What’s the Difference Between Human Resources and Organizational Development?

Organization Development and Human Resources

What’s the difference between Human Resources and Organizational Development? Being part of a consulting firm that focuses on people analytics and organization development, I am often asked to explain the precise differences between Organizational Development (OD) and Human Resources (HR). Both functions deal with people, right? So, many naturally assume they do the same thing. Yet, there are more differences than similarities in how Human Resource functions relate to Organization Development. Since I have yet to find a satisfactory explanation that would help someone understand the differences in a meaningful way, here is my feeble attempt to clarify what is a pretty murky area.

What is Human Resources?

Historically, Human Resources professionals were primarily concerned with the efficient management of the employment process (from recruitment to termination). HR also focused on helping the organization comply with governmental regulations and in mitigating employment-related risks. Thus, HR found itself acting in a support role to the other business units. Consequently, HR’s culture was mostly transactional and utilitarian in nature. And, HR was very
process-and-compliance-oriented in its thinking.

What is Organizational Development?

Organizational Development, on the other hand, was created as a way of applying behavioral science to help organizations improve individuals and systems. OD’s goal is to help people function better within an organizational context. At its heart, Organizational Development is supposed to represent purposeful and meaningful change for the better. An OD practitioner uses two primary tools in his or her work:
1. Assessments
2. Interventions
Unlike a traditional HR professional, you won’t find an OD professional looking at checklists and manuals. Instead, they are interested in data and research.
In my view, Organizational Development has more in common with leadership and management theory than it does with HR’s risk-managing legacy. Here is a partial list of the different roles that were frequently handled by HR and OD in the past:

Organizational Development Sought To:

• Improve organizational effectiveness while adhering to the organization’s culture and values
• Maximize employees’ potential and help them amplify their contributions in furtherance of the organization’s success
• Assess what is happening within an organization and then conduct an intervention to try and create positive change
• Align human behavior with the organization’s strategy, structures, processes, business objectives, and so on
• Help promote the organization’s values throughout the workplace

Human Resources Was Concerned With:

• Managing the hiring, retention, and performance processes
• Mitigating employment-related risks
• Ensuring legal compliance
• Confirming there is “enough” equity and diversity
• Enforcing policies and procedures
• Reducing labor costs
• Promoting workplace health and safety

Although not comprehensive, this list should give one a pretty good feel for the basic historical differences that existed between Organizational Development and Human Resources.

Over the past several years, management experts have started advocating for a shift towards “strategic HR” –– a focus on making HR a business partner that provides business solutions and strategies, not just compliance services. This advice has taken root in many companies, and the focus on creating a strategic HR department is now quite common. In fact, we see most companies talking about strategic HR as opposed to supporting an internal OD department.

I am not necessarily sure why the notion of a strategic HR function has proven to be more popular within the business community. My own personal theory is that HR professionals were always receptive to the contributions OD was making. With the new mandate that they offer strategic advice, it was natural that HR professionals would turn to OD as source of inspiration and solutions. Then, rather than having to rely on a few believing executives to advance OD’s cause, OD found itself being supported by thousands of HR professionals who started carrying the OD torch.

 

Blurred Lines Between Organizational Development and Human Resources

The upshot of this history is that a blurring of the lines has taken place between Organizational Development and Human Resources. Now that the lines are blurred, the real question is what should the OD community do about it? Should we go back to a world with more rigid boundaries?

HR professionals have already shown they are ready to merge the two functions. But, is that necessarily the right answer? On one hand, the OD community could fight to keep its “turf.” Or, alternatively, OD practitioners could focus on teaching, promoting, and developing OD principles, which are then made available to all type of business professionals. In other words, instead of fighting to keep OD as a separate business function practiced by a select few, OD practitioners could fight to keep OD as a distinct and recognizable business discipline that is used by many.

In my view, the concept of strategic HR is here to stay, and I applaud that fact. Our goal should be to improve the people-side of business, regardless of who is helping to advance that cause. So, in my opinion, a battle over whether businesses should maintain inelastic boundaries between HR and OD is somewhat futile. Rather than trying to segregate things by who does what, the better course is to make sure that practitioners understand and appreciate when they are applying OD to solve a problem and what problems require an OD solution as opposed to an HR solution.

