HR Analytics Nov 2012 PDF

HR Analytics
Session 1: Introduction
2009-2012, Smart Wave Education No part of this presentation shall be copied, reproduced, shared or transmitted without the prior approval of the author
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Why are we here?

Your expectations from the program
Nurturing leaders of tomorrow
What does 100% strike rate mean?

"Numbers, their use, which ones, and how to capture them have always fascinated me"
-John Buchanan, Coach of Australian Cricket Team

100% tells us very little. I wish to know out of those 100 balls, how many does he actually use? Our intention is not to increase a players' run rate, but the number of balls they scored from
So, we discussed what kind of existing shots the players had that he was comfortable with? Whether they could use those shots to different balls? We looked at periods of the game or bowling types when there were more balls which he wasn't scoring? Whether he could develop new shots in their repertoire?

How do we take this example to HR issues?
What does 1% increase in EE mean? What is the duration of impact of an EE initiative? What does 1st division with 5 year experience mean? Does the incentive scheme affect sales?

How does EE affect Store Performance ? Factors affecting Store Performance ? Factors affecting EE? Is there a relationship? How many types of data required?
List 3 HR metrics used in your firm

For each functional area
List 3 HR metrics used in your firm

What are the challenges associated with these metrics / implementation?
Monday - A tale of 2 Directors

The new Finance Director, is spending the morning with two of her most senior team. She pulls down the current management accounts and her expert eye scans through the figures, taking in the pattern to review trends and spot any anomalies. She knows that her first Board meeting is on Friday and it is important that she provides an authoritative grasp of the companys financial position. So every now and again she asks for more information and one of her colleagues at the PC clicks a button to drill down into more detailed analysis by region, by product to interrogate the data and highlight specific issues. After four hours she congratulates her colleagues on their good work, impressed with the speed and efficiency with which theyve worked.
The HR Director knows that on Friday there is a planned Management Review. Although there is no great pressure he still wants to make a strong impression. By Monday afternoon, however he is worried. The trouble is there is no data! There is no financial equivalent of the succession plan. Instead his PA has pulled out a few charts dated from last year. Glancing at it he sees that the structure is hopelessly out of date and that many of the candidates named as potential successors have either left or been moved sideways. Could we pull down the data for the top 100 execs? he asks. She disappears to return 30 minutes later, holding armfuls of folders. This is mainly CV stuff, but I do know that the execs went through an individual assessment exercise. The trouble is I dont know where the reports ended up.
Why are we here?

To get familiar with key developments in following areas of HR:
Evidence based HR How HR can emerge as TALENT DECISION SCIENCE Enable HR to emerge as a strategic partner
Program Outline
Fundamental HR Metrics Criteria for Metrics selection linking metrics to business goals Assessment of Metrics based on business alignment Assessing Metrics based on quality and feasibility Metrics Prioritization Selecting : Key Strategic Measures , Key Functional Measures and Impact metrics, HR Dashboards Types of HR dashboards, Crafting the HR Dashboard for your business environment Implementing new HR dashboards in your organization Case studies HR Data Analysis in MS Excel Data Handling, Sampling, Collection and Presentation, Questionnaires, surveys and Interviews using graphical and numerical techniques like statistical and probability theory, hypothesis testing, variance analysis, Predictive Modeling Use of Analytical Tools for determination of cause-effect relationship, regression, multiple regressions, cluster analysis, factor analysis, Computer aided Research in HR
New Methods
Big Data Predictive Analytics Collaborative BI
Moores Law of Information?
Users of Predictive Analytics

Top 5 Industries Insurance Healthcare IT/ITES Financial Services Retail
Top 5 Functions Finance Strategy Operations Marketing R&D
MIT Study: The New Intelligent Enterprise, 2010

Use of Predictive Analytics
MIT Study: The New Intelligent Enterprise, 2010

Predictive Analytics
Teams score on average once every 180 possession of the ball; this is near constant for any division of English football and the World Cup Two-thirds goal comes from possessions gained in the other half of the field - Neil Lanham, Soccernomics
HR CHALLENGES
Cascio & Boudreau have developed an excellent and comprehensive list of ways to use analytics to address and improve these talent-related issues
Cascio, Wayne & Boudreau, John, Investing in People: Financial Impact of Human Resource Initiatives
Cost of absenteeism Cost of employee separations (turnover) Employee health, wellness, and welfare Employee attitudes and engagement Financial effects of work-life programs Staffing utility Economic value of job performance Payoff of enhanced selection Costs and benefits of HR development programs Talent-investment analysis
HR Analytics
Session 2: Evidence based HRM
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How the role of HR is changing
Forces that are changing the workplace

