Contents
The Definitive Guide to HR Communication: Engaging Employees in Benefits, Pay, and Performance
Chapter 1: Know Your Employees
What Demographics Can Reveal About Employees
What You Can Learn from Demographics
Four Key Demographics to Explore
Use Focus Groups to Explore Needs and Preferences
Guidelines for Conducting Focus Groups
Checklist for Knowing Your Employees
Chapter 2: Treat Your Employees Like Customers
How to Sell Employees on the Value of Working for Your Company
How Marketers Begin: By Knowing Their Customers
Four Ways to Treat Your Employees Like Customers
Checklist for Treating Your Employees as Customers
Chapter 3: Plan and Manage Communication
Start Each Communication Project by Asking Great Questions
Use the Answers to These Questions to Establish a Goal and Objectives
What’s the Difference Between a Goal and an Objective?
Questioning Helps Identify Personal Agendas, Too
Manage HR Communication Projects Effectively
Create Award-Winning Communications and Communication Plans
Describe Your Communication Project Succinctly
Establish an Appropriate Budget
And When There Is No Money . . . Sigh
Checklist to Manage Your Communication Project Effectively
“Go Hollywood” to Create a High Concept
Use the Inverted Pyramid to Organize Your Message
Leverage the 1-3-9-27 Formula to Structure Content
Checklist for Framing Your Message
Chapter 5: Write Simply and Clearly
Convey What Matters Most to Employees
Slice, Dice, and Chunk Content
Leverage Visuals to Help Employees Understand
Illustrate the Specific Point You Want to Make
Make Complex Concepts Simple Through Infographics
When You Don’t Have Money for Graphic Designers
Checklist for Leveraging Visuals
Chapter 7: Use the Right Tool for the Job
Review the Tools in Your Tool Kit
E-mail: Love It, Hate It, Need It
Summing Up: Put Every Tool to Work
Checklist for Choosing the Right Tool for the Job
Chapter 8: Make Meetings Meaningful—and Support Managers
Good Meetings Begin at the End
Set Participants’ Expectations
Create a Facilitation Approach
Checklist for Making Meetings Meaningful (and Helping Managers)
Chapter 9: Measure Effectiveness
Analyze and Report on the Results
Checklist for Measuring Communication Effectiveness
Part II: Communicating in Key Situations
“We Want Only the Best and Brightest”
Keys to Successful Recruiting Communications
Present a Clear Portrait of Your Company
Feature Your Employees Describing Their Jobs
Create Accurate Job Descriptions
Give Candidates a Thorough Overview of Company Benefits
Use the Right Tool in Recruiting Communication
Checklist for Recruiting Talent
Translate the Manager’s Role into Action
That Special Day: The Orientation Program
A New Format for Your Orientation Program
Checklist for Giving New Employees What They Need to Be Successful
Here’s What I Expect from You and What You Can Expect from Me
Here’s Your Friendly Handbook. Don’t Be Frightened. It Won’t Bite
Do Your Homework Before Producing Your Handbook
Organize Your Handbook in a Way That Makes Sense for Your Company and Your Employees
Desperately Seeking Information
Keep the Language Conversational—Please, No Legalese
Encourage Employees to Use the Handbook as a Resource
Communicate Life Events When Policies, Programs, and Benefits Intersect
Checklist for Making the Most of All That Your Company Offers
Understand What Employees Know and What They Need
Communicate Simply, Clearly, and Candidly
Use Tools for What They Do Best
Checklist for Helping Employees Understand Their Benefits So That They Know What to Do
Money Does Not Equal Motivation
Create Visuals to Simplify Complicated Information
Help Prepare Managers to Talk About Pay
Checklist for Getting Value from Your Substantial Investment in Compensation
Chapter 15: Performance Management
What Is Performance Management?
Connecting the Dots if Your Company Is Large
Does Everyone Understand Your Performance Management System?
What if Your System Is Complicated?
