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A Dear Winning Them Over:

To justify an HR position to someone with a financial perspective on of theworld, articulate how HR creates value in financial terms.

Your goal to logically show how having the position would create value forthe company. In human resources, where the talent resources are managed, value is or canbe created in the following ways:

Increasing profit. Profits result simply from either increasing revenues,and/or decreasing costs. Being efficient will typically result in reducingcosts. Determine the costs of current programs and processes before you improvethem to compare future reduced costs to show your savings. Human resources’success cannot depend on increasing efficiency alone, however. HR can increaseprofits by better supporting those processes that generate revenue.

For example, does the sales function have the skills it needs? Are theremotivational issues hindering performance that you can affect with anintervention? Following an intervention, document current performance andmonitor future performance to compare to your estimated benefits. Increasingefficiency and supporting revenue-generating processes are opportunities an HRprofessional has to increase profits.

Decreasing risk. First, decrease the number of times something bad may occur.Are there safety concerns in your business? Are there criticalperformance-targets that must met by a group of employees? Must the company becompliant with any rules? How can the HR professional play a role in reducingthe frequency of: accidents, workers compensation claims, missed workdays,missing targets, compliance violations? Determine the cost of these events ifthey were to happen. If the company has experienced them before, are therevalues associated with them? Then, the HR professional can draw on his expertiseto help reduce the number of incidents. By reducing the frequency, the HRprofessional is saving the firm from the losses from each event.

The second way to reduce risk is by reducing the magnitude of loss incurredwhen an event happens. For example, if a missed workday by a key employee stopsan entire process, an HR professional seeing the opportunity could facilitatecross training of others to cover that position and reduce the adverse impact ofa missed day. What is it worth to the company, in this example, to keep theprocess running? By reducing the frequency and consequences of negative events,the HR professional creates value for the company.

Increasing talent liquidity. Talent liquidity draws from the finance conceptof liquid assets — those assets that are easily converted to cash and utilizedin whatever way is necessary. In the context of talent, the ‘assets’ ofhuman resources, it means having the bench strength to place people in new orevolving positions and having the right people in place at all times.

From the HR perspective, these take the form of development and staffing.Develop people to move into management and leadership roles when they areneeded. How important is it to have leaders that work together and alignfunctions to work toward a common company vision? What are turnover rates inthe different areas of your company? Is the company able to successfully staffthose positions as they turn over? The staffing process can be made moreefficient by using online resources for recruiting, for example. It can be mademore effective by applying appropriate screening criteria to applicants, lettingonly the “most-likely” on to meet with hiring managers. It can be morestrategic by adhering to a company-adopted competency model to ensure thateveryone hired ‘fits’ into the company and supports the mission and visionthe owner may have.

The HR professional and their team have unique expertise in managing theseprocesses to be efficient, effective, and strategic.

Before highlighting each of these ways, it is also helpful to remember toassess your actions in terms of whether your intent is to become, or help othersin your organization become, more efficient, more effective or more strategic.Your goals should balance efficiency, effectiveness, and strategic actions.

Thinking through each of the ways human resources creates value anddetermining where the position you are requesting can impact this framework canresult in a simple logic for justifying the position. A good understanding ofwhere the challenges lie in a company provides the savvy HR professional theopportunities to create value in all of these ways. Good luck.

SOURCE: Brian R. Ruona, Consultant, Organizational Solutions Group, PersonnelDecisions International, Inc., Atlanta, Georgia, and David Armstrong, SeniorConsultant, Organizational Solutions Group, Personnel Decisions International,Inc., Boston, Massachusetts, Jan. 17, 2002.

LEARN MORE: How to Sell Your Value

The information contained in this article is intended to provide usefulinformation on the topic covered, but should not be construed as legal advice ora legal opinion. Also remember that state laws may differ from the federal law.

