1. Using Analytics to Integrate and
Drive Talent Management
Presentation Title
Candy Knowles, FACHE, SPHR
Presenter’s Name • Date
& Scott Mondore, PhD
10/5/12
1
©SHRM 2012

2. Learning Objectives
• Link Talent Management processes to key business outcomes
> Succession Planning, 360, Survey, Full Integration
• Calculate an ROI for Talent Management processes
• Demonstrate the value of Integrated Talent Management for
organizations of all sizes
• Integrate the key Talent Management drivers of business
outcomes into one dashboard for Sr. Leadership, front-line
managers
• Build a business case for investing in talent/employees – treat HR
like a profit center!
©SHRM 2012

3. Guiding Principles
• Analytics means directly connecting what we do to real business
outcomes—it does not mean running more reports!
• Analytics must be made practical & actionable for senior leaders
and front-line leaders
• Integration does not mean fewer logins/passwords—it means
connecting talent management data to make better talent
decisions. It also means that talent management processes work
together (e.g. employee survey is connected to LMS)
• Employee engagement, by itself, is not a business outcome
3
©SHRM 2012

4. SMD Publications
#3 Bestseller for 2011
Published Published by
by SHRM SHRM
(2009) (2011)
HR People & Strategy has awarded SMD The
Walker Award for their article on Talent Management
Analytics.
“The Walker Award is given to the article that ‘best
advances state-of-the-art thinking and practices in
human resources.’"
©SHRM 2012

5. About SMD:
Driving Business Results Through Talent Management
Our Platform
• Implement Talent Management processes based on analytics, linking
people to critical business outcomes
• Partner with our clients to create and execute people strategies that
drive business outcomes and maximize ROI
Our Results
• Linkage of Talent Management (e.g., engagement
survey results, training, performance ratings,
competency assessments) to a variety of business
outcomes:
▫ Operations Metrics (e.g., operating margin)
▫ Financial Metrics (e.g., sales dollars, productivity)
Connecting Employees ▫ Customer Satisfaction
to Business Results ▫ Turnover/Retention
• HR Strategy & Planning
• Human Capital Measurement
▫ Employee Safety
• Talent Management • Significant bottom-line improvements and
• Leadership Development
• Executive Assessment & Coaching
return-on-investment for our clients.
• Organizational Effectiveness
©SHRM 2012

6. RETHINK Your Approach to HR!
Make HR a Profit Center
• Quantify the impact of employees on business outcomes
• Calculate an expected ROI for investments in employees
• Define the relationship between HR processes and business outcomes
Connect Key HR Processes
• Provide a single, integrated view of key HR processes
• Reduce your HR related costs through integration and strategic alignment
• Connect HR processes to business results
Spend More Time Driving Results
• Align HR professionals, organizational leaders, & employees to focus on
actions that drive results
• Provide customized analytics and simplified reporting through business-
focused scorecards
©SHRM 2012

7. i4cp Study of SaaS Customer Satisfaction
• i4cp's latest research HR Technology: The State of SaaS
HCM concluded:
> Very few SaaS (Software as a Service) vendors meet or exceed
their customer's expectations (a satisfaction rating of >4.0 on
scale of 1 -5).
> Dissatisfaction was highest in two key areas: 1) robust
reporting/analytics and 2) integration tools.
©SHRM 2012

8. Talent Link Key HR Processes
Performance Examples of
Management Business Outcomes
People
Training Selection
• Turnover
• Employee engagement
Service
• Customer satisfaction
• Wait times
Quality
Career Business Employee
Development Outcomes Survey • Clinical outcomes
• Product Defects
Finance
• % to budget
• Revenues
Growth
Competency
360 Feedback • Sales growth
Builder
• Margin growth
Succession
Planning
©SHRM 2012

9. Assess Business Impact:
Analytic Approach – Structural Equation Modeling
• Traditional data analysis includes:
• Qualitative analysis or gap analysis (strengths/weaknesses)
• Correlation
• Regression
• Advantages of SEM:
• Consider multiple independent & dependent measures concurrently
• Imply causality
• Calculate ROI
• Correct for measurement errors
• SEM is commonly used in other industries (econometrics, market
research)
©SHRM 2012

10. Case Study
Large Healthcare Organization
7,500 Employees
Key Issues: HCAHPS Reimbursements, Turnover Risk
©SHRM 2012

11. Process for Driving Results
• Link survey data to business outcomes (e.g., HCAHPS, turnover)
Analysis & • Produce HeatMaps for work units to prioritize interventions
Reporting
• Review linkage analysis results with HR partners and leaders
Review
• Leaders review results with staff; focus on priorities based on
Results HeatMaps
• Work with local HR partners and leaders to identify appropriate
actions
Action
Planning • Build action plans in Talent Link focused on HeatMap priorities
• Provide coaching and support to HR partners and leaders to
implement action plans
Coach &
Monitor • Monitor action plan progress and completion rates
©SHRM 2012

