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Last week we set the tone for how you should be building a culture of measurement. This week I am sharing my view of the human capital analytics continuum and how you can use big data to achieve various levels of measurement.
The human capital analytics continuum is a look at how organizations collect and report data. Viewing the continuum as a mountain, it suggests that similar to mountain climbing, things become more difficult but the view improves as you reach higher ground.
The ascent begins with anecdotes or storytelling. Professor Robert Brinkerhoff has some of the best work in this area. We use this method to tell the story behind the numbers. Personalizing a statistical analysis is a good way to get your audience to understand something that is complicated, in addition to graphics. Scorecards and dashboards are the next level of sophistication. Scorecards are a performance management tool that can leverage automated surveys and activity data to track how an organization executes strategy and the consequences arising from business processes.
A dashboard is, hopefully, a distillation of the most important key performance indicators of a company that an executive can view at a glance. Benchmarks appear next. Benchmarking has long been used as a standard tool; the idea is that studying the best-run companies in a specific area can be very beneficial in terms of setting things such as salary, training levels, desired turnover rates and so forth.
Correlations and causations are the next two stages in the continuum. “Correlations” we use to describe the descriptive statistics that might occur on a sophisticated dashboard. I’ll spend an entire post soon on the dangers of making decisions from your dashboards using correlated data. Did you know that the more ice cream we eat, the more drownings occur?
The final stage of the mountain is optimization, the holy grail of HR measurement. Optimization is having the intelligence to understand where the impact is occurring. Optimization is intimately wrapped up with causation. Without understanding all of the factors that control impact, it is impossible to be sure that you have correctly assessed it. The really positive side of having assessed and measured the different factors that control and mediate impact is that you can use them to control future impact and improve outcomes.
Based on a variety of industry feedback, I believe most organizations are on the lower end of the continuum, or are slightly up the mountain, obtaining information from their dashboards and scorecards. So, where is your organization on this human capital analytics continuum? If you don’t know yet, don’t worry — next week I am going to go into further detail about each of these steps along the continuum.
Please feel free to share your feedback below.
As co-founder and CEO of Capital Analytics, Gene Pease helps translate breakthrough statistical methodology into services that bridge the gap between people investments and business results. Pease is the co-author of "Human Capital Analytics: How to Harness the Potential of Your Organization’s Greatest Asset." Under his leadership, Capital Analytics has been recognized by Bersin and Associates as a 2012 Bersin Learning Leader and it has helped clients such as National Grid, ConAgra Foods and Chrysler win CLO Learning in Practice awards in the Business Impact category.