BUSINESS

Validity

is the ability of an instrument to measure what it is intended to measure. Validation answers two questions: What does the instrument measure? How well does the instrument measure it?

Data Gathering

knowing what constitutes sufficient, credible, and objective evidence and being able to find it.

Quantitative Data

objective measurements that can be verified and used in statistical analysis—for example, the number of employees in an organization, the number of female employees in the organization, or the average number of hires each quarter.

Artifacts

objects created by members of a culture that convey a sense of that culture's values and priorities, beliefs, habits and rituals, or perspectives. They can provide insight into aspects of an organization's culture that its members may not be able to or may not want to articulate to an outsider. Could include: -Physical workplaces that can suggest characteristics of organizational culture (e.g., the presence of personal artifacts, an emphasis on diplomas and certificates, environments that convey key values such as accessibility of top leaders to all employees). -Virtual environments, for example, social media providing clues about how the organization is perceived by outsiders and by employees.

Evidence-Based Decision Making (EBDM)

process of conscientiously using the best available data and evidence when making managerial decisions. being able to apply the results of data gathering and analysis to make better business decisions.

Critical Evaluation

refers to examining an idea, a process, or an event with an open, objective, and inquiring mind. It is a critical skill in evidence-based decision making (EBDM), using sound data to hypothesize, assess, and select solutions.

Reliability

reflects the ability of a data-gathering instrument or tool, such as a survey or a rater's observation or a physical measurement, to provide results that are consistent.

Root-Cause Analysis

starts with a result and then works backward. Each cause is queried to identify a preceding cause—conditions or actions that might have led to this effect. This questioning may proceed backward in rounds until the fundamental or root cause is identified—the point at which no further causes can be identified. This method is sometimes referred to as the "five whys method," which was developed as part of the Toyota Industries quality initiatives. For example, an HR professional is trying to determine why employees are not using employee self-service portals at the expected level. In the first round, the HR professional may identify a number of "whys"—employees don't have sufficient access, employees are unaware of the portal's existence, or the employees don't like using the portal. Each cause can be further queried. For example, employees may not like the portal because it is too slow or too hard to navigate or because the processes are too complicated or unreliable. These causes can be further queried until fundamental issues are identified. For example, the development process may not have included user input and pilot testing because the launch schedule was unrealistic.

Online Analytical Processing (OLAP)

A method of querying and reporting that takes data from standard relational databases, calculates and summarizes the data, and then stores the data in a special database called a data cube.

Business Case

A presentation to management that establishes that a specific problem exists and argues that the proposed solution is the best way to solve the problem in terms of time, cost efficiency, and probability of success. The form and level of formality will vary by organization. Some are written proposals with supporting financial analyses, while others may be slide-supported oral presentations. Whether they are written or oral, they generally have the same components. These components are described below. Statement of need. This is the condition or change impelling the function's action. Example: HR is aware that the organization's strategy includes growing its South American businesses. Until now, these businesses have operated independently from headquarters and from each other. The lack of common policies and processes for compensation and rewards and talent management and the lack of a shared organizational culture would inhibit the strategy. Recommended solution. The objectives for an ideal solution are defined (the desirable outcomes of such an initiative), and the proposed action is described in sufficient detail to show how it meets these objectives. In some cases, alternatives may be described as well, and the reasons why they are not being recommended may be discussed. Example: HR proposes conducting a customized salary and benefits survey for the targeted growth areas and the current countries in the portfolio and building a policy and practice "culture" for the existing individually run countries that would make acquiring a partner or growing organically more feasible. Risks and opportunities. Risks should include outcomes that could decrease the project's chance for success, outcomes that could present new opportunities that would require action, and the risks of doing nothing at all. Example: HR foresees the difficulty of obtaining this information in some businesses with poor data records but has included extra time and resources in its reserves for this. There is a currently unresolved legal issue about obtaining access to data in one country. The opportunity is that this information can come at an opportune time for the company's acquisition strategy and make integration much smoother. Estimated costs and time frame. The project budget should include all foreseeable elements (labor, equipment, fees, travel, and so on) plus a reserve for the unforeseeable based on the project's risk. The time frame should keep in mind not only the project requirements but also the organization's needs. Longer or more complex projects may be structured in phases, with gates or review milestones at which management can decide whether to proceed or not. Example: HR provides a cost estimate but also estimates this amount in terms of the benefits this information could provide in the event of an acquisition or merger.