Checklist for Communicating Performance Management
Chapter 16: Saving for Retirement
Hey, Can We Get Some Help Over Here?
You’re Ready for Your Simple Four-Step Program!
How to Give Advice When You Can’t Give Advice
“Tell Me How You Got to Be So Rich”
When You’re Announcing a New Plan, Write Your Own Story
The Beauty and Art of Illustrations
Checklist for Helping Employees Achieve Their Financial Goals
Chapter 17: Leaving the Company
“You Say Good-bye, and I Say Hello”
“Let’s Focus on What Happens Next”
Checklist for Communicating as Employees Leave the Company
Investing in People: Financial Impact of Human Resource Initiatives
Chapter 1. Making HR Measurement Strategic
How a Decision Science Influences HR Measurement
Data, Measurement, and Analysis
Hitting the “Wall” in HR Measurement5
Logic: What Are the Vital Connections?
Measures: Getting the Numbers Right
Analytics: Finding Answers in the Data
Process: Making Insights Motivating and Actionable
Software to Accompany Chapters 3–11
Chapter 2. Analytical Foundations of HR Measurement
Traditional Versus Contemporary HR Measures
Four Levels of Sophistication in HR Analytics
Fundamental Analytical Concepts from Statistics and Research Design
Drawing Conclusions about Correlation and Causality
Eliminating Alternative Explanations Through Experiments and Quasi-Experiments
Fundamental Analytical Concepts from Economics and Finance
Fixed, Variable, and Opportunity Costs/Savings
The Time Value of Money: Compounding, Discounting, and Present Value24
Estimating the Value of Employee Time Using Total Pay
Cost-Benefit and Cost-Effectiveness Analyses
Utility as a Weighted Sum of Utility Attributes
Sensitivity and Break-Even Analysis
Chapter 3. The Hidden Costs of Absenteeism
The Logic of Absenteeism: How Absenteeism Creates Costs
Direct Costs and the Incidence of Employee Absenteeism
Analytics and Measures for Employee Absenteeism
Estimating the Cost of Employee Absenteeism
Process: Interpreting Absenteeism Costs
Case Study: From High Absenteeism Costs to an Actionable Strategy
Controlling Absenteeism Through Positive Incentives
Summary Comments on Absence-Control Policies
Applying the Tools to Low Productivity Due to Illness: “Presenteeism”
Chapter 4. The High Cost of Employee Separations
The Logic of Employee Turnover: Separations, Acquisitions, Cost, and Inventory
Voluntary Versus Involuntary Turnover
Functional Versus Dysfunctional Turnover
Pivotal Talent Pools with High Rates of Voluntary Turnover
Voluntary Turnover, Involuntary Turnover, For-Cause Dismissals, and Layoffs
Logical Costs to Include When Considering Turnover Implications
Example: Separation Costs for Wee Care Children’s Hospital
Performance Differences Between Leavers and Their Replacements
The Costs of Lost Productivity and Lost Business
Chapter 5. Employee Health, Wellness, and Welfare
Health, Wellness, and Worksite Health Promotion
Skyrocketing Health-Care Costs Brought Attention to Employee Health
Two Broad Strategies to Control Health-Care Costs
Logic: How Changes in Employee Health Affect Financial Outcomes
The Typical Logic of Workplace Health Programs
Legal Considerations and Incentives to Modify Lifestyles
Analytics for Decisions about WHP Programs
Measures: Cost Effectiveness, Cost-Benefit, and Return-on-Investment Analysis
Cost-Benefit and Return-on-Investment Analysis
Conclusions Regarding Cost-Effectiveness, Cost-Benefit, and ROI Analyses
Solving the Analysis and Measurement Dilemmas to Improve Decisions about WHP Programs
Process: Communicating Effects to Decision Makers
Improving Employee Welfare at Work: Employee Assistance Programs (EAPs)
Costs and Reported Benefits of EAPs
Enhanced Analytical Considerations in EAPs
A Template for Measuring the Effects of EAPs
Future of Lifestyle Modification, WHP, and EAPs
Chapter 6. Employee Attitudes and Engagement
Attitudes Include Satisfaction, Commitment, and Engagement
Satisfaction, Commitment, and Engagement as Job Outcomes
The Logic Connecting Employee Attitudes, Behaviors, and Financial Outcomes
Employee Engagement and Competitive Advantage
Employee Engagement and Service Climate
Measures of Employee Attitudes
Analytical Principles: Time Lags, Levels of Analysis, and Causal Ordering
Estimating the Financial Impact of Employee Attitudes: The Behavior-Costing Approach
Behavior Costing at SYSCO: The Value-Profit Chain
Chapter 7. Financial Effects of Work-Life Programs
Work-Life Programs: What Are They?
