1. Defining Value and Measuring HR Mark O’ Donnell, Director and Practice Leader, Human Capital Advisory Services, Consulting

2. Agenda Defining the Value of HR Introduction 2 HR Strategy 6 Understanding the business 8 Define your HR Strategy 14 Measuring Impact of HR 18 Assess HR Function 25 Reassess HR Service Delivery 34 Conclusion 42 Questions

7. HR Strategy Defining the Value of HR

9. Understanding Business Strategy Defining the Value of HR

11. What do the sections of the EVM HC represent? 1. Value Drivers How value is created

12. Value Drivers - How Value is Created

15. Define HR Strategy Defining the Value of HR

17. Step 2: Identify Issues & Challenges Example – Strategic priorities and HR strategic actions: Exponential Headcount Increase: Focus on recruiting and selection, retention practices, talent placement, and employee development. HR Organization Transformation: Optimize the HR function. Enterprise Cost Reduction: Maximize investments and spend on human capital to focus on business issues, operational efficiencies, and process excellence. Focus on Customer Service: Build a culture of high performance and innovation with a focus on the customer. Post Merger Integration: Support rationalization of core process, technology, people, and policy with a defined project portfolio.

19. Measuring Impact of HR Defining the Value of HR

21. Best Practice Design: Characteristics of a Successful Scorecard Defining the Value of HR Involves the scorecard owner in the design Characteristics Makes efficient use of managers’ time Understandable & transferable Easily aligned across the organisation Only this person knows the answers Management time is scarce Must be communicated across the organisation Reason Help the whole company work towards a common goal

26. Assessing your HR Function Defining the Value of HR

29. Talent Maturity Model

30. HR Strategy Alignment Maturity Model

31. HR Customer Segmentation Maturity Model

32. HR Roles Maturity Model

33. HR Enablers Maturity Model

35. Establish and Re-assess HR Service Delivery Model Defining the Value of HR

36. Service Delivery Models - Leading Practices The Evolution of HR Service Delivery Deloitte HR Service Delivery Framework Ensure HR service delivery model is aligned to deliver effectively on Business & HR Strategies. Review Customers to determine if unique HR requirements exist for different customer segments. Assess how effectively service is being delivered through retained and outsourced HR Roles Evaluate the effectiveness of Enablers that HR can leverage to deliver efficient and effective service. Traditional ‘Ulrich’ model was used to describe the high level, basic relationships and players in the transformed HR organization, showing how the three building blocks of Shared Services Operations, Business Partners and Centres of Excellence interacted with managers and employees. HR Service Delivery Framework (mid-90’s)

43. Conclusion Defining the Value of HR