Embracing the Power of Performance Analytics

1. HR Thought Leader Insights Embracing the Power of Performance Analytics Engage2Excel recently sat down with Brian Kelly, CEO at Vestrics, provider of the leading workforce optimization platform for human capital. Kelly is widely recognized as a thought leader in the workforce analytics marketplace, having previously served as Co-Chair of the Institute of Human Resources Workforce Planning & Analytics Working Group and Vice-Chair of the Society of Human Resource Professional’s (SHRM) workforce metrics taskforce. We talked about how HR leaders can do a better job predicting and validating the business impact of employee recognition investments. Highlights from the interview appear below. www.Engage2Excel.com Embracing the Power of Performance Analytics

2. HR Thought Leader Insights the other hand, often lack a clear line of sight to desired outcomes. HR and business leaders have struggled to define the connections between engagement, recognition and business impact. So there’s less clarity regarding the rationale for implementing these programs. Also, from a quantitative standpoint, people are often more difficult to analyze than manufacturing systems and IT infrastructure. And, until now, there hasn’t been adequate data available to accelerate the transition to documenting not only correlational links between things like engagement and pro-ductivity, but also causal connections. There’s no longer any debate about the correlation between engagement and performance, but organizations still struggle to show causal business impact. Q. When companies invest in manufacturingfacilities, IT infrastructure and marketing programs, they are generally able to forecast and demonstrate return on investment for these initiatives. Why have HR employee engagement and recognition programs not been similarly managed from an ROI perspective? A.Well, in each of those scenarios you mentioned, desired outcomes and industry-standard measure-ments are typically clear and very well-defined. In the case of a manufacturing facility, for example, goals typically include efficiency, quality ratios and productivity improvements. In terms of marketing efforts, organizations can easily measure program impact by tracking things like number of sales calls, leads in the pipeline, closed deals and revenue. Em-ployee engagement and recognition programs, on Embracing the Power of Performance Analytics www.Engage2Excel.com

3. HR Thought Leader Insights When you’re able to demonstrate how recognition causes rather than just influences a desired business outcome, you can deliver dollars-and-cents ROI. A. Yes, segmentation is critical. In order to im-plement effective engagement and recognition initiatives, you need the capability to isolate how specific program variables impact various roles and groups in the workforce. It’s like the difference between X-ray and MRI technology. An X-ray shows you the big picture; an MRI reveals the underlying layers of muscle and tissue. We need that level of granularity in performance data. Advanced technolo-gies like the cloud and analytic platforms are enabling segmentation and scalability. Engaged2Excel, with its optimal blend of consulting services and technology expertise, is poised to help organizations collect and analyze the required data they need to develop prescriptive HR programs that demonstrate direct causal connections with targeted business outcomes. Q. Perhaps another challenge in terms of docu-menting causal impact and ROI for engagement and recognition programs is the fact that most of today’s monolithic platforms don’t allow HR practitioners to segment and analyze data by business unit or job family? www.Engage2Excel.com Embracing the Power of Performance Analytics

4. HR Thought Leader Insights Q. Traditionally, HR has been responsible foremployee happiness. Engaged employees are good for business. But what about the more quantitative elements we’ve been talking about today. Are we measuring how well leaders and their teams execute the CEO’s strategic agenda and achieve business objectives? We have to change the nar-rative so we stop talking about “spending money” and start talking about investing in the workforce. about the quanti-tative nature of human capital as a strategic asset driving organizational success. Senior management and the board want to see what matters—the ROI for engagement and recognition programs. Q. So as part of HR’s mandate to demonstratelinks between programs and business impact, what kinds of metrics can be used to measure, manage and improve engagement and recogni-tion investments? A. All metrics deliver valuable information, but the real question is what are you trying to achieve? What’s the business rationale for the program? That clarity of purpose is required in order to establish meaningful metrics and performance indicators to measure the effectiveness of engagement and rec-ognition programs. Let’s say your goal is to improve customer satisfaction in the call center. If you want your best phone reps to continue assisting your val-ued customers, you’ll want to design a program that A. HR has tended to focus on the qualitative aspects of workforce engagement… and those are important. As a CEO, I want my team to enjoy their work and be part of a vibrant culture. But, frankly , in the absence of business results, my board and investors don’t give a damn about the warm and fuzzy. They are more concerned www.Engage2Excel.com Embracing the Power of Performance Analytics

5. HR Thought Leader Insights We have to change the narrative so we stop talking about “spending money” and start talking about investing in the workforce. improves retention rates for your highest perform-ers. So your metrics should focus on indicators like tenure to ensure that your program achieves desired results. Similarly, in the sales organization, you’ll want to recognize and reward the most productive reps who deliver the greatest value to the business, so the metrics for these programs should also focus on how long sales superstars remain with the company. When thinking about metrics, instead of starting with what you are already tracking, consider beginning with a clean slate. Forget about your current data systems for a moment, adopt an aspirational view-point, and think about the top ten measurements you wish you could implement to document ROI and drive business results Q. Let’s say innovation is a top priority, as istypically the case in emerging tech startups. Do you think it makes sense to create and implement targeted recognition programs designed to cultivate innovation? A. Absolutely. Innovation is about embracing risk, thinking outside the box and accepting failure. Innovators make mistakes, recalibrate and refine, and continuously apply course corrections as they try new approaches before bringing a product or service to market. The problem is companies don’t typically incent their best and brightest to take the risks required to propel innovation and gain competitive advantage. Employees are also not encouraged to Embracing the Power of Performance Analytics www.Engage2Excel.com

6. HR Thought Leader Insights to raise their hands and question the viability of an established schedule or propose a new direction for an already planned product launch. That’s part of the reason many long-term, multibillion dollar projects result in failed initiatives. Many times, opportunities to change course present themselves, but employees are not properly incented to readjust stated goals. Recognition programs that successfully nurture innovation require a new mindset. care has always been a priority for healthcare organizations, but now there’s a direct connection between quality of care and government reimbursement rates, which are a key component of revenue. Patient satisfaction and improved outcomes are no longer just part of a healthcare organization’s mission, they directly impact business results. Look for healthcare industry recognition and reward programs to undergo fundamental transformation in the next two years. Healthcare providers will increasingly rely on the intelligence delivered by performance analyticsto launch recognition programs that incent their employees to help improve quality of care scores… and boost the bottom line. Q. In closing, can you share an example of howcompanies can use performance analytics to im-prove the effectiveness of recognition programs? When thinking about metrics, instead of starting with what you are already tracking, consider beginning with a clean slate. A. Sure. Let’s look at healthcare. It’s a great example to highlight many of the things we’ve been talking about today. Quality of Embracing the Power of Performance Analytics www.Engage2Excel.com