Chapter 13 Staffing System Evaluation & Technology PDF

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Chapter 13 Staffing System Evaluation & Technology

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Learning Objectives After studying this chapter, you should be able to: • Describe the effects staffing activities have on applicants, new hires, and organizations. • Explain the different types of staffing metrics and how each is best used. • Describe a balanced staffing scorecard. • Explain how digital staffing dashboards can help managers monitor and improve the staffing process. • Describe how staffing technology can improve the efficiency and effectiveness of the staffing function. • Explain how moral efficacy supports ethical staffing and HRM behavior Strategic Staffing 4th edition © 2020 Chicago Busin ess Press. All Rights Reserved. May not be scanned, copied or dup licated, or posted to a publicly accessible website, in whole or in part

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Strategic Staffing Outcomes

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Direct and Indirect Costs Direct costs: charges incurred as an immediate result of some staffing activity (e.g., higher training costs, lower productivity) Indirect costs: not directly attributable to staffing activities (e.g., lost business opportunities, lower morale)

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Staffing System Evaluation Staffing evaluation: the analysis of a staffing system to determine its performance and effectiveness. • Allows us to objectively identify which staffing activities are related to business strategy execution and company performance, assess how well different staffing initiatives are working, and improve the staffing system based on what is learned.

Competitive advantage can be created through staffing by identifying the staffing activities that drive business success and strategy execution, evaluating them, and improving them. Measurement occurs at a single point in time, and isn’t as useful as is tracking and making comparisons over time. Strategic Staffing 4th edition © 2020 Chicago Busin ess Press. All Rights Reserved. May not be scanned, copied or dup licated, or posted to a publicly accessible website, in whole or in part

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Key Performance Indicators (KPIs) Key performance indicator: measurable factor critical to the firm’s success and long- and short-term goals that can help understand, track, and improve organizational performance and the bottom line. • KPIs are the outcomes against which the effectiveness of the staffing system is evaluated. To design effective KPIs, it is essential to understand what is important to the business and what key business measures exist. The KPIs that promote and lead to organizational success are those best able to enhance strategy execution and organizational performance, such as financial outcome measures (e.g., revenue growth) and strategy execution and performance drivers (e.g., customer satisfaction, innovation, and globalization). Strategic Staffing 4th edition © 2020 Chicago Busin ess Press. All Rights Reserved. May not be scanned, copied or dup licated, or posted to a publicly accessible website, in whole or in part

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Leading and Lagging Indicators Lagging indicator: information that is available only after staffing decisions have been made. Leading indicator: information that precedes or predicts staffing outcomes. Some indicators can be both leading and lagging indicators. • For example, while the availability of talent is generally thought of as a leading indicator of the quality of hire (the larger the talent pool, the more likely you are to hire more qualified people), it can also be a lagging indicator of a company’s employer image.

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Leading and Lagging Indicators

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Long- and Short-term Metrics Short-term metrics help to evaluate the success of a staffing system in terms of recruiting and new hire outcomes and include: • Percentages of hires for each job or job family coming from each recruiting source (e.g., college hiring, employee referrals, job fairs, newspaper advertisements, Internet advertisements, etc.) • Number of high-quality new hires coming from each recruiting source and recruiter • Number of diverse hires coming from each recruiting source and recruiter • Average time-to-start (by position, source, and recruiter) • Average time-to-contribution (by position, source, and recruiter)

Long-term metrics help to evaluate the success of a staffing system in terms of outcomes that take place some time after hire and include: • Job success by recruiting source and by recruiter • Employee tenure by recruiting source and by recruiter • Promotion rates by recruiting source and by recruiter Strategic Staffing 4th edition © 2020 Chicago Busin ess Press. All Rights Reserved. May not be scanned, copied or dup licated, or posted to a publicly accessible website, in whole or in part

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Staffing Efficiency Metrics Staffing efficiency: the amount of resources used in the staffing process. • Hiring costs include sourcing, recruiting, screening, and hiring costs including referral bonuses, travel expenses, advertisements, candidate assessments, meals, transportation, and testing including drug tests and background checks. • Replacement costs include hiring costs as well as the productivity loss while the position is unfilled. Reducing time-to-fill and improving socialization and onboarding can reduce replacement costs. Strategic Staffing 4th edition © 2020 Chicago Busin ess Press. All Rights Reserved. May not be scanned, copied or dup licated, or posted to a publicly accessible website, in whole or in part

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Staffing Effectiveness Metrics Staffing effectiveness: how well the staffing process meets stakeholder needs and contributes to strategy execution and organizational performance. • Help answer questions such as, “Is the number and caliber of finalists being sent to hiring managers meeting their needs?” “Is the hiring experience and speed acceptable to candidates?”

