Posts tagged ‘Evidence-based HR’

Workforce analytics is in danger of over-selling itself

promises ave and realiry way

Tom Peters gave an excellent advise when he in 1982 said ‘Formula for success: under promise and over deliver’. This goes very much hand-in-hand with the truism in service management (and is HR not one big service organization?) that excellent service = customer perception – customer expectations. The more you raise the expectations the harder it is to deliver excellent service.

My point is; deliver the best product and service possible but just don’t over promise.

The field of Workforce Analytics is in danger of over selling itself. I think stating something like “HR has good data but needs to use them better in order to make better decisions” is a sensible statement and does not over-promise. It is a sort of statement which can lead to a discussion about which decisions we make from pure guess-work (most) and which decisions are so important that we need good data and clever analysis to improve those decisions.

What I do think HR, consultants and vendors should stop saying are things such as:

  • “I believe that well thought out predictive HR analytics could become as important to the CEO as the balance sheet and P&L statement,”
  • “Workforce Analytics can measure these things  [engagement, profit, turnover and customer service] and show a direct, causal relationship to prove the bottom line impact”
  • “Workforce analytics will enable us to reach our goal which is to reinvent work”
  • “Workforce analytics will provide the language for HR executives to speak the language of business: numbers. This will give HR a seat at the table”

Many of these statements come from people who have a vested interest in the hype surrounding workforce analytics. People such as myself – consultants and vendors. But they are actually doing a disservice to the whole field.

Workforce analytics will contribute a lot over the coming years; it will make use of big data, provide new insights about the workforce and make HR more efficient and effective. But it is not a game-changer. It is not something radically new. And its limitations lies not with the software and the tools themselves – they lie with the mindset of the HR executive, the biases of the people using it and with the level of trust HR has within the organization.

But to get to the place where we can add the value from Workforce Analytics we need to stop over-selling it.

09/08/2013 at 09:43 11 comments

Don’t go to a job interview at 11am

If you could choose the time of day to go to a job interview what time would you pick? Before you answer, let me just warn you; the time you pick may impact your chance of getting the job.

My advice is that you pick a time early in the morning or right after the lunch break.

Let me elaborate…

Consider the following research study by Shai Danziger. He studied the results of 1,112 parole board hearings in Israeli prisons over a ten month period (see the study here). The results are illustrated in the figure below:

Job1

The vertical axis shows the percentage of cases where the judges granted parole. The horizontal axis shows the time which the cases were heard during the day. The dotted lines show when the judges went away for a morning snack and their lunch break.

The graph shows clearly that the odds that the prisoners will be successfully paroled start off fairly high at around 65% and quickly plummets to close to zero just before the first break. After the judges have returned from break, the odds abruptly climb back up to 65% before continuing on their downward slide.

In other words; the time in the day when the case is heard is very important to the outcome. Indeed, Danziger found that the three prisoners seen at the start of each “session” were more likely to be paroled than the three who were seen at the end. That’s true regardless of the length of their sentence, whether they had been incarcerated before and regardless of their gender, ethnicity or the severity of their crime.

Danziger explains the judges’ behavior in this way: All repetitive decision-making tasks drain our mental resources. After a while we start to suffer from “choice overload” and we then opt for the easiest choice. For example, shoppers who have already made several decisions are more likely to go for the default offer, whether they’re buying a suit or a car. And when it comes to parole hearings, the default choice is to deny the prisoner’s request.

There is no reason to suspect that recruitment experts are different from judges in this respect. We are all human beings and we are all subject to biases and imperfections AND it affects our decision making. We may believe that when we interview candidates for a job, we view them objectively and fair. In reality, we are influenced by irrelevant things like our moods and as this study suggests, our breakfasts.

So if you are going for a job interview, see if you can move it to 9am. It will enhance your chances.

26/04/2013 at 09:30 1 comment

In defense of HR Best Practice

The concept of ‘best practice’ is so yesterday. So I am told. Although I fully understand where the critics are coming from, I think they are too negative on the concept. Let me expand…

Yes, ‘best practice’ has come under some criticism lately and quite frankly also with some justification. It is impossible to go to a conference, read a white paper or just look through the blogosphere today without being overdosed with best practice by consultancy companies (such as yours truly), who are trying to make their products and services sound better than it really is or are selling it to their customers as ‘this is how all the best are doing it and see how much money they are making’.