FROM
Local markets, operations Manufacturing, clerical work Hierarchy Intermediaries; face-to-face Obedience to formal authority Stability, efficiency, control Full time job Customer service Work done by employees Fixed work location Management prerogative Loyal service White, male workforce Financial performance
TO
Global markets, operations Service, knowledge work Networks Direct access/virtual relationship Questioning of formal authority Change, creativity, flexibility, order Part-time and project work Shareholder, stakeholder value Work done by many contributors Diverse work locations Social license Marketable knowledge, skills Diverse workforce Triple bottom line
How the role of HR is changing

Welfare Officers
Paternalistic
Personnel Officers
Manage absenteeism
HR Officer
Line Manager Efficiency & Effectiveness Compliances
Business Partner
Expert New Technology Compliances
???
Caring for injured/sick

Protection of disadvantaged
Training
Productivity Trade Union
Today, there is a movement to find the critical human levers for improving business results
Some thoughts
We do much order-taking and mistaking talk for action
To be a true strategic partner HR needs to evolve into a bimodal structure (similar to Finance and Accounting or Marketing and Sales)
- Boudreau and Ramstads in their book Beyond HR (2007) - Jim Moore, Director HR, Sun Microsystems
Talentship: A term coined by Boudreau and Ramstad which envisions HRM as Talent Decision Science
How does HR become a strategic partner

Focus on Strategy
Strategy may be defined as how the company creates value for its stakeholders (Kaplan and Norton) Part of any strategy are Goals. Measurement of these goals is through Key Performance Indicators KPIs must be Aligned with the strategy Quantifiable and measurable Recognized through the Firm
Sabermetric
Using Statistical Analysis to find hidden dimensions of success and acquire talent accordingly
Finding the right metric
Which major league baseball team holds the record for the longest consecutive winning streak?
Boston Red Sox Los Angeles Dodgers New York Yankees Oakland Athletics St. Louis Cardinals Philadelphia Rangers
WINNING
So, how did the As manage such success with 1/3 the resources of their biggest competitor?
2nd lowest payroll in MLB
MONEYBALL PREMISE
Theory - One could construct a better team using better & different methods of selection Opportunity - All baseball teams were using outdated methods of player selection
Approach - Rigorous statistical analysis identified undervalued players who manufactured cheaper runs, resulting in more, less expensive wins
Analytics
If somebody is right 30% of the time using gut feel and you can find a way to increase it to 35%, you create 5% winning arbitrage"
- Billy Beane, Oakland A
Key Questions for us .

source talent differently? manage compensation/benefits differently? prepare for the oncoming baby boomer worker gap? schedule my workforce differently? decide which countries are most profitable to operate in? manage my high potentials differently?
Quality of data is the key to analysis

Causal relationship must fulfill three criteria:
1. Strong relationship exists between the 2 factors 2. Cause factor occurs before the effect factor 3. Analysis must account for other possible influences
Data must be collected in a timely manner

Evidence based management can be a powerful tool but only if were clear about what constitutes valid evidence. Unless we can distinguish hard facts from questionable data, we may not get very far, no matter how good our intentions may be - Prof. Rosenzweig
Identify 3 causal relationships

1. .. 2. . 3.
3 relationships which are not causal

1. .. 2. . 3.
How BMW used analytics
People analytics @ Google
Do Managers Matter?
X-Y Plot
Performance Review Employee Satisfaction Score
Top v. Bottom Performance Quartile

Team productivity Employee satisfaction Employee retention
Great v. Struggling Managers

Behavioral indicators
8 behaviors of Great Managers

In order of importance
1. Is a great COACH 2. Empowers; does not micromanage 3. Is concerned about team members personal success and well-being 4. Is result oriented 5. Is a Good Communicator 6. Helps with Career Development 7. Has VISION for the Team 8. Is technically good
Behaviours of Struggling Managers

In order of importance
1. 2. 3. 4. 5. Undergoing a TRANSITION Lack of consistent focus / vision Not concerned with Career Development Spends too little time in Communicating Less focus on 1 to 1 meeting
Which staff category has maximum impact on customer experience at Disneyland?
Beyond HR: the New Science of Human Capital John Boudreau & Peter Ramstad
Disneyland : Mickey or Sweepers?

