- HR Audit as a Risk Mitigation OpportunityYesterday
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With Dow Jones YTD returns plunging to -25.00% this week, we all witnessed how the debacle of financial institutions is paralyzing the whole economy. Clearly, poor risk management and short-sight of financial institutions are some causes at the roots of this abysmal. As a backbone of organizations human capital strategy, HR has unique opportunity to proactively identify and mitigate these risks with HR Audit. Here are some thoughts.
1. Organization structure and reporting relationships: Inconsistent job functions and reporting relationships are the evidences of poor risk management, oversight and control. A systematic and disciplined review can pin-point the reporting relationships, authorizations, roles and responsibilities that are not conducive to effective risk management. For example, the audit may reveal a missing portfolio level risk assessment function for new investments and induce the need for additional reporting relationships to enforce managerial approvals for transactions involving high risk.
2. Objective and goal management process: Establishing realistic and achievable goals is critical to ensure that the managers are not tempted to signup for the risks that can put the whole organization in danger. The audit is an excellent opportunity to identify and improve situations where the unrealistic goals are contributi
- Estimated Cost of Bailout: $700 Billion; Return of Investment: TBDSeptember 27
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In Enterprise IT world no IT project gets funded without a formal Return of Investment analysis. Even in very beginning phases of project, often called initiation/qualified idea phase, a very high-level business case including ROI & risk assessment is predicament to fund the resources required for further definition. It is not uncommon for large Enterprise Initiatives to get approval for the overall budget soon after the ROI justification, however funding of budget will be done in a phased approach, only upon the successful conclusion and review of deliverables from earlier phases. In contrast, operational costs are recurring cost of business operations and do not necessarily require extensive ROI analysis for funding.
On corollary, most fiscal government policies are enacted into law and generally do not require additional approvals. Chairman Bernanke sometime back clarified that the proposed bailout plan is not a fiscal plan instead it’s a market-focused initiative that buys (and sells) assets using market-focused pricing strategies such as options. While everyone agrees that something need to be done to help the economy, market-focused initiative of this size demand clear quantification of associated costs, risks and value. However, these are the missing pieces in this puzzle currently.
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- Harnessing the Power of Trust with Pay for PerformanceSeptember 7
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Darren Gorton in his blog (Item 5 in September Carnival of Trust Top 10) Trust vs Control: Is control merely a substitute for trust? makes a perfect case to nurture the culture of trust to deter fraud and reduce cost of control.
I further extend his point and argue that creating, developing and nurturing Pay for Performance culture is the first step towards harnessing the power of trust between employees, business partners and stakeholders. Here is why.
1. Organizations that embrace Pay for Performance philosophies communicate often with their employees about organization goals, contribution of individuals to the organization goals and how individual pay is linked to the performance. This transparency is the first seed in developing trust between employer and employees
2. A well-designed pay-for-performance system increases employees’ understanding of what is required of them, their performance and the organization’s outcomes. Merit awards, bonus and promotions are based on evaluations by the person's supervisor, colleagues and people they supervise. So everyone knows that the rewards are based on collective feedback of the team itself, foster
- How Global is your Talent Management Platform?August 17
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As more and more Talent Management vendors claim globally capable, it is increasingly becoming difficult for organizations to assess the level of globalization & localization enabled by these vendor platforms. Depending on architectural maturity, different Talent Management vendor platforms may have varying degrees of support for multi-language, multi-currencies, local compliance and data security. What really matters is the ability of Talent Management platform to support a combination of all of these to enable business agility and visibility.
For example, consider a global Compensation scenario where a centralized compensation department in headquarters administers the overall job families, levels and codes. However, the salary structures and grades are defined at country level to ensure alignment with the local market trends. However, a line manager managing a global team should have cohesive visibility to overall team performance along with the country specific guidelines for pay awards. On the same token the county level data protection policies mean the HR Administrators in one country should not have access to personal data of employee in other countries. In addition, the country level aggregated metrics may be visible to the authorized senior executives for benchmark purposes.
- Power of Metrics in Preparing a Compelling Business Case for Talent ManagementAugust 17
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As Meg Bear indicated in her blog, a compelling business case is critical to get the buy-in for launching Talent Management 2.0 initiatives. While the faltering economy created awareness of efficient Talent Management strategies to attract, engage, develop and motivate talent, the challenge often is how to quantify the business value from TM investments for a winning business case? One approach is to begin with end in mind – once you deploy the solution what specific tools it will enable to achieve business goals?
Figure: Most Commonly Used Talent Management Metrics Courtesy: TM talent management magazine July'08To start with, above are some high-level categories of commonly used Talent Management metrics. Decompose these categories into actionable metrics that will enable HR organization to contribute to business goals. You can apply the insight from Cathy - for example, in Cost to hir