Jane Watson formulates it well when she says:

“Best practice” has become a largely meaningless label an individual applies to one or more business practices that they hold in high regard; practices that they, or their industry or profession, consider to be ‘best’, presumably in comparison to other practices previously or currently in use. There might be theoretical underpinnings or research that illustrate the efficacy of these practices, but quite frequently there is not. It seems to me that in cases where such supporting data is lacking, the evidence used to justify the labeling of a practice as ‘best’ is the degree to which it is popular amongst similar organizations, especially if those organizations are successful (e.g. profitable, recognized and positively viewed). Often these practices are advanced as ‘best’ by the very organizations that employ them, or by consultants, thought leaders or professional bodies that champion the adoption of the practices in question. Given these questionable motives, it can be difficult, I think, to assess whether a ‘best practice’ is effective, or simply the latest craze.”

Spot on Jane. I totally agree.

As I see it, best practice can be criticized from five angels:

  1. Lack of evidence. Frankly most of the so called Best Practice are hailed as such without any real evidence, research or anything substantial to back it up.
  2. You will not be better than your competitors. By adopting best practice (assuming it is), you will still not be better than your competitors. Indeed all you are doing are imitating them and probably doing it worse than them.
  3. Lack of context. Because something is working in a young start-up in Sillicon Valley does not mean it will work in your old mid-western production company.
  4. Based on (very) few cases. It appears that a best practice often is the result of one or two companies doing something which works for them. Also, it seems like it is the same few cases which are doing the rounds.
  5. Illusion of simplicity. Reading best practice cases – such as Zappos and Google – it gives the illusion that it is actually quite simple to replicate. What they do is smart and easy to do. Wrong. The best practice cases never seem to capture how long time and how much effort it has taken to make it work.

BUT BUT BUT wait a minute before you discard best practice all together. It is easy to criticize but instead of saying that we can’t use best practice cases at all we should recognize it for what it is (and importantly also for what it is not) and then use them intelligently.

There is nothing wrong with listening to what others do, be inspired by it, adopt it to your particular context and use it how you see fit.   Let me illustrate my thinking:

15 years ago I decided to run a marathon. I didn’t know how to prepare for such an event as I had never run long distance before. I decided to buy a book. It was written by someone, who had completed more than 50 marathons. In the book he gave details about nutrition, running program, do’s and don’ts, equipment and advice on what to expect. As I was travelling quite a lot at the time, I had to adapt the training program significantly. Also much of what he suggested I should eat was not easy to prepare while travelling, so I had to adapt that as well. I know there are many ways to prepare for a marathon and his was only one way. Indeed many successful running experts may even had disagreed with some of his advice. Who knows. Also, he was not the best in the world. His fastest time would not have made the top 50 in the world. But he was pretty good and certainly better than I was (and still am). But I learned a lot from the book. I improved and most importantly I completed the marathon. Along the way, friends gave me advice which contradicted the advice in the book but by and large I stuck to his advice.

I guess my point is: don’t think that best practice is the only or even the best way to do something. It is not. And what works for one company will most definitely not work in exactly the same way for another. But best practice cases are about companies and people who have done something with success and are passing on some key learning points. Take those learning points. They can be a source of inspiration. Listen to it, adapt it, use your common sense and see what you can learn from it. There may be value in best practice after all.

26/02/2013 at 16:50 6 comments

Let Hell Week inspire your recruitment process

HR Recruitment lears from Hell Week

The “war for talent” has made many companies change their recruitment processes and practically beg talents to come and join their company. The processes have been made as friendly, warm and inviting as possible partly to signal that it is a friendly and open company (nothing wrong with that) but also to convince talented people that they should apply.

There is however an argument for doing the exact opposite. In his book “Influence”, Robert B. Cialdini present compelling evidence that people who goes through a hard (and sometimes physical painful) recruitment experience actually is more engaged and dedicated to the organization they join.