12. Analyzing Your Report:
Key Drivers of Business Outcomes
What is a HeatMap?
• A graphical plot that shows the impact of employees’ attitudes on a key business
outcome.
• Allows leaders to identify attitudes that are key drivers of business results and
prioritize improvement efforts in these areas.
HeatMap Interpretation
1. Focus: Low Performing AND Key Driver
(Average Rating)
Performance
Maintain Promote
2. Monitor: Low Performing, Not Key Driver
3. Promote: High Performing, Key Driver
Monitor Focus
4. Maintain: High Performing, Not Key
Level of Impact
Driver
ANALYZE REVIEW PLAN IMPLEMENT
©SHRM 2012

13. HCAHPS HeatMap
Linked to
LMS
©SHRM 2012

14. Turnover Risk HeatMap
©SHRM 2012

15. Key Priorities
HCAHPS Turnover Engagement Union Risk
1. Sr. Mgmt. 1. Sr. Mgmt. 1. Sr. Mgmt. 1. Sr. Mgmt.
2. Development 2. Teamwork 2. Participation 2. Development
3. Participation 3. Work 3. Supervision 3. Pay
Demands 4. Teamwork 4. Benefits
5. Perf. Mgmt. 5. Role Clarity
6. Supervision
Dimension Item
Senior Mgmt. Communicates Objectives
Senior Mgmt. Genuinely Interested in Employees
Senior Mgmt. Will Use the Survey to Make Improvements
Participation Opportunities to Participate in Hospital Decisions
Participation Opportunities to Participate in Department Decisions
Teamwork Good Communication within the Department
Teamwork Employees Treat Each other with Respect
Development Adequate Opportunity to Grow in My Position
©SHRM 2012

16. Case Study
©SHRM 2012

17. Case Study–Mid-size Pharmaceutical Company
• Pharmaceutical company with 23% market share facing
new competitors and recent stagnant growth
• Sales training is a big investment, but not sure of ROI
• Need to conduct skills assessment and ROI study to create
company-wide training strategy
©SHRM 2012

18. Selling Skills Assessment Content
Sales Force Evidence-Based Selling Skills
Differentiators Managed Care Expertise
25 competency items
4 overall ratings Needed Relationship Building
1 open-ended item to be Successful Advanced-Level Selling Skills
7-point response scale
Product & Disease State Expertise
Must have
Account Management
to do the Job
Consultative Selling Skills
©SHRM 2012

19. Selling Skills 360 Sample Items
Competency Sample Item
Account Management Responds with appropriate urgency to requests that require follow up
Advanced-Level Selling
Engages in discussions with healthcare providers that are relevant and interactive
Skills
Evidence-Based Easily discusses concerns about bias in XYZ’s clinical studies
Selling Skills Accurately answers questions about clinical study methodology
Product & Disease Articulates all potential effects that XYZ can have on patients depending on
State Expertise therapy paradigm and patient profile
Managed Care
Effectively finds solutions to managed care challenges and restrictions
Expertise
Relationship Building Comfortably builds rapport with healthcare provider’s office staff
Consultative Selling Asks pertinent and insightful questions during interactions to identify customer
Skills needs
©SHRM 2012

20. Competency-Level Results by Region
Product & Sales
Account Advanced-Level Consultative Evidence-Based Managed Care Relationship
Region Disease-State Representative
Management Selling Skills Selling Skills* Selling Skills* Expertise* Building
Expertise* Overall
201 6.55 6.43 6.49 6.49 6.34 6.48 6.63 6.36
202 6.81 6.69 6.70 6.70 6.67 6.81 6.81 6.69
203 6.66 6.41 6.51 6.51 6.35 6.60 6.62 6.56
204 6.73 6.65 6.65 6.65 6.55 6.66 6.65 6.66
205 6.50 6.35 6.55 6.55 6.38 6.61 6.65 6.52
206 6.49 6.55 6.65 6.65 6.68 6.71 6.66 6.46
207 6.73 6.54 6.53 6.53 6.51 6.52 6.65 6.48
301 6.59 6.47 6.42 6.42 6.56 6.45 6.62 6.47
302 6.75 6.57 6.50 6.50 6.49 6.57 6.77 6.59
303 6.68 6.53 6.61 6.61 6.52 6.63 6.76 6.59
304 6.79 6.64 6.74 6.74 6.65 6.75 6.82 6.72
305 6.48 6.38 6.29 6.29 6.37 6.46 6.55 6.41
306 6.68 6.71 6.64 6.64 6.68 6.68 6.73 6.65
307 6.68 6.63 6.58 6.58 6.46 6.57 6.59 6.51
308 6.53 6.48 6.63 6.63 6.57 6.57 6.67 6.54
Overall 6.64 6.53 6.56 6.62 6.51 6.60 6.68 6.55
Rating Scale: 1 = Strongly Disagree; 2 = Disagree; 3 = Somewhat Disagree; 4 = Neither Agree nor Disagree;
5 = Somewhat Agree; 6 = Agree; 7 = Strongly Agree
*Denotes key drivers of Script Writing and Market Share Performance;
Averages Exclude Self Ratings.
Green and Red Shading denote differences of +/- 0.10 from the Overall Competency Average..
©SHRM 2012

