Leadership

How to Measure HR Success Like Capital One

By Jessica Stillman

Updated on: August 18, 2008 / 2:12 PM EDT / MoneyWatch

The Find: HR functions can sometimes seem far removed from a company's strategic core, but new techniques of "evidence-based" HR are allowing much-maligned talent managers to show the links between soft HR programs and the cold, hard realities of the bottom line.
The Source: A soon to be published study from the Conference Board.

The Takeaway: In the abstract, everyone acknowledges that talent can make or break a company, but HR still retains a less than glamorous reputation as an unscientific warren of paperwork and gut instincts far from a company's strategic core. Perhaps that's because it's been hard to link specific HR practices with a company's bottom line. The Conference Board is stepping into this gap with a new report entitled "Evidence-Based HR in Action," which shows how HR departments can make the seemingly intangible, tangible.

What's evidence-based HR (or EBHR)? Using newly developed HR metrics to "empirically demonstrate [human capital's] impact on business outcomes." The Conference Board acknowledges that the approach is not yet widespread but offers case studies to show how EBHR can benefit a range of organizations.

The human resources folks at Capital One, for example, not only do the all the usual hiring, paperwork and employee performance evaluations, but also have a "workforce analytics function." Using EBHR they have developed quantitative measures that establish links between touchy-feely HR policies like the executive coaching program and key performance metrics such as "teller attrition, customer satisfaction, and revenues per account at retail branches."

The Conference Board also takes a look at two other companies that have jumped on the EBHR bandwagon - Harvard University and Hewlett Packard - to see how they have put they put the idea into practice. Intrigued? The full report will soon be available at the Conference Board's website.

The Question: Is HR "possibly the most vital yet overlooked means of establishing competitive advantage" as the Conference Board claims?

(Image of tape measure by aussiegall, CC 2.0)