MANAGEMENT-BY-MEASUREMENT pillar of HCM4.0 MODEL

 

FIRESIDE CHAT -

WITH MR VIKESH WALIA  INSTITUE OF DIRECTORS FOUNDATIONATION 

WHY HAS MANAGEMENT-BY- MEASUREMENT APPROACH POSITIONED AS  A PILLAR OF THE HCM 4.0 MODEL?

The celebrated CEO of Hewlett Packard Carly Fiorina said: “Information is the currency of the digital age. The goal of digital technology is to turn data into information and information into insight”.. Every company has its own collection of raw data converting this into insightful  information is the business need. Information needs organization and  analysis for deeper understanding.  Information which is focused on understanding the past; what happened and why it happened has limited value.

Information is really valuable when it facilities comparisons and trends  and provides clues to the future .To plan ahead HCM 4.0 needs reliable, high-quality data for predicting future trends; addressing  recurrent business problems and making  long term decision making

 

WHAT IS THE URGENCY FOR HCM4.0 TO RADICALLY SHIFT TO THE MANAGEMENT-BY- MEASUREMENT APPROACH?

Business functions  like marketing, supply chain and manufacturing report   their  results in sharp monetary terms. These  business functions   not long ago used to rely on intuition and hazy reports to define  their  outcomes; they  have made this shift toward the use of metrics/KPI in everything they do.

As a result of all these changes, CEO’s, CFO's and  stakeholders are now looking  to HCM to adopt  HCM Metrics/KPI/KPIs  as a means of reporting and measuring and to provide  insight for board level decision making.

Today top management treats measurement as a key C-Suite issue. The HCM function has to go  beyond anecdotal evidence  to justify it cost/benefit calculations.  It is only keeping with the norms of  business  that HCM too  must work like   other business functions

HOW SHOULD CHROs THINK  STRATEGICALLY ABOUT MANAGEMENT- BY-MEASUREMENT IN INDUSTRY 4.0?

 

Thinking strategically about measurement means understanding whether the measurement system you are considering will provide you with the kinds of information that will help you manage the HCM function strategically. This is a quantum leap  HCM wants to be a business partner, it must show business impact. It’s time to realize the traditional metrics add little value to strategic business decision-making .  HCM 4.0  today must integrate traditional metrics to KPI;  and this must be  aligned to corporate objectives.  This will be the pathway when even the critics of HCM will say ‘’they are  solving real problems’ . Hence they  want to make sure they are making the right decisions based on data; to be particularly aware of the way they prioritize and measure this data, especially when it comes to the measurement of the strategic plan.

HOW DOES   MANAGEMENT-BY- MEASUREMENT APPROACH REALLY PROVIDE THE CUTTING EDGE TO THE HCM 4.0 MODEL?

The first step is to discard the accounting mentality that says that HCM is primarily a cost center in which cost minimization is the principal objective and measure of success. The main cause of this misconception is the lack  of hard evidence demonstrating their contribution to firm performance.

We have too often generic statements like “ HCM must add value to the business..” hence HCM  Management- By-Results approach must answer these  questions

1.     how can the value HCM brings to the business be ascertained in monetary/business terms?. 

2.    How does HCM  justify with facts and figures its  impact on business functions?? Especially when its time speak up to defend HCM budgets against cutbacks or outsourcing.

3.    How does HCM justify its  positive impact on  employee productivity and satisfaction ??

 The CHRO  also needs comprehensive case management data / summary accounting statement to  track year-to year-trends and improvements in HR critical business processes. The best way to leapfrog is to  focus on the few items that have the biggest cost and the most impact.  The biggest stumbling block to  become a true strategic partner is presenting hard facts supported by data.

 

HOW CAN THE CHRO PRESENT THE BENEFITS CASE TO HIS OWN TEAM THAT   MANAGEMENT-BY- MEASUREMENT APPROACH IS AN IMPERATIVE?

 

The language of business is results which in turn are measured in rupees !!!  The ‘Management By  Measurement’ approach  should aim   to establish a clear “line of sight “ between HCM interventions and business results

the Management-by- Measurement approach ADDRESSES the challenge before business centric HCM leaders to covert good intent  into visible and recognizable results. It urges HCM leaders to REGOGNIZE the  benefits of the Management-by- Measurement approach:  Which makes sure that HCM activities inside the firm deliver value; Makes them visible and recognized by  line managers first and then the top management

  Management-by- Measurement approach has a strong is emphasis on how to FACILITATE REPORTING AND MIS The language of business is results which in turn are measured in rupees !!! CEO’s and the top deck of management  are typically short on time so they  focus on key business issues; hence the need for concise reports which provide the insight for decision making It explains why  HCM has to lift the horizon levels from the lag  factor of measurement to proactive people analytics

 Finally Management-by- Measurement approach  shows how to BUILD A CASE FOR HCM TRANSFORMATION This approach would strengthen HCM  operational efficiency as well as build a strong case at the year-end budget meet for fund allocation.

Metrics/KPIs  facilitates management reporting/MIS HCM 4.0 processes need a barometer to  help guard against inflated claims  both for and against HCM 4.0 operations and results. Management-By-Results approach   are useful in day-to-day top management processes  like  reporting and improving  performance; managing accountabilities and aligning organizations activities to streamline work.

WILL MANAGEMENT-BY- MEASUREMENT APPROACH GIVE HCM4.0 RECOGNITION AND RESPECT IN THE C-SUITE?

HCM 4.0 for over two decades is struggling hard  to gain recognition for its  contributions in driving organizational success. The Quality movement of the 1980s  gave rise to the dictum that what gets measured get done! HCM 4.0 does likewise

 The finishing line of  HCM 4.0 Model  is Management-by-Measurement. HCM 4.0  puts it faith in  Metrics/KPIs & Analytics. HCM 4.0   can  explode the myths that  everything in HCM cannot  be measured. We can banish for ever doubts about HCM  contribution and company improved  performance. HCM 4.0  we need to forever ban the all too common phrases “I think”, “I believe” and “I feel” and replace these phrases each time with… “the data shows”.