Impact of Work-Life Strains on Job Performance
Work-Life Programs and Professional Employees
The Toll on Those Who Don’t Opt Out
Enhancing Success Through Implementation
Analytics and Measures: Connecting Work-Life Programs to Outcomes
Work-Life Policies and Firm Performance
Stock Market Reactions to Work-Life Initiatives
Chapter 8. Staffing Utility: The Concept and Its Measurement
A Decision-Based Framework for Staffing Measurement
Framing Human Capital Decisions Through the Lens of Utility Analysis
Overview: The Logic of Utility Analysis
Utility Models and Staffing Decisions
The Brogden-Cronbach-Gleser Model
Process: Supply-Chain Analysis and Staffing Utility27
Chapter 9. The Economic Value of Job Performance
Pivotal Talent at Disney Theme Parks
Logic: Why Does Performance Vary Across Jobs?
Analytics: The Role of SDy in Utility Analysis
Measures: Estimating the Monetary Value of Variations in Job Performance (SDy)
The Cascio-Ramos Estimate of Performance in Dollars (CREPID)
System Effectiveness Technique
Superior Equivalents Technique
Process: How Accurate Are SDy Estimates, and How Much Does It Matter?
Chapter 10. The Payoff from Enhanced Selection
The Logic of Investment Value Calculated Using Utility Analysis
Measuring the Utility Components
Analytics: Results of the Utility Calculation
Process: Making Utility Analysis Estimates More Comparable to Financial Estimates
Logic: Three Financial Adjustments
Analytics: Calculating the Economic Adjustments
How Talent Creates “Compound Interest:” Effects of Employee Flows on Utility Estimates
Analytics: Calculating How Employee Flows Affect Specific Situations
Logic: The Effects of a Probationary Period
Logic: Effects of Job Offer Rejections
Logic: The Effect of Multiple Selection Devices
Process: It Matters How Staffing Processes Are Used
Cumulative Effects of Adjustments
Dealing with Risk and Uncertainty in Utility Analysis
Process: Communicating the Impact of Utility Analyses to Decision Makers
Employee Selection and the Talent Supply Chain
Chapter 11. Costs and Benefits of HR Development Programs
The Relationship Between Training Expenditures and Stock Prices
The Logic of Talent Development
Utility Analysis Approach to Decisions about HRD Programs
Modifying the Brogden-Cronbach-Gleser Model to Apply to Training
What If Training Covers Less Than the Full Range of Job Skills?
Break-Even Analysis Applied to Proposed HRD Programs
Duration of the Effects of an HRD Program
Economic Considerations and Employee Flows Applied to HRD Programs
Example: Skills Training for Bankers
Costs: Off-Site Versus Web-Based Meetings
Process: Enhancing Acceptance of Training Cost and Benefit Analyses
Chapter 12. Talent Investment Analysis: Catalyst for Change
Better Answers to Fundamental Questions
Absence Means More Than Just Getting the Work Done
Turnover Isn’t Always a Bad Thing
When Everyone Is Reducing Employee Health Investments, Is It Smart to Invest More?
