The return on_people_e_book

Seven C-Suite actions to increase strategic
alignment, agility, and performance with
maximum return on Human Capital Investment
Chris Frederick Willis

The Return On People eBook was written by
Chris Frederick Willis
Chris is the visionary entrepreneur behind Media 1, driving measurable performance improvement for some of the
world’s most enviable brands since 1993. Chris played an instrumental role in the development of the Return On
People organizational performance methodology. A recognized authority on the future of work, Chris is passionate
about breaking down the barriers that trap organizations in outdated models, and unnecessarily hinder workers
from giving their greatest contribution. She is a regular industry conference presenter, has authored articles for the
eLearning Guild and Training Magazine, and been published in Dr. Michael Allen's eLearning Annual.
A special acknowledgement goes to L. Michael Wykes, CPT for leading research and process development for
the Media 1 Return On People assessment and performance improvement methodology.
With contributions from the Media 1 ROP consulting team:
Harrison Withers
William F. Jones
Ben Froese
Cover and information design by
James Barnes
Please share this eBook freely with leaders, innovators, and champions. Thank you!
Media 1 are experts in Return On People, a powerful organizational performance methodology grounded in
Human Capital Analytics. We apply ROP to increase long-term profit and fuel an empowered, agile, and
sustainable work environment for all contributors. Our clients include senior executives from companies who have
grown through merger and acquisition and emerging organizations seeking to implement leading people practices.
Return On People will help you create an accountable measurement culture for a greater return on your
investment in people.
This work is licensed under the Creative Commons
Attribution-NonCommercial-NoDerivs 3.0 Unported
License. To view a copy of this license, visit
http://creativecommons.org/licenses/by-nc-nd/3.0/ or send
a letter to Creative Commons, 444 Castro Street, Suite
900, Mountain View, California, 94041, USA.

Contents
STOP! ....................................................................... 4
Consider yourself warned ….................................. 4
Why ROP matters: A cautionary tale ..................... 6
Measurement counts.............................................. 7
Reality check.......................................................... 8
Help, how did we get here? .................................... 9
We segregate our people data ............................... 9
We measure the wrong things................................ 9
We treat people as a liability ................................ 10
So what? .............................................................. 10
Return On People (ROP) ....................................... 11
What can ROP do for you? .................................. 13
ROP and benchmarking....................................... 13
Benefits of ROP.................................................... 14
Take a holistic view .............................................. 14
ROP and the C-Suite............................................ 15
What the research says ........................................ 16
It’s harder than you think...................................... 17
The truth is in the middle ......................................19
Level 1: Operational Provider ...............................19
Level 2: Strategic Service Partner.........................20
Level 3: Integrated Enabler...................................21
Level 4: Predictive Driver......................................22
Level 5: Empowered Driver...................................23
Beyond measurement............................................24
Three organizational performance factors ............24
Three individual performance factors....................25
Performance Factor Grid ......................................25
7 C-Suite actions to improve ROP Maturity .........26
1. Align at the top..................................................26
2. Chip away at information silos ..........................26
3. Ask better questions .........................................27
4. Make a bold declaration....................................27
5. Identify Enablers and Barriers...........................28
6. Create new roles...............................................28
7. Master change ..................................................28
Learn more .............................................................29
References..............................................................30

The Return On People eBook
4
STOP!
Return On People (ROP) is not an HR strategy. This eBook is written for the
leadership team.
The ROP information you’ll find here—the cautionary tales, the best
practices, and practical steps to start piloting now—are aimed at the
C-Suite. Effective ROP strategy must be a leadership mandate. It requires
looking at the organization holistically. It requires challenging the structure
and role of HR, and breaking down silos, physical and artificial, that are
barriers to business agility in a global economy.
ROP Maturity is a both a process and a philosophy. In order to achieve
higher Return On People, an organization must be willing to fundamentally
change the way it measures its workforce and view its people as a financial
asset, not a liability. It must thrive on rapid change, and recognize that agility
is now a basic survival skill.
The ROP Maturity model will open your eyes to what you need to do to get
there.
Consider yourself warned …
Non-executives, read on with caution. The ROP model may leave you
feeling frustrated, wanting to do more to help your organization achieve
higher return on its investment in people. You are not alone. Most large
organizations still operate under Industrial Age command and control
models. Unless you are in the command part of the equation or are lucky
enough to have the ear of someone who is, your control over organizational
performance improvement is, sadly, limited.
Sorry.