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DearWorkforce Newsletter

Features WhyCustomer Satisfaction Starts With HR There’s convincing evidence thatHR drives customer satisfaction — and revenues — by carefulattention to who it hires, how they’re trained, how they’recoached, and how they’re treated on the job. By Patrick J. Kiger RelocationChanges to Fit Changing Times Economic, social, andtechnological shifts are affecting how HR handles relocations.Read about the latest trends, and see how HR is responding tothem to save money and prevent the problems that relocationsometimes brings. By Carroll Lachnit FourSteps to Building E-Learning Success Your timeline is tight and yourbudget even tighter. Here’s a plan for researching, testing,and launching an e-learning program under strict time andmoney constraints. By Jason Lewis & DanMichaluk OptimasFinancial Impact Winner: How Performance Management ReversedNCCI’s Fortunes A new system brought gains inefficiency and productivity that helped the company battleback from near extinction and offer multi-million dollar pricebreaks and rebates to its owner-customers. By Patrick J. Kiger Special Advertising Section ProductShowcase: Internet Solutions HR is moving to free itself from theburdensome administrative paperwork that has kept it from reallycontributing to the organization’s most critical goals. With its powerfulcapabilities for helping HR recruit, train, and retain great people, theInternet can help. Departments Between theLines Well Served by Serving Well Mailbox The Trouble with Tests • Vintage Writing• Points for Discussion TheBuzz The Critical Care and Feeding ofGeneration Y • Well Done: Pep Boys Turbocharges Training • HR& Pop Culture: Hollywood and Evil HMOs On theContrary Musing Her Way Through Life: NotShari Caudron. She’s just an “Abstract Random,” and the only wayshe can do her job is to be, well, a little distracted sometimes. What Works The Business of Storytelling: Changing minds is one thing. Changing hearts is another. Tom Terez offerssome ideas on how to shape workplace stories to inspire, lead, and bringabout real change. DearWorkforce: Finding balance in health-care workplaces •How to manage a former peer • Is there a way to fix a”humiliating” salary gap?  Small,Medium, Large Three Ways to Deliver InvestmentEducation: Retirement benefits are supposed to help you attract andretain good employees. But they’re not valuable if employees don’tunderstand them. See how three companies help their employees betterunderstand retirement planning. Legal Insight Mandatory Arbitration Takes a Hit – butSurvives:The U.S. Supreme Court has ruled that the EEOC can make end runs aroundthe agreements. Here’s what it means to you. Legal Posts: Can HR pinchthis on-the-job habit? Think Twice Happiness May Be Overrated: Areyour employees completely satisfied with their jobs? If so, Todd Raphaelsays you’re headed for trouble.

More than a decade later, NCCI Holdings Inc. reports that its approach has worked well. The not-for-profit organization continues to conduct reviews on individual performance every six months, as opposed to only doing it once a year. Chief human resources officer Bradley Kitchens says this frequency allows managers to reinforce what’s working well and flag areas needing improvement.

The approach also prevents problems from festering. “There are no big surprises at the end of the year,” Kitchen says. She credits the reviews with fostering better communication, stronger rapport between supervisors and subordinates and a clear understanding by employees about where they stand in regards to their performance. The meetings also provide a safety net that ensures NCCI Holdings remains on track to meet individual and organizational goals.

“Employees feel informed and like the valuable feedback,” Kitchens says. “In turn, happy employees work harder to make customers happy.”

In this 2002 piece, Workforce looks at the NCCI’s approach to performance management.

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At NCCI Holdings, developing an innovative evaluation system has been asignificant factor in reducing turnover, pumping up performance, and improvingcompany revenues. These are the key elements:

• Evaluate employees semi-annually, instead of once a year. More frequentevaluations are more work for supervisors, but they curb the tendency ofemployees to lose focus during that long time-span between reviews. Atwice-a-year system gives employees an opportunity to demonstrate improvementmore quickly.
  
• Split the process into individual and corporate evaluations. A companyhas a need for both day-to-day competence and above-and-beyond creativity thathelps achieve larger goals. Evaluating each type of performance separately is away of ensuring that both are properly valued.
  
• Show individuals precisely how they contribute to the organization’ssuccess. Take the scorecard of company-wide goals and figure out what eachdepartment can contribute to achieving them. Then break down the goals evenfurther, into pieces that an individual worker can have an impact upon. When aperson can see how an individual effort — reducing the turnaround on paperwork,for example — helps achieve higher profits, she is going to be more motivated toaccomplish it.
  
