H Factors - Factoring Technology in Human Capital

Is the career website dead?

2011-07-27T15:22:00.000+05:30

Jason Averbook gushes about the innovation & its impact on HR Tech..Gautam Ghosh talks about its impact on India & how candidates can benefit from it.
Yes, we are talking about the new innovation from Linkedin whereby prospective candidates can apply directly to companies & send them their public profile for open positions on their company pages.

Well, this post is not about Linkedin's innovation, but more specifically how this innovation will radically change traditional career websites.
In a traditional setting

Candidates logon to career websites, register, fill up their profile information, search & apply for specific positions.
Companies would check the applicant database, screen, interview & onboard candidates.

Then Linkedin came along & changed the traditional way of sourcing candidates.
Companies realized that here was a much more powerful & better candidate database than what they were having with them. The rest is history...
Now there is a danger of the career website itself being shelved.
Imagine that there is an API which can expose open positions from the HRIS on the company page in Linkedin, the the candidate applies for that position.
After the candidate is screened, interviewed & hired, there is another API which can pull the profile information of the hired candidate into the applicant pages & then onto the HRIS as an employee.
Sounds like fun...Who needs a career website..??
Thoughts..

HR Apps & consumer orientation

2011-07-14T10:49:00.000+05:30

Steve Boese in his latest blog talks about a consumer oriented approach to HR Technology, where we can have the latest apps for HR downloaded, configured & ready to use.
The same thought occurred to me when we I was getting a demo of SuccessFactors (SFSF) & their entire suite of applications. I was really impressed with the deep functionality, UI, configurability & their 2-3 month implementation time frames, not to mention that a customer is always on the latest release.
Traditional ERP shops like PS, SAP etc take a lot of time & cost to upgrade, their UI sucks big time & functionality is, well, nothing to speak of. Try configuring their workflows & then you really start hating them big time.
Of course, we are still far off from Steve's vision of preloaded HR apps, but we are getting there..

Are you ready for Social technology?

2011-01-31T10:03:00.000+05:30

Nowadays there is a growing trend within organizations to talk, understand and then adopt some form of Web 2.0, Social collaboration technologies. Typically these may consist of internal blogs, wikis, collaboration tools, profiles etc. Although this is a good & positive trend, but sometime one wonders if organizations are really ready to internally deploy & reap the fruits of the Social tech tools.

Some factors that readily come to mind

Is the organization truly open? - Many Indian firms are extremely risk averse as well as criticism sensitive. Once you deploy social technologies, you are essentially giving employees the freedom to display/voice their opinions. Can you swallow negative opinions as well? One Indian firm discovered this last year when employees gave vent to the flaws in the new performance management system through their company blogs. The company responded by bringing down the servers. Only if you are sure of taking in both the bouquets & brickbats should you consider deploying this technology

Rewarding the collaborators - Organizations need to answer the question - what is the need for employee to contribute to the social networks? The power of social networks is that they are open, have their social hierarchies & their own rules. Employees will contribute to get themselves noticed, get "followed" & "liked". So there is no real incentive for rewarding collaborators, apart from ensuring there is no bureaucracy or artificial rules. Can the organization ensure this?

Hierarchy hurdles - are managers willing to propagate the benefits & use these tools. Hierarchy is usually a great motivator or demotivator for usage of social tools. If employee sees that his manager is actively using these tools, he knows & understands that it will be a good idea to use it. If the opposite happens, then tool usage will typically lag & fall into dis-use.

Linkage to pay/performance - once employees start using these social tools for collaboration, knowledge management, profile updation, etc, this will become the default location to turn to for understanding the skills, competencies etc of the employee. Can organizations/managers start using the information from social tools to help in the pay or performance decisions.
How this will be done is something that HR needs to come to an agreement, but eventually this will be a great driver to influence the employees to be users of internal social tools.

What are the other hurdles you foresee for adoption of these tools?

Junk the Pay for Performance systems

2011-01-21T11:06:00.000+05:30

Fistful of Talent has a new blogpost on Pay for performance & guess what.. Andy Porter, VP of HR/OD with Merrimack Pharmaceuticals says what most of us secretly believe but never have the guts to say it aloud....they are going to "junk" their performance management system & their pay for performance model.

Here are some of the reasons he gives
1. By rating short term employee performance through semiannual reviews, we're preventing employees from focusing on the big picture, taking long-term risks and being innovative
2. A rating based system actually encourages a manager to give less frequent performance feedback to employees preventing real-time learning
3. Having a reward system based on the faulty premise that financial incentives improve performance, we are undermining powerful intrinsic employee motivation towards achieving our mission
4. There's no evidence that convinces me that a performance rating system actually improves performance

The last point is very pertinent to note, in fact I happened to read the very same point by Jeffrey Pfeffer in his testimony to Congress about Evidence-Based Practices. Prof. Pfeffer notes some interesting points which point to what Andy has said above.