5
If you work in an outdated command and control organization, please do us
both a favor and share this book with someone in your organization whose
title begins with “C.”
Maybe start with the Chief HR Officer (CHRO), who not only understands
the value of your people, but who, along with the Chief Information Officer
(CIO), owns much of the people data that feeds Workforce Analytics.
Your Chief Financial Officer (CFO) will be interested in how the analytics
side of ROP provides visibility to Key Performance Indicators and takes
some of the voodoo out of the softer side of Human Capital Investment.
Your Chief Executive Officer (CEO), as lead executive, will appreciate the
clarity and actionable strategy that the ROP Maturity model offers for
improving business performance in the short term and guiding better long
term decisions in a volatile market.
Meanwhile, whatever your role, if you happen to be one of those people who
aren’t satisfied with the status quo, go ahead. Take a risk. Catch a ride on a
rising wave and become an ROP evangelist. Spread the word. Someday
you can remind everyone that you knew about ROP first.
Except, maybe let the CEO take credit. CEOs like that.
Chris F. Willis, CEO
Media 1: The Return On People People
www.roipeople.com • solutions@media1.us • @media1der

6
Why ROP matters: A cautionary tale
CTBY (Could This Be You?) are, by every public indicator a model
company, a Fortune 1000 international conglomerate, grown through
multiple high profile acquisitions. CTBY Flagship and each of its lesser
Satellites regularly appear on the “Best of” awards lists: Best Places to
Work, Excellence in Learning, Global Leadership Award … you name it. The
acquired brands are no less impressive, each highly respected in their own
category.
CTBY had attempted HR Transformation by moving select transactions to
Shared Services, and the Flagship business units had enhanced HR
automation through their enterprise ERP software. They assigned HR
Business Partners and designated Centers of Excellence to place greater
focus on business strategy. But for some reason, expected efficiencies had
not materialized.
We were engaged to lead an HR process improvement and consolidation
initiative across all CTBY business units, on the premise of eliminating
inefficiencies in order to cut cost. Because employee engagement and
satisfaction are valued so highly in CTBY’s high touch culture, they had
previously shied away from offshoring their HR transactions as so many
other Fortune companies had done.
Top management at CTBY determined they were still spending far too much
on processing non-strategic HR transactions. Management estimated that
through consolidation and process re-engineering they could cut $2M USD
annually from their combined HR budget. It was our task, in essence, to
analyze their current state and ferret out the best ways to capture those
reductions.
Is this true?
Yes, CTBY (Could This Be You?) is a
pseudonym for a real company, and
this story is true. Of course, our
Performance Consulting Code of
Ethics prevents us from sharing
details about their business, our
findings, and specific strategic
recommendations for improving their
investment in their people.
However, our research and
experience show that the examples in
this eBook portray a surprisingly
accurate picture of the Return On
People Maturity of most Fortune 1000
organizations, especially those who
have grown through a merger or
acquisition.

7
Measurement counts
It was only a short time into the project before we surfaced strategic flaws in
the cost-cutting focus and serious disconnects across the business units.
Once we interviewed key process managers from each division individually,
multiple discrepancies and issues came to light:
• There were no enterprise standard methodologies for calculating
HR spend. Each business unit had estimated spend, deciding, on
their own, which factors to include in their calculations.
• Transactional volume was also difficult to pin down:
o Business units used disparate systems (some home-grown) and
reporting methodologies; they weren’t measuring the right things.
o Management cited employee dissatisfaction with their self-serve
portal, and it was widely believed to be common for HR Business
Partners (HRBPs) to perform transactions when called upon in
order to keep managers happy.
• Priorities were conflicted by a strong cultural bias toward keeping
employees happy at all costs versus a C-Suite focus on increased
efficiency and cutting cost.
• There were no standards for capturing or reporting total spend for
outsourced labor.
• People metrics had never been required by management, so few
business units had strong analytical or reporting competencies.
• There was poor cooperation and a deep lack of respect between the
business unit leaders. Units that had been acquired had never been
fully integrated and openly shared their disdain for the “soft” culture of
their new parent enterprise. Additionally, each held a deep seated
belief that their core business was so unique that consolidation was
impossible.
A funny thing happened on the way
to HR Transformation
Over the past decade, following the influence of
David Ulrich and colleagues, most large
organizations attempted HR Transformation.1
The
goal of HRT was to move from a rigid, command and
control personnel department to modern Human
Resources as a strategic business partner with a
coveted seat at the boardroom table.
In reality, early efficiencies were gained in
automating or outsourcing HR transactions. Some
moves to Shared Services or Employee Self-Service
also bore early gains.
But the other side of the equation—the HR Business
Partnership—has not fully come to fruition. Anointing
HR Generalists with the title, HR Business Partner,
did not automatically provide all with either the savvy
or authority to take on a truly strategic leadership
role.
Our research shows that most HR organizations
today are stalled in varied states of business
maturity. Like CTBY, they attempted HRT as a
process improvement initiative, cutting costs and
redundancies by doing what they were currently
doing faster and more efficiently. However, true
transformation seldom comes from doing more of the
same thing better.