• Link compensation to performance in a clear, tangible way. When employeesknow exactly what they have to accomplish to earn a pay raise or an end-of-yearbonus, they’re better able to focus on achieving those goals. Eliminatingsurprises at evaluation-and-pay-raise time helps keep morale on an even keel.
  
• Provide coaching to help employees achieve their goals. Evaluations helpemployees see how they’re doing, but they still have to figure out how to usethe feedback to improve their performance. Well-trained corporate coaches canhelp them turn insights into specific action.
  

Workforce Online, May 2002 — Register Now!

Eighty-two percent of the companies that relocate employees see theirrelocation activity for 2002 increasing or staying the same, according to theWorkforce 2002 HR Trends Survey. The figure is slightly lower — 73 percent –for relocating new hires.

When asked about the increasing costs of employee relocation, surveyrespondents said:

• 43 percent were more careful about selecting those to be relocated
• 14 percent were reducing the relocation benefits package

One respondent company in the 5,000- to 24,999-employee range said, “we areensuring that our benefits are tracking in a competitive sense with the market,as the market responds to relocation costs, particularly if the trend isdownward.”

Among the reasons cited for increasing employee relocations in 2002:

• Specialized talent that is needed elsewhere in the company: 20 percent
• Opening new offices: 9 percent
• Harder to find qualified people in specific geographic areas: 9 percent
• Moving offices/plants to other relocations: 7 percent
• Plant/office consolidations: 6 percent
• Opening new lines of business: 4 percent
• Other: 4 percent

One company in the 5,000 to 49,999-person range delayed relocating in 2001.”Those employees are now relocating in 2002,” said the respondent. “Also,[there is] an increase in [the] current management development program whichrequires relocating on a yearly basis.”

Another 5,000 to 49,000-person company was “replacing laid-off employees bymoving others.”

Approximately 8 percent of the survey respondents said that were decreasingrelocation activity for 2002. The reasons cited included fewer new hires torelocate (17 percent), not recruiting out of the area (7 percent) and feweremployees to relocate (3 percent).

Issues Affecting Employees’ Desire to Relocate
The reluctance of employees to relocate due to family or lifestyle issues isthe number one relocation issue facing respondents. Seventy-six percent citedthis concern.

The second-ranking reason cited (by 35 percent of respondents) is thereluctance of employees to relocate because of cost-of-living increases in thenew location.

Workforce Online, May 2002 — Register Now!

Spending on training and development will increase or stay the same for 2002,say 65 percent of the respondents to the Workforce 2002 HR Trends Survey. Why?The investment in good employees pays off.

Focused, well-placed training provides a return on investment (ROI). That’swhy 86 percent of respondents to the Workforce survey say they formally orinformally measure the ROI on training:

• Informally measure or evaluate the ROI of training 47 percent
• Formally measure the ROI of training 9 percent
• Plan to more formally measure the ROI of training in the next 18 months 30 percent

What Are the Training Priorities?
Here is the training that HR is doing, according to the survey:

• Leadership/Management Training 81 percent
• Technical Training (e.g., computers, software) 73 percent
• Custom-Designed Training for Specific Needs 69 percent
• Teamwork and Team Problem-Solving 55 percent
• Diversity Training 43 percent
• Workplace Security/Safety Training 42 percent
• Sexual Harassment Prevention 40 percent
• Conflict Resolution Training 34 percent
• Quality Control/Quality Management 25 percent
• Basic Skills (e.g., math, reading) 15 percent
• Other 26 percent

2002 Spending Is Increasing
Of the 65 percent of Workforce survey respondents who are increasing orkeeping their spending levels the same:

• 38 percent are increasing their spending on training and development
• 27 percent are keeping their spending on training and development the same

The 2002 spending follows on the heels of a strong 2001, according to thesurvey.

For 2001, 65 percent of those surveyed by Workforce kept or increased theirlevel of spending. Of those:

• 10 percent increased their training budget based on need
• 36 percent spent their training and development budgets as planned
• 19 percent put training expenditures temporarily on hold and eventuallyspent them

Explains one respondent from a company with 500 to 2,499 employees, “Wehave experienced an increase in training responsibilities and our goals are nowtied into the company goals.”