Sweepers at Disney make a huge difference to the customer experience
While they keep its parks clean, they interact with customers frequently. helping them navigate through the park pointing them to catering and merchandising coping with the unexpected problems
Sweepers are front line customer representatives with brooms in their hands. Investment in the recruitment, induction and training of its sweepers have more business impact than directing resource to its costumed characters
Beyond HR: the New Science of Human Capital John Boudreau & Peter Ramstad
AmEx
Measurement in central to HR Activities
1. All measurements are metric focussed 2. PeopleSoft as the backbone for data quality and consistency 3. Rolled out across 83 countries
CapOne and Nextel
Cost of replacing an employee

1. .. 2. . 3.
Cost of replacing an employee
HR Analytics
Selecting HR Metrics
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What gets measured, gets done

Attrition Analytics @ Convergys
We used consumer marketing technique, conjoint analysis. When used with employees, it helped figure out the mix of benefits most likely to encourage people to stay with the organization. Using this tool, we learned, that employees were more likely to stay with the company if they got half their annual pay raises every six months instead of the entire amount only once per year.

Key Questions from HR Perspective
WHY measure? WHAT to measure? HOW to be measured? How frequently to be measured ?

The challenges lie in being first able to measure it effectively especially across the multiple service lines, for example, a high-end consultants productivity may need to be measured through a combination of billing rate and utilization, while a developer may need to be measured using the effort needed to code either a certain number of lines or a function point. - Nandita Gujar, SVP, Infosys
If you put it all under one larger metric, it can camouflage some of the more critical issues
- Prabir Jha, SVP, Tata Motors
At Fortis, we track four essential areas: customer satisfaction developing people developing processes financial impact
Metrics to measure employee productivity

Productivity is measured as - revenue per person - operating margin per person
At Infosys, employee utilization is measured as

person hours deployed on billable engagement
person hours available for billable engagement
Metrics that predict organizational performance

Some metrics consistently predict organizational performance
leadership employee engagement access to knowledge workforce optimization organizational learning capacity
and some metrics do not

turnover rate time to fill total hours training
Bassi and McMurrer (2007)
Efficiency Metric v. Effectiveness Metric

Efficiency =
Effectiveness =
Analytics
Teams measure goalkeepers on what % of goals they stopped, This favored gatekeepers from big teams because of tighter defence; However, analysis of % of goals stopped from within the penalty area gives entirely different result - Daniele Tognaccini, AC Milan
Leading Metric v. Lagging Metric

Leading Metric =
Lagging Metric =
Leading Metric v. Lagging Metric

Turnover Cost to hire / time to hire Absenteeism % of PRs completed % of DPs in place Disciplinary activity % internal movement : external hiring Revenue/employee % of new hire retention Avg tenure : average PR measure Avg L&D spend/employee : avg PR Rating % of succession plans in place against critical roles % of ready nows for critical roles Engagement
Valero - Talent Supply Chain

Grew from 2,000 (Yr. 2000) to 22,000 (2007) employees and Revenue - $118 million (2000); $75 billion (2007) The challenge
recruiting operations were entirely paper-based start-up of a new refining complex in USA Outsourced engineers in Canada Programmers in India Manufacturing workers in China
Launches world-class staffing program in 2002

In 2002, it took us 41 pieces of paper to hire, more than 120 days to fill an open position and cost us $12000 per hire
Valero Recruitment Metrics and Dashboard

Talent needs communicated to the best sources Started maintaining suppliers record
efficiency (cost, time) effectiveness (quality of hire, reliability)
Continuously monitors adverts placed on Internet Portals (one source) to assess the cost, speed, quality and dependability of the supplier Captures data on the quality of talent to rate Suppliers
job performance, Fitment with organization and its culture Retention
Dashboard shows
Green = suppliers performance is good Yellow = Okay Red = Problems identified
In 2007, it is all automates, takes 41 days to fill a position and cost is $2300 per hire
Efficiency Metric v. Effectiveness Metric
Efficiency and Effectiveness Metric for

Recruitment Training
Retention
.
Human Capital Metric
HC ROI = Human capital return on investment measures the return on each dollar invested in human capital after adjusting for the cost of financial capital = (Profit Financial Capital Costs) Human Capital Costs HC Productivity = Amount of revenue generated for each dollar invested in human capital, after adjusting for the costs of materials and financial capital = (Revenue Material Costs) (Human Capital Costs + Financial Capital Costs)
The status
Gates study of 104 HC Execs
71% have some form of HC measures Only 7% have metrics capturing information on efficiency, effectiveness, and impact (on business process and strategic outcomes)
Luketic survey of 307 HR Professionals

