HR METRICS: HR SIX SIGMA

IN INDIAN ORGANIZATIONS

CHETNA WADHWA
15PGHR13
(Submitted to: Prof. Jyotsna Bhatnagar)

OVERVIEW
Need for HR metrics
Some Models
HR Metrics
HR Six Sigma
Case-1: Globcorp
Case-2: MNC Bank
Discussion

NEED FOR HR METRICS

According to Ulrich and Smallwood, 2005
Intangibles represent hidden value of firm
Different from financial and physical assets
Difficult for competitors to imitate
According to Kaplan and Nortan, 2004
Alignment between organizational strategy and
intangibles create value for the organization
INTANGIBLES = SUSTAINABLE COMPETETIVE
ADVANTAGE

NEED FOR HR METRICS

HR professionals- justify their contribution

Human Capital

INTANGIBLE ASSETS

For HR, there are no objective parameters to

measure the value of intangibles and show
contribution to the organization
Metrics help in justifying HR's role and
contribution

SOME MODELS
I) Myer's and Flower's 5-D Model
M. Scott Myers and Vincent S. Flowers proposed a
procedure for assessing the workforce of an
organisation and estimating the costs of various
inputs to improve the effectiveness of human
organisation
Knowledge

SOME MODELS
II) Lev Schwartz Compensation Model
Used by Infosys Technologies in India
Based on the concept of human capital
Capital is a source of income over a period of time
Model identifies an individuals expected
economic value to the organization to his future
earnings for his remaining active service life
This model ignores inherent qualities, traits and
skills, environment of the organization and
possibility of talent flight and transfer (Singh
and Gahlot, 2000)

HR METRICS
EVA (ECONOMIC VALUE ADDED)

HR SIX SIGMA
Six sigma is a set of tools and techniques used for
process improvement
A data driven approach for eliminating defects
Pioneered by Motorola and then by GE and
Alliedsignal
Six sigma denotes the organizational mindset in
which people make decisions based on data, look
for root causes of problems, define defects based
on external or internal customer, and seek to
control variation, track leading indicators of
problems to prevent them from happening
(Lanyon, 2003)

HR SIX SIGMA
Management BB Champions

Key Roles in Six Sigma

HR
SIX
SIGMA
Define

DMAIC MODEL

CASE I- GLOBCORP
HR SIX SIGMA: MANAGING TALENT ATTRITION

Indian Operations include:

12000 Employees
4 Geographical Locations
450 processes around world

Organizational
Design and Staffing

OBJECTIVES:

Induction placement

Diversity

People development
HR Brand: Employer of Choice

ROLE OF HR

Talent retention

Performance
management

CASE I- GLOBCORP
HR SIX SIGMA: MANAGING TALENT ATTRITION
SITUATION
Unclear targets and no control over its processes
Frequent incidences of delay in salary payout, nonadequate bench strength, mistakes in Management
and Labor Studies, headcounts etc
Six-sigma implementation was more difficult
because the nature of job
People involved did not think in terms of objective
data
Objective parameters for performance
measurement and evaluation - neither presented
nor well documented.

CASE I- GLOBCORP
HR SIX SIGMA: MANAGING TALENT ATTRITION
SIX SIGMA DEPLOYMENT PLAN- DMAIC MODEL
I) DEFINE
Identification and prioritization services based on
characteristic of customer
Project selection based on the following:
Customer satisfaction survey: know about the feelings
of the internal customer
Pareto diagram: reason for the defects as well as gaps
between practices
Benchmarking: provided important leads for the project
Prioritization: was to find out the cost sources of the
organizations

CASE I- GLOBCORP
HR SIX SIGMA: MANAGING TALENT ATTRITION
SIX SIGMA DEPLOYMENT PLAN- DMAIC MODEL
I) DEFINE
After identifying and prioritizing the process four areas were
decided:
Process map
Metrics
FMEA: Failure mode effect analysis
Control plan
Those attributes that have most impact on quality and
customer satisfaction are called Critical to quality
characteristics questions.

CASE I- GLOBCORP
HR SIX SIGMA: MANAGING TALENT ATTRITION
SIX SIGMA DEPLOYMENT PLAN- DMAIC MODEL
I) DEFINE
Process

CTQs

Attrition

Reduction of overall attrition

Diversity

Increase the ratio of female

employees

Induction

Optimization of bench
headcount

Organization Design Optimization of Span of

control
Performance
management

Increase Internal movement

CASE I- GLOBCORP
HR SIX SIGMA: MANAGING TALENT ATTRITION
SIX SIGMA DEPLOYMENT PLAN- DMAIC MODEL
II) MEASUREMENT

Capability of the process determined along with the metric, units,

opportunities of defect and improvement target
Measurement matrices decided for every CTQ (effectiveness or
process metrics) and CTPs (efficiency or output metric)
measurement process started with data collection related to sub
processes
Team had better insight of the problem and the problem areas
A random sample of new joinee and preexisting employees taken
and significance level checked for difference in TAT (turn around
time) for the process for newly joined and pre existing employees

CASE I- GLOBCORP
HR SIX SIGMA: MANAGING TALENT ATTRITION
SIX SIGMA DEPLOYMENT PLAN- DMAIC MODEL
III) ANALYSIS
When and where the defects occur
The Probability of target was plotted
Brainstorming sessions were conducted within the team.
Fishbone analysis was conducted to understand the cause and
effect relationship of the defect in the process.
Aim of Analysis:
involvement of different customers at different step of the process
output at each level
full map of the process
input and suppliers role