Why Positive Employee Attitudes Are Not Simply “Soft” and Nice to Have
Work-Life Fit Is Not Just a “Generational” Thing
The Staffing Supply Chain Can Be As Powerful As the Traditional Supply Chain
Taking HR Development Beyond Training to Learning and Workforce Enhancement
Intangible Does Not Mean “Unmeasurable”
The HC BRidge Framework as a Meta Model
Lighting the LAMP of Organization Change
Appendix A. The Taylor-Russell Tables
Financial Analysis for HR Managers: Tools for Linking HR Strategy to Business Strategy
Chapter 1 Business Strategy, Financial Strategy, and HR Strategy
Is HR Weakest in the Most Critical Areas?
You Don’t Need to Be a Quant to Make Good Business Decisions
Which HR Decisions Are Important?
Chapter 2 The Income Statement: Do We Care About More Than the Bottom Line?
Profit Can Be Measured at Various Levels
Liabilities on the Balance Sheet
Which Numbers on a Balance Sheet Can You Believe?
Use Caution When Using Published Financial Ratios
Chapter 4 Cash Flows: Timing Is Everything
Cash Flow Information from the Income Statement
Cash Flow Information from the Balance Sheet
Chapter 5 Financial Statements as a Window into Business Strategy
Common Size Financial Statements
Differential Impact of Financial Leverage
The Link Between HR Strategy and Business Strategy
Chapter 6 Stocks, Bonds, and the Weighted Average Cost of Capital
Why Is the Cost of Capital Important to HR Managers?
Where Does the Money Come From?
Is Your Company of Above Average or Below Average Risk?
Chapter 7 Capital Budgeting and Discounted Cash Flow Analysis
Do the Future Benefits Justify the Upfront Costs?
Money Has Time Value Because of Interest Rates, Not Because of Inflation
Chapter 8 Financial Analysis of Human Resource Initiatives
Decisions Involving Cash Flow That Occur at Different Points in Time
Allocating Budgets When There Are a Larger Number of Alternatives
Calculating NPV of Specific HR Initiatives
Determining Program Impacts Using Pre-Post Changes
Determining Program Impacts Using Comparison Groups
What Is Your Firm’s HR Budget?
Is Your HR Budget Allocation Optimal?
Maximizing the ROI on Your Analysis Efforts
Chapter 9 Financial Analysis of a Corporation’s Strategic Initiatives
Estimating the NPV of a Strategic Initiative Such as a New Product Introduction
Using the Spreadsheet to Structure the Deal
Using Monte Carlo Simulations to Model Risk and Uncertainty
Chapter 10 Equity-Based Compensation: Stock and Stock Options
What Is the Intrinsic Value of an Option? What’s the Time Value of an Option?
Are Options High-Risk Investments?
Do Employees Prefer Options or Stock?
Understanding the Inputs to the Black-Scholes Model
Firms Must Disclose the Methods and the Assumptions They Use to Cost Stock Options
Using Monte Carlo Simulation to Determine the Value of Employee Stock Options
Dilution, Overhang, and Run Rates
Equity Compensation Is One Tool for Aligning Executive and Shareholder Interests
Chapter 11 Financial Aspects of Pension and Retirement Programs
Defined Contribution (DC) Plans
The Shift from DB Plans to DC Plans
Why Base Costs on the Expected Rather Than the Actual Return on Plan Assets?
How Do Firms Select the Appropriate Discount Rate?