21. Linkage Analysis Results:
Overview of the Full Model
Circled numbers indicate the development priority based on the
Product &
2 magnitude of the relationship with script writing & market share.
Disease-State
Expertise XYZ Script
0.54*
Writing
3 1 0.16*
Managed Care 0.29*
Evidence-Based
0.60*
Expertise Selling Skills
0.19*
0.10*
4 Market Share
Consultative
Selling Skills
*Higher path values indicate a stronger impact based on a 0.0 to 1.0 scale.
Findings & Implications:
• Evidence-Based Selling Skills are a significant, cause-effect driver of Script Writing and Market Share.
• Evidence-Based Selling Skills, in turn, are driven by Product & Disease State Expertise, Managed Care
Expertise, and Consultative Selling Skills.
• Prioritizing initiatives that target the key drivers listed above will lead to improvements in sales
performance among XYZ Sales Representatives.
©SHRM 2012

22. Linkage Analysis Results:
Overview of Critical Item-Level Drivers
Priority* Competency Item
Evidence- Easily discusses concerns about bias in XYZ’s clinical studies
1 Based Selling
Accurately answers questions about clinical study methodology
Skills
Possesses broad knowledge of the therapeutic market
Product &
2 Disease State Articulates all potential effects that XYZ can have on patients depending on
Expertise therapy paradigm and patient profile
Understands the specifics of managed care plans
Managed Care
3 Expertise Effectively finds solutions to managed care challenges and restrictions
Understands physicians’ unique approaches to treating the disease state and
Consultative provides solutions based on needs
4 Selling Skills Asks pertinent and insightful questions during interactions to identify
customer needs
*Priorities determined based on the magnitude of the relationship with script writing & market share.
©SHRM 2012

23. Longitudinal Impact on Sales Performance
By focusing on improving Sales Reps’ Evidence-Based Selling Skills, the training team played a key role in
improving bottom line sales (i.e., Script Writing and Market Share) performance .
Actual Sales
Sales Outcome Estimated Impact* Improvement Total Sales Impact
(2009 to 2011) Increasing Script Writing
3.2% of Script Writing by .77% equates to
XYZ Script Writing +24% +.77% approximately
Improvement
3.8% of Market Share $15,400,000
Market Share +1.0% +.04%
Improvement in additional revenue.
Product & Disease-State
Expertise
XYZ Script Writing
Change in Mean from 0.54*
2009 to 2011 of +.14 299Scripts  371 Scripts
0.16* 2009 2011
Evidence-Based Selling
Managed Care Expertise 0.29*
Skills 0.60*
Change in Mean from
Change in Mean from 0.19*
2009 to 2011 of +.22
2009 to 2011 of +.22 Market Share
0.10*
23%  24%
Consultative Selling Skills 2009 2011
Change in Mean from
2009 to 2011 of +.12
*Impact based on 0.2 change in Evidence-Based Selling Skills Mean; Results based on the average Script
Writing and Market Share performance of XYZ Sales Representatives who participated in the Sales
Assessment and remained in the same sales territory between 2009 and 2011 (N=54). 23
©SHRM 2012

24. Prioritizing Interventions:
360 HeatMap: Market Share/Script Writing
Performance
Linked to
LMS
Impact on Revenue (Beta Weight)
©SHRM 2012