The Employee Experience: Attract, Retain, and Engage

Organization development has the power to dramatically improve companies and the well-being of their employees. For that reason alone, OD deserves real attention by business leaders. But, there is also a strong business case that supports OD. In today’s modern service economy, the ability to win is dependent more on how an organization’s talent performs than on historical factors such as market share, access to raw materials, or logistical prowess. In the 21st century, winning organizations will be those that build an effective employee experience that helps them attract, retain, and engage the right talent.

In my view, the case for OD is strong, but I am ambivalent about who gets to use OD. For us, we want all HR leaders and business professionals to apply OD concepts wherever possible. For most of us in the OD community, we are comfortable if the line between HR and OD stays blurred. But only if we do a good job of making sure practitioners have a clear understanding of how to use OD principles, tools, techniques, concepts, and processes. Rather than fighting for the sanctity of the OD department, the winning strategy, in my opinion, is to fight for the sanctity of OD as a well-used and well-practiced business discipline.

The Why Behind 360-Degree Feedback

360 feedback, also known as multi-rater feedback, 360-degree assessments, or 360-degree surveys, have been around for over 60 years, and are enjoying increased popularity. Organizations today are using these results for a number of purposes, ranging from employee development to talent assessment (and a myriad of uses across that spectrum). Why might you want to consider this a tool in your organizational or personal tool kit? There are a number of reasons. But, before we tackle the issue of “why 360-degree feedback?” let’s first set the stage by addressing the question, “What is 360-degree feedback?” 

360-degree feedback is a unique development tool. With an individual figuratively in the center of a 360-degree circle, feedback is gathered—typically online through a 360 assessment tool or platform—from key stakeholders in that individual’s success. This allows an individual to receive influential feedback from peers, coworkers, managers, and anyone else who works closely with them.

Why 360-Degree Feedback?

The “what” behind 360 feedback is fairly simple, and there are various tools that allow us to gather that feedback. So, what about the “why?” Why use 360-degree feedback in your organization, or as an individual?

Consider this. Imagine looking in a mirror. What does the mirror help you do?

Get out of your head
  • The mirror helps you to see what you cannot see on your own.
  • You get a picture of what others will see when they encounter you.
  • You want to know if something is amiss; you can fix it or be aware of it.
  • A mirror can be used to help you view yourself from a different perspective.

Without other perspectives, we tend to invent our own reality. We think we see the world as others see it—we create a picture of what is “real”. A mirror provides us with a different perspective.

360-degree feedback is your workplace mirror. It allows you to see characteristics, attributes, and behaviors that you might not be able to perceive on your own (for more information around this concept, you may want to explore the notion of the Johari Window!). You gain a better idea of what others think of or see in you, both in terms of successes and areas for improvement. You can better identify when something is wrong, or not up to your personal standards, and rectify it. In short, by taking into account the feedback of the people you work with, and making goals to improve, you can become your best self. Does what we see in that mirror mean we need to act on it? Not necessarily. But it gives us choices that may not have been available to us without a more complete picture.

When 360-degree feedback is targeted to improve performance or to develop specific competencies essential to your organization or leadership, it provides insights that assist in development and growth. 360-degree feedback is designed to highlight strengths, as well as opportunities for development. We often find that individuals have shrugged off the value of their strengths, focusing instead on addressing areas for development. However, using an established strength to lead change in a weaker area is typically more effective than merely focusing on a weakness on its own. The saying “play to your strengths” rings true in the workplace as we strive to create a high-performing, highly efficient organization. Multi-rater feedback is an excellent way to identify not only what isn’t working, but what is working.

360 Feedback is a Tool For Change

As we become more comfortable considering the mirrors shown to us by our peers, supervisor, direct reports, and others, we gain confidence in using feedback as a tool. As confidence grows, we naturally begin to ask for feedback, rather than soliciting it solely from a tool or instrument. This information acts as a navigation tool, helping us to understand where we are, relative to where we want to (or should) be. Feedback becomes a great way to chart progress on selected goals.

Just as no one changes lanes on the freeway without checking their mirrors first (ok, we’ll just assume we are all decent drivers), we should learn to check our personal mirrors before we strive to make changes as leaders in our organizations. We must learn to value and trust the information given to us and use it to our benefit.

