netrashetty
Netra Shetty
Respironics, Inc. is a medical supply company that specializes in products that improve respiratory functions. It is based in the Pittsburgh suburb of Murrysville.
8. Cost per Hire = (Advertising + Agency Fees + Recruiter's Salary/Benefits +
Relocation + Other Expenses) / Operating Expenses
9. Health Care Costs per Employee = Total Health Care Costs / Total
Employees
10. Turnover Costs = Termination Costs + Hiring Costs + Training Costs + Other
Costs
It is also important to benchmark your HR metrics against past performance and
other companies. For example, if you report turnover costs of $ 50,000, the CEO
may think this is too high, but when you benchmark it, you are in the top 20% for
lowest turnover costs. One of the best sources for HR benchmarks is the Saratoga
Institute in Santa Clara, California.
HR Metrics, like other measurements within the Balanced Scorecard, should have
strong connections to the strategies of the company. This will help ensure that the
evaluation of HR really matters to the organization and we are working to make
things happen. Listed below are some critical questions that GTE used in their award
winning HR Balanced Scorecard:
Strategic Perspective
Do we have the talent we need to be successful in the future?
Are we investing in growing our HR capabilities?
Customer Perspective
Are we viewed as a great place to work?
Are we creating an environment that engages our people?
Operational Perspective
Are our HR management processes and transactions efficient and effective?
Are we using technology to improve HR efficiency?
Financial Perspective
Is our return on investment in people competitive?
Are we managing our cost of turnover?
A final point that needs to be emphasized is the correlation between human capital
and the creation of value. Watson Wyatt, a major consulting firm, recently released
the results of a one-year study on human resource management practices for 405
publicly traded companies. The study concluded that there is a correlation between
how human resources are managed and the amount of shareholder value. According
to Bruce Phau, head of Watson Wyatt's measurement division, if you can improve
your human resource management in certain key areas, you can experience a 30%
increase in shareholder value. The message is clear - measuring and managing
human capital is a major part of creating value and it must be a key component of the
Balanced Scorecard.
Cross Functional Teams
Financial management, like most disciplines is becoming driven by projects as
opposed to routine day-to-day work. Projects help facilitate needed change and
represent the real value-creation activities of the organization. At the heart of projects
is the Cross Functional Team (CFT). The CFT is a small group of people, committed
to reaching project goals, which in turn brings about improvement within the
organization. Understanding what makes a good CFT is important to successful
project management and ultimately to the creation of value.
What makes a good CFT? Here are some key elements:
Everyone within the CFT must be dedicated to improving the company's
performance.
CFT's should measure their own performance and set deadlines for getting
things done.
CFT's should have the ability to move around the organization and cross
through organizational hierarchies.
CFT's should have strong support and resources from senior management,
including training, staffing, funding, autonomy, and time.
Choosing the right projects and the right people for the CFT is extremely important.
The closer the "fit" a project has with the use of CFT's, the more likely the project will
be successful. Projects that lend themselves to CFT's include:
Project requires the involvement of several departments.
Project impacts or influences outside customers or end-users.
Project deals with a major strategic issue.
Project requires considerable time and resources.
Project deals with a complex area where errors and mistakes are common.
As a general rule, CFT's should be considered when you have a project that:
Represents a major challenge
There is a sense of urgency
Project has major implications within the organization.
Project has high risk and mistakes are likely to occur.
When choosing members for the CFT, three important factors to consider are:
1.
Technical Expertise - Education, knowledge, experience, etc.
2.
Problem Solving Abilities - The ability to identify problems and develop
solutions.
3.
Interpersonal Skills - The ability to communicate, temperament, personal
skills, etc.
4
If possible, it is best to let team members join on a voluntary basis. Additionally, allow
team members to choose their own assignments and name the project. This can
help ensure high productivity. And don't forget to include diversity and balance within
the CFT. You need to cover a broad range of skills and talents within the CFT.
The scope and size of the project will determine the size of the CFT. In cases where
the project is highly complex, the CFT may form sub-teams or task forces consisting
of five to eight members. If the CFT is too large, interaction and consensus is difficult.
If the CFT is too small, there is a lack of creativity with a very narrow focus.
Several roles are required for making CFT's work. These roles include:
1. Sponsor or Champion: A person should serve as a bridge between senior
management and the CFT so as to obtain and maintain upper-level support.
Sponsors or champions are not full-time members of the CFT, they act as a
liason for getting the resources the CFT needs.
2. Team Leader: The overall manager of the CFT is the Team Leader. Team
Leaders coordinate activities, encourage participation, maintain cohesiveness,
and direct the CFT.
3. Team Facilitator(s): Team Facilitators act like coaches within the CFT, helping
prepare for CFT activities, meetings, and keeping everyone focused on
project objectives. Team Facilitators have good communication and teaching
skills.
4. Team Secretary: Someone will need to summarize the decisions and actions
of the CFT. The Secretary keeps minutes of meetings and distributes minutes
to all team members. This helps reinforce what needs to be done.
5. Team Members: Members must carryout the activities and task as indicated
by the Team Leader. Team members should take their assignments seriously.
Team members tend to be high achievers and they should be expected to
serve for the entire life of the project.
CFT's have a much better chance of success when the goals of the project are clear
and concise. The expected outcomes of the project should be specific and
measurable; such as a 15% improvement in production output. Make sure upper-
level management communicates the following to the CFT:
What are the deliverables from this project?
Why was this project chosen?
What type of support will upper-level management provide?
What restrictions, limitations or other special issues will affect the
project?
A final point concerns how the CFT works through the project. In his book, Project
50, Tom Peters points out that the biggest mistake within a project is to move too
quickly to implementation. Failure to plan and design the project will result in failed
implementation. So once you have the right CFT in place, make sure you spend time
planning, testing, and designing the project.