25. Individual Prioritization
2011 Selling Skills Assessment:
Individual Development Priorities and Action Plan to Drive Market Share/Scripts
MSC NAME: John Doe
REGION: 304
Individual Development Priorities*
Performance/
Competency Item
Priority Level**
Evidence Based Selling Accurately answers questions about clinical study methodology 1
Evidence Based Selling Easily discusses concerns about bias in XYZs clinical studies 1
Consultative Selling Asks pertinent and insightful questions during interactions to identify customer needs 2
Provides education and clinical information and is viewed as a trusted pharmaceutical
Consultative Selling 2
representative
Gains commitment from stakeholders across the healthcare provider's office to take specific
Consultative Selling 2
action (e.g. try XYZ)
Understands physicians' unique approaches to treating the disease state and provides
Consultative Selling 2
solutions based on needs
*Priority competencies/items identified based on the magnitude of their relationship with XYZScript Writing and Market Share;
Focusing on development actions that target the competencies/items listed above will contribute directly to improvements in bottom line sales performance.
**Performance/priority based on Rep's performance on the 2011 Selling Skills Assessment; Red = Low Performance; Yellow = Average Performance;
Green = High Performance.
Development Action Plan
Competency/Item Development Action Target Date
1.
©SHRM 2012

26. Case Study
©SHRM 2012

27. What is Succession Planning?
Succession
Planning
*Succession Planning should
not occur in a vacuum*
Career
Leadership
Assessment/
Development
Development
©SHRM 2012

28. Integrated Succession Planning
based on Business Drivers
Employee Individual
District
Region
Current Personality
Ready Now Scorecard Critical Competencies2 Critical Experiences3 Survey Potential Talent
Performance Trait
Key Drivers Health6
Business Outcomes Critical Exp. #1 Critical Exp. #2 Assessment
Ready Now Employee Communication Leadership Execution 5 year Average
(% Effective) (Supervisor) (Manager) Score
Joe Blow 1 20 67% 67% 71% 75% 43% 73% 63% 29% 25% 57%
Jane Smith 1 20 67% 93% 100% 53% 80% 60% 75% 33% 25% 65%
Beverly Jones 1 20 69% 80% 84% 69% 86% 70% 50% 48% 25% 64%
Anne Johnson 2 21 71% 91% 90% 83% 90% 88% 84% 58% 33% 76%
Steve Simmons 2 21 75% 100% 100% 83% 69% 95% 88% 92% 50% 83%
Bill Norder 2 21 77% 93% 88% 86% 94% 88% 77% 23% 33% 73%
Paul Monroe 3 22 80% 97% 90% 87% 88% 100% 75% 27% 75% 80%
Jill Stevenson 3 22 83% 94% 93% 93% 84% 87% 89% 76% 75% 86%
Ben Stevens 3 22 83% 95% 94% 86% 94% 92% 82% 79% 67% 86%
Ken Mowen 4 23 85% 100% 98% 100% 96% 97% 93% 79% 100% 94%
Jack Jameson 4 23 88% 96% 97% 96% 90% 85% 64% 50% 100% 85%
John Jackson 4 23 96% 98% 100% 100% 97% 100% 83% 93% 80% 94%
Gary Stepsin 5 24 100% 100% 100% 100% 100% 100% 100% 75% 100% 97%
Janice Norris 5 24 100% 100% 100% 100% 100% 100% 100% 80% 75% 95%
Stacy Simpkins 5 24 100% 80% 98% 70% 90% 82% 15% 30% 80% 72%
Average Element Score7 83% 92% 94% 85% 87% 88% 76% 58% 63%
Overall Ready Now Health8 81%
28
©SHRM 2012

29. Integrating Succession Planning and Compensation
Potential and Position in Pay Range
Director Level Employees
0-20% 20-40% 40-60% 60-80% 80-100%
John Doe
Matt Madson Mary Matlock
Steve Daniels Meggin Gowen Jane Doe
High Potential Carol Johnson Scott Donovan
Billy Ryan Tom Tuberville Sam Smith
Amy Andrews Jill Rogers
Jim Johnson
Katie Bradford
Sasha McDonald Julie Jones
Promoteable Shane Donovan Carter Smith
John Mondore Sam Bradford
Jason Kidd
Erin Dry
Grow in Ricky Bobby Marc Ward
Tommy Timmons Chris Payer Jason Murry
Position Brett Favre Gena Vantuyl
Sherry Hartnet
Bobby Bean
Jerry Jones Billy Simmons
Placement Issue Mike Roberson Janice Smill Mike Kelly
Kim Klover Jodie Johnson
Jill Vantuyl
Performance ratings are integrated with your compensation philosophy to
pre-populate merit, incentive and equity recommendations
©SHRM 2012

30. Case Study
©SHRM 2012

31. Case Study – Large Retail Organization
• $93 million annual shrink problem
• Create a business-focused TM Strategy:
> Empirically link employee data to meaningful business outcomes
> Identify ‘invisible levers’ in employee attitudes, skills and behaviors that
will drive outcomes
> Leverage existing data to create the strategic framework
> Prioritize employee-focused interventions to drive business outcomes
> Provide customized solutions to drive business outcomes
©SHRM 2012

