I would like to propose a some key analytical skills for the HR professionals of tomorrow:

• Research / Hypothesis Design: HR needs to understand how it can design experiments to validate hypotheses or come up with alternative explanations to organizational phenomena. At the same time, knowledge about effective sample design techniques can come in handy as well. It can help HR design research studies which can be administered to statistically representative samples, instead of the entire workforce. This could help generalize findings and help save on precious time & efforts.
• Correlations & Regressions: I cannot count how many times I have seen these two key techniques completely misinterpreted or used senselessly. Most importantly, we need to distinguish between the two. Correlation is, simply, two variables moving in the same direction. For instance, employee engagement and financial performance might be positively correlated implying that both generally, move in the same direction. However, we cannot say that one causes the other for sure. On the other hand, regressions help us to form models to explain causality i.e. variables moving in the same direction because one causes the other to happen. For instance, among an employee engagement survey of 50 questions, you can use this to analyze what factors have the largest influence on engagement levels.
• Financial Analysis Techniques: Now, this is a potentially long list, but there are a few key things that help in working out the business case for key initiatives / decisions. Firstly, there has to be a fine appreciation of costs – fixed costs, recurring costs, and variable costs. Secondly, skills around conducting cost-benefits or break-even analysis would be extremely helpful. And speaking of that, if HR professionals can master concepts around “the time value of money”, they can really start demonstrating the rigour of their analyses.

On the other hand, there is some data (though limited to the USA) from a mobile analytics firm, Flurry, to suggest that mobile app usage is not only increasing over time, but is also actually ahead of the traditional web consumption. This reinforces the strength of the mobile medium.

Combining the two trends above, I feel that the most ubiquitous, available, connected and engaging screen is the screen of a smart-phone. It is always with the individual, it is always on and one can push content on it. While a number of companies are using this screen for engaging their customers, I have not come across companies with a mobile strategy for engaging their employees. The possibilities are endless. It could be an enterprise social networking app to keep up with other colleagues or the latest news about the company or to check out what is the next product being developed by the team on the 18th floor! It could be a video app where people could listen to senior leaders articulating the purpose of the company or the new strategy. It could be an app that provides e-learning. It could be an intelligent recommendation engine app that looks across all your enterprise web activities and recommends books for professional development. Or it could all come together in an integrated app. I could go on, but I am sure that we can conjure up even greater possibilities with this.

I think having a mobile strategy for engaging employees is very important already, though it may not be widely recognized as a need. I think this is a powerful medium to connect and engage with employees. If you have any ideas on how to bring a “mobile employee engagement strategy” to life, do write in!

I could think of one potential approach, and it may be suitable to larger size organizations with a decent number of “units of analysis” i.e. bank branches, retail stores, production sites etc. If we have sufficient number of units to study, the first step would be to start linking the employee engagement survey data to business metrics. Think sales, profitability, productivity, employee attrition, customer survey scores, safety incidents, customer waiting time etc. Then you would need some analytical wizardry to examine how these metrics link to employee survey data. Do highly engaged bank branches have higher loan growth and higher net interest margin? Or do low engagement manufacturing plants showlow productivity as well? Or worse, the linkage is not meaningful or not strong enough (in which case you really need to go back to the drawing board to design a good survey). Such linkages help to establish the validity of your employee research frameworks and help create buy-in among the senior leadership team.

The next step is really to take it a notch further up. Based on the above linkage analysis, you would have identified your high / average / low performing units. Now, the way HR can really add value and improve business performance is by replicating the high performing units. How do you do that? Well, you try to examine what differentiates these high performing units from others. You could look at a range of variables for employees in these groups – age, tenure, experience, competencies, managerial practices – anything that can hypothetically differentiate performance. And yes, you could also connect it all back to the employee survey and see what issues are these “high engagement – high performance” units particularly satisfied on as compared to other units. Again, we are just looking for factors which can differentiate or even predict engagement and performance

Only when you have insights of this depth, then you could work out a plan for replicating such high-performance. Such insights can provide inputs into recruitment plans, talent management, rewards, training & development, career progression etc.  And all this will potentially have much more credibility since you have validated these against business outcomes.

