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HR Analytics An Introduction

HR analytics is the application of data and analysis to improve people-related decisions and performance. It involves descriptive, diagnostic, predictive, and prescriptive levels of analysis. A six-step process for implementing HR analytics includes determining critical outcomes, creating a cross-functional data team, assessing measures, analyzing data, building and executing programs, and measuring/adjusting. Presenting analytics using the LAMP framework of logic, analytics, measures, and process can make insights more impactful for decision-makers.

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Muskan Manchanda
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211 views

HR Analytics An Introduction

HR analytics is the application of data and analysis to improve people-related decisions and performance. It involves descriptive, diagnostic, predictive, and prescriptive levels of analysis. A six-step process for implementing HR analytics includes determining critical outcomes, creating a cross-functional data team, assessing measures, analyzing data, building and executing programs, and measuring/adjusting. Presenting analytics using the LAMP framework of logic, analytics, measures, and process can make insights more impactful for decision-makers.

Uploaded by

Muskan Manchanda
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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HR Analytics:

Introduction
What is HR Analytics
HR Analytics is the application of a methodology and integrated
process improving the quality of people-related decisions fo rthe
purpose of improving individual and/or organizational
performance.
- Laurie Bassi ( McBassi & Company)
Levels of Analysis

PRESCRIPTIVE ANALYTICS

PREDICTIVE ANALYTICS
VALUE

DIAGNOSTIC ANALYTICS

DESCRIPTIVE ANALYTICS

COMPLEXITY & DIFFICULTY


Levels of Analysis
• Descriptive Analytics: Focus is ‘What Happened?’ Data
visualization
• Diagnostic Analytics: Focus is ‘Why did it happen?’ Data
mining and data discovery techniques are used to get further
insights into the data. Results used as input for decision making
• Predictive Analytics: Focus is ‘What will happen?’ Takes
descriptive and diagnostic analytics into account to predict the
possible consequences of activity in the future
• Prescriptive Analytics: Focus is ‘How can it be made to
happen?’ The objective is to suggest the way forward
Descriptive Vs. Predictive HR Decisions
Descriptive/ Correlational HR Decisions Analytic/ Predictive HR Decisions
Basic details of employees Basic details of employees
• Number of years Mr. X has been working with • Number of years Mr X will continue working
us with us?
• CTC of Mr X • Likely CTC of Mr X after 10 years
• Performance rate of Mr. X • Likely rate of absenteeism of Mr X after five
• Average rate of absenteeism of Mr X years
• Average man-days of training of Mr X • Number of man-days of skill-change training
required by Mr X after five years?
Specific career- related information Specific career-related information
• How many years Mr. X has been working at • Number of promotions need to be given to Mr
the same job level? X in his career span of next 10 years in the
• Was Mr. X recommended for promotion by his organization?
superior? • Year-wise likely rate of performance of Mr. X
• What merit rating Mr X got over the last 3 in the next 10 years
years? • Year-wise merit rate of Mr X for next 10 years
• What seniority score Mr X has at present? • Year-wise seniority score of Mr X for next 10
years
1. Determine Critical
Outcomes