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Staffing Effectiveness Metrics Job success Quality of hire Retention rates Voluntary turnover rate of top performers Voluntary turnover rate of bottom performers Value of top performers Strategic Staffing 4th edition © 2020 Chicago Busin ess Press. All Rights Reserved. May not be scanned, copied or dup licated, or posted to a publicly accessible website, in whole or in part

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Return on Investment When using metrics and evaluating staffing activities, it can be easy to focus on staffing efficiency and lose sight of staffing effectiveness. A balance must be struck between staffing efficiency and staffing effectiveness. ROI can be calculated for a firm’s investment in individual staffing activities, such as the ROI of different recruiting sources or assessment methods, or for the staffing system as a whole.

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Six Sigma Six Sigma: a data-driven quality initiative and methodology that uses statistical analysis to measure and improve business processes and their outcomes to near perfection Six Sigma can be used to improve a variety of staffing outcomes, such as: • • • • •

Lowering turnover among high performers Improving applicant quality Improving new hire fit with corporate culture Reducing time-to-fill Increasing the return on the company’s staffing investment Strategic Staffing 4th edition © 2020 Chicago Busin ess Press. All Rights Reserved. May not be scanned, copied or dup licated, or posted to a publicly accessible website, in whole or in part

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Six Sigma Six Sigma methodology begins with a process map that defines and graphically maps out the process to be improved. The process map represents the entire process, and is helpful in identifying important metrics for analysis. After identifying the source of any defects, an improvement program is created to remove the cause of the defects. To improve the quality of a staffing process, each step of the process must maximize the probability that the selected candidate meets the hiring manager’s expectations by maximizing the chances that unqualified candidates are screened out at each step, and enhancing candidates’ interest in the job and in the organization as an employer.

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Strategic Staffing 4th edition © 2020 Chicago Busin ess Press. All Rights Reserved. May not be scanned, copied or dup licated, or posted to a publicly accessible website, in whole or in part

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Six Sigma For existing internal processes, use DMAIC (Define, Measure, Analyze, Improve, and Control) • Define the problem: reduce unwanted turnover among high performers. • Measure: identify key measurements underlying turnover. • Analyze: understand key factors and trends that create turnover. • Improve: identify and execute a plan to address those factors. • Control: implement controls to lower turnover on an ongoing basis. Strategic Staffing 4th edition © 2020 Chicago Busin ess Press. All Rights Reserved. May not be scanned, copied or dup licated, or posted to a publicly accessible website, in whole or in part

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Six Sigma To create new processes, use DMADV (Define, Measure, Analyze, Design, and Verify) • Define project goals and customer deliverables, such as improved new-hire quality • Measure: determine hiring manager needs • Analyze the process of sourcing, recruiting, screening, and making job offers • Design the staffing process to screen out undesirable candidates and maximize new-hire quality • Verify the performance of the process and its ability to meet hiring manager needs Strategic Staffing 4th edition © 2020 Chicago Busin ess Press. All Rights Reserved. May not be scanned, copied or dup licated, or posted to a publicly accessible website, in whole or in part

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Balanced Staffing Scorecard Balanced scorecard: a tool for managing employees’ performance and for aligning all employees with key business objectives by assigning financial and non-financial goals and monitoring and assessing performance Balanced scorecards help organizations to: • Compare performance within the organization • Track trend performance within the organization • Benchmark the organization against other organizations • Identify best performers in the company and its best practices Strategic Staffing 4th edition © 2020 Chicago Busin ess Press. All Rights Reserved. May not be scanned, copied or dup licated, or posted to a publicly accessible website, in whole or in part

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Balanced Staffing Scorecard Balanced staffing scorecard: contains objectives, targets, and initiatives for each activity that adds value to the staffing process. The company’s goals and strategies should guide scorecard development, with most measures focusing on value creation and staffing effectiveness and a smaller number addressing staffing efficiency and cost control. The choice of scorecard criteria can be based on company strategy and goals, anticipated challenges such as a tightening labor market or changing workforce demographics, current problems such as difficulty staffing key leadership positions, and practical reasons such as ease of communication to hiring managers. When choosing what to include on a staffing scorecard, be sure to consider the company’s talent philosophy, and HR strategy. Set clear and consistent goals, and carefully balance cost, time, quality, and customer satisfaction. Strategic Staffing 4th edition © 2020 Chicago Busin ess Press. All Rights Reserved. May not be scanned, copied or dup licated, or posted to a publicly accessible website, in whole or in part