What do you think? How are you using employee survey data to improve business performance? Drop in a line if you would like to discuss this in details.

Enjoy the infographic! And do share your best ideas on gamification.

Employee Value Proposition (EVP) can also be understood in a similar way. It is the sum-total of benefits and experiences a company promises an employee in return for the employee’s time and efforts. The EVP can include compensation, benefits, learning & development opportunities and the overall workplace experience. Usually, companies would define their EVP through some combination of these. So, that’s the promise. But, the crucial challenge for HR, leaders and managers is to deliver on the EVP.

Many a times, I see HR professionals in a rush to define the EVP and communicate it to the world. We want to create a message, come up with great tag-lines, brand the communications and throw it out. Advertisements, posters, billboards, social media – you can do it all and still achieve nothing. A badly execution EVP strategy can never solve talent attraction and retention problems. To be effective in the EVP initiative, it is equally or more important to think about whether existing systems, policies, culture, management style and processes support the delivery of the EVP. If not, then we need to think about what changes are required. Your Employer Brand could fail miserably if the brand doesn’t deliver on the promises. And in this day and age, sentiments are often vented quite openly on public channels.

So, if your EVP promises “a culture that thrives on teamwork, leveraging collaboration to solve X challenges”, but employees join the organisation only to find silos, then its a failure. Or if you promise “performance based pay and best-in-class benefits”, but pay is driven by tenure and benefits are just about average when compared to other organizations, employees will feel disenchanted. The list of examples can be endless.

So, the first step is to look within, not outside. Look within and ensure that the delivery mechanisms are in place. If you get it right, you will just end up creating engaged employees, who also act as advocates for the Employer Brand. It’s as much about the delivery, as it is about the those feel-good, slick communications.

• Jon Ingham is one of my favourite bloggers. He feels that there is a need for a differentiated unique proposition for people management. Sticking to the theme of “talent race”, he shares how Haier (a consumer electronics MNC that started off in China) established race tracks for a unique way of managing their talent base.

• Laura Schroeder wonders where has all the talent gone. She analyzes reports from the Economist Intelligence Unit and Bersin & Associates to come up with strategies to bridge the talent gap.

• Talent retention is on top of the agenda for most HR professionals. Derek Irvine from GloboForce outlines some Tips to Keep Headhunters Away from your Top Employees.

• Tanmay Vora writes at the QAspire blog and shares with us some Core Lessons in Leading & Managing People. He says that “working with people, guiding a team and helping them in their quest for peak potential is one of the noblest things we can do as leaders. It is an opportunity and an obligation as well.

• As HR professionals, we are often heard advising employees to “take charge of your own development”. But do most employees really know how to do this? In this post, Dan McCarthy, from Great Leadership, offers a free step-by-step self-study guide to developing leadership skills. Best of all, it’s free to use and/or share, as a way to engage and retain valuable employees who are willing to learn on their own but need a little structure”.

• Yes, programs are needed. Benefits have to be appropriate. Salary right. But no matter what the industry, the killer app in retention is the personal involvement of management with employees, says Marsha Keeffer.

• Heard about the “HR Hairball”? Find out in this excellent post by Mark Stelzner.

• Ian Welsh writes in from Canada and says that “If we need talent for the future, we need to belong to the future we visualize”. Simply “buying” talent is not the panacea.

• It might be important to hire employees for their skills, but hiring for culture-fit is really important as well. Wally Bock shares his views on Hiring Well. One of my favourite lines from the blog post – “Performance and growth are often situational”.

• Amy Wilson writes about transforming existing performance models into one that is more work-centric and embedded in the natural flow of business to get the best work done.

• Robin Schooling has a different take on Talent Management – Family Style.

• A strong learning & development platform is critical for organization looking at managing their talent base effectively and driving sustained business performance. Linda Fisher Thornton from Leading in Context shares 11 Learning & Development Reports. Informative!