8
Reality check
Once we established clear Human Capital measurement baselines using the
same methodology across all business units, the picture changed
dramatically. After meeting with CTBY Finance and bringing all business unit
leaders to the table to agree on standard metrics, we were only able to
calculate less than half the reported apples-to-apples spend on HR
transactions. CTBY would have to slice current HR transactional spend by a
whopping 25% in order to achieve the desired $2M in savings.
Additionally, we found little tangible evidence to back top management’s
belief that HR Business Partners were actually spending a substantial
amount of time performing low level transactional work. In reality, while
hands-on service remained a priority, HRBPs were also well aware of
leadership expectations. Most of the business units had worked hard over
the prior 18 months to automate or outsource the lowest level, repetitive
transactional tasks. In fact, a bigger issue was that individual efforts by
business units without enterprise governance had led to a proliferation of
new or expanded disparate systems and processes, a problem of which
leadership was largely unaware. Without accurate data, C-Suite perceptions
had been clouded by a few high profile stories that had become ingrained as
corporate mythology.
Likewise, CTBY Flagship, by far the greatest enterprise consumer of HR
transactions, had already completed an extensive business unit initiative to
optimize their transactional processes. When it came to optimizing HR
transactions, the low hanging fruit had already been plucked.
The entire project premise had been flawed from the start. The returns
CTBY were seeking simply could not be achieved by optimizing or
outsourcing their HR transactions.
Where is CTBY, now?
After sending out a fact finding missive to
validate that our Return On People
recommendations were sound (they
were), CTBY took a step back from their
HR Transaction Process Improvement
project.
As of the time of this writing, they had
assembled a new project leadership team
and were prioritizing goals and developing
strategies for moving forward. Armed with
the truth – an accurate picture of their
current state and baseline data – their
next steps will be strategically aligned
around greater ROP maturity and a
mandate for providing measurable
outcomes.

9
Help, how did we get here?
How could it be possible for such a highly regarded, Fortune 1000
company to be so completely out of touch with the people side of their
business?
Research shows that they are not alone and are perhaps even the norm.
The problem stems from how we think about, and measure, our people.
We segregate our people data
Most large organizations capture and report data about their people
through HR and Talent Management systems that operate and report
separately from business financial systems. Bersin by Deloitte reported
that the average large company has more than 10 different HR
applications,2
and most of these are not even integrated within HR. People
data in organizations that have grown through merger/acquisition is likely
even more segregated, with no visibility across business units.
We measure the wrong things
Although we collect people data in HR, measurement and reporting that
comes through HR does not directly tie to business strategy. We measure
the number of transactions performed and the number of individuals who
attended training sessions. We perform satisfaction surveys. We track the
time to hire and average turnover.
HR Analytics measure how well HR itself is performing in its traditional role
of administering the employee lifecycle. This data is largely used as a
scorecard to show management how efficient HR is operating—and to
justify its importance to the business. However, HR performance data is
only loosely tied to the overall corporate strategy and is seldom properly
framed in terms of meeting specific strategic business goals.
The average large company has
more than 10 different HR
applications, and their core HR
system is over 6 years old. So it
takes effort and energy to bring this
data together and make sense of it.2
Josh Bersin

10
We treat people as a liability
Back in 1999, Peter Drucker predicted,
“The most valuable assets of a 20th-century company were its production
equipment. The most valuable asset of a 21st-century institution, whether
business or non-business, will be its knowledge workers and their
productivity.” 3
Fast forward to 2010, and Ocean Tomo estimated that approximately 80%
of the S&P 500 market value was attributed to intangible assets, including
specialized talent.4
It appears that Drucker’s prediction has become reality—
at least by calculations that take intellectual property into account.
But not in the C-Suite. Even in today’s knowledge economy, people, and the
resources that support them, appear as an ever-growing liability on the
corporate profit and loss statement. In boardroom sessions to increase
business profitability, there are two opposing strategies at play—reducing
liabilities or enhancing assets.5
When faced with business downturn or
disruption, an organization’s people are presented to top business leaders
as its greatest liability.
So what?
In today’s competitive global economy, the companies that win will be
category leaders with the ability to predict changes in the marketplace and
react to opportunities with people-focused solutions that increase
competitive advantage before anybody else. It’s a game of agility and focus.
Those who win will have the best systems to gain maximum value from their
people resources, their Human Capital, to earn the highest returns.
Data Story
Despite all of the
information and data,
an effective argument
is not enough. You
need to have the ability
to fashion a compelling
narrative to convince
and communicate.
Daniel Pink