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Balanced Staffing Scorecard

Strategic Staffing 4th edition © 2020 Chicago Busin ess Press. All Rights Reserved. May not be scanned, copied or dup licated, or posted to a publicly accessible website, in whole or in part

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Staffing Evaluation Process Identify a problem area and assess how to measure and improve it. The metrics you use shouldn’t be too complex or numerous to understand or explain to others. It is often a good idea to implement a staffing evaluation program incrementally, rather than taking on the entire staffing system at once. • Evaluate one component of the system at a time by calculating its impact on relevant KPIs such as a division’s productivity, tenure, performance, labor costs, and promotions. For example, a firm pursuing a cost-leadership strategy based on an operational excellence competitive advantage might be very concerned about labor costs. Evaluating the impact of employee turnover and new hire quality on labor costs helps build the case that these factors are important. • Involve other units like finance and operations to acquire needed information and data. This process helps build your case that staffing activities influence important organizational outcomes and can secure the buy-in needed to make staffing improvements and increase the scope of the evaluation program. Strategic Staffing 4th edition © 2020 Chicago Busin ess Press. All Rights Reserved. May not be scanned, copied or dup licated, or posted to a publicly accessible website, in whole or in part

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Résumé Screening Software Screens résumés for certain words or phrases so that recruiters do not have to look at every résumé. Saves recruiters a lot of time, and makes Internet recruiting much more manageable for companies that receive thousands of responses to a job posting. Relying too heavily on software can lead to overlooking highly qualified candidates who do not match specific criteria.

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Applicant Tracking Systems Applicant tracking system: software that allows you to maintain a database of both applicant and job information to facilitate finding matches between openings and applicants. Allow human resources and line managers to oversee the entire recruitment and staffing process, from mining résumés to identifying qualified candidates to conducting background checks and facilitating onboarding by tracking completed tasks and activities and automatically sending new hires relevant information. Reduce costs, speed up hiring process, and improve the company’s ability to find people who fit its success profile.

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Strategic Staffing 4th edition © 2020 Chicago Busin ess Press. All Rights Reserved. May not be scanned, copied or dup licated, or posted to a publicly accessible website, in whole or in part

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Human Resources Information Systems (HRIS) Human resources information system: a system of software and supporting computer hardware specifically designed to store and process all HR information and keep track of all employees and information about them Combine separate HR systems into a centralized database that performs the majority of HR transactions. HRIS include reporting capabilities, and some systems are able to track applicants before they become employees.

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Company Website In addition to providing information about current job openings, the careers site can also contain information about the corporate culture and mission. Online applications are possible, and prescreening tests can be administered. Thoughtfully developed careers sites can also result in more effective interviews because applicants’ basic questions will already have been answered by Web site content and poor fits are more likely to have selfselected out after learning more about the organization and job opportunity online. Strategic Staffing 4th edition © 2020 Chicago Busin ess Press. All Rights Reserved. May not be scanned, copied or dup licated, or posted to a publicly accessible website, in whole or in part

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Digital Staffing Dashboards Digital staffing dashboards: interactive computer displays of indicators of how the staffing function is meeting its goals Well-crafted staffing dashboards help companies monitor and manage their workforce and chart progress toward meeting strategic and tactical staffing objectives. Strategic Staffing 4th edition © 2020 Chicago Busin ess Press. All Rights Reserved. May not be scanned, copied or dup licated, or posted to a publicly accessible website, in whole or in part

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Seven Tips for Creating Digital Staffing Dashboard 1. Identify drivers of staffing and business success. 2. Set specific goals. Each metric should have a target level or range that reflects a business priority (e.g., hiring and retaining more top performers, promoting from within) or financial return (e.g., reducing turnover saves money). 3. Prioritize. Dashboards are ineffective if they contain too much information. Identify which metrics are key, and put them on the main dashboard page. 4. Identify how best to present the data. Bar charts, tables, pie charts, graphs, and even speedometer-style displays are all possible. Test formats and warning colors with the people who will be using it to identify what works best. 5. Assess user comprehension. Ensure that users are not misinterpreting the data and that the communicated information is being quickly and clearly understood. 6. Consider including dynamic capabilities...