As we get to know ourselves better through feedback mechanisms, we start to see some powerful benefits:

  • We become more effective in our communication with others.
  • We use more efficient conflict resolution strategies.
  • We are more accountable.
  • We navigate change more efficiently.
  • We build better working relationships and create stronger teams.
  • Our Emotional Intelligence improves.

At first, feedback can be difficult to hear for many of us. In fact, when we provide coaching on 360 feedback we typically step feedback recipients through the “SARA model,” which stands for Shock, Anger, Resistance, and Acceptance. It is not always easy to have people close to us say that we are misaligned, misunderstood, or misbehaving. But who doesn’t want to know that they have spinach in their teeth after lunch, or that their clothing is not in order after a visit to the restroom? This is delicate information to give someone, and sometimes startling information to receive. However, if it is given with the intent to assist rather than harm, the feedback is valuable information that may also prevent further problems. Getting to the point where one sees 360 feedback as positive information is not always graceful, but can be used as a powerful tool for change.

Receiving Feedback Can Be a Delicate Process

A 360-degree feedback assessment does not generally address spinach-in-the-teeth types of delicate or sensitive issues. It addresses issues that may feel delicate in the beginning, like trust, openness, dependability, vision, energy, concern for others, conflict management, problem-solving ability, expertise, or teamwork. They may feel delicate because feedback is an emotional process (and here is my blatant plug for 360 feedback coaching!). But feedback, done right, points to opportunities.  When opportunities are embraced and action is taken, additional feedback is solicited and progress is noted. As an individual, you feel the satisfaction that comes from growing, which then acts as a catalyst to stimulate further growth. As an organization, you begin to build a feedback culture. Feedback becomes more objective and informational, and less emotional and sensitive. 

Does it hurt your feelings to see a car in the lane next to you when you check the side-view mirror before changing lanes? No! The car may surprise or startle you, but you are glad you checked your mirror before you moved over. As we get more experience with feedback, we learn to use it, rather than personalize it, just as we use our side-view mirrors.

So why 360-degree feedback? Essentially, 360-degree feedback is a way of asking others to tell you what you are doing well and what you can be doing better. It is a mirror that can assist you in seeing above, below, and around you. It is a tool that can accelerate your development as a leader. This process that can mature your perspective of yourself and others. It is a way to get out of your own box. It is a refiner’s fire that may burn a little at first but will leave you with a better shine.

360-degree platform

3 Crucial Elements That Drive Employee Success

Training Female Smiling

At DecisionWise, we are in the business of driving employee success through experience and feedback. When working with organizations, we focus on their employee experiences, which we define as an organization’s culture understood through the eyes of its employees. Put differently, the employee experience is the way in which employees perceive and are impacted by their work, their supervisors and leaders, and the other various touchpoints they encounter within and around an organization.

When I first started writing and talking about employee success, I tried using a definition that equated the employee experience with what I called “deliberate culture.” This definition, however, proved to be too narrow and a bit over simplistic. Instead, our ongoing research at DecisionWise has led us to discover that there are three, vital interrelated concepts, of which the employee experience is just one component.

These three elements are:

1. Culture

Culture can readily be understood as “the way things are done around a particular place or within a certain group.” Organizations, civic leagues, clubs, families, etc., all have unique cultures. When addressing an organization that has employees, we define culture as those values, norms, guiding beliefs, principles, and common understandings that are shared among members of the organization as the proper way to behave, think, and approach the organization’s work and mission. An organization’s culture is either organic, such that it is created by a myriad of interactions with little shaping by senior leaders.  Or, alternatively, culture can be designed and managed – by the organization’s senior leaders – to support and sustain the organization. 

2. The Employee Experience

The employee experience is the impact an organization’s culture has on its individual employees. The employee experience is that intersection where an individual bumps into the organization’s culture, either for good or bad. When dealing with an employee’s experience, we are seeking their perceptions, attitudes, and beliefs about what it is like to work at a particular organization or company. Again, the experience tells us how the organization’s shared norms and values are impacting the employee, and when we aggregate the employees’ responses from surveys we send them, we uncover an array of insights that help us know how we might change or strengthen the culture.