“In my company,” says an HR professional from 100- to 499-person company,training “is growing and people are beginning to see the great need for moreknowledge.”

Spending Responsibility for Training Involves the HR Department
Who has responsibility for training? In most organizations, HR is involvedand sometimes with overlapping responsibilities, according to results from theWorkforce survey.

In two-thirds of the organizations (or 68 percent), HR is involved intraining:

• HR generalists manage training : 11 percent
• Training specialists within the HR department manage training: 32 percent
• Training specialists in a separate training department reporting to HRmanage training: 25 percent

In one-third of the organizations (34 percent), the training departments isseparate from HR, and in a quarter (26 percent) of the organizations some typesof training are managed outside of either HR or the training function.

What has happened to the training function in the last 18 months? Almost halfof the Workforce survey respondents (49 percent) report the status quo: nochange in the number of staff involved in training.

In some organizations, there’s been a change in the number of specializedtrainers. Almost a quarter (25 percent) report a decrease in the number ofspecialized trainers. Conversely, 19 percent report an increase in the number ofspecialized trainers.

E-Learning Training Technology Represents Cost Savings for Some
Anecdotally, some of those HR professionals surveyed saw technology ande-learning options as a way to save money.

“Our training department budget was severely diminished in 2001 resultingin video, web-conferencing and conference calls,” said one respondent from anorganization in the 500-to-2,999 employee range.

Added another respondent from similar size organization: “We are leaningmore toward e-learning and less toward leader-led classes. We also placeemphasis on self-study and provide our employees with the materials needed tocomplete various self-study projects through our on-site library.”

A respondent from an organization with 5,000 to 24,999 employee says, “Wehave concentrated more of our efforts on distance-based training and CBT[computer-based training] activities.”

“We have seen the appetite for leader-led training fade,” said an HRrespondent from a company with 5,000 to 24,999 employees. “We are convertingseveral courses to a Web-based format to save on coasts and reach a wideremployee base.”

As with everything dot-com, training on the Internet works best as a part ofa mix of offerings. “We will employ a blended solution. There are times whenface-to-face is still best,” said this same respondent.

A respondent in an organization with more than 25,000 employees says thecompany was doing “a transition toward a blended approach, i.e., traditionalplus e-learning to get further reach and larger volumes for similar dollars.”

“We are also adopting an e-learning culture. Twenty (20) online courseslast year, 12-plus this year,” said a respondent in a 100 to 499-employeeorganization.

Training Focuses on a Variety of Skills
The pending economic recovery will lag unless there are qualified employeesin place to make it happen, experts say. Now is the time to gear up, somerespondents said.

‘We are not ‘waiting’ around doing nothing. We are looking for ways toadd value by providing change management and workforce re-engagement/retentiontools and consulting,” said one Workforce survey respondent.

• Management/Leadership Training: As the Baby Boom generation begins toretire, HR needs to be prepared to fill these open management positions. Eightin 10 survey respondents said management and leadership training is targeted for2002.

  
  

  There are “more requests for leadership development and soft skillstraining,” said a respondent from a company with more than 25,000 employees.There is an emphasis on “training the ‘whole person’ and a focus onrelationships, communications, self development.”

• Technical Training: 73 percent of the Workforce survey respondentsindicated that technical training will be provided by their organizations in2002.

  
  

  Technically skilled employees are needed in every industry. The lines areblurring between manual labor, technical skills and professional requirements.

• Team & Problem-solving Training: 55 percent of those in the Workforcesurvey target teamwork and team problem-solving training. As companies look tore-engineer, the ideas and solutions will come from the workforce itself.

• Custom-Designed Training: 69 percent plan to do custom-designed trainingfor specific needs, such as industry-specific skills or special organizationalneeds. Also, downsizing and succession planning make cross-training more vitalthan ever.

  
  

  “We are formally cross-training individuals in various production areas,”said one respondent from a 500 to 2,999-employee organization. “This was donesomewhat haphazardly before.”