79% using some form of HC metrics Only 11% are strategically focused
Stephen Gates, Strategic Human Capital Measures, The Conference Board (2008) Helen Luketic, Human Capital Metrics Trends 2008 Survey Report, ResearchVOICE (2008)
Case of a global automobile maker

A US manufacturer of cars and trucks 400,000+ employees As the HR function transitioned from Sales $200B + transactional to strategic, it was critical Profit $ 5B+ to improve the process of identifying
and prioritizing metrics.
Situation To quantify HR support towards business objectives

Identify metrics clearly aligned with business objectives
Metrics to provide the highest quality information Metrics should be feasible to collect Metrics that have maximum impact on the business
VP of HR
Business Objectives of the firm

Business Objectives HR Objectives
Focus on Brand
Grow Market Share
Increase Profits
HR Objectives of the firm

Business Objectives HR Objectives
Top Company to Work Leverage global network to provide unmatched career opportunity Hire Right Person at the first instance Appreciate Diversity and Culture Increase People Return on Investment Increase PROI Build firms capability for higher targets, goals, competition To achieve targets: Ensure people have right skills Increase people motivation
Focus on Brand
Grow Market Share
Increase Profits
What CRITERIA should be used

for selecting the
METRICS
Screen the Metrics for

Alignment
Quality
Feasibility
Characteristics
Screen the Metrics for

Alignment
Linked to achievement of Business Objectives Measures how well is the firm using human capital
Quality
Depicts quality of HR performance in supporting business objectives The Red Flags, to show decline in performance
Feasibility
Characteristics
Ease of data collection Resources required in implementation
Step 2: Identify potential metrics to support business Objectives
Internal Sources
Input from Line Managers Input from Line-Based HR Previous HR Metrics
External Sources
Best Practices Case studies
Metrics like level of attrition, recruitment mix, and bench strength have a direct bearing on cost and organizational performance. Other key focus areas include optimal resource utilization, and impact on top line and bottom line. Finally, continuous competency enhancement including leadership pipeline affects delivery excellence and hence, has a positive effect on organizational performance. These are all people metrics and we look very closely at all of them. -Dr. Ritu Anand, VP, Global HR, TCS
Step 3: Select Metrics based on Alignment

Direct Metrics Supporting Metrics
Step 3: Select Metrics based on Alignment

Direct Metrics
These indicate actual performance which impacts the achievement of business objective.
Supporting Metrics
Positive performance on these indicators contributes favorably to the achievement of business objective.
Example: Competitive compensation package contributes to, but does not directly impact the ability to achieve the objective Having the Right People at the Right Time.
Example: Employee productivity (vehicles per employee) has a direct impact on the ability to achieve the objective Build firms capability for higher targets, goals, competition
Our approach is to categorize talent and focus on retaining the essential - Intercontinental Hotels
Step 4: Select Metrics based on Quality

Better quality means greater business impact
Quality Category Subjective Quantifiable Category Description Metric cannot be communicated as a number. Subjective terms are used to indicate performance (e.g., employee morale). Metric can be communicated as a number. A numeric goal can be established, or trend goal visually apparent (e.g., hours of training). Ratings 0 1
Results
Qualitative Predictive
Positive performance will directly impact company financial performance (e.g., gap between current and required workforce skills).
Metric reflects the quality of performance (e.g., utilization of training). Metric will raise the red flag when performance begins to decline, allowing management an opportunity to put in place immediate countermeasures designed to reverse poor performance. Metric is conducive to problem solving and process improvement. Best-practice performance can be isolated, globalization of practice implemented, and financial impact forecasted e.g., strength of employment brand
1
3 6
Step 5: Ease of Implementation

Quality Category Category Description Ratings 1 -1
Easy to Measure Moderately Difficult to Measure Difficult to Measure
Metric exists already or data to support metric is currently available (low cost and low resource utilization). Metric does not currently exist. Data may currently exist but is not readily available (moderate cost and resource utilization). Metric does not currently exist. Data may not currently exist (cost and resource intensive).
-2
Step 6: Prioritize Metrics

Metric Hire Right Person at the first instance Ensure people have right skills and people motivation Build firms capability for higher targets Top Company to Work Increase PROI Appreciate Diversity Quality Score Implement ation Score Overall Score
HR:FTE Ratio Competitivenes s of Compensation Package New Hire Turnover Turnover by Employee Segment Gap Between Current and Required Workforce Skills Employee Productivity (Vehicles/Empl oyee) Inter-region executive transfer
Talent Metric
With the recruitment of Carlos Tavez, David Silva, Adam Johnson and Yaya Toure our pass rate in the final third has gone up by 7.7%"
- Gavin Fleig, Head of Performance Analytics, Manchester City
Step 7: Select high Impact Metrics

