graphic for The 2019 Index of Intelligent Technology in HR Tech

 

Starting Again

On October 9, 2018, in Dr. Chris Andrews, Editorial Advisory Board, HRExaminer, by Dr. Chris Andrews

 

2018-09-19-hrexaminer-photo-img-dr-chris-andrews-article-starting-again-cc0-via-pexels-blank-book-business-68562-full-crop-544x335px.jpg

How would you construct the HR profession if you had the chance to start again? Dr. Chris Andrews reminds us that there is a lot more to it than deploying the latest HR Technology bandage.


If we had to start again and design the HR profession from a blank page, we wouldn’t start by hoping HR technology could fix the current mess. So where would we start, and what could it look like?

An Integrated Whole

At the national level, there would be a common framework for depicting and describing the full suite of HR Activities. Each element in the framework would have a description of purpose, sources of evidence and the expected performance outcome. The elements of the framework, once agreed, would be followed consistently, and integrated across organizational activities, educational programs, professional membership categories and performance expectations. This establishes the criteria for ‘what we expect to see’ at any workplace.

This common taxonomy (or framework if you prefer) would show how the various parts of the profession relate to all other parts and we would have a common HR dictionary of agreed terms and agreed metrics and measures that enable us to report and analyze each element of the taxonomy across organizations. It would include a standard HR data dictionary which technology vendors could use to build systems based on nationally agreed criteria. It would also have a Data Quality assurance mechanism, since HR data quickly goes stale without constant updating.

How would we evaluate the performance of the profession? If you listen to an experienced performance auditor, the methodology is already here; it applies across organizations big or small, public or private, to any industry, including not-for-profits. To evaluate performance, you need to look for effectiveness, efficiency and economy. Some of the advantages would be:

  • The HR profession is constructed within a nationally agreed taxonomy, with agreed core and non-core activities, using a common language set.
  • Organizations can set their own criteria for ‘what we expect to see’ across each HR Activity but placed within the nationally agreed context. They can also set their own priority areas and performance standards above the minimum requirement.
  • Professional membership gradings would be based on the same taxonomy.
  • University and other HR courses would teach students using the HR Taxonomy, the common dictionary and the activities they would encounter in business, in a consistent way.
  • Needless variation is avoided and technology providers operate in a more certain environment.

This results in synergy across all aspects of the profession.

HR Reporting

Now we come to a tricky part – how to consistently report between organizations in a way that enables comparisons to be made. HR lacks the fundamental reporting elements of the accounting profession: the balance sheet and the profit and loss statement. So, what is the equivalent of the Balance Sheet and the Profit (or Surplus) and Loss Statements in our new HR profession?

For Profit and Loss, I propose that Profit (or surplus) per Full Time Equivalent is the better measure in the HR space. Sure, it hides a lot of information but so does the accounting version. It certainly draws the reader to explore and project the value added by additional (or fewer) employees.

What about the Balance sheet? What is the equivalent that organizations need to show? In my opinion the key is the word ‘balance.’ The new HR profession needs to show that it is balanced across all the key elements that make up the HR Taxonomy. For those activities in which specific organizations have a strategic priority they need to excel in these specific elements. So how would you do that?

HR Taxonomy – Balanced HR

I’m not dogmatic about the elements within our taxonomy, or what is deemed core or not; but the key point is we should have one common taxonomy to work from. We would need to scope each of the activities that make up the new profession and understand why these activities are needed by the organization. There are also core activities in the new profession and those that are non-core, depending on the context.

You would want to have a way of constructing each activity so that they are presented in a common format for evaluation. Performance Auditors can also help here as they regularly use the model:

Objectives – Inputs – Processes – Outputs – Outcomes – Risk Assessment

To break this down: the Objective should equal the desired Outcome, and at the evaluation stage, the Outcome is assessed against the Objective. In the mind of a performance auditor, Effectiveness relates to the Objectives–Outcomes analysis, while Efficiency relates to the Inputs–Processes–Outputs elements. Economy is about, amongst other things, innovation and alternative ways of doing the activity that might deliver better value for money. HR people usually struggle with the concept of economy.

Just as it is hard to play football without goalposts each element of the model should clearly identify “what we expect to see” and have standard evaluation metrics and measures attached. In a nutshell: to evaluate performance, you must have clearly defined outcomes in place.

A HR Balanced evaluation would be a minimum score across each HR core activity category (say, 5 out of 10), and a higher score for the areas of strategic priority (say, at least 6.5). While self-assessment is acceptable at first instance, audit assurance by independent evaluators would provide a higher level of assurance for boards and investors.

Validation

2016-10-28 hrexaminer eab dr chris andrews 200px.jpg

Dr. Chris Andrews | Contributor, HRExaminer Editorial Advisory Board


It is not hard to envisage a matrix with HR Activities running down the page with the horizontal access identifying whether the line item related to effectiveness/efficiency/economy and the Objectives-Inputs-Processes-Outputs-Outcomes-Risk identifiers we mentioned earlier. Too hard? When my Australian colleague Neal McCormick wanted to do just that, it didn’t take him long to complete the draft. Context is important and verifying the detail through large scale testing is the harder activity and this is still to be undertaken. The present HR can be good at evaluating processes and measuring outputs. What strikes you immediately is that very, very few of the current HR metrics and measures in the listing relate to the meaningful evaluation of outcomes. In the new profession, by design, we need to focus on outcome measures.

What does the future hold?

Let’s consider the best way to consistently report organizational results across boundaries.

My own organization is obligated to report staff and payroll data to an extensive number of external agencies in precise formats. These formats are often similar but sufficiently different to warrant individual attention. Internal reporting can be both standardized and ad hoc. It is often the non-standard reporting that provides the best insights. The data warehouse, drag and drop era and colorful dashboards are yesterday’s heroes. Data integrity starts by knowing every number is correct and can be relied upon. Tagging and labelling data according to an agreed Taxonomy allows for the data piece to be assigned multiple attributes and then compiled into internal and external reporting. Tagged data is a bit like providing each data piece with its own DNA. Internal and external reporting built on correctly tagged data is a solid foundation for reporting purposes.

After a lot of thinking about this, the new profession could utilize inline-XBRL (iXBRL) for reporting purposes, the same product used to file organization annual reports across industry and in many different countries. iXBRL has the advantage of being both human and machine readable, which is what we need for the task at hand. I understand you need a taxonomy, a data dictionary, a common reporting format, consistent tagging and labelling conventions (and ultimately tagging software). If HR can deliver on those, iXBRL might just be the missing piece in my newly reconstructed HR profession.

Back to the opening statement – how would you construct the new HR profession if you had the chance to start again?

____________________________________________________________________________

Explanation: What is IXBRL?

iXBRL, or Inline XBRL, is an open standard that enables a single document to provide both human-readable and structured, machine-readable data. iXBRL is used by millions of companies around the world to prepare financial statements in a format that provides the structured data that regulators and analysts require, whilst allowing preparers to retain full control over the layout and presentation of their report.

Source: https://www.xbrl.org/the-standard/what/ixbrl/
 

graphic for The 2019 Index of Intelligent Technology in HR


 
Read previous post:
2018-09-10-hrexaminer-photo-img-HR-award-2019-watchlist-200px.png
HRExaminer Watchlist: Development Based Performance Management: Bridge by Instructure

Bridge makes employee development the heart of talent management. It uses intelligent tools to guide managers when helping an employee...

Close