HR Processes and Business Outcomes

Over the years, organizations have steadily improved the overall implementation of numerous HR processes. These improvements are apparent in many ways, from the manner in which organizations execute the hiring and development of employees to the implementation of company-wide opinion surveys. However, organizations and HR functions often come up short, specifically in these key areas:

• Building the business case for HR initiatives

• Effectively executing HR initiatives from start to finish by applying proven best practices

• Demonstrating the cause-and-effect relationships between HR initiatives and business outcomes

• Calculating expected return on investment (ROI)

• Creating a culture of measurement and modification

These five key areas represent significant opportunities for HR leaders to confront, overcome, and leverage for competitive advantage. This book is the step-by-step guide HR practitioners need in order to incorporate best practices and fully leverage data and senior- leadership buy-in, across numerous HR initiatives, to drive business outcomes in their organizations. HR initiatives (and human resources, in general) should have a demonstrated impact on business outcomes, particularly in the current economy in which any opportunity to gain a competitive advantage is critical. At the same time, the outsourcing of human resources is becoming a real proposition; therefore, showing a definitive connection between what we do as HR leaders and how it impacts business results will help keep the function relevant in organizations and improve our professional standing. Human resources typically has a great reputation as a function that gets things done; it is now necessary to take the next step and show the true impact of all our hard work.

Incorporating the steps outlined in this book will enable HR leaders to be considered business partners and trusted advisors. The constant desire by HR leaders to be given a "seat at the table" has been hindered by our inability to demonstrate the value of HR initiatives in terms of their impact on bottom-line business results. The process outlined in this book will allow you to demonstrate meaningful and measure-able value and impact the health, stability, and growth of the organization while also providing direction to the leadership team on how to execute effectively.

The Science-Practice Gaps

Let us start with a quick story: Every year we, as scientists-practitioners, attend the annual conference for the Society for Industrial and Organizational Psychology (SIOP). SIOP is a division of the American Psychological Association (APA) dedicated to industrial- organizational (I-O) psychology. In case you are not familiar with this discipline, it is basically the scientific study of the workplace where methods of psychology are applied to issues of critical relevance to business. The point is not to educate you on the field of I-O psychology but rather to highlight a key issue we talk about every year at the conference. For nearly 15 years, we have attended this annual conference and for most of those years, the content has focused on "closing the scientist-practitioner gap." This topic is discussed and debated every single year. In fact, it is the topic of the keynote address of the president at least every other year. So what is this science-practice gap, and why are we so concerned with it? This "gap" refers to the lack of alignment between the I-O academic community and I-O practitioners. A 2009 survey of I-O psychologists suggested that the gap exists for several reasons:

• Practice underutilizes available science and research.

• Science undervalues innovations in practice.

• Science does not produce research findings that are relevant to practice.

• Practice does not provide sufficient opportunities to research relevant issues.

This survey was specific to the I-O community, but it has relevance to a much broader issue in human resources. As HR professionals, a significant opportunity exists to build our processes and programs based on applied, scientific research. There is also an opportunity for researchers to conduct more meaningful, practitioner-oriented research. In response to these existing needs, the purpose of this book is threefold:

• To summarize relevant applied research for key HR processes

• To describe best practices for each HR process

• To identify how to make the processes business-focused — link the processes to relevant business outcomes (i.e., show ROI for each process)

This book is written to assist HR practitioners in utilizing key research findings and best practices to design and implement more effective HR processes. Taking the key points from tested, reliable, valid, and objective research and incorporating them into the initiatives will improve execution, limit legal risks, keep human resources on the cutting edge, and most importantly, help human resources demonstrate business impact and return on investment (ROI).The goal is not to get hung up on the science or the math of the research; we are in the people side of the business — and that is a good thing. One of the goals of this book is to briefly summarize the scientific research for key HR processes to make human resources relevant, practical, and people-focused. Most HR practitioners understand why this goal is necessary, but just in case you are not convinced yet, we will review a simple example of this gap and the relevance of this book.

Let us consider employee selection, which is probably the most researched HR process of all. When it comes to selection, we know a lot about what works and what does not. The validity of the employee interview has been studied literally hundreds of times — probably more, but we could not finish the book if we counted all of them. The research shows that an unstructured interview is only slightly better than "chance" at selecting a high performer. This means that when hiring managers interview candidates in the typical "tell me about yourself" approach, the decision they make about whether or not to hire the candidates is only slightly better than flipping a coin. However, as HR practitioners, we also know that this method is exactly how most hiring decisions are made. Often an organization will have multiple people conduct an...