After individually evaluating potential metrics, the HR team meets as a group to select the metrics they believe will have the highest impact on HRs contribution to business objectives. The team discusses the quality and implementation ratings assigned to the metrics by each team member and ultimately comes to consensus on the final rating for each metric. Finally, the team selects the two or three metrics with the highest ratings for each objective
Step 8: Final HR Dashboard

Focus on Highest-Value Metrics: Dashboard includes only the highest-value metrics based on the HR planning teams assessment of alignment, quality, and ease of implementation
Concise Collection of Measures: Each objective is mapped to no more than two to three metrics Organized by Business Objective: The dashboard is organized by business objective to clearly indicate HR performance in supporting these objectives
Step 9: Select high Impact Metrics

Parameter HR Accelerated Leadership Program Employee Engagement Plan Measure No of workshops Conformance to Plan Focus on Quality Organizational Excellence
Global functional alignment

Transform HR Service PMS Implementation Increase Profit HR Budget Performance People Cost Perf. To Cadence Hire Plan
Linkage Matrix
Performance to Plan % Population $M $M Performance to Plan
Grow Mkt. Share Critical Capabilities
Metric Assignment: Strategy of firm
HR Analytics
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THE PRIORITIZATION PROCESS

I.
II. III. IV. V. VI. VII. VIII.
Create your Firms Business Plan-Define your business objectives Map your HR objectives which will support this business plan Identify potential Metrics that can be used to support each HR objective Score each potential metric in terms of Quality and Feasibility Hold a consensus meeting to agree on a final score for each metric select highest impact Metrics-One or two for each metric Ask for HR feedback Freeze the Final HR Dashboard
Analytics at Sysco thru' ESS

Three gross measures
work climate and employee satisfaction Productivity, Retention
Across seven dimensions such as supervisors effectiveness, diversity, quality of life etc. Results:
Units with highly satisfied employees have higher revs, lower costs, better retention and customer loyalty Identified management actions with greatest impact Tracks each units ESS Increased retention rates of delivery agents from 65% to 85% $50M savings in hiring and training costs
Davenport, Harris, Shapiro, Competing on Talent Analytics, Harvard Business Review, 2010
What area might offer the greatest financial benefit for your company if addressed?
Improving quality of hires Reducing absenteeism or turnover Improving employee engagement Increasing effectiveness in job Optimized labor allocation/scheduling
THE METHODOLOGY
Four steps to help you leverage analytics
1. 2. 3. 4. Identify the right things to measure (i.e. KPIs) Select the best analytic method to apply to your project Effectively communicate the results Build a follow-through strategy
Bassi, Laurie HR Analytics Handbook, 2010
Analytics Value Chain

Opinion
A Gut Feel I think so Based on experience
Data
Basically Raw Difficult to make sense Could be structured
Metrics
Ratios Trends Too many metrics become confusing
Analysis
Identify relationships trends
Insights
Influences decision Leads to action
Actions
Case Study
Background Fortune Best Company Strong culture, low turnover by industry comparison Experienced Senior Management Team Challenge Large training investment 240 hours in year 1 alone Discovered that majority of WF was leaving within 1-2 years Question Can we do a better job of identifying those who will stay versus those who will leave?
STEPS INVOLVED
Collected 20 years of employment history data (26,000 employees & 50+ attributes per employee) Employment duration made known for half of employees (training the model) Model identified variables best at predicting outcome (5 attributes retained from 50+) Outcome was hidden when model applied to other half (testing the model 85% accurate) Model applied to current employees, giving them a score (applying the model)
HR Analytics
Session 5 & 6 : Data Analysis
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Truths, half truths and statistics

Raw data is: Voluminous Difficult to handle Decision makers hate it, hence, often prefer to take decisions without data
First 100 weeks of

15 59 8 41 35 57 0 24 88 5 10 27 68 119 21 11 16 7 15 40
148 6 17 114 5 0 11 111 1 6 0 73 50 9 165 78 62 28 104 71
142 96 6 43 11 34 85 179 54 40 10 4 0 52 2 24 122 31 177 74
10 0 42 7 18 2 61 36 15 4 169 9 35 9 7 15 88 92 4 83
143 139 8 23 15 148 13 4 155 79 177 31 34 7 47 113 67 0 136 6
How would SHE be doing in the next 10 weeks