1. Mere prevalence or persistence of some management practice is not evidence that it works
2. The idea that individual pay for performance will enhance organizational operations rests on a set of assumptions. Once those assumptions are spelled out and confronted with the evidence, it is clear that many -- maybe all -- do not hold in most organizations
3. The evidence for the effectiveness of individual pay for performance is mixed, at best -- not because pay systems don't motivate behavior, but more frequently, because such systems effectively motivate the wrong behavior

I think intrinsically, we all know that money can at best be only a hygiene factor, for driving higher performance we all need that higher, lofty goal which will motivate us. A classic example is of our armed forces, who may not be paid that well, but nevertheless they do a great job.

I am also not getting into the issue of forced rankings, a major contributor to pay for performance decisions, which deeply flawed, still continue to be used for lack of a real alternative.

What is required for organizations, is to really assess their incentive systems & see if they are motivating the right behaviors. Also needed are interventions in creating & sustaining a proper organization culture & providing the right leadership capabilities to manage the workforce.

Web 2.0 & Competitive Advantage to firms

2011-01-17T10:32:00.000+05:30

A new research by Mckinsey points out a significant correlation between adoption of Web 2.0 technologies & the firm's market share. This is wonderful news, esp for CxO's who want evidence that implementing Web 2.0 technologies would enhance the firm's competitive advantage.
Infact this research, while still in its infancy, is as seminal as the one conducted earlier by Becker, Huselid on how implementing best HR practices can help the competitive advantage of a firm.

From McKinsey ..."Market share gains.. were significantly correlated with fully networked and externally networked organizations"...
"...companies that used Web 2.0 to collaborate across organizational silos and to share information more broadly also reported improved market shares"

Naomi at Mercer

2010-12-06T09:51:00.001+05:30

We always follow Naomi as one of the original thought leaders in the HR technology space.
In her recent post, Naomi writes that she will be joining Mercer and "acting as a strategic advisor to the Human Capital Operations and Technology Solutions practice at Mercer. A major focus of my work with Mercer will be their Human Capital Connect solution powered by Peopleclick Authoria technology, advising on business and marketing strategy through software architecture and functional roadmaps."
She will also be focussing on best HR practices, Strategic HRM and HR Service delivery models.

Interesting times and we will be following more of Naomi as she embarks on a new journey at 70..!.. Here's wishing her all the best

On the factor of HR Consultants

2010-03-10T14:28:00.001+05:30

Another important factor which we have observed is the reluctance of Indian organizations to engage HR consultants during the implementations. By usage of the term Consultants, we mean real consulting experience of HR processes, Best Practices, Change Management - & not IT consultants who just do the system implementation.
An interesting study conducted by Accenture pointed out that " Indian firms were unaware of many modern management practices or did not have the know how to implement them".
Also the study showed that companies that availed these consulting practices showed a dramatic improvement in efficiency and profits.
While this study was primarily in the textile manufacturing sector, there is sufficient understanding that a broad based nature of these problems could exist in other industries as well.
In a similar vien, we have seen most of the organizations struggle with their HR technology implementations. Even after implementation, most organizations only use it as a tactical and operational tool failing to fully leverage strategic benefits of the technology.

Why is it that organizations do not want to employ consultants? I premise a few

Consultants are generally too expensive
Openness to consulting kind of a model - we know it the best attitude
Consultants generally recommend too much without actually having a grounding in the problems, what I would call Recommend and Run.

While some of these criticisms are true for the consulting industry, one cannot really use the same brush to tar all consultants. Consultants can bring in their professional grounding in different industries, different verticals and advise clients. Also it is a myth that many consultants are expensive. Organizations can discuss & debate various pricing models with consultants to derive the maximum value from their advice.
It may make sense for organizations to involve consultants in a limited way in niche areas during the course of their HR implementations. The reasons for involving HR consultants could be the following:

Lack of awareness of HR technology & its application to their HR issues - Organizations are generally good at formulating HR policies but do not know how to implement the same using HR technology.
Even before the launch of RFP for the technology to be implemented, there is a lot of due diligence to be done, organizations are generally unaware of how to go about doing the same
Organizations are not aware of how to formulate requirements for implementing a technology solution for their HR challenges
Lack of clarity on Best Practices: Even though implementation partners claim to bring best practices in the implementation, more often these are a rehash of their last implementation without any thought to the critical parameters such as industry sector, nature and size of the organization, geographical span etc. This generally results in implementation of processes which do not have a fit with organization’s requirements. This has to be done at the time of requirement definition itself in the pre-implementation stage.
During vendor evaluation, due to information asymmetry as vendors typically try to sell the “hot stuff” available and do not take completely into account the organization’ need, organizations may not be in a position to make right choices , hence wrong vendor and technology selection may happen.
Lack of preparation by the HR team: Once an implementation partner is chosen, the organizations go along with what the partner brings to the table, more often losing focus on critical areas such Job Profiling, Competency Mapping, Talent Management linkages, integration points and data extraction, cleansing and reconciliation approaches. This generally results in half baked work done by the implementation partner who is not well versed with these specific organizational processes.
Lack of monitoring and health checks: Most of the implementations do have a monitoring mechanism in the form of steering committees but these committees generally operate at a very high level mostly handling coordination and conflict resolution. There is no hands-on independent health check of the implementation at critical milestones leading to cascading of critical issues towards the end of implementation lifecycle. This generally results in chaos during the User Acceptance and Go Live stages of the project. Going live is a tumultuous experience for most of the organizations due to lack of advanced assessment of all aspects of production readiness.
Lack of understanding on the right reporting: The reports delivered with the HR standard products are very generic in nature and do not cater to specific reporting requirements for specific roles in the organization. Selection of right KPIs relevant for the industry is generally given a miss by the implementation partner. Clearly spelling out the reporting requirement is critical for right management reporting and right level of decision making support at levels of management. This is also one most of the most important measures of the success of technology implementation
Change management is another area where organizations usually are under-prepared. Moreover, incumbent vendor may not have necessary skill sets to advise clients for the same. In most cases, organizations start on this critical process too late in their project life-cycle considering it as an end of lifecycle activity. As a result, after implementation, organizations may not realize the necessary benefits of the new technology due to lack of user adoption.
Value Assessment: During post implementation stabilization phase, organizations fail to measure the return on their investment and effectiveness of technology implementation. This result in organizations losing interest in the implementation as a source of competitive advantage and use it only as a tactical tool for administering the workforce.

Elusive hunt for the right solution

2010-03-03T11:41:00.001+05:30

Shopping for a new HR solution is relatively an enjoyable experience for the HR and IT team members who later become part of implementation team. This is because the journey afterwards is generally uphill. The evaluations process is marked by all day meetings with internal process owners to agree on the current or as-is processes, spending weekends formulating and documenting the requirements and the presentations running into late evenings by vendors claiming to have the best fit solution for their requirements . There are deep dives and reference visits along with the sumptuous working lunches and dinners delivered from the nearest pizza outlet. There is generally a sense of satisfaction in the team going into the final phase of commercial negotiation. Once the negotiations are over and the procurement team gets the ‘best-price’ from the winning vendor, the newly formed project team is all set and raring to go. The organizational air is quiet thick with expectations.

Yet within weeks of the of the project launch, the team finds itself in the midst of an impending storm. The solution does not seem to fit the requirements and there are huge disagreements on the To-be process definitions. The process owners are not ready for any changes or work arounds and want to stick to the current processes. The implementation partner is not able to fully explain the cost and benefits of the proposed processes vis-à-vis the current processes. The differences are generally resolved through agreeing to large amount of customizations which in turn results into change requests for additional services from the implementation vendor. The financial implications of these additional change requests take the matter to steering committees where there arguments and more arguments. Finally there is a compromise reached on the services fees charged by the implementer. However, there is hardly a discussion on possible re-engineering of the process or the best practices due to lack of right resources and capabilities on both sides of the table.

The impact of this initial chaos is multi-fold. First and foremost is the high risk of time and cost overruns impacting project lifecycle in fundamental way driving the cost of ownership up and delaying the realization of expected benefits. Second, it dents the organizational confidence in the implementation team and introduces friction between the customer and implementation partner teams having long term impact on the team morale. Last and most important, process improvements expected from the implementation are never achieved as the project ends up automating the current process inefficiencies and does not seriously evaluates the re-engineering and best practices.

There are primarily three reasons why the search for the right solution turns out to be so elusive. The vendor evaluation team hardly ever includes an HR technology expert who could understand the process requirements and translate it into a system requirement, thereby ensuring the right requirement formulation. This flows from the fact that members from the HR team only have process understanding whereas members from IT only have systems understanding and there is no independent voice bridging the two. Typically this results in the relevant questions not being asked by the evaluation team and general discussion hovering around whether the system can take care of the current processes.