PESTLE Analysis

Analysis of the external political, economic, social, technological, legal and environmental factors affecting a business

Ben Eubanks - 6 Steps of EBDM based on research

Ask.When faced with a problem, translate the situation into a question that can then be answered through information gathering. For example, an HR manager notes that the discipline system the organization uses is not effective in preventing eventual terminations or resignations. The HR manager asks, "What are we doing now? Does our disciplinary approach reflect what we know about adult behavior and motivation to change?" Acquire. Gather information from varied sources. For example, the HR manager reviews the organization's policies and processes concerning discipline and retrieves from HR's records data about disciplinary actions and subsequent employee history. The HR manager develops some case studies on specific incidents, gathering information from the supervisors involved. The manager also begins to gather information about current research into these areas and assessments of current practices from journals and HR professional societies and networks. Appraise. Determine whether the evidence gathered is relevant, valid, reliable, accurate, complete, and unbiased. Aggregate. Combine and organize the data to prepare it for analysis. Determine the priority to be given to different types of information. Apply. See the logical connections within the data and with the issue. Use the data to draw conclusions, develop possible solutions, win sponsor support for a decision, and take action. Assess. Monitor the solution that has been implemented and objectively measure the extent to which the objectives have been attained.

Affinity Diagramming

Data sorting technique in which a group categorizes and subcategorizes data until relationships are clearly drawn.

Pareto Chart

Description: Applies the Pareto principle (that 80% of effects come from 20% of causes) in the form of a histogram. Categories of data are ranked, usually from left to right along the x axis, according to size. The y axis shows reference ranges (e.g., number or percentage of occurrences). A cumulative percentage line plots the category contributions to the whole, making it easier to identify the 80/20 cut—the 20% of factors that are creating 80% of the problems. Application: Distinguishes between the "vital few" categories that contribute most of the issues and the "trivial many" categories of infrequent occurrence to support more-focused quality improvement activities. Example: An HR professional uses a Pareto chart to analyze and illustrate causes of voluntary and involuntary employee separation from the organization.

Pie Chart

Description: Graphically depicts as portions or slices of a circle the constituents that comprise 100% of a data group. Textual data information can be included in callouts or in an attached table for more precise communication. Application: To present a high-level impression of the data distribution as a percentage of a whole—e.g., the workforce. This information may be helpful context for a deeper discussion. Example: HR uses to describe the age breakdown of the workforce.

Histogram

Description: Graphically depicts the sorting of data into groups arranged in the shape of a statistical distribution, showing a central tendency and dispersion around that tendency. This appears as columns of varying heights or lengths. Histograms can include a comparative referent, such as a target or range of values. They can also be designed to show comparisons over time (usually through multiple columns for each category). Application: To sort data and to support rapid comparison of categories of data. Example: HR uses to analyze recruiting methods in terms of employee performance ratings.

Scatter Diagram

Description: Plots data points against two variables that form the chart's x and y axes. Each axis is scaled. The pattern formed by the plotted data describes the correlation between the two variables: The tightness of clustering indicates the probable strength of the correlation. A line rising from the lower left to the upper right quadrant indicates a positive correlation. (As x increases, y increases.) A line falling from the upper left to the lower right quadrant indicates a negative correlation. (As x increases, y decreases.) Application: Can be used to test possible causal relationships and narrow focus on subsequent tests. Example: An HR professional maps the correlation of workplace accidents with a series of factors, such as access to safety training.

Trend Diagram

Description: Plots data points on two axes. The horizontal axis usually represents time, while the vertical axis represents volume. Application: Can be used to test for presence of cycles or developing trends. Example: The HR group analyzes workforce demand to identify overall trends in demand as well as high and low points in the calendar year.

Denise Rousseau and Eric Barends mention several ways to become a better data-based HR practitioner

Develop a questioning mind. Make it a habit to ask questions such as "Why do we do it this way?" or "Why is X happening?" and "What is the evidence for thinking that?" Questioning minds try not to accept the status quo. They are naturally curious about everything. Build fluency in the scientific literature for HR. This can include regularly scanning resources to identify new and reliable sources of data and monitoring the topics that are being discussed. Rousseau and Barends recommend undertaking focused research projects to practice critical evaluation skills. For example, an HR practitioner could systematically study available evidence and practitioner opinions on the use of formal performance management review meetings. Gather data on a continuous basis about the efficacy and efficiency of legacy systems (e.g., recruiting) and stakeholder interests (e.g., the perceptions of other functional managers about their current needs and the forces affecting their performance). Use evidence when communicating with stakeholders. When responding to questions from organizational customers, HR practitioners can recommend solutions and include the data supporting their analysis and recommendations. Institutionalize the competency in the HR function. Rousseau and Barends refer to establishing journal study groups in the HR function. At regular meetings, designated members research and report on new or important classic articles. HR leaders can also establish task groups to gather evidence whenever significant decisions are planned.