15 59 8 41 35 57 0 24 88 5 10 27 68 119 21 11 16 7 15 40
148 6 17 114 5 0 11 111 1 6 0 73 50 9 165 78 62 28 104 71
142 96 6 43 11 34 85 179 54 40 10 4 0 52 2 24 122 31 177 74
10 0 42 7 18 2 61 36 15 4 169 9 35 9 7 15 88 92 4 83
143 139 8 23 15 148 13 4 155 79 177 31 34 7 47 113 67 0 136 6
5 number summary
Min Q1 Median Q3 Max
Outliers : Unusual observations

It affects analysis
Needs to be IDENTIFIED Analyzed separately
May not necessarily be BAD data

How to identify OUTLIERS?
How to identify OUTLIERS

IQR Test,
IQR (inter-quartile range) = Q1 Q3
If data is
Q3 +1.5 IQR Q1 - 1.5 IQR
How to deal the OUTLIERS?
2 Critical Aspects
Central tendency Spread
How to does OUTLIERS affect centrality and spread?
CTC of TLs
Given below is a sample of monthly CTC (Rs.K) for 70 Team Leaders in BPOs based in Gurgaon. The data are presented in ascending order.
425 440
450 465 480 510 575
430 440
450 470 485 515 575
430 440
450 470 490 525 580
435 445
450 472 490 525 590
435 445
450 475 490 525 600
435 445
460 475 500 535 600
435 445
460 475 500 549 600
435 445
460 480 500 550 600
440 450
465 480 500 570 615
440 450
465 480 510 570 615
Mean
The mean of a data set is the average of all the data values.
x xi n
If the data are from a sample, the mean is denoted by x-bar .

xi
If the data are from a population, the mean is denoted by mu
CTC of TLs
x xi n
435 445 450 472 490 525 590 435 445 450 475 490 525 600
34,356 70
435 445 460 475 500 535 600
490.80
425 440 450 465 480 510 575
430 440 450 470 485 515 575
430 440 450 470 490 525 580
435 445 460 475 500 549 600
435 445 460 480 500 550 600
440 450 465 480 500 570 615
440 450 465 480 510 570 615
Median
The median is the measure of location most often reported for annual income and property value data A few extremely large incomes or property values can inflate the mean
Median
The median of a data set is the value in the middle when the data items are arranged in ascending order. For an odd number of observations, the median is the middle value. For an even number of observations, the median is the average of the two middle values.
CTC of TLs
Median = 50th percentile i = (p/100)n = (50/100)70 = 35.5 Averaging the 35th and 36th data values: Median = (475 + 475)/2 = 475
425 440 450 465 480 430 440 450 470 485 430 440 450 470 490 435 445 450 472 490 435 445 450 490 435 445 460 500 435 445 460 475 500 435 445 460 480 500 440 450 465 480 500 440 450 465 480 510
475 475
525 600 535 600
510 575
515 575
525 580
525 590
549 600
550 600
570 615
570 615
Mode
Mode is the most frequently occurring data The greatest frequency can occur at two or more different values If the data have exactly two modes, the data are bimodal If the data have more than two modes, the data are multimodal
CTC of TLs
450 occurred most frequently (7 times) Mode = 450
425 440 465 480 510 575 430 440 470 485 515 575 430 440 470 490 525 580 435 445 472 490 525 590 435 445 475 490 525 600 435 445 460 475 500 535 600 435 445 460 475 500 549 600 435 445 460 480 500 550 600 440 465 480 500 570 615 440 465 480 510 570 615
450 450
450 450 450 450 450
Percentiles
A percentile provides information about how the data are spread over the interval from the smallest value to the largest value. Admission test scores for colleges and universities are frequently reported in terms of percentiles.
Percentiles
COMPA RATIO??
Percentiles
The p-th percentile of a data set is a value such that at least p percent of the items take on this value or less and at least (100 - p) percent of the items take on this value or more.
Arrange the data in ascending order. Compute index i, the position of the pth percentile. i = (p/100)n
If i is not an integer, round up. The p th percentile is the value in the i th position. If i is an integer, the p th percentile is the average of the values in positions i and i +1.
CTC of TLs
90th Percentile i = (p/100)n = (90/100)70 = 63 Averaging the 63rd and 64th data values:
90th Percentile = (580 + 590)/2 = 585
425 440 450 465 480 510 575 430 440 450 470 485 515 575 430 440 450 470 490 525 435 445 450 472 490 525 435 445 450 475 490 525 600 435 445 460 475 500 535 600 435 445 460 475 500 549 600 435 445 460 480 500 550 600 440 450 465 480 500 570 615 440 450 465 480 510 570 615
580 590
Compa Ratio & Range Penetration