  
  

  The tragic events of Sept. 11 pointed out the reality of “suddensuccession.” HR realized then, if it hadn’t before, that succession planningwas not a luxury, but a necessity and not just for a few key executives, but forall positions.

  
  

  Successful succession planning relies on skills assessment followed by skillstraining to ensure that the company is preparing and training its employeesadequately.

  
  

  “We are expecting many retirement between now and 2010,” said onerespondent from a company of more than 25,000 employees. “Perhaps a third ofall people now in the organization will retire by then.

  
  

  “We will have to find ways to helping new people learn what the retireesknow. Formal training? Sure. But I expect that expert systems and knowledgemanagement will meet some of this need as well.”

Diversity Training: Of those responding to the Workforce survey, 43 percentare planning to do diversity training.

• Safety Training: HR continues to face OSHA requirements and internalsafety standards. That’s why 42 percent of the survey respondents indicatethey are planning to conduct workplace security/safety training.

• Sexual Harassment Prevention: As the tensions and uncertainties of men andwomen together in the workplace continue to become more complex, the need forsexual harassment prevention training is cited by 40 percent of the companies.

  
  

  A respondent from a company with less than 100 employees noted an “increasedemphasis on prevention of harassment. When the economy is bad and layoffsprevail, there are more suits. Managers need to be trained on how to avoid andprevent employment litigation.”

• Conflict Resolution Training: There’s increased personal tension –tempers are shorter, nerves are frayed, and employees are suspicious. Thus,one-third of the survey respondents – or 34 percent – put conflictresolution training on their list for 2002. Employers need to head off issuesbefore they become significant problems.

Workforce Online, May 2002 — Register Now!

Dear Trust Ops:

One of the most significant trends is theapplication of electronic and information technology to HR systems. New, robustsoftware applications are available for nearly all HR systems (e.g.,recruitment, selection, compensation, training and development, etc.) that notonly increase speed and efficiency, but also allow system integration. Thistrend is rapidly transforming how employees will learn and develop new knowledgeand skills.

Perhaps the biggest change will be the shiftfrom organization-directed to self-directed learning and development. Employeeswill be given the responsibility and the means to diagnose their strengths andweaknesses, develop personal learning paths, and then complete learning anddevelopment activities on their own.

This is all made possible by e-learning systemsthat offer diagnostic tools like online multi-rater assessments, Web-basedtraining (and online registration for classroom training), electronicperformance support tools, and sophisticated tracking and administration tools.It will be challenging for employees to learn these new tools, but it might bemore challenging for employees to re-learn how to learn. Most of us, for most ofour lives, have had others direct us to the classroom (parents, guidancecounselors, supervisors) where we’ve been taught by teachers.

Although some of this direction and support willstill be available with e-learning, most employees will need to find themotivation, initiative, and direction to learn and develop from within. They’llalso need to become proficient at deciding what, how, and when to learn.

A related HR trend is the shift from traditionaljob descriptions and prescribed career paths to role definitions and adaptablelearning paths. In today’s high-velocity business environment, jobs can quicklycome and go or morph into different functions or roles. Increasingly, breadth ofcapability (e.g., leading a team, managing a project, handling customers) issuperseding depth of knowledge as the currency of individual success. Again, theemployee is responsible for adapting to new roles and obtaining the knowledgeand skills to be successful in the role.

For employees who want to make a positive impactin their work, these trends are both energizing and challenging. A question manyHR professionals ask is: “are employees ready to take control of theirlearning and development?”

SOURCE: Jim Concelman,production manager, Development Dimensions International, Pittsburgh,Pennsylvania, Sept. 25, 2001.

LEARN MORE: See “What toConsider When Moving to Web-Based Training“

The information contained in thisarticle is intended to provide useful information on the topic covered, butshould not be construed as legal advice or a legal opinion. Also remember thatstate laws may differ from the federal law.