One of the best examples outside of organization life is probably during “Hell Week” held each year on college campuses across US. Here young students make their fraternity pledges through a variety of activities some of which includes social embarrassment and sometimes physical pain. Why do young people go through such a recruitment processes?

A similar example is known in most countries. Just before getting married it is a tradition the groom-to-be (and increasingly also the bride-to-be) goes through a day of social embarrassments often held by their best friends. Why would someone go through this? Why would best friends/colleagues/fellow students put them through this? Why would society allow this? And why does it work?

The conclusion comes from two researchers Elliot Aronson and Judson Mills who observes that “persons who go through a great deal of trouble or pain to attain something tend to value it more highly than persons who attain the same thing with a minimum of effort”. Interesting. In their research they saw that their participants rated the groups they joined more interesting and valuable if the access to the group was harder even though the groups were identical.

So if you actually make it harder to get recruited to your company, perhaps you will experience that people will value their job more, which in turn increases their commitment and engagement. I am certainly not saying that recruitment should resemble “Hell Week”, but perhaps companies are sucking too much up to talented young people today?

29/01/2013 at 21:21 1 comment

The problem with ‘evidence’ in HR

I admit it: I like the evidence based approach to HR. I like it because it appeals to my sense of trying to do the right thing in the right way. And I like the idea of using other people’s findings and applying them to my own work.

The evidence based approach essentially tries to apply scientific standards of causality and evidence to demonstrate how intangible human capital can be observed and shown to add tangible business results. It questions common beliefs and demands that the practitioner use methods which is proven to work. Bingo. It is an approach taken from Evidence Based Medicine (EBM), which has been around for more than 20 years.

Evidence in HR

The problem I have found with a lot of the “evidence” in HR – especially in emerging areas (such as HR analytics) – is that it is produced by people who have a vested interest in the results.

Imagine for example that you were reading a study, which concludes that a particular drug is really effective. The article highlights all the benefits (and a couple of irrelevant disadvantages) and shows how this is a new important step in curing this particular illness. It compares  the product with similar products and shows that the effect is much better. Patients report higher satisfaction levels.  Everybody is happy.

Would it make a difference if the study had been made by the producers of the drug?  Of course it would. You would question the findings. You wouldn’t necessarily think that they were lying or making up stuff. You just wouldn’t trust it completely. And so you shouldn’t. The conflict of interest is obvious.

This is a major problem in HR. Take talent management. I have seen many studies showing high ROI on TM, correlation studies which show that companies with great TM processes have higher profit, lower employee turnover and higher engagement levels. I have seen studies showing TM leads to higher market share etc. The problem is that all of these studies are made by people and companies who have a clear interest in the results; consultants, software vendors, authors/publishers etc. I have only seen very few really good research (double-blinded, longitudinal etc.) about Talent Management.

Why is that? I believe there are three primary reasons;

  1. It takes time (and resources) to make great research. A great piece of double-blinded, longitudinal research takes many years to produce. Unfortunately many don’t have the patience for this.
  2. There is too little. Because clients like data and research and there is too little available from neutral researchers, people and companies with vested interest will have to produce it themselves.
  3. The conclusions are ‘better’ if produced by consultants. When consultants conclude something it goes something like this “we can conclude that better talent processes lead to the creation of significant shareholder value”. When a university professor concludes something, it goes something like this: “Our research point to several processes which may benefit the talent as well as the company but the effect depends on the context and other unknown factors”. Which one sells?

The fact that much of the evidence is produced by people with a vested interest does not make the studies or conclusions wrong. They may be as correct as they come. The problem is that as long as there is too little ‘proper’ evidence it is difficult to really trust it.

This is a problem because if we want people outside of this profession to take us serious – such as CEOs and CFOs – we must be able to show them data which cannot be questioned. So lets make those surveys and that data which can do that.

26/11/2012 at 20:56 5 comments

What HR data can’t tell you

What HR Data cannot tell you

HR data and HR analytics is becoming increasingly popular – and with good reason.  Good data and clever use of the data can make HR better. Data mining, charts and data reports are used to guide innovation and process optimization.  All good things.