11
Return On People (ROP)
Return On People is the art and science of maximizing investment in
Human Capital to drive successful business strategy.
Economist Theodore Schultz invented the term "Human Capital" in
the 1960s to describe the economic value that people provide6
. He
believed that investing in people leads to an improvement in the
quality and level of productivity. Human Capital Analytics have shown
that investment in people provides a positive impact on profitability
and stock value7
.
Organizations continually seek ways to receive maximum benefit
from their investments, including those in their workforce. We all
know these investments are comprised of salary, wages, cash,
benefits, perks, and rewards…
But we also make investments in people in terms of what it costs our
organization to maintain culture, leadership, recruiting, development,
retirement, learning, tools, resources, and even HR support.
However, as we’ve seen, it’s very difficult for organizations to report
and utilize meaningful data about their people. Even if we have the
data that we need, very few organizations actually use it to measure
how these investments in people increase value.
We call this your Return on Investment in People, or Return On
People, for short.
Which analytic is which?
Analytics are all the rage. An increase of available
data has converged with the need of the business
to be more competitive in a global market and the
desire by HR to better support business strategy.
In the emerging practice of people analytics, the
terminology can be confusing. Here’s how these
terms are used in this eBook:
Human Capital Analytics measures the economic
value that people provide; can be used
interchangeably in economic theory as well as
business measurement.
Talent Analytics or Workforce Analytics
measures past employee activities to predict future
outcomes; a business-specific application of
Human Capital Analytics.
HR Analytics measures the performance of the
Human Resources organization for enterprise HR
improvement.
Return On People describes our unique process
and methodology for creating strategic alignment
and eliminating barriers so you can make use of
your people data, however you refer to it, in order
to improve business performance.

13
What can ROP do for you?
We all know why we make investments in people; we want our companies to
be more efficient, more agile, and more engaged. We want them to be more
innovative and productive. But we don’t necessarily know how our people
investments help us get there. The truth is: earning the best Return On
People is a significant business driver.
Each dollar we invest in people results in specific improvements that yield
financial returns for our organization. Those financial returns include an
increase in net operating profit, plus fueling competitive advantage and
better stock health.
But it’s not about having more data or spending less: it’s about getting better
data that helps us make choices that lead to earning more.
It’s about aligning the C-Suite around a united strategy. It’s starting a two-
way conversation that broadcasts a shared vision across the organization
then rolls back up as data to check hypotheses and illuminate what is
working, so you can build on that momentum.
Once you measure your Return On People, you can determine which
investments earn your best returns and make better decisions.
People data matters less than the
picture we paint when interpreting the
data story and sharing that story
throughout the organization.
ROP and benchmarking
Benchmarking shows how you
are performing, high or low,
relative to an established baseline
measurement.
A baseline is simply a “line in the
sand” performance metric that
you and your team establish as a
meaningful point of reference.
The baseline itself is neither good
nor bad; that interpretation is
determined only by measuring
your movement in relation to it.
The current state information that
is uncovered in a comprehensive
Return On People Audit can, and
should, be used for establishing
baselines for measuring your
future progress toward increasing
ROP Maturity.

14
Benefits of ROP
What kinds of returns are we talking about, specifically?
Organizations that make an investment in putting Workforce Analytics
to work benefit across the board:
• Greater visibility into ROP means that limited budget dollars
can be allocated to the right employee initiatives:
o Continuing or expanding solutions that have already
proven to impact critical business performance metrics
and outcomes.
o Funding small pilot projects to test innovations that can
be expanded based on promising returns.
• Supporting higher performance investments builds a stronger
organization through returns that benefit shareholders,
customers, and employees.
• It is much easier to align strong personalities around a single
vision when armed with quantifiable information; a unified
vision is easier to roll down consistently through the enterprise.
• The HR organization can be held accountable for bottom-line
impact in the same way as any other business unit, building
desired credibility and trust with the greater business.
• HR executives add value to C-Suite conversations when they:
o Quantify their current impact on business outcomes.
o Explain the current state of the workforce and projected
future needs.
o Make a business case for future initiatives.
Take a holistic view
Return On People is not an HR or Talent Management
initiative. In a comprehensive ROP Maturity Audit, we
examine six aspects of your organization.
• Workforce Strategy and Organizational Design:
The ability to match employee capabilities with
business-driven current and future workforce needs
combined with the ability to organize people for
maximum productivity toward business goals.
• HR Operations: Includes operational and
transactional aspects of basic HR services as well as
compliance and employee focused legal issues.
• Human Capital Development (HCD): Includes
training and development for top business
performance.
• Talent Management: Ensuring the best possible
environment for all employees to maximize their value
as a strategic competitive advantage.
• Human Capital Analytics: The ability to derive the
highest Return On People.
• Cultural Readiness: An organizational culture of
measurement and agility in response to rapid change.