Chapter 12 Creating Value and Rewarding Value Creation
Appendix A: A Sample of Financial Measures Currently in Use
1.1 How We Make Decisions and What Gets in the Way
1.1.1 Intuition Versus Analytical Thinking
1.1.2 Poor Intuitive Statisticians
1.1.3 Understanding Human Nature
1.1.5 Big Data and Information Overload
1.1.6 The Problem with Certitude
1.1.7 Advanced Analytics Does Not Care Who It Annoys
1.1.8 Types of Decision Making
1.2 Rise of the Machines: Advanced Analytics and Decision Making
1.2.3 Improper Linear Models: Combining Expert Intuition with Analytics
1.2.4 Artificial Intelligence and Machine Learning
1.3 Human and Machine: The Ideal Decision-Making Team
Chapter 2 Collaboration, Cooperation, and Reciprocity
2.1 Human Nature and Human Science
2.1.1 Reciprocity and Fairness
2.1.2 Selfish, Greedy, Lazy, and Dishonest
2.1.6 Hard Wired to Share What We Know
2.1.8 Asymmetric or Private Information
2.2 The Power of Collaboration: The Scandinavian Model
2.2.1 What Kinds of Organizations Could Benefit from a High Degree of Collaboration?
2.2.2 The Benefits of Collaboration
2.2.3 The Bottom-Line Impact of Participative Decision Making
2.2.5 Optimal Incentive Contract for Collaboration: Sharing Control and Return Rights
2.3 Advanced Analytics and Collaborative Decision Making
2.3.1 Challenges and Opportunities with Participative Decision Making
2.3.2 Software, Advanced Analytics, and Cooperation and Collaboration
Chapter 3 Value Creation and Advanced Analytics
3.1 The Wealth of Organizations and What Advanced Analytics Can Do
3.1.2 Constant and Unrelenting Experimentation
3.1.3 Gold in Them There Databases: Human Capital Data
3.1.4 Not Only Human Experts Are Prone to Biases
3.2 Value and How to Create It: Intangible Capital
3.2.1 Who Really Holds the Keys to the Kingdom
3.2.2 The Nature of the Organization
3.2.3 The Cost of Employee Turnover
3.3 Strategic Choice and Advanced Analytics
3.3.1 HCM Practice Choice and Advanced Analytics
3.3.2 Business Intelligence Alignment of HCM Practices and Policies with Business Strategy
3.3.3 Decision Science, Business Intelligence, and Implications for HCM Decisions
3.3.4 Machine Learning and HR Practice Choice
3.4 Software Applications, Analytics, and HR Decisions
3.4.1 Software Options and Optimal HCM Practice
3.4.2 Enterprise Resource Planning Software
3.4.4 SAS Business Intelligence
3.4.6 Talent Management Suites and Advanced Analytics
Chapter 4 Human Science and Selection Decisions
4.1 Optimizing Selection and Promotion Decisions
4.1.1 Performance and Selection
4.1.2 Making the Unobservable Observable
4.1.3 Eliminating Biases from Selection Decisions
4.1.4 Human Science and Employee Selection
4.2 Workforce Planning, Talent Acquisition, and Decision Analytics
4.2.1 Workforce Planning and Predictive Analytics
4.2.2 When Is Workforce Planning Necessary?
4.2.3 Challenges with Forecasting
4.2.4 External Big Data and Employee Recruitment and Selection
4.3 Human Science and Selection and Promotions Decisions
4.3.2 Biases and the Selection Decision
4.3.3 Selection Tools: Augmented Biographical Survey
4.3.4 Challenges with the Use of Bio Data
4.4 Applications of Human Science to Selection Decisions
4.4.1 The Application of Expert Intuition to Selection and Promotion Decisions
4.4.2 Applied Game Theory and Selection Decisions
4.4.3 Deep Q&A Expert Systems and Selection Decisions
4.4.4 Predictive Modeling and Selections Decisions
4.4.5 Applied Econometric and Machine Learning Techniques
Chapter 5 Human Science and Incentives
5.1 Human Science and Incentives
5.1.1 Incentives, Motivation, and Human Science
5.1.3 Collaboration and Tournament Compensation Do Not Go Together
5.2 Human Science and Motivation
5.3.1 Biases Impacting Performance Management and Compensation Decisions
5.3.2 Strategy Maps and Performance Management
5.4 Applying Human Science to Incentive Contracts
5.4.1 Irrational, Cooperative, and Looking for Meaning
