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Press Release / News
Major Organizations Demonstrate How HR Practices Boost Business Performance, Finds New Report
Aug. 13, 2008
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A small but growing number of companies are demonstrating the impact HR policies can have in meeting overall business goals, according to a report by The Conference Board, the global business research and membership organization.
Organizations such as Hewlett-Packard, Capital One and Harvard University are using evidence-based approaches to Human Resources to show how company-aligned HR practices help them achieve business performance goals.
Human capital is a vital, yet often overlooked, means of establishing competitive advantage. But despite constant pressure to attract and retain talent, only in recent years have companies begun to empirically demonstrate its impact on business outcomes. Evidence Based Human Resources (EBHR) has been developed by researchers at The Conference Board as a way of moving beyond efficiency or ROI approaches to HR metrics. EBHR begins with the notion that talent drives performance. Starting with the financial and organizational performance measures, HR professionals then identify human capital strategies that empirically drive the desired outcomes.
The Conference Board report, Evidence-Based HR in Action, provides an overview of the EBHR approach. While this approach is not yet widespread, and has only been employed by a few companies in recent years, the report highlights case studies of several leading organizations that are pioneers in this field, including Hewlett-Packard, Capital One and Harvard University.
John Gibbons, senior research advisor, Management Excellence Program at The Conference Board, and co-author of the report with Christopher Woock, research associate. "It also is changing the way they gather, process, and most importantly, evaluate information. These developments hold the promise of helping the profession move beyond chasing fads, to getting to the real work of helping their organizations improve business results through more effective management of people."
Case Studies: Evidence-Based HR in Action
In 2002, Hewlett-Packard launched a new initiative to build and maintain a "customer-centric" culture. The HP leadership team realized that in order to better understand the complex relationships between employees, customers and financial performance, the new strategy would need to include ideas and talent from across many functions. Cross-divisional teams created a "business performance chain" and collected empirical evidence to support each link - starting with key business outcomes and working backwards to employee experience. Since 2004, HP has been measuring behavior and performance of its customer support operations teams. Findings established important correlations between lower-level operational measures and key customer experience measures - allowing HP to diagnose a decline in operational level measures before it affects the bottom line.
At Capital One, every business aspect is informed by an analytic approach. Based on the premise that analyzing data for opportunities to improve service offerings can provide a sustainable competitive advantage, empirical analysis is an integral part of the company's makeup. In keeping with this philosophy, the human resources function is complemented by a workforce analytics function. While the HR department provides all of the traditional personnel and benefits-related services, the workforce analytics team contributes analyses for other business functions, creating a tangible, proven link between HR practices and company performance. For example, the team was able to empirically demonstrate the impact of the company's executive coaching program and establish links between teller attrition, customer satisfaction, and revenues per account at retail branches.
Harvard University's goal was to transition HR from its existing support function to taking on a more strategic role in supporting its commitment to excellence in teaching and research. Typical drivers such as talent management and employee retention, along with outcome measures such as shareholder value or the return on investments of HR practices, had not received as much consideration at Harvard as they would in the for-profit sector. Further complicating the issue is the fact that the human resources function is highly decentralized across schools. A gap analysis based on surveys and focus groups identified staffing, employee development and performance management as key human resources issues. Based on key research findings, Harvard redesigned its employment / recruitment process and implemented a skills assessment tool for HR employees, along with several other new initiatives.
For a copy of the report email Carol Courter:
courter@conference-board.org
Source: Evidence-Based HR in Action
Report No. 1427-08-CS, The Conference Board
For further information contact:
Frank Tortorici
(1) 212 339 0231
f.tortorici@conference-board.org
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