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Dear Workforce Newsletter

Summary
On December 20, 2000 the Clinton Administration released final regulations toprotect the privacy of individually identifiable health information. Theregulations are intended to broadly protect personal health information createdor maintained by “covered entities” — an insured or self-insuredhealth plan, provider, or health care clearinghouse — including electronicrecords, paper records that have never existed in electronic form, and oralcommunications. The regulations also apply to public health plans.

Covered entities generally may not disclose protected health informationwithout the individual’s permission, unless the regulations specify thatindividual permission is not required. Stricter state laws will not be preemptedunless they conflict with a provision of the regulations.

On March 27, the Department of Health and Human Services (HHS) publishedproposed regulations to modify the standards for the privacy of individuallyidentifiable health information. The proposed regulations would clarify andchange certain provisions in the 2000 final regulations. For example, theproposal suggests removing a requirement that certain health care providers geta go-ahead from patients when releasing some private information about thepatients.

Under the proposed changes, health care providers with direct relationshipswith individuals do not have to obtain an individual’s consent before using ordisclosing protected health information for payment, treatment, and health careoperations. (The 2000 final privacy regulations applied a consent requirement toproviders, but not to health plans and health care clearinghouses.) Under theproposed changes, a covered entity may still elect to obtain an individual’sconsent to use protected health information for payment, treatment, and healthcare operations.

The proposed regulations provide sample contract language to meet the newrequirement for covered entities to establish contracts with business associates(e.g., third-party administrators, consulting firms, external revieworganizations) concerning the creation, use, or disclosure of protected healthinformation.

Status
HHS published final privacy regulations in December 2000, and publishedadditional guidance in July 2001. However, in response to comments from healthcare and employer groups, and others, the agency said that it would publishproposed modifications to the final rules in 2002 – these are what are spelledout above.

HHS has requested submission of comments on the proposed changes to theprivacy regulations (issued on March 27) by April 26, 2002. Most coveredentities have until April 14, 2003 to comply with the privacy rules. (Smallhealth plans have an additional year to comply.) The new proposed regulations donot change these compliance dates.

Impact
For employers’ group health plans, whether self-insured or fully insured,many administrative changes may need to be made by the 2003 compliance date.Among the most burdensome requirements, health plans must maintain a record ofall uses and disclosures, allow participants access to and copies of theirmedical records, train all employees who need access to protected healthinformation, and create standards for routine and non-routine disclosures.

The plan would then need to determine what information is the minimum amountnecessary to achieve the purposes of any disclosures. Employers and health plansmay want to familiarize themselves with the original regulations and proposedmodifications to the regulations. They may also want to begin assessing how theyuse protected health information in order to determine what kinds of changeswill be required to comply with the regulations.

To Learn More

• Link to HHS fact sheets on the proposed modifications
  • http://www.hhs.gov/news/press/2002pres/20020321.html
  • http://www.hhs.gov/news/press/2002pres/privacy.html
• HHS press release on the proposed modifications
• HHS press release on the 2000 regulation 
• HHS fact sheet on the 2000 regulation 
• 2000 privacyrule, HHS Guidance, White House statement, and otherinformation

SOURCE: Hewitt Associates LLC

Dear Looking:

Here is a suggested checklist of qualities tohelp you find a good industrial medical provider.

1. Are the reports comprehensive and issuedin a timely manner?

2. Is the medical treatment comprehensive andof good quality?

3. Is a physician available to discuss caseswith you — at least on the telephone — and to solicit your input?

4. Is the initial history taken by thephysician or does he/she have a historian? (Taking the initial history isvery important and should not be allocated to anyone who doesn’t understandthe implications.)

5. Is the physician willing to placerestrictions on a person’s employment and/or job tasks rather than placinghim/her off work?

6. Is the medical provider familiar withworkers’ comp laws and rating systems?

7. Does the medical provider do mostlydefense or plaintiff work?

SOURCE: Certification of Disability ManagementSpecialists Commission (CDMSC), Rolling Meadows, Illinois, Sept. 28, 2001.

LEARN MORE: See “PurchasingHealth Care and Value“

The information contained in this article isintended to provide useful information on the topic covered, but should not beconstrued as legal advice or a legal opinion. Also remember that state laws maydiffer from the federal law.

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Dear Workforce Newsletter