15
ROP and the C-Suite
With Return On People data and resources scattered across pillars, an ROP
performance improvement initiative requires a big picture approach and must start at
the top level of the organization. Success will require alignment and input from
multiple business leaders and will offer benefits to all involved.
Chief Information Officer (CIO)
A recent Gartner report listed increasing enterprise growth as the top CIO business
focus and analytics and business intelligence as the top priority for technology.8
These two top concerns intersect at the corner of ROP and Workforce Analytics.
Chief Financial Officer (CFO)
In a volatile global marketplace, the CFO is facing increasing pressure to get a
handle on true Total Cost of the Workforce (TCOW) and other Human Capital
metrics that are emerging market performance indicators. An ROP initiative forces
the organization to come to a mutual agreement on which strategic metrics matter
most and how they will be measured and reported consistently across all business
units.
Chief Executive Officer (CEO)
According to the 15th Annual Global CEO Survey by PWC, only 15% of CEOs
reported that they are getting comprehensive information on their Return on
Investment in Human Capital, with the majority indicating that they wanted more
information.9
Chief Human Resources Officer (CHRO)
The CHRO holds the key to the organization’s Human Capital data, and has likely
been investing in a stronger talent management strategy. A C-Suite ROP
performance improvement initiative would provide the aligned focus, authority, and
accountability required to revitalize a stalled strategic HR Transformation.
Without the appropriate level of
analysis and tools, there can be a
continuing wake of destructive
activity as organizations move
from one extreme in over-hiring
to the other of recurring layoffs
and reductions, much like a binge
and purge bulimic cycle,
destroying company health over
time.11
Human Capital Management Institute

16
What the research says

17
It’s harder than you think
Our work with companies like CTBY, whose story we shared at the
beginning of this eBook, highlights how Return On People transcends
HR and how complex people measurements can be. Because people
data crosses systems and pillars, it requires a unified vision and
cooperation from the top levels of the organization—the C-Suite—in
order to remove the barriers that are keeping you in the dark.
Our research shows that it’s common for a single complex
organization to have a wide range of sophistication in measuring and
using people data. Disparate departments collect and report data
differently, and that adds to the confusion and misunderstanding
around Workforce Analytics, the measurements required for
calculating Return On People. We recognized the need for an
instrument that systematically and consistently educates
organizations on how well they are currently using ROP data and
what they can do to improve.
Based on existing theory about Human Capital Analytics in the
workforce, and our own extensive research, we know there are five
levels of maturity that every business leader will need to move his or
her organization through, in the process of transforming human
resources information into an empowered driver of business strategy.
The Return On People Maturity continuum spans from an operational
provider transitioning into a strategic enabler, all the way through an
enabled, predictive, and empowered driver using Return On People
analytics. The goal is becoming a proactive, fully integrated,
continually improving organization that maximizes its ROI in people,
and creates value for the business.
How ROP Maturity fuels agility
Working together toward a higher ROP
Maturity level is actually an enterprise
performance improvement initiative. The
process, when done right, uncovers
barriers to peak performance and guides
business leaders to agreement around
actions and measures that matter most to
your organization. Alignment and visibility
to key performance indicators and
predictive analytics are all prerequisites to
true business agility.
The illustration on the next page
summarizes the “Five Levels of ROP
Maturity,” followed by a detailed
description of each level.

19
The truth is in the middle
In large, complex organizations, information and best practices are often
trapped in silos, especially for those who failed to fully integrate following a
merger or acquisition. Because of this, it’s common for one function,
department, or business unit to be more sophisticated in using predictive
people analytics, while other areas are almost solely focused on tactical
activities.
As you learn more about the Five Levels of ROP Maturity, you will likely find
that you have advanced visibility to your people data in certain areas and are
flying blind in others. Additionally, you likely have data available to you that
you are not fully utilizing, for reasons we’ll explore later.
Assessing different business units and functions around these Five Levels of
Return On People Maturity will help uncover these situational discrepancies
so that you can work on aligning and raising up the entire organization.
Level 1: Operational Provider
Employee focus
At the Operational Provider level, your company is delivering traditional HR
services to your employees such as payroll, benefits, and training and
development. Your company is also likely delivering administrative support to
front line leaders for transacting employee services. HR helps enforce
company policies and monitors legal human resource issues.
Because data sources are not standardized across the organization, HR
cannot consolidate measures, information, and metrics to provide strategic
business insights to leaders.

