Nowadays, the fanciest topic in Human Resources field is People Analytics. The word “People” comes from the area of Human Resources and the word “Analytics” from Statistics, specifically Predictive Analysis.
The evolution of decision-making in HR is now on the verge of shifting from reactive to a proactive position. The main reason behind it would be the changing dynamics in the working environment and the good, old “talent war”. The traditional HR decision-making process excluded the data analysis until the last decade. It was fascinating; Human Resources was also becoming a true co-pilot where the decisions were backed with fancy graphs and some numbers. But what was the source of data? Past.
We are now in an era where we start trying to become well-recognized fortunetellers. The success lies within the capability of reading the future based on historical and current events while assessing and implementing current factors that could affect the situation.
So, the summer days of “Analytical HR” is over. It’s becoming obsolete. HR needs to be geekier, more technology-driven, more complex than ever.
We need more “people engineers”, statistician or mathematicians in HR department rather than some social guys/ladies that are competent in arranging events or shoot out some fancy corporate announcements to become more successful. No puns intended!
I just wanted to remind you that the world’s changing.
So should the beloved department of Human Resources.
P.S.: I will go into detail in another post what would it mean especially in our area, Total Rewards.
It’s been awhile that I couldn’t spend time on my blog, but after reading this month’s WorldatWork Journal, I wanted to share some thoughts regarding the merit pay.
I feel that it’s a good timing to question merit increases hence it’s the time for pay reviews here in Dubai.
As per the article authored by Scott, Somersan, Repsold in this month’s issue, I quote a paragraph:
Low merit pay increases in recent years have made it difficult to differentiate the rewards of high performers from those with only average performance. Furthermore, getting managers to differentiate performance across their employees is difficult. One strategy for improving merit pay that has been discussed in recent years is to separate pay adjustments based on labor cost increases from increases for good or exceptional performance. The former would be based on the cost increases in the labor market not on employee performance. Thus, merit increases that were previously rolled into base pay would be given as bonuses, which does not increase base pay and long-term fixed payroll costs.
I would like to concentrate on the last sentence. I’ve experienced very high and also very low levels of inflation in some countries. As the authors also implied, it was easier to link the merit increases to inflation and cost of living and labor in recent years. However, especially in emerging and developed countries, trying to differentiate employees with merit pay linked to inflation started to be an issue because of low increase rates.
A very aggressive merit matrix set with regard to (of course) corporate costs and budgets would have maximum differentiation of 300% -tell ya, it’s a VERY aggressive one- between a top performer and low performer.
Multiplying this with a very low merit increase like 2%: Max. differentiation is only 6%?
Here it is. A basic example showing that merit pay is not enough anymore to be a differentiating factor for the high performance because I don’t think it’s rational to tell a high performer that he/she is differentiated from a low performer by only 6% of the annual salary. It sounds funny, I know.
In the new world’s economic outlook we need to revise our reward schemes and be more flexible and creative. We have the tools and practices – just need to use them accordingly and smart.
Last but not least, I think it’s a good idea to rely less on merit increase and try to differentiate employees with a short-term incentive where we also need to leverage on our performance management systems and processes.
Let me know what you think about this topic by writing a comment to this post.
It’s nice to see that nobody’s knocking on others’ doors in the festive season; so many people are having very relaxed time at the end of the year.
In Middle East, the general practice is that short-term incentive payout and the salary reviews are generally done in the first quarter of the year, so it applies for the C&B professionals here as well.
Well, this might be the silence before storm (Yes, it is!) but it’s the subject of another post.
We mentioned knocking on doors… The dark, unholy and rusted doors of the narrow cave called C&B Department?
Hey! Chill… Just joking… We’re not Orcs…
However, I understand. Since many years, C&B has been the black box of the organization and the C&B professionals are seen as the bad guys of the town. Employees were very nervous to talk to them or ask questions… They were afraid to get a call from them which might mean that their time in the organization is over…
But it’s not the case in reality and I blame us for this. We created this dark environment by being secretive, discussing the matters behind closed doors and doesn’t come up with answers when even the most simplest questions like “how are the salaries reviewed?” are asked.
Since last decade we are investing on the importance of the strategic communication in Total Rewards and try to be more transparent, educative and approachable. We are saying that three main objectives of Total Rewards approach are to attract, motivate and retain the employees and we are working on that.
We are spending our efforts more and more on how to communicate rather than how to calculate.
This has been accomplished in some regions and it’s still in process in others.
That makes me feel we’re in the good way when I see the happy sparks in the eyes of the employees I train on Total Rewards.
Do the C&B professionals to be that much approachable and transparent? What do you need to expect from them?
I think that there’s a limit. Yes, we should be more open and social but we cannot give up from the main characteristics our job requires:
A C&B professional is not allowed talk too much. At least about the details of his/her job. As a person having the maximum access to the most sensitive data of the organization, he/she cannot spread even a single part of that data. Luckily, many C&B professionals follow this invisible oath.
What do you need to do:
You shouldn’t ask too many questions regarding other people or any plans and projects about organization.
Working under pressure
We work under pressure.
Yes, everybody does but we do a bit more. We work with Human; we work with Government; we work with Blue-collar and also Executives; we work with past, present and future money transactions which goes directly to YOUR pocket rather than the bank reserves which has a direct impact on people’s lives. We work with transactions as well as strategic plans.
What do you need to do: Do not blame us for issues and problems directly and have a co-working approach. We work in the same organizations and we support you; so should you. Please do not think that C&B is just printing some pay slips and transferring money via online banking.
We can prove easily that we conduct analytical practices that many engineers never do in their daily routine. (No offense; I gave this example because I was an engineer before and never done such exhaustive analysis before)
We are your consultants. If your C&B Specialist is a very well-educated and experiences in his/her area, she can be very influencing on you and your decisions.
Personally, I helped many employees when they got another offer from another company and we cannot retain them anymore (after the real break-up you can stay friends, no?), when they had issues with tax authorities or even when they were confused about the host package for their expatriation. So, again, we’re here to help.
What do you need to do: Consider us your therapists in your Rewards. We’re there to help but also be fair and consistent. We can give you insight about the information that you can only have by word of mouth (which is almost always untrue) or won’t have access at all. Think about it like you have a legal issue and you go directly to the Corporate Legal Counsel.
Same thing here… Just don’t misuse this service and don’t take our recommendations as we try to damage your career – if we say so, it’s real.
I assume that if your C&B professionals and employees work together taking above points into consideration, the organization’s journey in Strategic HR Communication will have a big leap sooner than you think.