Marcus’s professional background is in behavioral science, with undergraduate and graduate qualifications in Organisational Psychology. Marcus is passionate about using evidence to make decisions about workforce strategy and has worked in the field of HR analytics for around 18 years in a wide range of industries. Some of the projects Marcus has worked on include strategic workforce planning, modeling retention, analyzing safety behavior, productivity assessment, assessing and quantifying human capital, measuring HR effectiveness, exploring the behavioral drivers of individual and organizational conduct, and workload capacity modeling.
What are the key aspects of employee performance that are critical to the success of HR Analytics?
I am interpreting this question as making a comment on the skills and capabilities required to be successful in HR analytics. Not necessarily in order: curiosity, systems thinking, asking lots of questions, evidence-based mindset, knowing about people, change management, and storytelling.
How can HR Analytics enhance employee performance?
HR analytics can inform employee performance in a number of ways:
- Help identify and/or inform key questions around performance.
- What is driving organizational performance? What are the factors that are contributing to long-term organizational sustainability? What does good performance look like and what does bad performance look like? (not only does this help to identify risks, but also helps to define performance itself). What are the bundles of employee capability and behavior that is driving these outcomes?
- Helps define what is good/bad/indifferent performance.
- HR analytics can obviously help define performance, but also put quantitative and qualitative boundaries of performance so not only can performance outside of expectations be identified but also helps drive performance improvement through measurement. Ultimately, much like any athlete will tell you, performance cannot be improved if there is no feedback to let you know who you are going. HR analytics can provide that feedback.
- Identifying the drivers of performance
- Even once the performance is defined and quantified, and feedback is being provided on progress, the next stage is how to change performance over time. As various factors are tested for their performance outcomes, evidence will be needed to determine whether the performance was changed…or put another way, data will help identify and define the causal pathways from intervention to outcome. This it is the difference between a metric is a lag indicator versus a lead indicator and predictor of future performance.
- Evidence helps identify and quantify risk
- Organizational risk can manifest in many different ways, but workforce risk is definitely one of them. Even when performance is going well, there may be factors building up in a system that can lead to failure but are not immediately apparent or well understood. The right questions, understanding of the system interdependencies and measurement will likely provide insight into such risk factors and provide warning signs that they need to be addressed…or highlight factors they need to be taken into account when making decisions.
- The key message is that HR analytics is just a set of tools, what’s important is the evidence-based mindset that underpins it. Evidence-based approaches have demonstrated themselves to be far superior to any other method we have to understand our world and it is long overdue we bring this way of thinking into organizations and businesses. In my experience, the majority of decisions that are made in organizations are based on everything but evidence, and can only imagine the potential performance improvement that is waiting to be extracted by changing this mindset.
What do CEOs/CHROs look for in employee performance analytics?
Asking questions, providing insight into the impact of decisions, identifying and defining organizational risk, supplying feedback on business outcomes, understanding how the organization operates as a system, highlighting the potential impact of contextual change on organizational outcomes, and insight into why people behave in the way they do.
What is missing in terms of employee performance data that could make HR Analytics even more meaningful?
Wrong question. No amount of data, variables, factors, fancy model or clever algorithm will fix flawed thinking and poor conceptualization of the problem. The question drives everything else, without good questions then no amount of data or number crunching power will save you. The question should start with, what’s the strategy? Why do customers come to us versus our competitors? What’s our competitive advantage? How will it change in the future? And what organizational capabilities, processes, or knowledge is driving that outcome? How is our organizational system put together and how are the pieces related to each other? What’s our operating environment and organizational context? With answers to these questions, the key variables, methodology, data points, and assessment tools become clear.
Can HR Analytics play a prescriptive role in helping employee finetune performance real-time?
Yes, but I would be very hesitant describing any measurement/feedback process in these terms. Being prescriptive can be effective in an environment that is defined, known and unchanging…can you think of many instances where this is true? No, not many. Again, it gets back to understanding the parameters of the question. Within a set of defined assumptions, any feedback process can play a prescriptive role in driving performance outcomes, however, note the caveat…defined assumptions and unchanging environment. If those assumptions and environment are well understood, then you will have insight if the prescription has to change if either the setting changes or an environmental factor changes that affect the assumptions.
This is one of the reasons benchmarking has to be undertaken very carefully, and the idea of “best practice” is laughable. In one setting a prescriptive best practice can be a solid fit and work well, change the setting however and it becomes disastrous. Furthermore, the prescriptive advice to fine-tune performance can work really well right up to the moment it doesn’t, because an environmental factor has changed.