Compa Ratio = actual pay / midpoint of the grade ( or mkt) Range penetration = (Salary Range Min)/ (Range Max-Range Min) Group Compa Ratio??
Quartiles
Quartiles are specific percentiles
First Quartile = 25th Percentile Second Quartile = 50th Percentile = Median Third Quartile = 75th Percentile
CTC of TLs
Third Quartile Third quartile = 75th percentile i = (p/100)n = (75/100)70 = 52.5 = 53 Third quartile = 525
425 440 450 430 440 450 430 440 450 435 445 450 435 445 450 435 445 460 435 445 460 435 445 460 440 450 465 440 450 465
465
480 510 575
470
485 515 575
470
490 580
472
490 590
475
490 525 600
475
500 535 600
475
500 549 600
480
500 550 600
480
500 570 615
480
510 570 615
525 525
Frequency Distribution
Used for large data set Divide large data into smaller groups / classes with number of occurrence for each class
Class 425-449 450-474 Frequency 18 16 Percentage 25.7% 22.9%
475-499
500-524 525-549 550-574 575-599 600-625
11
7 5 3 4 6 70
15.7%
10.0% 7.1% 4.3% 5.7% 8.6%
Frequency Distribution
30.0% 25.0%
20.0% 16.0% 15.0% 14.0% 12.0% 10.0% 10.0% 8.0%
6.0%
5.0% 4.0% 2.0% 0.0% 400 450 500 550 600 650 0.0% 400 450 500 550 600 650
STURGEs RULE for Number of Classes: 2k-3 <= n <=2k-2

Measures of Variability
It is often desirable to consider measures of variability (dispersion), as well as measures of location. For example, in choosing Recruitment Consultant A or B we might consider not only the average delivery time for each, but also the variability in delivery time for each.
Measures of Variability
Range Interquartile Range Variance Standard Deviation Coefficient of Variation
Range
The range of a data set is the difference between the largest and smallest data values. It is the simplest measure of variability. It is very sensitive to the smallest and largest data values.
Range
The range of a data set is the difference between the largest and smallest data values It is the simplest measure of variability It is very sensitive to the smallest and largest data values
CTC of TLs
Range = largest value - smallest value Range = 615 - 425 = 190
425
440 450 465 480 510 575 430 440 450 470 485 515 575 430 440 450 470 490 525 580 435 445 450 472 490 525 590 435 445 450 475 490 525 600 435 445 460 475 500 535 600 435 445 460 475 500 549 600 435 445 460 480 500 550 600 440 450 465 480 500 570 615 440 450 465 480 510 570
615
IQR = Inter Quartile Range

The inter-quartile range of a data set is the difference between the third quartile and the first quartile It is the range for the middle 50% of the data It overcomes the sensitivity to extreme data values
CTC of TLs
Inter-quartile Range
3rd Quartile (Q3) = 525 1st Quartile (Q1) = 445 Inter-quartile Range = Q3 - Q1 = 525 - 445 = 80
425
440
450 465
430
430
435
435
435
435
435
440
440
440
450 470
440
450 470
445
450 472
445
450 475
445
460 475
445
460 475
445
460 480
450
465 480
450
465 480
480
510 575
485
515 575
490
490
525 590
490
525 600
500
535 600
500
549 600
500
550 600
500
570 615
510
570
525
580
615
Variance
The variance is a measure of variability that utilizes all the data points It is based on the difference between the value of each observation (xi) and the mean (x for a sample, for a population).
Variance
The variance is the average of the squared differences between each data value and the mean. If the data set is a sample, the variance is denoted by s2. 2 ( x x ) 2 i
n 1
If the data set is a population, the variance is denoted by 2.
( xi )2 N
Standard Deviation
The standard deviation of a data set is the positive square root of the variance. It is measured in the same units as the data, making it more easily comparable, than the variance, to the mean. If the data set is a sample, the standard deviation is denoted s.
If the data set is a population, the standard deviation is denoted (sigma).
Coefficient of Variation
The coefficient of variation indicates how large the standard deviation is in relation to the mean. If the data set is a sample, the coefficient of variation is computed as follows:
s (100) x
If the data set is a population, the coefficient of variation is computed as follows:
(100)
CTC of TL
Variance
( xi x ) 2 n 1
2
2 , 996.16
Standard Deviation
2996. 47 54. 74
Coefficient of Variation
s 54. 74 100 100 11.15 x 490.80
Mean, Median and Mode

