This Week's Herman Trend Alert

Leadership in Normal 2.0

  The Herman Trend Alert

March 26, 2008

Making HR Metrics Serve the Bottom Line

In our 2008 Workforce/Workplace Forecast, we discussed the growing importance of metrics (measurement) in Human Resources to drive more money to the bottom line.

Recently, we met Janet Walsh, President of Birchtree-HR, Llc, the person who coined the term "Human Capital Financial Management" (HCFM). "In HCFM, we evaluate investments in people for their returns and link them to business strategy," said Walsh. "Research studies conclusively prove organizations that link human capital programs with business strategy enjoy six to 38 percent higher return on total capital than those that don't," she added. The best systems are the ones where there is a "clear line of sight" between the people programs and the business strategy.

A global Human Resource consultant, focusing on HR strategy, compensation and performance management, Walsh is often asked, "How do I link the business strategy of the company to my programs?" Agreeing with our previous Herman Trend Alert, "The Future of Training Will Be Gaming And Simulation," Walsh and her colleagues created an HR simulation, called "At the Table".

Created in conjunction with the Atlanta chapter of the Society of Human Resource Management and 16 CEOs, HR and business leaders, "At The Table" is a one-day competitive case study program that trains business executives in the use of human capital financial management techniques to increase organizational return on total capital.

In the simulation, participants are challenged to create an optimal solution incorporating business and HR metrics including competitive industry measures, financial analysis techniques, HR program design in total rewards, staffing, training, performance management, and ethical decision making considerations.

What makes this training program unique are the real-world, business issues in the case study, the advice and guidance of the Simulation executives and Jim McGuirk, former president of Unisys, whose comments offer a unique window on how CEO's make complex business decisions. Workbooks and DVD set are included. With experience in 58 countries, Birchtree also offers customized simulations, built around company-specific metrics.

We believe that "At the Table" is a great example of the kind of simulations that will become more and more popular in the future.

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