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 May 2012
In This Issue
HR Analytics How-Tos Part III: Beyond Benchmarking
Want to Know More?
Update on the Human Capital Investor Metrics Standard
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HR Analytics How-Tos Part III: Beyond Benchmarking

Benchmarking is not analytics.  Consider, for example, your organization's employee engagement survey.  Knowing that you benchmark at the 90th percentile on a specific survey item should not be cause for celebration unless you also know that specific item drives an important business outcome.  Conversely, a low score on a specific survey item should only create significant concern if your analysis indicates that specific item drives a key outcome.  In other words benchmarking provides little, if any, basis for creating your HR strategy.

 

The graph below, modified slightly from actual findings for a McBassi client, helps illustrate this point.  Each point in the graph represents a survey question. 

 

The vertical axis shows how strong or weak the organization is on each survey item, measured relative to the overall organizational average.  Survey items in the bottom half (Quadrants 3 and 4) are areas of weakness, while items in the top half (Quadrants 1 and 2) are strengths.  Following a survey, many organizations spend lots of time working on their lowest-scoring items.  They would therefore focus heavily on seeking to improve survey item A (lower left corner), the item with the lowest overall score.

 

However, if a second piece of information is added to the mix, a different conclusion emerges.  Take a look now at the horizontal axis, which shows the results from statistical linkage analysis on how important each question is in predicting a key measure of sales success.  Those items farther to the right (Quadrants 2 and 4) are positive predictors of sales success, and those items on the left (Quadrants 1 and 3) are negative predictors of sales.  (As expected, many more survey items are positive predictors than negative ones.)
 Sample Scatterplot

Remember survey item A (the one with the lowest score)?  Turns out it's a negative predictor of sales and therefore is actually a lousy target for improvement.  The best area of focus turns out to be survey item B, which has the fourth-lowest score, but is both an important positive predictor of sales and still an area of relative weakness. 

 

The content of the actual survey items in this example doesn't matter; the results will be different for every organization.  And that's the whole point of doing this analysis - it helps you move beyond benchmarking to targeting those survey items that are the most important predictors of your organization's business outcomes.

Want to Know More?

McBassi now offers an HR Analytics Coaching Service that can help you learn quickly how to best implement an analytics perspective in your own work, with detailed guidance and advice on your specific projects and opportunities.  And if you haven't yet read our HR Analytics Handbook, don't miss it - it's specifically designed to help you get started in this exciting area!

Update on the Human Capital Investor Metrics Standard

Please take a look at the draft ANSI Standard, now available for public review and comment.  If you have suggestions for how it can be improved, please provide your input on or before May 24, 2012, when the public comment period closes.

About McBassi & Company

McBassi is a human capital analytics firm that helps organizations improve their performance through more effective management and development of people.  We have proprietary research-based measurement methods, the analytic know-how, and a proven track record in serving as a catalyst for change and generating win-win results.

You can download a brochure describing McBassi and our services, or visit us on the web.

 

We can be contacted toll-free at 866.345.5730 or [email protected].

 

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