32. Data Utilized in the Study
• Shrink data at store level—as an example (used multiple business
outcomes in the full study)
• Employee opinion survey results
• Performance Mgmt/Competency ratings
• LMS training data
• HRIS data – dishonesty terminations
• Store turnover data
• Customer satisfaction results
©SHRM 2012

33. Talent Link Key HR Processes
Performance
Management Business Outcomes
Training Selection People
• Turnover
Service
• Customer satisfaction
Quality
• Shrink
Employee
HRIS Data Finance
Survey
Business • Cost reduction
Outcomes
Career
360 Feedback
Development
Competency Succession
Builder Planning
©SHRM 2012

34. Drivers of Shrink
Job-Person 1a
Match
Engagement
Manager 1b
Effectiveness 3
Ethics Course 2
Participation
2
Shrink Course Shrink
Participation
2
Legend Dishonesty
Terminations 1
Employee Survey
Training Participation
Terminations
Achieve Results
Competency Ratings
Numbers in paths indicate the intervention priority based
on the magnitude of the relationship 2012 shrink.
©SHRM
with

35. Planned Interventions & Cost
• Build optional shrink training courses for
Training specific roles
• $300k
Recognition & • Deploy a store-level incentive program for
meeting quarterly shrink goals
Reward • $5 million
Selection • Nothing planned
• Insert shrink focused messaging in a larger
OD & Leadership “customer experience” initiative
Development • $250k
©SHRM 2012

36. Recommended Actions to Reduce Shrink
TRAINING:
• Code of Ethics Course
> Has a direct, significant impact on shrink
> Opportunity to re-train or conduct refresher courses with managers
and employees
> Senior leaders regularly re-communicate the key messages from the
Code of Ethics
• Sales and Shrink Course
> Has a direct, significant impact on shrink
> Currently not mandatory
> Opportunity to make the course mandatory and re-train managers and
employees
©SHRM 2012

37. Revised Interventions & Cost
• Enhance and update ethics and shrink course –
Training make both mandatory
• $50k
Recognition &
• Nothing planned
Reward
• Improve selection process for front-line employees
Selection – background checks & integrity testing
• $2 million
• Develop shrink management routines
OD & Leadership • Develop shrink partnering program
Development • $50k
©SHRM 2012

38. Actions Taken and Actions Cut
• Initial budget was $5.55 million
• Revised budget was $2.1 million
• Cut incentive plan
• Cut major training build
• Cut “shrink focused” customer experience programs
• Data analysis
• Did not identify pay/benefits as a major driver of shrink
• Showed the existing training courses were having an impact
• Did not identify “customer focus” as a major driver of shrink
• Showed that “dishonesty terminations” were a significant driver of
shrink
• Created an HR Strategy with a known impact on shrink
©SHRM 2012

39. Calculating Impact & ROI
Intervention Beta Potential Shrink Level of
Impact Investment
Manager Competency .14 $13.0 million Under-investing
Ethics Course .10 $9.3 million Under-investing
Shrink Course .09 $8.4 million Under-investing
Dishonesty Terminations -.08 $7.4 million Under-investing
Engagement .04 $3.7 million Appropriate
Reward & Recognition ns ns Over-investing
Customer Satisfaction ns ns Over-investing
• $93 million in annualized shrink
• Example – average Manager Competency score of 3.92
• Moving 0.30 could result in additional savings of $984,897
• Approximate cost of $200,000 (build, employee time)
• Expected ROI: 497%
• Reduced annual shrink to $13 million in 1.5 years
©SHRM 2012

40. 40
©SHRM 2012

41. Key HR Processes in One Place
©SHRM 2012

42. Analytics and Integration
• Analytics means connecting key HR processes to real business
outcomes
• Analytics does not mean running numerous reports around one key
HR process at a time
• Analytics must be strategic and practical for the C-suite and front-
line managers
• Integration does not mean having key talent management processes
on one platform
• Integration means TM processes work together (360 and LMS)
• Integration means TM processes come together to show the full
story on your talent (succession planning)
• Analytics and Integration allow you to show your CEO (and all
leaders) what you are doing, why you are doing it and the direct
business impact that it will have
42
©SHRM 2012

43. To Contact Us:
Candy Knowles, FACHE, SPHR
Chief HR Officer-University of Maryland
Medical System
cknowles@umm.edu
410-328-2885
Scott Mondore, Ph.D.
Managing Partner
Strategic Management Decisions
smondore@smdhr.com
404.808.4730
www.smdhr.com
©SHRM 2012