6. Measure and adjust 2. Create cross-


functional data team
Six-step Process of
Implementing HR Analytics

5. Build program and 3. Assess outcome


execute measures

4. Analyse Data
Six-step Process for Implementing HR
Analytics
1. Determination of Critical Outcomes
• Org needs to identify few outcomes that are critical to it and would focus on
them in future
• Outcomes, to a great extent, depends on mission & vision
• For example, outcomes such as productivity, turnover and customer
satisfaction are commonly desired outcomes
2. Creation of cross-functional data team
• Objective is to identify who owns the data
• Data reconciliation experts are needed to ensure that only redundant data are
shredded off from the database
• Warning: There can be instances of turf-battles over data and suspicion about
turning over business data to another function—for this reason, additional
senior leader participation is critical.
Six-step Process for Implementing HR
Analytics
3. Assessment of Critical Outcomes
• To understand the procedure used to capture current employee data
• Involves periodicity of the measurement, the target level for
measurement (individual, team, department, branch, region,
organization)
4. Objective Analysis of Data
• Analyst needs to know advanced statistical techniques and tools
Six-step Process for Implementing HR
Analytics
5. Building and Executing a Programme
• Requires HR Analyst to prepare an action plan based on results from
the data analysis and if permitted, execute it
• At this action-planning stage you can focus activities at the systemic,
organization wide, line of business or work-unit level. The big
opportunity is that the investments focus on those employee
processes/skills/attitudes/ demographics, that have been shown to have
a direct impact on the organization’s desired business outcomes—and
not just an assumed impact or a feeling that it is the right thing to do
Six-step Process for Implementing HR
Analytics
Matrix for Decision Making in HR

Positive and Significant Positive and insignificant


(Strategy: Leverage) (Strategy: minimise)
If the results show that the relationship between HR activity and If the results show that the relationship between HR activity and
outcome is positive and significant, recommendation should be outcome is positive and insignificant, recommendation should
to invest increase time and effort in such activities be to invest lesser time and effort in such activities
Negative and Significant Negative and insignificant
(Strategy: depart) (Strategy: avoid)
If the results show that the relationship between HR activity and If the results show that the relationship between HR activity and
outcome is negative and significant, recommendation should be outcome is negative and insignificant, recommendation should
to drop such activities as soon as possible and keep a record to be to avoid investing time and efforts in such activities to the
not invest in them again extent possible
Six-step Process for Implementing HR
Analytics
6. Measurement and Adjustment
• Sensitivity to the actual outcome is taken care of
• Improvements are done whenever and wherever required in the
measurement scales
• Scales are modified to suit the ongoing market requirements
HR Process Analytics Case Study:
Employee Opinion Surveys
Employee engagement/satisfaction/commitment is not a business outcome, but it can
be a driver of business outcomes. HR analytics will allow you to link the survey data
that you collect to important business results and then focus your initiatives on those
key areas that drive results.
• On what outcomes/metrics are the senior leaders in this organization most focused?
• Who owns the specific data/metrics that senior leaders are focused? How do I
connect with those individuals to obtain the data?
• Are the important business data/metrics collected at the appropriate level for me to
make apples-to-apples comparisons (i.e. department level/district level)?
• Do I have the statistical capabilities inhouse or do I need to look at a university or
consulting firm to help me analyze the data?
• Based on the linkage analysis, what is the highest priority/ROI project that I should
execute first?
• How do I assess the change that has occurred and make adjustments to maximize
effectiveness?
LAMP Framework
HR leaders can present analysis in a more impactful manner by
using the LAMP framework.
L Logic
A Analytics
M Measures
P Process
LAMP Framework
Logic
Articulate the connections between talent and strategic success,
as well as the principles and conditions that predict individual
and organizational behaviors.
For example
Beyond providing numbers that describe trends in the
demographic makeup of a job, improved logic might describe
how demographic diversity affects innovation, or it might depict
the pipeline of talent movement to show what bottlenecks most
affect career progress.
LAMP Framework
Analytics
Use appropriate tools and techniques to transform data into
rigorous and relevant insights — statistical analysis, research
design, etc.
For example
Understanding whether employee engagement causes higher
work performance requires analysis beyond correlations that
show the association, to be certain that the reason is not simply
that better performers become more engaged.
LAMP Framework
Measures
Create accurate and verified numbers and indices calculated from
data systems to serve as input to the analytics, to avoid having
“garbage in” compromise even with appropriate and
sophisticated analysis.
LAMP Framework
Process
Use the right communication channels, timing, and techniques to
motivate decision makers to act on data insights.
For example
Reports about employee engagement are often delivered as soon
as the analysis is completed, but they become more impactful if
they’re delivered during business planning sessions and if they
show the relationship between engagement and specific focus
outcomes like innovation, cost, or speed.

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