Integrated Approach to Change Management

Human resource practitioners may find an integrated view of the two models, as described by Cesar Aguirre ("Managing Across Borders in Latin America") and shown in Figure 40 most helpful in describing the total process of change. Integrated view of Lewin's Steps and Kotter's Techniques.

Life Cycle Concept (Organizational or Product)

Industries, organizations, brands, and products have a characteristic life cycle. The stages may have different names, but they describe a gradual increase in success (usually measured as revenue) over time, a peak, and then a gradual decline and possible demise. HR professionals must be aware of the life-cycle concept, because the organization's and HR's priorities will shift as the life cycle (of the organization itself, its industry, or its products and brands) progresses. HR must be ready to shift the HR strategic plan accordingly. Introduction. Revenue (the vertical axis) is low because there is little market awareness (of the new industry, organization, products, services, or processes) and because of the market's resistance to change. Entrants (new industries, organizations, or products) must create an identity with customers and develop a value proposition. This takes imagination, business acumen, and leadership. Growth. As time proceeds (the horizontal axis), revenue begins to increase. The rate of growth (or the steepness of the curve) will vary by industry, enterprise, or product. The focus shifts to creating processes that will increase efficiency without stifling innovation. Maturity. The market is saturated with competitors and growth occurs only through introduction of new products or customer groups (which starts new cycles for those entrants) or through acquisitions. Profit margins become narrower and efficiency becomes more important. This means greater formalization and perhaps bureaucracy. Renewal/no growth/decline. Eventually demand will decrease, either because the need no longer exists or it is satisfied more effectively by something or someone new. Organizations can: Renew themselves by completely changing their offerings, where they compete, or how they compete. If they succeed, revenues rise. Organizations must return to their innovative roots. Take no action and accept continued low revenue. As time goes on, organizations and products have few resources to take advantage of opportunities that might deliver growth. Take no action and experience a decline in revenue that will make it impossible to compete or operate.

Conditions That Make Change Possible

McKinsey & Company consultants Emily Lawson and Colin Price identify several conditions that make it easier for people to get to the point where they will consider or try a new way of doing things: Shared purpose. If people believe in the overall purpose of and reason for the change, they will make a legitimate effort to change themselves. Those leading a change initiative should communicate how proposed changes are necessary to achieve the organization's strategic goals and/or values. Reinforcement systems. Structures, management processes and encouragement, measurement, communication, and other critical support factors must be present and congruent with the desired change initiative. Skills required for change. While this need may seem obvious, it is often overlooked. Training is a much more efficient and effective method than trial and error for equipping people with the knowledge and skills to be successful. Consistent role models. The presence of a role model within an individual employee's sphere of influence makes change real and demonstrates, in real time, that change is possible. Many role models (in addition to managers and executives) need to be present throughout the organization to keep the message of change alive until it becomes part of the way the organization operates.

Lewin's Model of the Change Process

Often used to explain the dynamics through which organizational change takes place. By understanding these dynamics, HR professionals can offer the proper initiative for change. Unfreezing Moving Refreezing

Business Intelligence (BI): Data Warehousing

One of 3 components of a BI system. Data gathered from different systems is translated into a standard format, cleaned (or "scrubbed") of errors and duplications, and then stored in databases related to specific uses (e.g., operations, finance, sales, HR). Organizations that have invested in an enterprise resource planning (ERP) system are able to integrate these distinct databases. This allows everyone in the organization access to the same current data. This improves communication and coordination. ERP products are "suites" of integrated applications for special purposes, such as those shown in Figure 27. The data warehouse is integrated but divided into separate sections or data marts that share reporting and analytical needs or interests. For example, the human resources information system (HRIS) captures data related to managing tasks such as payroll, workforce planning, performance appraisal, training and development, and succession planning. Some ERPs actually extend outside the organization by supporting electronic data interchange (EDI). Among other purposes, EDI is often used to automate outsourcing and vendor payments.