3. Employee Engagement 

Employee engagement is the positive emotional response employees have to their individual employee experiences. If alignment between the employee experience and the individual’s personality, viewpoints, values, etc., is high, then the individual will bring more of themselves to the organization’s mission and purpose. They will engage in moving the organization forward in a constructive manner. Thus, employee engagement is an outcome; an outcome that is derived from both the organization’s culture and the way the organization’s culture is experienced by its employees. 

For years, many of us in this space spoke of an umbrella concept that we called “employee engagement.” The challenge with this approach was that it gave the impression that employee engagement was something you worked on independent of your culture or the corresponding employee experience. What we now better understand is that these three elements do not exist independent from each other, and that the first two elements are drivers of the third element.

For us here at DecisionWise, being precise with our definitions has helped us better deliver value to our clients. We have improved our ability to both measure employee success at various levels and to learn precisely where our efforts have the most impact in growing engagement.  I deliberately use the word “grow” in this context. Employee success is not something you build; it is something you grow by carefully cultivating your culture.

Employee engagement is grown and cultivated

How does an organization improve its cultivation efforts? Improvement is found by consistently measuring employee experiences at various points in time and at various stages within the organization. Fundamentally, it’s about taking the time to listen, then seeking to understand, and then acting with genuine intent to improve the culture so that employees can thrive and bring their best selves to work.   

Nowadays, we spend much of our time helping our clients understand their cultures by providing them with the data, insights, and recommendations they need  to build the right culture for their organization. The reward?  Successful business outcomes that are driven by highly engaged employees who are benefitting from rewarding and fulfilling employee experiences. 

MAGIC-Five-Keys-for-Managers-to-Unlock-the-Power-of-Employee-Engagement

Infographic: 5 Tips For Giving Effective 360 Feedback

Download the PDF version of “Infographic: 5 Tips For Giving Effective 360 Feedback”

The next time your boss, colleague, direct report, or friend comes to you for input on a 360-degree feedback survey, remember these five points to ensure your feedback is immediately conducive to the personal improvement of the recipient.

For more on giving effective 360-degree feedback, read the full blog: “5 Tips for Giving Effective 360 Degree Feedback”

Learn more about our 360-degree Feedback platform:

360-degree platform

5 Employee Engagement Ideas to Motivate Your Team

DecisionWise has been conducting employee engagement surveys with organizations around the world since 1996. During that time, we have studied over 32 million survey responses to understand what manager behaviors have the greatest influence on employee’s engagement in their work. These behaviors are tied to the five keys that drive engagement, namely: Meaning, Autonomy, Growth, Impact, and Connection (MAGIC). The more employees have positive experience with these five employee engagement ideas, the more likely they are to engage in their work.

Without getting too theoretical, we have distilled the most important manager behaviors for each of these keys. On top of this, we have five additional ideas that may help you cultivate a company culture of engaged employees. Here are some practical employee engagement ideas that you, as a manager, can use to create experiences that will drive engagement and, ultimately, performance.

MEANING

“It is impossible to have a great life unless it is a meaningful life. And it is very difficult to have a meaningful life without meaningful work.”

Jim Collins

People experience meaning when their work has purpose beyond the tasks or work itself. Generally, people feel a greater sense of meaning when the organization they work for has goals that align with their own personal value systems. Managers help reinforce meaning within their teams by talking frequently about the mission and goals of their organizations, departments, and teams to help employees clearly see how working toward those goals is personally important to them.

Manager Tips to Improve Meaning

  • Find out what is meaningful to each of your employees and how they experience meaning at work. Encourage them to work on tasks that are meaningful to them.
  • Frame goals with a sense of meaning and purpose. Explain the “why”.
  • Share how the organization’s products or services are meaningful to end users and/or the community.

AUTONOMY

“Control leads to compliance; autonomy leads to engagement.”

Daniel Pink

Another employee engagement idea is to establish a sense of autonomy as a critical factor in creating lasting engagement within your team. Different team members require different levels of autonomy. As a manager, you should work with employees on an individual basis to determine how much autonomy you can appropriately offer based upon individual skill level and drive. Typically, an employee will respond favorably to being granted autonomy and trust in creating their own work life balance. Conversely, most individuals respond poorly to continual oversight or micromanagement. Empower employees by giving them healthy levels of autonomy.