Application
Compensation Benchmarking Time to fill Training days Attrition .. .
11 9
2-Sigma
12 0
4-Sigma
12 1
6 Sigma
12 2
Impact of varying mean and standard deviation
12 3
Market CTC Data
Level
7 6 5 4 3 2 1
Median
8441 4811 2699 1817 1249 841 479
75P
9921 5367 3079 2032 1445 885 523
12 4
Interpret this for Your Company
Level
7 6 5 4 3 2 1
Median
8441 4811 2699 1817 1249 841 479
75P
9921 5367 3079 2032 1445 885 523
YourCo
11000 3800 3576 1900 1440 980 471
12 5
Interpret this for YourCo

12000
10000 Median 8000 6000 4000 2000 75P YourCo
0
1 2 3 4 5 6 7 12 6
Right visual matters for right decision

12000
10000
Median
8000 6000 4000 2000
75P
YourCo
7 12 7
Employee Engagement Surveys
Metrics
Unit Top Box Score Ratio of Engaged to Actively Disengaged
Employee Engagement Surveys
Plotting the Bell Curve
Ratings % of Rated Employees Your Co Best Practice Well Performing Co
1 0% 10% 5%
2 3% 20% 15%
3 50% 40% 40%
4 42% 20% 25%
5 5% 10% 15%
13 0
Plotting the Bell Curve

60%
Series1 50% Series2 Series3
40%
30%
20%
10%
0% 0 -10% 1 2 3 4 5 6
13 1
Time to Fill
Position 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40
Time to fill (in days) 34 45 92 55 12 24 35 47 52 21 78 45 67 110 28 31 62 40 26 85 15 53 44 35 39 49 58 31 37 40 71 19 62 22 56 26 33 38 41 80
13 2
Regression Analysis
1. Statically identify historical predictor of workforce size Example: FTEs = a + b1 sales + b2 new customers 2. Only use equations with predictors found to be statistically significant
3. Predict future HR requirements, using equation Example: (a) FTEs = 7 + .0004 sales + .02 new customers (b) Projected sales = 1,000,000 Projected new customers = 300 (c) HR requirements = 7 + 400 + 6 = 413
Measuring relationships
Does sales increase with number of sales force? How much waiters are required if seats increase?
Predictive Analysis
13 5
Hotel rooms and attendants

Rooms 200 150 150 120 125 220 180 240 250 180 280 300 305 325 350 400 425 440 450 500 500 520 550 600 620 660 700 800
Attendants 240 210 150 140 150 225 200 240 255 230 260 260 275 275 420 470 450 500 475 450 520 490 525 620 600 640 660 900
st 1 Analysis
Rooms Total Population Average St Dev
1000 900 800 700 600 500 400 300 200 100 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
Attendants 10830 386 191.8
R/A 1.03 1.05 0.13
10540 376 191.4
Number of Attendants
Another Graphical Representation

1000 900 800 700 600 500 400 300 200 100 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
Another Graphical Representation

1000 900 800 700 600 500 400 300 200 100 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
Hotel Staffing
Dependent and Independent variables ???
Size of Hotel and Attendants - Relationship

1000 900 800 700 600 500 400 300
200
100 0
200
400
600
800
1000

1000 900 A = 0.979*R + 17.91 R = 0.956
800
700 600
500
400 300
200
100 0
200
400
600
800
1000

1000
900
800 700 600 500 400 300 200 100 0 0 100 200 300 400 500 600 700 800 900
Analyze relevant cluster

700 650 600 550 500 450
400
350 300 300 350 400 450 500 550 600 650 700 750
Analyze relevant cluster

700 650 600 550 500
A = 0.704*R + 160.4 R = 0.876
450
400 350 300 300 350 400 450 500 550 600 650 700 750
t-statistic
Likelihood of = 0
14 6
Regression Standard Error
How much are the points scattered?

14 7
Manpower Planning using Monte Carlo Simulation
Case Study of a Loan Processing Unit of a Bank
Manpower Planning at Starbucks
Manpower Planning at Starbucks

No of Staff 5 6 7 No of Days 4 10 16
8 9 10 11 12
50 62 38 12 8

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HR Analytics

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