20
Level 2: Strategic Service Partner
Business unit focus
Strategic Service Partners are in the process of moving from an HR-centric to
a business unit focus and have likely embarked on one or more strategic “HR
Transformation” initiatives over the past decade. This has left various areas of
the organization working at a more advanced ROP level than others,
especially in Recruiting and Talent Management.
Level 2 organizations may report decreasing people costs and increasing
revenue and productivity. You may be using dashboards and scorecards to
track and measure business performance. However, you may experience
limitations in providing the most useful business information to the entire
organization due to a lack of standard data and measurement systems for
finance, IT, and Human Capital assets across business units.
As part of HR Transformation, you have assigned skilled internal consultants,
HRBPs. These consultants work with business leaders to drive talent
strategies and solutions to maximize returns on financial, Human Capital, and
other organizational assets.
HR has moved toward a Shared Services model that operates across multiple
business units. These services may be expanded to include increased levels
of employee and manager self-service. In addition, Centers of Expertise likely
work in concert with your Shared Services functions to deliver best practice
consulting and services in specific areas of the business, such as workforce
management and management development.
Your organization’s level of analytical capability is poised to evolve into key
measures that help the organization adapt business strategies.

21
Level 3: Integrated Enabler
Enterprise focus
As an Integrated Enabler, your organization efficiently gathers and analyzes
critical Human Capital data. Your people incorporate data into meaningful
measures, and proactively provide business insights to help the enterprise
succeed.
In other words, an Integrated Enabler provides a single integrated view of
Human Capital measures and information to enable better business decisions
and deliver a higher Return On People. The organization has likely adopted
an enterprise approach to Shared Services that manages multiple
competencies, either in-house or outsourced, such as HR, IT, Purchasing,
Finance, CRM, facilities management, travel, or other enterprise-wide
functions.
Additionally, enterprise-wide measures from numerous functional areas are
aggregated into standard metrics. Information and metrics are provided to the
business that allows root cause analysis of specific problems. The
organization can then ask critical “what if” questions and determine what
factors of the problems affect the workforce.
At this level, efficient data gathering, measurement, and analytics capabilities
are used to determine factors driving good or poor performance. Also, a mix
of Human Capital, finance, operational and marketing initiatives drive the best
overall performance for the entire enterprise. These insights are translated
into specific financial terms that align with business goals.

22
Level 4: Predictive Driver
Market focus
An organization at the Predictive Driver level weighs internal Human Capital
metrics against external market forces, enabling comparisons between
current Human Capital needs with future enterprise business needs.
At this level, the entire enterprise measures itself on the return it receives
from combined investments in people, financial, and other capital assets. The
organization monitors metrics related to market conditions and continually
assesses projected workforce capital demands against current availability.
As a Predictive Driver, key insights related to Human Capital trends are
developed, which help the company design strategies and tactics to maximize
investments.
Additionally, the organization predicts changes and supplies enough skilled,
engaged, and motivated employees to meet changing business needs and
drive future business decisions.
Analysts are beginning to statistically link predictive analytics to business
outcomes to drive business direction. This, in turn, drives business agility in
the ability to act quickly on strategic decisions in an ever-changing market.

23
Level 5: Empowered Driver
Future Focus
The Empowered Driver has honed the highest level of sophistication in
predictive Human Capital Analytics for agility and continuous improvement.
Your organization holds a finger on the pulse of external market and internal
Human Capital metrics for the enterprise, enabling comparisons between
current Human Capital needs with future business needs.
An Empowered Driver organization is based on a culture that values the truth,
as proven through measurement. At this level, the entire organization scores
itself against the return it receives from combined investments in people,
financial, and other capital assets. The company monitors metrics related to
market conditions and continually assesses workforce capital needs against
the current supply.
At this level, the HR organization as we know it today is no longer separate
from the business but is comprised of Human Capital Consultants who are
deployed strategically through the Global Shared Services Organization.
Their input is charged back to the business unit which utilizes their services,
and their effectiveness is measured against the return on investment they
bring the engagement.
HR transactions, whether in-house or outsourced, are managed efficiently
and painlessly and are measurable contributions to total employee
compensation, engagement, and productivity.
Human Capital Analytics are sought for insight into future scenarios and are
key component of any strategic business decision made through the C-Suite.

24
Beyond measurement
While measurement is an important component of the Return On
People methodology, the ROP Maturity model involves so much more
than analytics. The model views the current state of an organization
through the lens of Human Performance Technology.10
HPT tells us
that, for each ROP Level, there are six factors that must be in place
to perform optimally and to successfully advance to the next level.
Get these six factors right to develop and empower an aligned, high
performing organization with maximum ROP potential.
Three organizational performance factors
Organizational performance factors are controlled by the
organization, either directly from the C-Suite or through management,
to support a wider organizational strategy. Note that in this context,
“workers” describes all levels of employees, from executives to
individual contributors.
1. Clear expectations, information, and feedback: The ROP
strategy and vision have been clearly communicated, and
everyone knows their role in helping bring it to fruition.
2. Good tools, processes, and resources: Workers have what
they need to act with optimum efficiency, and barriers to
performance have been eliminated.
3. Effective incentives and consequences: Workers
understand what’s in it for them when goals are met and
what’s at stake if they are not.
Breaking down barriers
At each of the Five Levels of ROP
Maturity, we have identified a number
of typical Enablers that support
optimal performance and Barriers
that get in the way.
An ROP Performance Audit reviews
your current state of ROP Maturity
using the six performance factors
outlined here. It identifies your current
Enablers, so you can take full
advantage of what is working for you.
The ROP Analysis also calls out
current Barriers, with recommended
steps to remediate them so you can
move toward the next level of ROP
Maturity.