• Anita Lettink feels that “best practices” may not always work for you because you have your own unique context. Instead, she shares some guidelines for winning the Talent Race.

• Finally, to add more of an Asian touch to the Carnival, here is one of my posts about Change Management and Leadership in Asia 2.0

As a consultant, I constantly meet HR professionals and get great opportunities for conversations. What I realize from these conversations is that most HR professionals are in a race – the “Talent Race”. And the race seems to get hotter and harder as some parts of the globe ease out of the economic downturn and are preparing for the next growth phase. So, tell me more about what are your latest & greatest ideas about winning the race – specifically how do you think we should go about attracting, engaging and retaining talented people in our organisations? What’s new in talent management?

And since I am based in sunny Singapore, posts with an Asian flavour would go to the top of the pile! So, start putting your thoughts together and write out the next best idea. Few things to keep in mind:

• Submit a recent post. Something that is written in the 2 weeks preceding the Carnival
• Send me the posts by 4th July, 2011. My email is i at abhishekmittal dot com

To better understand what makes for a robust recognition program, I did a short interview with Derek Irvine of Globoforce. Derek is Globoforce’s Vice President for Client Strategy & Consulting and is one of the leading voices on employee engagement, strategic recognition, talent management and business performance.

Q. There is something you call “Strategic Recognition”. Could you share with me what Strategic Recognition is all about and how it benefits organisations?

Derek: Strategic recognition means integrating employee recognition with a company’s core values and strategic goals. This helps employees understand the behavioural norms you have identified as necessary for achieving the desired business outcome—and strategic recognition does this for every employee in your company, regardless of where they live and work. The benefits of strategic recognition can be categorised in three ways:

1) Increased alignment with the company values and strategic objectives to ensure employees are recognised and rewarded only when they achieve desired targets by behaving in ways the company has deemed appropriate to success.

2) Increased employee engagement because employees intimately understand how their daily efforts contribute to achieving the bigger picture, resulting in increased productivity and performance. Our clients regularly realise double-digit increases in employee engagement in less than a year.

3) Increased retention of employees by ensuring employees know their value to the organisation and also building stronger bonds between employees, colleagues and managers.

Q. Human Resources professionals often draw out recognition programs for their organisations. What are some of the missing ingredients in such programs based on your experiences? What are the key elements to consider while designing such programs?

Derek: In some organisations, the first hurdle to clear is helping those responsible for designing their organisation’s recognition program to understand that recognition is not a Years of Service or Long Service award program. At least, employee recognition is not just Years of Service. In the same vein, employee recognition is not just sales or customer service incentive initiatives.

The first step is therefore broadening the understanding of employee recognition to anything and everything you as an organisation, manager or even peer do to acknowledge, praise and appreciate the hard work, success and achievements of colleagues. Once that understanding is in place, we can move into the key elements to consider when designing a truly strategic recognition program. We call these key elements the Five Tenets of Strategic Recognition:

1. A Clear Global Strategy for a consolidated recognition program flexible enough to allow for peer recognition, spot recognition, milestone anniversary recognition, etc., while creating visibility and auditability into the recognition budget spend across the globe for improved governance.

2. Executive Sponsorship with Defined Goals to signal senior management support and establish a management methodology including clear targets for success and meaningful measurement and reporting functionality linked with company strategic objectives.

3. Aligned with Company Values to ensure all recognised activities are associated with a company value, helping employees understand how their direct actions and behaviours impact achievement of company goals and giving managers dashboard insight into the traction of each company value by employee, region, division or department.

4. Opportunity for All to Participate to empower and unite the entire workforce, not just the top performers, behind the company’s strategic objectives and values. Top performing companies ensure 80% of the global workforce will be touched by the recognition program each year, largely through peer-to-peer recognition.

5. Offer the Reward of Choice to reinforce the recognition recipient’s positive association with the company through personally memorable, culturally relevant, locally based rewards.