Business Intelligence (BI): Data Gathering

One of 3 components of a BI system. Data is routinely gathered through different computer systems in all parts of the organization (e.g., point-of-sale performance, purchasing and sales transactions, employee and customer records, security terminals).

Query and Reporting Capabilities

One of 3 components of a BI system. Users can access the data they need and use stand-alone or integrated (ERP) business application software to sort, describe, and analyze data in myriad ways and to create report graphics, such as bar or pie charts.

Michael Porter's Five Forces Model

Originally designed to identify industries that were more likely to be profitable and would provide a return on investment. Applying the framework, however, reveals a great deal of subtle information about the dynamic forces within industries. The analysis can be used to identify opportunities and threats, foresee possible changes in the competitive landscape, and plan strategy. The model is based on the premise that every industry and its members face similar competitive challenges. Industry conditions directly affect the organization's business model or how it will create value. Threat of substitution. How easy is it for a competitor to capture customers by offering a similar product or a product that satisfies the same need but perhaps in a different way? If the threat is high, an organization may be forced into competing on price, and HR will need to develop a strategy that promotes cost efficiency. If the threat is low, the organization will have more capital to invest. HR may focus on developing an entrepreneurial culture. Threat of entry. How easy is it for a new competitor to enter the industry? How much capital investment is required? How much time does it generally take for a new entry to become a threat to market share? If the threat of entry is high, management and the workforce must be nimble. HR professionals must examine the organization's structure to support rapid decision making and response. Bargaining power of suppliers. How vulnerable are organizations in this industry to the actions of upstream supply chain partners? Are there few suppliers or many? What would happen if a supplier went out of business or was bought by a competitor? If the bargaining power of suppliers is high, HR must be sure that the job descriptions include skills such as negotiation and managing risk and competencies such as Ethical Practice and Relationship Management. Bargaining power of buyers. How vulnerable are organizations to actions by customers looking for the lowest price or large customers who can greatly affect sales and revenue? When buyers exert more influence, marketing competencies are key. HR may need to align compensation practices to motivate marketing and sales toward behaviors important to the organization's strategic objectives—e.g., developing long-term or sole-source relationships. Rivalry among existing competitors. All of the other forces have the potential to increase the intensity of competition within the industry. A concentration of suppliers or buyers will trigger competition, and the insecurity caused by easy entry into the market and substitution can lead to price-cutting wars and product or service design aimed at locking customers in.

Value Chain

Represents the process by which an organization creates the product or service it offers to the customer. (aka Business Model). Every activity required to make a good or service and then sell or deliver it. The process is described as a chain because it represents the sequential and simultaneous contributions of a number of internal and external participants. Value Chain Primary Activities: R&D Operations Marketing and Sales Fulfillment Secondary Activities: Management Finance Legal Supply Management HR Management Technology

Business Intelligence (BI)

The ability to use information to gain a deeper understanding of an organization and its parts, to see how the whole organization and its parts are performing (through business metrics) and to make sound business decisions that are grounded in relevant and accurate facts rather than assumptions or "gut feelings." A commitment to good governance requires more informed, transparent, and accountable decisions, and better business intelligence makes those decisions possible. An organization's BI system has 3 basic components: - Data Gathering - Data Warehousing - Query and Reporting Capabilities

Activity-Based Budgeting

The cost factors for specific activities are identified and used to estimate funding requirements. Once the function has accumulated historical information about cost factors, estimates can be more precise. This gives leaders more control over spending decisions.

Macroenvironmental Factors

The macroenvironment refers to all the factors that exist outside the organization that could influence an organization's strategic decisions. These factors include: - Industry and market conditions and behaviors that shape the organization's competitive environment. These factors directly affect the core competencies the organization needs to compete - and HR's responsibility to provide the organization with the right number of workers with the right kinds of skills. - Events and trends in society that may affect the present and future availability of talent, compliance requirements, and employee needs. HR professionals should be aware of the world around them and the opportunities for the HR profession to shape that world.

Zero-Based Budgeting

The previous year's budget is "zeroed out" and no funding commitments for the coming year are assumed. The budget for every item must be proposed anew. The process can be time-intensive at first but becomes more efficient with experience. Its benefit is that it tends to reduce wasteful spending practices that can go unchallenged in traditional budgets.

Incremental Budgeting

The previous year's budget is a starting point for the next year's budget, and program and function leaders are told that they may increase it...or need to decrease it...by a certain percentage. This is less time-consuming, but it does not recognize changes in business circumstances or practices that should affect spending.