8. Cost per Hire = (Advertising + Agency Fees + Recruiter's Salary/Benefits +
Relocation + Other Expenses) / Operating Expenses
9. Health Care Costs per Employee = Total Health Care Costs / Total
Employees
10. Turnover Costs = Termination Costs + Hiring Costs + Training Costs + Other
Costs
It is also important to benchmark your HR metrics against past performance and
other companies. For example, if you report turnover costs of $ 50,000, the CEO
may think this is too high, but when you benchmark it, you are in the top 20% for
lowest turnover costs. One of the best sources for HR benchmarks is the Saratoga
Institute in Santa Clara, California.
HR Metrics, like other measurements within the Balanced Scorecard, should have
strong connections to the strategies of the company. This will help ensure that the
evaluation of HR really matters to the organization and we are working to make
things happen. Listed below are some critical questions that GTE used in their award
winning HR Balanced Scorecard:
Strategic Perspective
Do we have the talent we need to be successful in the future?
Are we investing in growing our HR capabilities?
Customer Perspective
Are we viewed as a great place to work?
Are we creating an environment that engages our people?
Operational Perspective
Are our HR management processes and transactions efficient and effective?
Are we using technology to improve HR efficiency?
Financial Perspective
Is our return on investment in people competitive?
Are we managing our cost of turnover?
A final point that needs to be emphasized is the correlation between human capital
and the creation of value. Watson Wyatt, a major consulting firm, recently released
the results of a one-year study on human resource management practices for 405
publicly traded companies. The study concluded that there is a correlation between
how human resources are managed and the amount of shareholder value. According
to Bruce Phau, head of Watson Wyatt's measurement division, if you can improve
your human resource management in certain key areas, you can experience a 30%
increase in shareholder value. The message is clear - measuring and managing
human capital is a major part of creating value and it must be a key component of the
Balanced Scorecard.
Cross Functional Teams
Financial management, like most disciplines is becoming driven by projects as
opposed to routine day-to-day work. Projects help facilitate needed change and
represent the real value-creation activities of the organization. At the heart of projects
is the Cross Functional Team (CFT). The CFT is a small group of people, committed
to reaching project goals, which in turn brings about improvement within the
organization. Understanding what makes a good CFT is important to successful
project management and ultimately to the creation of value.
What makes a good CFT? Here are some key elements:
Everyone within the CFT must be dedicated to improving the company's
performance.
CFT's should measure their own performance and set deadlines for getting
things done.
CFT's should have the ability to move around the organization and cross
through organizational hierarchies.
CFT's should have strong support and resources from senior management,
including training, staffing, funding, autonomy, and time.
Choosing the right projects and the right people for the CFT is extremely important.
The closer the "fit" a project has with the use of CFT's, the more likely the project will
be successful. Projects that lend themselves to CFT's include:
Project requires the involvement of several departments.
Project impacts or influences outside customers or end-users.
Project deals with a major strategic issue.
Project requires considerable time and resources.
Project deals with a complex area where errors and mistakes are common.
As a general rule, CFT's should be considered when you have a project that:
Represents a major challenge
There is a sense of urgency
Project has major implications within the organization.
Project has high risk and mistakes are likely to occur.
When choosing members for the CFT, three important factors to consider are:
1.
Technical Expertise - Education, knowledge, experience, etc.
2.
Problem Solving Abilities - The ability to identify problems and develop
solutions.
3.
Interpersonal Skills - The ability to communicate, temperament, personal
skills, etc.
4
If possible, it is best to let team members join on a voluntary basis. Additionally, allow
team members to choose their own assignments and name the project. This can
help ensure high productivity. And don't forget to include diversity and balance within
the CFT. You need to cover a broad range of skills and talents within the CFT.
The scope and size of the project will determine the size of the CFT. In cases where
the project is highly complex, the CFT may form sub-teams or task forces consisting
of five to eight members. If the CFT is too large, interaction and consensus is difficult.
If the CFT is too small, there is a lack of creativity with a very narrow focus.
Several roles are required for making CFT's work. These roles include:
1. Sponsor or Champion: A person should serve as a bridge between senior
management and the CFT so as to obtain and maintain upper-level support.
Sponsors or champions are not full-time members of the CFT, they act as a
liason for getting the resources the CFT needs.
2. Team Leader: The overall manager of the CFT is the Team Leader. Team
Leaders coordinate activities, encourage participation, maintain cohesiveness,
and direct the CFT.
3. Team Facilitator(s): Team Facilitators act like coaches within the CFT, helping
prepare for CFT activities, meetings, and keeping everyone focused on
project objectives. Team Facilitators have good communication and teaching
skills.
4. Team Secretary: Someone will need to summarize the decisions and actions
of the CFT. The Secretary keeps minutes of meetings and distributes minutes
to all team members. This helps reinforce what needs to be done.
5. Team Members: Members must carryout the activities and task as indicated
by the Team Leader. Team members should take their assignments seriously.
Team members tend to be high achievers and they should be expected to
serve for the entire life of the project.
CFT's have a much better chance of success when the goals of the project are clear
and concise. The expected outcomes of the project should be specific and
measurable; such as a 15% improvement in production output. Make sure upper-
level management communicates the following to the CFT:
What are the deliverables from this project?
Why was this project chosen?
What type of support will upper-level management provide?
What restrictions, limitations or other special issues will affect the
project?
A final point concerns how the CFT works through the project. In his book, Project
50, Tom Peters points out that the biggest mistake within a project is to move too
quickly to implementation. Failure to plan and design the project will result in failed
implementation. So once you have the right CFT in place, make sure you spend time
planning, testing, and designing the project.
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