CASE I- GLOBCORP
HR SIX SIGMA: MANAGING TALENT ATTRITION
SIX SIGMA DEPLOYMENT PLAN- DMAIC MODEL
IV) IMPROVEMENT

Ways to attain six-sigma capabilities determined by narrowing

down the work area
Focus was on identifying the root causes with further
investigations concentrated on these root causes
Identified root causes were measured again on two main
parameters:
Degree of impact of them on undesirable quality
Degree of control upon them

Finally those root causes which could be controlled and left

high impact on quality were picked up for improvement

CASE I- GLOBCORP
HR SIX SIGMA: MANAGING TALENT ATTRITION
SIX SIGMA DEPLOYMENT PLAN- DMAIC MODEL
IV) CONROLLING
Aim: Insure institutionalization of the improvement
Normal distribution curve of turn around time (TAT) for the
process drawn to check if change sustained at significant
level or not
Before and after analysis: measure of current process
capability and important tool for controlling
Potential causes of failure accessed and method of
controlling identified and implemented.
Control response plan was prepared to serve as regular
check on system to control the generation of undue
variance in the processes.

CASE I- GLOBCORP
HR SIX SIGMA: MANAGING TALENT ATTRITION
OUTCOME

Attrition rate maintained at constant level since last two

years (difficult task in industry related to call center)
Bench strength at optimum level of 4%, which used to be
more than eight percent one year hence
Faster processing of back end HR activities like
compensation, preparation of ID cards etc.
Number of employees per HR professionals count was
increased from 160 to level of 190

CASE II- MNC BANK

HR SIX SIGMA: TRAINING INITIATIVES
Indian Operations of MNC include:
12000 Employees
4 Business Divisions
AIM: To achieve service excellence for
increased customer satisfaction and enable
organization to increase share of market
and top line revenue growth

CASE II- MNC BANK

HR SIX SIGMA: TRAINING INITIATIVES
According to Quality Leader, MNC Bank
Six- sigma is more than cost saving initiative
Helped integrating regional banks in
multinational framework

Reviews
Goals
Measur
es

CASE II- MNC BANK

HR SIX SIGMA: TRAINING INITIATIVES
ROLE OF HR
Compensation
Training and Development
Other Benefits
Social Brand Imaging

SIX SIGMA TEAM

Team comprised of a
change leader, black belt,
green belt and a quality
leader
Implementation Team
comprised of process
owners and participants
Green Belts- Process
Owners

Six Sigma was an organization wide initiative. Every associate

was trained and responsible for implementing this across
organization

CASE II- MNC BANK

HR SIX SIGMA: TRAINING INITIATIVES
SIX SIGMA DEPLOYMENT PLAN- DMAIC MODEL
Training and development activities were motivational
factors for employees and significant resources were also
spent on these activities
I) DEFINE
Problem identification and prioritization
Methods: Voice of customer, Pareto chart benchmarking
and expense record
Customer Satisfaction Survey- effectiveness of training
initiatives were found to be only 49% as against 56%
Benchmarking- Johnson and Johnson achieved up to 70%
customer satisfaction for training initiatives

CASE II- MNC BANK

HR SIX SIGMA: TRAINING INITIATIVES
SIX SIGMA DEPLOYMENT PLAN- DMAIC MODEL
II) MEASUREMENT
Criteria for the measurement of performance were selected
based on:
Critical to quality questions
Critical to cost concerns
Concern: Alignment of HR to the business strategic
objectives
Primary Metric: Learning and development index which
depicts the customer satisfaction from training on various
parameters in percentage basis was taken up
Secondary Metric : The cost per man-hour, spent on
training. 33% increase in man-hour was made as an
objective

CASE II- MNC BANK

HR SIX SIGMA: TRAINING INITIATIVES
SIX SIGMA DEPLOYMENT PLAN- DMAIC MODEL
III) ANALYSIS
Find out the root cause of undesired quality level
Instruments used were pareto, voice of customer,
hypothesis testing etc.
Controlling the inputs that control the measures
Influencing Factors:
Factors from Voice of
Coaching
Customer:
Learning opportunity for all Client information
Right
Product knowledge
Link training and growth
Training need analysis
Opportunities to apply skills
acquired

CASE II- MNC BANK

HR SIX SIGMA: TRAINING INITIATIVES
SIX SIGMA DEPLOYMENT PLAN- DMAIC MODEL
IV) IMPROVEMENT
Causes accessed keeping in mind the practicality of
application
Persons responsible are communicated
CAUSES:
Training was not directly linked with associates career
progression
Associates needed opportunities to apply skill
Associates needed involvement and participation in the
process of internal trainings

CASE II- MNC BANK

HR SIX SIGMA: TRAINING INITIATIVES
SIX SIGMA DEPLOYMENT PLAN- DMAIC MODEL
IV) CONROLLING
Predictive impact of each counter measure outlined
Implementation of counter measures decided
Vendors were identified, a budget was approved and
system requirement study was commenced
Controlling process outlined
FINAL RESULTS
Saved $ 1 million
Training better aligned with organizational requirements
Faster and better services with 14% rise in satisfaction level

COMPARITIVE STUDY
MNC Bank

SIX SIGMA: PROS AND

CONS

THANK YOU