25
Three individual performance factors
Individual performance factors are what each employee must bring to the table.
4. Skills and knowledge: Workers know what to do and how to do it, either through prior
experience or on-the-job learning and development.
5. Capability: Workers have the mental and physical ability to perform assigned roles.
6. Motivation: Workers are engaged with the ROP vision, ideally because it matters to them
personally, or because they are externally driven by incentives and/or consequences.
Performance Factor Grid
This Performance Factor Grid illustrates the interplay between the three organizational and three
individual performance factors:
Organizational
Clear expectations,
information, and
feedback
Good tools,
processes, and
resources
Effective incentives
and consequences
Individual Skills and knowledge Capability Motivation
Grid based on work of Tom Gilbert 1978, 1996; Geary Rummler 1995; Peter Dean 1997; L. Michael Wykes 2000

26
7 C-Suite actions to improve ROP Maturity
Now that you’ve been introduced to the Five Levels of ROP Maturity
and the Return On People performance improvement methodology,
here are seven things that you can start doing right now to begin
getting your highest return on your investment in your people.
1. Align at the top
A successful ROP performance improvement initiative starts with a
holistic, asset-based view toward Human Capital improvement.
Unlocking people data and applying it usefully crosses pillars. It is an
organizational initiative that cannot be accomplished by HR, IT, or
Finance alone. ROP requires an aligned, strategic vision, and a
commitment from the C-Suite. Consider holding an ROP Leadership
Workshop to establish common ROP goals.
2. Chip away at information silos
Integrated Workforce Analytics will be a requirement for the agile
organization of the future, and there is no easy, overnight solution for
breaking down the information silos that are standing in your way.
Disparate information systems and specialized roles have cultivated a
myopic focus, with both physical and cultural barriers that hinder big-
picture thinking about your workforce. This is an especially difficult
problem for established organizations rooted in traditional command
and control organizational models and those who have grown through
merger or acquisition. Begin pursuing an integrated approach to
information management, aligning vision and process as well as
systems and data.
How do you measure up?
Take our free ROP
assessment.
Our free assessment returns a
single ROP Maturity score, which
provides a quick snapshot into your
organization's readiness to make
strategic use of Human Capital
information for your highest Return
On People. The report you receive
with your score also offers high level
advice for taking your next steps
toward using predictive analytics to
drive better business strategy.

27
3. Ask better questions
The real purpose of Workforce Analytics is to answer questions and
test hypotheses about people costs, staffing, outsourcing, and
productivity.
For example, what is your Total Cost of Workforce? TCOW, as defined
by HCMI, is a measurement comprised of all direct and indirect cash
and equity compensation, benefits, and development costs for
employees and contingent workers.11
Few companies have a good
handle on this metric, but the savvy ones are using it in advanced
productivity measures shown to be highly predictive of future stock
performance.
Calculating TCOW is a complex exercise that requires multiple
divisions and functions to cooperate and uncovers unexpected barriers
along the way. Removing those barriers now sets the stage for
increased ROP Maturity across the entire organization.
4. Make a bold declaration
As we saw with the CTBY story at the beginning of this eBook, it
matters less which reports your leadership team relies on, than that the
metrics driving the information and resulting interpretations are
consistent across the organization. Establish solid baselines; then
declare data sources, formulas, and how the data story will be shared
with those who need to act on the information. Most importantly, hold
all employees accountable for achieving the “critical numbers” you
establish for your organization. This process of clarity and
accountability is the first step in establishing a measurement culture,
with a solid foundation that will grow in sophistication over time as the
right analytics yield positive results.
Each step you take toward increasing
your ROP Maturity yields greater
visibility and predictability.
You become armed to make better
business decisions and achieve a
consistently higher Return On People.
Causes come in threes.
Solutions come in fours.
Dr. Judith Hale