5.4.2 Complexity Theory and Incentive Contracts
5.4.3 The Application of Expert Intuition to Incentive and Motivation Issues
5.4.4 Applied Game Theory and Incentive Contracts
5.4.5 Deep Q & A Expert Systems and Incentive Contract Decisions
5.4.6 Predictive Modeling and Incentive Contracts
5.4.7 Applied Econometric and Machine Learning Techniques
5.5 Application of Human Science to Specific Incentive Issues
5.5.2 Other Possible Human Science Incentive Applications
Advanced Analytics and Diagnosis of HCM Issues
The Science (and Art) of Prediction
The Challenges with Being Empirically Declarative
Decision-Making Authority and Cooperation
Sharing Control and Return Rights
Chapter 1 Introduction: Setting the Stage
The Cost Versus Expense Conundrum
The Current HR Cost-Classification Structure
The Current Accounting for Compensation and Benefit Cost Elements
Chapter 2 Business, Financial, and Human Resource Planning
The Overall Planning Framework
Chapter 3 Projecting Base Compensation Costs
Appendix: Cash Flow Impact of Salary Increases
Chapter 4 Incentive Compensation
An Introduction to Incentive Compensation Programs
Accounting for Annual Cash Incentive Plans
Key Incentive Compensation Metrics
Free Cash Flow as an Incentive Plan Metric
Economic Value Added as an Incentive Plan Metric
Residual Income as an Incentive Compensation Plan Metric
The Balanced Scorecard and Incentive Compensation
Balanced Scorecard and Compensation
Chapter 5 Share-Based Compensation Plans
The Accounting for Stock Options
Tax Implications of Stock Plans
International Tax Implications of Share-Based Employee Compensation Plans
Appendix: Stock Options and Earnings per Share
Chapter 6 International and Expatriate Compensation
The Background to International and Expatriate Compensation
The Cost-Differential Allowance
Chapter 7 Sales Compensation Accounting
Accounting Control and Audit Issues
Other Salient Elements of a Sales Compensation Plan
Chapter 8 Employee Benefit Accounting
Defined Contribution Versus Defined Benefit Plans
Calculating Plan Benefit Obligations
Claims Incurred but Not Reported (IBNR)
Additional Obligations for Postretirement Health Plans
Self-Funding of Health Benefits
International Financial Reporting Standards and Employee Health and Welfare Plans
The Financial Reporting of Employee Benefit Plans
Chapter 9 Healthcare Benefits Cost Management
The Reasons for the Rising Costs
Forecasting Healthcare Benefit Costs
Chapter 10 The Accounting and Financing of Retirement Plans
The Pension Benefit Obligation
Accounting Standards Affecting Pension Plans
Chapter 11 Human Resource Analytics
The Background for the Use of HR Analytics
Measuring the Effectiveness of HR Investments
Total Compensation Effectiveness Metrics
Chapter 12 Human Resource Accounting
Appendix: No Long-Term Savings from Workforce Reductions
An HR Finance and Accounting Audit
Chapter 1 Sensible Organizations: Sensors, Big Data, and Quantifying the Unquantifiable
Telescopes, Microscopes, and “Socioscopes”
Chapter 2 Evolution, History, and Social Behavior: Our Wandering Road to the Modern Corporation
You Say “Groups,” I Say “Organizations”
Individual < Tribe < City-State
New Information, New Communication
Chapter 3 The Water Cooler Effect: Why a Friendly Chat Is the Most Important Part of the Work Day
Blue-Collar versus White-Collar Water Coolers
Chapter 4 The Death of Distance? Measuring the Power of Proximity
So, Should I Stay at Home and Work in My Pajamas?
Co-Located Offices: The Gold Standard?
Distance Makes the Heart Grow Fonder?
Chapter 5 I’m the Expert: Why Connections Are More Important Than Test Scores
Chapter 6 You Look Like the Creative Type: The Importance of a Diverse Network
Lessons from South Park: The Roots of Creativity
Chapter 9 Attach Bolt “A” to Plank “Q”: Matching Formal Dependencies with Informal Networks
Congruence, Distance, and Software
Chapter 10 The Future of Organizations: How People Analytics Will Transform Work