There is an argument among some people in HR that “you cannot measure people and convert people (and feelings) into hard facts”. They somehow see HR analytics as reducing people to something objective, deprived of feelings and being non-human. That is simply not correct. Objective facts and observation about human behavior has guided management and psychology for many years and has increased our understanding of human behavior. Our increasing technological powers will improve our insights in human behavior and hopefully assist us in making better HR decisions on the back of these insights.

BUT the advocates of HR analytics sometimes forget the limitations HR data. HR analytics face many challenges – many of which are psychological and rooted in the mindset of HR – and some misunderstandings about what HR data can do persist. Let me express three common ones;

  1. The data will speak for itself. The views expressed in statements such as “the data will speak for itself”, “HR data will make decision-making easy” and “numbers will express the law of causality so clearly that you will have to stupid not to understand that a will lead to b” are all naive if not dangerous. HR data will only get you so far but they cannot take away the fact that you will need to make subjective decisions, that all data requires subjective input to be meaningful and that HR data will only take you so far. The data will not speak for itself, the conclusions will continue to be in the eye of the beholder.
  2. More data will make it easier to interpret. This statement is not correct –  in fact the opposite is often the case; interpreting data is not getting easier. The more data you collect the harder it is to see the meaning of them. True, our capabilities to arrange them, visualize them and to publish them are getting better all the time. But interpreting data is not about arranging them, it is about finding out what they mean. Our obsession of collecting ever more data actually makes it even more difficult to find their meaning. And visualization techniques will not help us there.
  3. Data is objective. In one way HR data is objective but we should not be fooled that it is the same as getting a true representation of the world. The datasets are representations of the world gathered, generated, selected, put together, analyzed and adjusted for the particular purpose they are created for. Not only that, but in real life most HR Data is often incomplete, inaccurate or simply outdated.  So instead of treating data as objective and non-debatable understand that HR data is nota true representation of the world – it is a subjective representation of the world. But a good one nevertheless.

But perhaps the most important thing that HR Data cannot tell you is that they cannot tell you why people react as they do. Even the most predictive HR data can ‘only’ give you better information for your predictions and probabilities to forecast what will happen. That’s all. HR Data will not tell you why it will happen or how the people will fell about it. But it is frankly also quite enough.

HR Data will do a lot and hopefully it will make HR better. But it will not take the human element out of HR. And for that we shall be happy.

09/11/2012 at 15:47 2 comments

Shareholder value from a great talent management program

Every organization relies on a small cluster of talent in order to be able to execute its strategy and meet its goals. These employees – or talents – account for a disproportionate share of revenue and profits. They are the backbone of the organization and the company should do whatever they can to nurture and look after these talents.

This makes intuitive sense, but now this is increasingly also being proved through  more and more studies. Development Dimensions International, a consultancy company, write that “There is a demonstrated relationship between better talent and better business performance. Increasingly, organizations seek to quantify the return on their investment in talent. The result is a body of “proof” that paints a compelling picture of the impact talent has on business performance”

A few studies are being mentioned by DDI – to highlight just a few:

  • A 2007 study from the Hackett Group found companies that excel at managing talent post earnings that are 15 percent higher than peers. For an average Fortune 500 company, such an improvement in performance means hundreds of millions of dollars.
  • A study from IBM found public companies that are more effective at talent management had higher percentages of financial outperformers than groups of similar sized companies with less effective talent management.
  • Similarly, a 2006 research study from McBassi & Co.5 revealed that high scorers in five categories of human capital management (leadership practices, employee engagement, knowledge accountability, workforce organization, and learning capacity) posted higher stock market returns and better safety records—two common business goals that are top of mind for today’s senior leadership.

So, evidence support the long-held view that few talents (about 15%-20% of all employees) account for a disproportionate share of profits. A great strategic talent management program will identify, attract and retain those important people. Such a successful strategic talent management program must be a) driven by business strategy, b) integrated with other processes, c) managed as a core business practice and d) engrained as a talent mindset. Sounds easy but it isn’t but as evidence show – it is worth it.

22/02/2011 at 16:14 2 comments

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