28
5. Identify Enablers and Barriers
Begin with a comprehensive assessment of your current ROP Maturity.
Seek out analytics pilot projects and internal success stories that you
can co-opt and build on, including business intelligence or
dashboarding efforts for marketing or other areas. Ask for creative
input from those who were involved. Inventory the systems that
currently house your people data and consider consolidation or
replacement of those that are holding you back. Begin developing
greater analytical competencies and institute basic business finance
training for all employees. Share wins to reward and strengthen your
emerging data-driven culture.
6. Create new roles
Many roles and personalities that served us well in a command and
control organizational structure can work as barriers to growth and
agility. If your organization is one of the many suffering from a stalled
HR Transformation initiative, it’s time to dig in and find out why. Your
HR Business Partners should be the internal consultants poised to
help raise your ROP Maturity. What is holding them back? Is your
Shared Services Organization living up to its promise of greater
efficiency and process standardization? HR Shared Services should be
the ideal place to pilot small Workforce Analytics projects. Appoint a
Chief Analytics Officer to help make sure that you have visionary
leadership in place in roles that can facilitate ROP success.
7. Master change
Change is a now a permanent condition, not a one-time event.
Cultivate a culture that is comfortable with using data to support the
timely, educated decisions and continuous improvement that are the
hallmarks of an agile organization.
ROP and Big Data
Don’t try to boil the ocean.
The path to realizing the full
potential of Big Data is best
walked in many small steps.
A modest Workforce
Analytics pilot project can
yield big results that pave
the way for more ambitious
future initiatives.

29
Learn more
Our current favorite Return On People reading list …
The New HR Analytics: Predicting the Economic Value of Your Company's Human Capital Investments
Jac Fitz-enz
Go deep into Human Capital Analytics with “Dr. Jac,” widely acknowledged as the father of Human Capital strategic analysis
and measurement.
HR Analytics Handbook
Laurie Bassi
An indispensable pocket reference to advanced HR Analytics by expert Laurie Bassi.
Human Capital Analytics: How to Harness the Potential of Your Organization's Greatest Asset
Gene Pease, Boyce Byerly, Jac Fitz-enz
Practical examples from case studies of companies applying analytics to their people decisions and providing a framework for
using predictive analytics to optimize Human Capital investments
Metrics: How to Improve Key Business Results
Martin Klubeck
A simple guide for non-analysts on how to collect, analyze, report, and use measurements to improve your organization
Optimize Human Capital Investments: Make the "Hard" Business Case
Frank J. DiBernardino
Human Capital Analytics and strategy expert, Frank DiBernardino, links Human Capital Investment performance with
shareholder value.
Keeping Up with the Quants: Your Guide to Understanding and Using Analytics
Thomas H. Davenport, Jinho Kim
A general “quantitative literacy" guide to help non-analysts develop the skills to summarize data, find the meaning in it, and
extract its value.

References
1
"Dave Ulrich co-author of HR Transformation," Web, http://youtu.be/V6y-9glrhqI.
2
Bersin, Josh. Forbes, "Big Data in Human Resources: Talent Analytics Comes of
Age." Last modified February 17, 2013. Accessed June 29, 2013.
http://onforb.es/12czO3P.
3
Drucker P.F. (1999 p135) Management Challenges for the 21st Century,
Butterworth-Heinemann, Oxford.
4
Ocean Tomo, "Ocean Tomo's Annual Study of Intangible Asset Market Value - 2010."
Last modified April 04, 2011. Accessed June 29, 2013. http://bit.ly/13hsrxc.
5
Stybel, Larry, and Maryanne Peabody. MIT Sloan Management Review, "Enhance
Assets or Reduce Liabilities?" Last modified June 26, 2010. Accessed June 29, 2013.
http://bit.ly/1cBHBgy.
6
Questia, "Human Capital." Accessed June 29, 2013. http://bit.ly/1cBJ1HS.
7
McCann, David. CFO.com, "A Powerful Stock-Price Predictor." Last modified May 15,
2013. Accessed June 29, 2013. http://bit.ly/13hu7a3.
8
Gartner, Inc., "Gartner Executive Program Survey of More Than 2,000 CIOs Shows
Digital Technologies Are Top Priorities in 2013." Last modified January 16, 2013.
Accessed June 29, 2013. http://gtnr.it/1575yeM.
9
PWC, (p23) "15th Annual Global CEO Survey 2012." Accessed June 29, 2013.
http://pwc.to/1576oZd.
10
International Society for Performance Improvement, "What is HPT?" Accessed June
29, 2013. http://bit.ly/12vjf6p.
11
Higgins, Jeff, and Grant Cooperstein. Human Capital Management Institute,
"Managing an Organization’s Biggest Cost: The Workforce." Accessed June 29, 2013.
http://bit.ly/13hz1nh.

R
Media 1 are experts in Return On People, a powerful organizational performance methodology
grounded in Human Capital Analytics. We apply ROP to increase long-term profit and fuel an
empowered, agile, and sustainable work environment for all contributors. Our clients include
senior executives from companies who have grown through merger and acquisition and
emerging organizations seeking to implement leading people practices.
Return On People will help you create an accountable measurement culture for a greater return
on your investment in people. Learn more at ROIPeople.com.
ROP Maturity Audit  C-Suite ROP Alignment Engagement
Team ROP Workshops  Free ROP Assessment

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