Second issue originates from the lack of mandate for process standardization/improvement as part of the technology implementation. Process owners are extremely protective of their processes from any scrutiny and any attempt for re-engineering becomes an extremely political issue. The absence of executive endorsement and an independent voice recommending the process changes at the system level ensures that best solution is never ever comes up for discussion.

Insufficient resource commitment from the implementation partner is another important reason the failure to implement the right solution. The functional consultants working on the implementation are generally product gurus but have do not have in depth grounding in HR processes. As a result, they seriously lack the ability to present alternative solutions explaining the costs and benefits of each of the alternatives. The lack of real alternatives forces the process owners to stick to the current processes which are low risk from both automation as well as user adoption perspectives.

Looking at all these factors, the need for an independent voice that understands both HR process and technology is imperative to work as a bridge between customer and implementation partner teams. This group can work as independent consultant in helping the customer team evaluate different solutions, work closely with process owners in standardizing and improving current processes and work with the implementation partners in defining and vetting the alternative solutions. Without such a mechanism in place, an HR implementation that gives a strategic edge to the HR practices and processes in the organization will remain an elusive dream.

On the Factor of Project Governance

2010-02-19T13:22:00.001+05:30

An often overlooked Factor in a HR Technology implementation is Project Governance.
Everyone loves to talk about IT project governance, there are elaborate models built around it, but it is surprising that many of the IT projects usually fall short of the original expectations. Also amongst the IT projects that may be going on in an organization, the HR IT project is usually given the short shrift. This is not unusual, since HR is considered to be "Easy" and not the hard impacting critical project like say Finance or Accounting etc. This inevitably leads to poor governance of these HR technology projects, with it not really being on the radar of the top management.

All projects definitely start with good intentions, but somewhere down the line something goes wrong. So what constitutes good governance? Some of the ideas which I have distilled

Project Governance begins even before the project starts - One HR Technology implementation project that I was part of had this interesting way of project governance. When we had finished with the Fit-Gap analysis, the total number of customizations came up to 45, the Senior VP of IT requested each of the process owners to come up with a reason why a customization was required. After analyzing it with every owner, the list was pruned to just 5..!..

Here is a good example of senior management intervention to ensure that project budget is kept in line & also reminding everyone that the reason a new product was being implemented was to ensure that new business processes were rolled out & not to keep old ideas running in the new system.

It is imperative that even before the project is started, the top management draw out what they want the HR technology project to achieve. This will be the basis on which they will measure everything that follows downstream. Some of the top issues could be

Project execution within budget & time
HR solution not to have x% of customizations (the value of x will be debated internally & arrived at)
Reduction of cycle time in key processes like Recruitment, Payroll etc

These parameters will then be evaluated during the project and after the project is live.

Strong Project Manager - while it is a no brainer that the project will require a strong project manager from the customer side, many a times we have seen that the project manager usually performs the role of a business analyst as well. This is a sure shot recipe for failure, since project management is a full time job & cannot really be combined with anything else. In case the customer feels that there may not be anyone available for this job within the organization, then they should hire some one to play this role.

Continuous top management support - We have seen Steering Committees being setup, meetings being scheduled but hardly any top management participation. The result - a HR Technology project running out of sync with the original parameters on which the project was conceived. The HR solution might then end up with lot of customizations, poor change management, woeful end user adoption and thus run with huge cost and effort escalation. Thus a strong continuous committment from the top management is essential to see that the project is in shape & progressing well.

Project health checks at various intervals - While the above factors are important, it is useful to also consider having project health checks to ensure the project is in alignment with original goals. The health checks can be conducted at various milestones like Fit Gap, Unit testing, System testing, User Acceptance, Cutover etc - how to do this & what all to consider in the scope of a project health check will be the subject of a future post.

A case of lower expectations

2010-02-17T21:08:00.002+05:30

Most of the organizations in India which decide to go for an HR technology implementation actually have fairly low expectations from their implementations. This might sound a little paradoxical in the context of most of the system integrators complaining that Indian clients are very difficult to handle and the large number of implementations hitting the rough weather. Nonetheless, this is true.

The expectation from most of the organizations is primarily to consolidate the workforce data in a centralized system and automate the core operational processes. This gives them a basic insight into the workforce in terms of headcounts, reporting structures etc and help them increase HR department’s productivity by taking away the high load of manual record keeping and processing in functions such as onboarding, transfers, payroll and exit. At best the system is used to decentralize service delivery through self service access for employees and managers to manage essential functions such as leave, time and appraisals. Beyond this , there is no expectation whatsoever from the technology solution to help in objective alignment, workforce profiling, talent and leadership development , measuring effectiveness, managing employee and alumni relationships and attracting the best talent available out there in a competitive job market.