Manager Tips to Improve Autonomy

  • Decide where you can grant more autonomy and offer it. Is there flexibility about how they do their work, when they do it, where they do it, or with whom they work?
  • Provide clear direction and boundaries so that employees don’t get overwhelmed trying to figure out what you want.
  • Celebrate success and don’t punish mistakes.

GROWTH

“The growth and development of people is the highest calling of leadership.”

— Harvey S. Firestone, founder of Firestone Tire & Rubber Company

Employees experience growth by being challenged and stretched in ways that lead to personal and professional progress. Growth is a key factor leading to employee engagement and retention. Managers can help their team engagement by being attentive to their career and development goals. Having regular discussions to plan and check in on career development can be very helpful and motivating to team members. It’s especially important to show new hires that there are continued growth opportunities within the company.

Manager Tips to Improve Growth

  • Make sure each employee has an Individual Development Plan (IDP) and review it at least quarterly.
  • Talk with your employees about their career aspirations.
  • Regularly coach your employees.

IMPACT

“A life is not important except in the impact it has on other lives.”

Jackie Robinson

People experience a sense of impact when they see the difference their work makes, or when they feel valued for the contribution they make to the organization and its mission. A manager can help team members improve their engagement by showing them how their contributions are integral to the success of the larger team, the organization, and to the organization’s customers, clients, or patients. Employee recognition, taking the time to acknowledge the efforts and contributions of team members can also help them feel a sense of impact, not to mention a sense of connection and care.

Manager Tips to Improve Impact

  • Set clear goals and objectives that are challenging with your employees.
  • Define success and track it.
  • Regularly Recognize your employees’ contributions.

CONNECTION

“Communication—the human connection—is the key to personal and career success.”

Paul J. Meyer

Of our employee engagement ideas, this is one of the most important. Connection is the sense of belonging a person feels when they are part of an organization or team. Our research data shows that a strong sense of connection is one of the most critical factors in determining the engagement of organizations and individuals. Individuals connect to organizations through social relationships, enjoyable work opportunities and experiences, congruent values, and common purpose.

Manager Tips to Improve Connection

  • Show that you care about your employees so that they trust you. In the words of Teddy Roosevelt: “People don’t care how much you know until they know how much you care”
  • Don’t be afraid to be vulnerable to your team. Let them get to know you personally.
  • Provide space and activities so that your team can have fun and get to know one another.

START LISTENING

The first step in improving anything is to understand the current state. Gathering employee feedback through surveys is a key component of this. We suggest using a variety of employee surveys to gain insights and understanding into the experience your employees are having. Use a listening program to help you answer this fundamental question of internal communication: What experience am I creating right now for my team, department, or organization?

DEFINE the EMPLOYEE EXPERIENCE

As you have probably noticed, these tips appear to be simple and you may be one of those managers that practices them on a regular basis. But based on our survey research, we find that many teams lack managers that are either good at these employee engagement ideas or do them consistently. When was the last time you had a conversation about your employee‘s career aspirations? Or do you recognize your employees on a weekly basis?

employee engagement ideas

KEEP YOUR EAR to the GROUND

Listening is the starting point, the endpoint, and vital for everything in between. Continue to listen to what your employees have to say about the experience they are having. Do they wish there were more opportunities for remote work? Is there not enough collaboration between different departments? Do new employees feel heard and valued? Use continuous listening programs to provide leaders with data insights to help them improve experiences at levels within the organization.

MAKE DATA-DRIVEN DECISIONS

Your gut is great, but it’s not all-knowing. Enhance your decision-making through people data and data analytics. Invest in the tools and resources you need to make better decisions that are grounded in evidence and data.

INVEST in a COMPETENCY-BASED CULTURE

Ground your employee experience in competencies by helping your people develop the knowledge, skills, and abilities that will drive success, fuel growth and encourage team building. Be clear on what competencies are needed for success and what behaviors will be observed and prevalent when those competencies are operating at full force.

CONDUCT A SELF-ASSESSMENT

As you have probably noticed, these tips appear to be simple and you may be one of those managers that practices them on a regular basis. But based on our survey research, we find that many teams lack managers that are either good at these employee engagement ideas or do them consistently. When was the last time you had a conversation about your employee’s career aspirations? Or do you recognize your employees on a weekly basis?