Formula-Based Budgeting

The total amount of a function's budget is apportioned to departments or activities according to defined percentages.

Nominal Group Technique (NGT)

This technique proceeds through rounds in which participants each suggest ideas. The rounds continue until no further ideas are proposed. Then the group discusses the items, eliminates redundancies and items considered irrelevant, and agrees on the importance of the remaining items. NGT can be practiced with idea generation by individuals, subgroups, or the entire group. Similarly the initial sorting of ideas can be done in subgroups before returning to the main group to reach consensus.

Delphi Technique

This technique progressively collects information from a group on a preselected issue. The first respondent proposes information, the next respondent adds something different, and so on, until a list can be compiled. The respondents are anonymous. In the second round, the researcher circulates the list and asks each respondent in turn to refine previous ideas, to comment on each idea's strengths and weaknesses for addressing the issue, and to identify new ideas. This technique is designed to facilitate group involvement, problem solving, and individual thinking while avoiding "group think," where participants can be influenced by what others say.

Facilitating Change

Whether working on a large organizational project or one-on-one with an employee or manager, HR professionals must determine the organizational interventions necessary not only to support organizational objectives but also to address the current day's challenge. Although employees of an organization, human resource professionals can be considered in-house consultants, ready to analyze and diagnose problems and recommend creative solutions that support both organizational and individual needs. When planning and implementing a change, organizations often rely on one of the following approaches. Cascade. This approach relies on a top-down sequence with complete change at each level. Change at one level or unit high up in the organization eventually transforms the units and levels beneath it. Progressive. In this model, the change originates at the top and is broadcast to the entire organization. Individuals slowly change with added information, and the change becomes uniform across business units. Organic. This method relies on independent centers and multiple origins of the change within the organization. Points of origin can be at any level. Organic change radiates out unevenly but accelerates when top leadership supports local change and local leaders.

Focus Group

a small group (normally six to twelve) invited to actively participate in a structured discussion with a facilitator. Focus groups typically last from one to three hours, depending on the topic and the purpose. Focus groups serve a variety of purposes. They are often used to follow up on a survey, providing a more in-depth look at specific issues raised during the survey. In this respect, focus groups collect qualitative data that enriches quantitative survey results.

Regression Analysis

a statistical method used to determine whether a relationship exists between variables and the strength of the relationship. Data points can be plotted on a diagram called a scattergram. The shape of the line formed by the data suggests if there is a likely correlation, whether that correlation is positive or negative, and how strong or weak the correlation is. Analyses can use multiple variables.

Qualitative Data

a subjective evaluation of actions, feelings, or behaviors. Measurements can be made by a third-party observer (e.g., an audit of HR's compliance with compensation laws that rates performance as excellent, acceptable, or poor). They can also be self-assessments, such as employee evaluations of satisfaction with job conditions on regularly administered employee surveys. The data can be assigned numerical values, but these values don't carry significance. Qualitative data can include observations of steps in a process or of traits that are present in people who are rated as successful in a job. It may be assessments of value or significance.

Mind Mapping

a technique that uses branches radiating out from a core idea to structure thoughts and ideas

Data Analysis

being able to organize data so that it reveals patterns and to analyze it to detect logical relationships.

Scenario Analysis (What-If Analysis)

can be used to test the possible effects of altering the details of a situation to see how the outcomes will vary under different conditions. The outcome of a particular situation is projected, using different inputs to see what changes have the most profound effects. This analysis is greatly aided with software applications and models. Monte Carlo analyses, for example, use computing capabilities to change scenario variables randomly and thereby generate up to thousands of possible outcomes. This can be helpful when analysts fear that historical patterns may not hold in the future.

Ratio Analysis

compares the relative size of two variables and yields a percentage. Net profit margin, for example, is a ratio that compares net revenue with costs. Many commonly used HR metrics are ratios, such as the turnover rate (comparing the number of terminations or resignations in a time period with the average number of employees in that period).

Data Advocacy

developing an inquiring mindset, learning what data drives the business and where it can be found, developing partnerships across the organization to promote EBDM, and modeling the skill of EBDM to the entire organization through the decisions HR makes and the plans of action it undertakes

Trend Analysis

hypothetical extension of a past series of events into the future

Variance Analysis

identifies the degree of difference between planned and actual performance. The term is usually applied to analysis against objective baselines, such as schedules and budgets.

SWOT analysis

identifying internal strengths (S) and weaknesses (W) and also examining external opportunities (O) and threats (T)