Ans. If HR wants to be part of strategy, it has to understand its contribution. Ask Students: • How does HR impact cost and revenue? Review HR Planning Today 14.1—Return on Investment Example: National Steel’s Safety Incentive Program. Ask Students: How can a health cost incentive increase employee safety? Ans. • Employer gave $75 to every employee every 6 months who had had no medical treatments. • Results show improvement. Review HR Planning Notebook 14.6—Added Value. Review HR Planning Notebook 14.5—Examples of Efficiency Measures. 1. Cost 2. Volume 3. Response Time Review HR Planning Notebook 14.7—Measuring the Contribution of HRM Practices. Review Table 14.1—Summary of HR Measurement Alternatives. Ask Students: Which measures they think are the most important? Ans. Depending on success of business and morale of employees, all are important. Figure 14.2—HR Deliverables Linked to Strategy. Review Table 14.2—People Analytics: Old Rules Vs. New Rules. See Figure 14.3—Two Approaches: Fit or Best Practice. Ask students why they believe fit is the best approach. Ans. Best practices will be ineffective if they are too complex, too expensive, or do not meet the needs of the company and employees. Review HR Planning Notebook 14.8—An Example of Utility Analysis. Ask Students: By what measures are employees considered? Ans. By tenure or performance. See HR Planning Notebook 14.9—Leading and Lagging Indicators. Ask Students: How can businesses measure employees’ worth? Variables are many and greatly depend on the goals of the company. Suggested Ans. • Generation of new customers • Identification of cost savings • Initiating efficiencies • Interpersonal relationships • Loyalty to the business • Judgment in activities • Employee engagement • Adaptability Review HR Planning Notebook 14.10—Challenges of Evaluating HRM. Ask Students: What are some of the challenges of HRM evaluation? Ans. • HR assessment is costly. • Time is at a premium. • HR is not the only input for employee behaviour. • It is all about the numbers. • Danger of results showing no impact by HR practices. Review HR Planning Today 14.2—Popular HR Measures. See that the most popular HR measures are related to employee retention/turnover and employee engagement/satisfaction. Ask Students: After reading the text in the left-hand column under “Separation of Cause and Effect,” consider what the meaning of culture is in a business. Ans. Culture encompasses the values and practices shared by employees in an organization. Have students read the article 5 Powerful Ways HR Can Leverage Big Data by Charles Ebert at http://www.digitalistmag.com/future-of-work/2017/08/31/5-powerful-ways-hr-can-leverage-big-data-05242673 Instructor Manual for Strategic Human Resources Planning Monica Belcourt 9780176798086, 9780176570309
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