As you look at this list, consider which of these keys is most important to your engagement and the engagement of each of your employees. We are all unique, so each key will rank differently in importance. As you conduct one-on-ones with team members, ask them about these keys and find out how they play into their engagement. Better yet, have them take our free Engagement MAGIC® Self-assessment and review the results together.

Employee Engagement online learning course

How to Become a Development-Centered Leader

A development-centered leader works with her team

My 2-year-old son is the ultimate leadership teacher.  

On any given day, I have tasks I need him to perform. I have tried many different strategies to get him to do the things I ask him to do—some more effective than others. The least effective sequence of events:  

  • Ask him to complete a task. 
  • Get reluctance and excuses (his current line “Not today, Dada.”). 
  • Tell him what to do. 
  • Motivate him with bribery and incentives. 
  • When this does not work, use my authority and position to get him to comply. 

Do we see elements of this behavior in the workplace?

A team works more cohesively with a development-focused leader

My parenting strategy is an example of what some leaders do to motivate team members to accomplish role objectives. My 2-year-old wants what everyone wants: A leader that empowers decision-making in others that leads them towards personal growth. Our data shows that team members are eager to find leaders willing to help them develop personally and professionally.

Development is motivating because we all want to progress and gain a sense of mastery in both our work and life. Workplaces need leaders that can balance the development and growth of others while still achieving business demands.  

So, how do you continue to become this kind of leader? 

Leaders often fall prey to the siren call of results, and their focus on developing others gets pushed to the back burner. Again, most leaders have good intentions of leading from a development-focused approach, but business demands are always the priority.  

Here are two principles to help you lead with a development-centered approach.  

#1: Avoid Telling Others What to Do

Most leaders go through a phase where they rely heavily on a command-and-control style of leadership, where the focus is on this core idea, “do what I say.” Orders and directives are issued down the hierarchy chain. This style of leadership often produces immediate results.  

Tasks are completed, but what is the cost? Morale can suffer with a heavy dose of top-down instruction. Input, innovation, and discretionary effort wane. Power struggles can ensue, and individuals may carry out instructions but only because they are compelled to do so.  

There is a time and place to give instructions and directives, but it should not be your default leadership orientation. One appropriate example of when to offer more guidance and instruction is to newer employees that are not up-to-speed in the role. 

Employees engage more with their development centered leader

A primary objective of a development-centered leader is to create employee experiences where people feel empowered to make decisions and advance in their careers. If leaders give orders and micromanage procedures, it removes the individual’s ability to make decisions, problem-solve, and ultimately, progress. Humility and patience are qualities needed in a development centered leaders’ approach to allow direct reports to learn and grow. Individuals will make mistakes; tasks may not be accomplished in the way you would have instructed, but individuals will learn and become better. They will feel a greater sense of ownership in the process and the result will be increased engagement and discretionary effort. 

#2: Co-Create Instead of Dictate

Ask yourself how often you do the following? 

  1. Lead with questions to clarify, explore, and guide other’s thinking. 
  2. Give suggestions rather than commands to allow individuals to make decisions. 
  3. Establish clear guidelines and outcomes less focused on excessive rules and processes. 
  4. Give warnings about potential pitfalls. 
  5. Hold individuals accountable for both correct and poor decisions. 
  6. Support, recognize, and reward strong performance. 
  7. Double down on compassion throughout the whole process. 

Leaders that follow these principles will benefit in both business results and team member development to confront the next wave of workplace challenges.  

The development-centered leader approach focuses on the long-term success of individuals and companies that will produce sustainable teams, leaders, and organizations. The ROI will be worth the additional time and focus it requires.  

As I continue to work at this approach, I still get “Not today, Dada.” from time-to-time but, I am finding a shared engagement, commitment, and decision-making orientation unfolding in my 2-year-old son’s behavior. Individuals on your team will value your dedication to their success. You will find a greater commitment and self-directed nature in your team.