This lowering of expectations could be due to a number of reasons. The first and foremost remains the lack of appreciation within the HR community that a technology based solution can be used to drive the aforementioned strategic initiatives. This lack of appreciation and comfort results in them never demanding these functionalities from the implementers. Moreover, very often organizations are not ready as the organizational processes have not reached the right level of maturity for these initiatives to kick in.

The other important reason is that the implementers or IT consultants themselves are not aware of these practices and advanced system know-how to implement them. The fact remains that most of the HCM IT consultants do not have an academic or professional background in Human Resources and do not have a grounding in these practice areas, The other related issue is that best resources in the Indian IT companies are not deployed on Indian projects as the consultants themselves prefer working in overseas locations and projects.

Indian organizations very often rely on the management consulting firms to define their strategic human resource initiatives and processes. However, this group of strategic HR consultants hardly ever go down to the system level or even discuss the possibility of using the HR technology solutions to drive these processes and initiatives.

As a result, the bar for HR technology initiatives is kept quiet low. This means that organizations take an easy route of automating their current or as-is processes, thereby taking a stringent stance against any work around, reengineering or best practices. This results in the solution to go through massive customization which is generally welcomed by the system integrators as customization is easier to achieve using the rookie resources who are well versed in programming and also provides a higher revenue stream than what is called a vanilla implementation. The higher level of customizations means that application of product fixes and future upgrades become very complex, risky and costly which in turn forces the customers to stick to the old release of the solution and not able to leverage the new advances and enhancement in the solution.

This vicious cycle coupled with the governance issues during the implementation ensure that the solutions fail to achieve the higher level of maturity and value addition for the organizations. Therefore, most important need for the organizations is to raise their expectations from their HR technology implementation and demand more rather than less.

More on this in future posts.

Significance of the name H Factors

2010-02-17T13:01:00.002+05:30

We are all aware of the term Factorial (also shortened as Factor) from our school days. All of us used to dread those permutations and combinations topic & this term used to very frequently appear there.
So just to refresh memories.. n! meant the product of all numbers less than or equal to n, so 5! will be 5*4*3*2*1. Hence higher the "n" higher this factor number. Also colloquially, we often say, there are n number of ways of doing this..!.

When we looked around the HR and the HR technology space we found that there are lot of things that the organizations could do which would add value to their HR technology investments. We can call these "things" as Factors. This blog as Tanzil mentions below is focused on all the factors that matter to organizations, but due to many reasons remain under utilized.

Hence we decided to name this blog as H Factors, which signify a number of factors which can & should be taken care of to ensure that an organization fully realizes its value from its HR technology & thus manage its employees better. As we go along we will be highlighting these factors and suggesting ways and means to better them.

Also the Factor symbol when turned upside down resembles a human like figure & thus nicely fits in with our name. The image on the right side represents our thoughts on the name of this blog.

HR Technology in India – Aiming for the sky

2010-02-17T12:19:00.001+05:30

HR Technology Solutions have made huge strides in the last couple of years and the strategic HR offerings of the major business software vendors are fairly advanced and cater to the current thought processes in Human Resources. The current focus seems to be on aligning organization objectives to individual goals, talent management, effective service delivery and developing workforce insight.

Indian organizations have seen tremendous growth and workforce transformation over the last two decades. The nature of organizational roles, demographic distribution, compensation structures and the organizational culture have all been through massive changes. To manage the burgeoning workforce, a large number of firms in India have invested in technology solutions. However, most of these systems are characterized by adhoc and incremental application development and roll-out based on situational functional requirements rather than a well thought out HCM strategy. This results in incremental operational efficiency and does not give any real competitive advantage. The current implementations in these organizations are also not able to support the complexity in organization structures and people and talent management practices in the organizations.

The current implementations also fail to fully leverage the capabilities of the packaged solutions. The transactional HR modules are implemented and used to a large extent but the utilization of Strategic HR modules is fairly low. In many cases modules are bought but never deployed. User adoption seems to be a major issue with users not being able to use the system beyond the basic transactions.

The focus of this blog is to discuss the capabilities, challenges and future directions of HR technology and how can it be leveraged for strategic processes such as objective alignment, pay for performance, leadership and talent planning especially from the perspective of Indian organizations. We will bring the academic, practice, solutions and implementation contexts together in our discussions for a better appreciation of the HR technology and its application as a tool for building competitive advantage through people.