Q. Is there a measurable ROI on strategic recognition programs?

Derek: Yes. Strategic recognition is proven to increase employee engagement by double digits, improve employee performance and reduce employee turnover. Gallup found in research last fall that employees do not become engaged just because they work for a financially successful organisation. Rather, employees who are engaged drive financial results. And those results are significant. In their 2007-2008 Global Workforce Study, Towers Watson found that companies with high employee engagement vastly outperform low-employee engagement firms in terms of operating income, income growth rate, and earnings per share. In an earlier study, Towers Watson calculated that a 15% improvement in levels of employee engagement correlates with a 2% improvement in operating margin.

In terms of retention, Gallup found organisations with high employee engagement had 37% less employee turnover. Considering the cost of replacing just one employee is 75-150% of that person’s salary, increasing retention alone can have a significant impact on the bottom line.

Aside from the benefits of increasing employee engagement with strategic recognition, the ROI benefits of strategic recognition directly on employee performance and productivity are profound. Especially in today’s world of rapid change, the ability to communicate to employees changing priorities and company strategies in a way that makes sense to employees in their daily work is itself a primary benefit. Quickly re-focussing employees precisely on most critical tasks in a positive way ensures employees remain at their most productive.

Q. In your opinion, are non-monetary forms of rewards & recognition as effective as monetary forms?

Derek: Non-monetary rewards are far more effective than monetary ones. Much research supports the fallacy of “give them more money” as a reward strategy. The most obvious example is the bonus culture that led to egregious behaviours in the financial world and, in many ways, the Great Recession. I argue base compensation in these firms should be much higher, with regular, frequent recognition of achievements and no ridiculously high year-end cash bonus.

Cash is an inappropriate reward mechanism because cash is the currency of compensation – of base pay. To be differentiated in a recipient’s mind, rewards must have a different currency.

These non-monetary rewards can still have economic value to the recipient and do have their place in a strategic program. Non-cash rewards in the form of gift cards to local high-value, lifestyle venues around the world take rewards beyond compensation to trophy award status. Recipients can choose rewards in their local neighborhoods, supporting their local economies and vendors they trust, or they can choose to enjoy rewards anywhere in the world. Options are limitless – shopping, dining, travel, adventures, sporting events, concerts, shows, even charities around the world. Employees who are deserving of recognition are also deserving of memorable rewards with unrestricted choice.

Q. Finally, what are 3 recent books that you enjoyed reading?

Derek: 

1. Delivering Happiness. The Zappos story is great in terms of follow your passion, and have the courage to build the right culture.

2. The Thank You Economy. What he describes as a mega trend for brands and the impact of all things social is going to be enormous for company cultures, and how to actively manage your culture – something I’m passionate about too.

3. Good Boss, Bad Boss. Contemporary management practices are shifting fast, the bad bosses had better catch up quick, or they’ll fall off the cliff before they even notice!

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That’s it for now folks! I thank Derek for making time for this and you could also follow Derek’s blog “Recognize This!”.

The idea of the book is to apply commonly used business analysis tools to HR / Talent Management problems. It does not disregard existing HR systems, frameworks and approaches, but focuses on articulating and solving such problems in a way that leaders and managers readily understand because of their familiarity with these business tools. For instance, it applies “portfolio diversification” techniques from Finance to scenario planning for talent management. It borrows from Marketing Research to identify hot talent groups and optimize talent supply strategies. My favourite was the application of “Conjoint Analysis” to design Total Rewards for Microsoft. Here, employees’ preferred Rewards packages were determined and the data was analyzed to find out the expected costs / pay-offs of each Reward scenario. The books is full of such real-life examples. I am soon to start work on a new project on Human Capital Risk Management and I think this book will be a great resource for me.

I strongly recommend the book for anyone who wants to bring strong analytics, clarity, logic and structure to the way HR & Talent Management is approached in his/her company. In fact, I feel this book will be a great addition to “recommended readings” for business school students as well.