People Analytics Strategy: Building the Right Foundation

Engaged Team

When it comes to leading an organization, 2020 was a year unlike any other. The shifting demands of a global pandemic, mass migrations to remote work, not to mention political and social unrest, all challenged even the strongest of organizations. Critical decisions had to be made almost daily to keep up with new regulations, employee expectations, and harsh new business realities.

So, how did some of the best companies make leadership decisions during these trying times? Increasingly, they looked for support through people analytics.

At its simplest, people analytics involves using data to better understand your workforce and to improve the quality (and speed) of organizational decisions. A strong people analytics strategy organizes and leverages data to reduce uncertainty and help decisionmakers select the best paths forward. The ultimate value from people analytics is when it is used to generate reasonable predictions about the future.

A robust People Analytics program relies on three core elements:

  1. A multi-disciplinary team to lead and manage the process and to oversee the strategy (the “who” and “why” questions);
  2. Constructing and maintaining the technical details of gathering, storing, securing, cleaning, and accessing the data (the “what” and “when” questions);
  3. A well-designed people analytics strategy to analyze and use the data to derive maximum value for the organization (the “how” question). 

This article will focus on this third element of “how” to build the right people analytics strategy.

Embracing People Analytics

While the potential benefits of people analytics are numerous, the ultimate value can only be as good as the quality of the data sources used as inputs. The model below outlines the key data categories to be considered when creating a robust people analytics strategy. To unlock powerful predictive insights, a strategy should be built on a solid foundation of employee demographic data, employee experience data, and operational outcome data.

Demographic Data

Employee demographic data refers to descriptive information about your employee population. What do you already know? Age, gender, tenure, manager status, educational background, performance ratings, exemption status, etc. Most demographic items are best captured when an employee is first hired and onboarded, though employee profile surveys can also be used to help update and expand demographic fields. The potential fields are virtually limitless.

During 2020, with the growing national conversation on diversity, equity, and inclusion, we saw an increase in organizations capturing ethnicity data and an expansion of gender categories to better support DEI efforts. Robust employee demographic data helps create a broad foundation for deeper analysis when combined with other datasets.

Employee Experience (EX) Data

Employee experience (or EX) data refers to the perceptions, attitudes, and beliefs that an employee forms directly from their experience working for an organization. This data is constantly changing and requires a measurement strategy that captures perceptions frequently and appropriately across the employee lifecycle.

DecisionWise helps collect EX data via employee lifecycle surveys, annual anchor surveys (engagement surveys), anniversary surveys, and 360 feedback assessments. EX data helps an organization understand the experience they are creating for employees across a myriad of planned and unplanned moments.

Outcome Data

This category includes anything that is tracked as part of your organization’s operational metrics. This includes traditional HR operational data such as attrition numbers, as well as non-HR data like sales or production metrics. Often these outcome items are the areas that you will be using people analytics to solve for later.

Interestingly, outcome data is often a limiting factor in a people analytics strategy. Why? Because human resource teams frequently do not have access to (or do not seek out) data sets outside of HR. I have worked with hundreds of HR teams over the last ten years and I am continually surprised how many organizations keep their “HR data” and their “operational data” in separate silos. This is why we strongly encourage HR leaders to help build a multi-disciplinary team to work on their people analytics initiatives.  All outcome metrics (and corresponding human custodians) should be sought out as potential inputs for people analytics and the team. 

Insights & Predictions

The ultimate goal of a people analytics strategy is to unlock insights and predictions that are useful to the organization. These insights are derived by combining and analyzing an organization’s demographic, EX, and outcome data. Some insights may become apparent simply by slicing EX data by a few demographics. For example, an engagement survey with demographic detail might reveal that female managers in a company’s Northeast region are feeling overworked. Other insights and predictions may require advanced statistical analysis to reveal. For example, correlating the impact manager 1:1’s is having on customer churn, or how a training program is impacting clinical outcomes within a healthcare organization.

Leadership workshop in the office

In many ways, the Human Resources function is still seeking to find its strategic voice within the organization. A strong people analytics strategy that leverages robust demographic, EX, and outcome data not only gives HR the tools to create a world class experience for employees, it also provides the insights and predictions to help HR inform business outcomes throughout the organization. The case is becoming increasingly strong for companies to organize and analyze their data to increase their understanding, to make data-driven decisions, and to leverage people analytics to improve the quality of their thinking.