Human Resource Management is very important for an organization in selecting and retaining the right employees for the right jobs. There are many strategies for human resource management, and an innovative company, Google, has been using analytics for human resource management (Sullivan). A company that continues to gain and sustain competitive advantages in the marketplace through innovation, and so the company has focused on recruiting and retaining innovative employees. Analytics has been a part of business for some time now, but the focus has been on finance, the supply chain, marketing, and operations, and not HR.
Sullivan's article investigates how Google using information system technologies and analytics to increase the effectiveness of human resource management and thus the effectiveness of the business. First of all, they do not call in human resources, instead they call it "people operations." Google has many employee perks that are very enticing to prospective employees and current employees such as free food, allowing 20% of employee time to be spent on special projects, and fun activities. These perks were implemented and are maintained based on data and analytics. They also used this to determine the eight characteristics of good leaders within the company. They found that periodic one-on-one coaching, interest in the employee and feedback were the most important things to be a successful leader in the company. Managers get rated twice a year by their employees. They have even developed a retention algorithm, which predicts which employees are most likely to become a retention problem, so that managers can react and try to retain the employee. They have developed a hiring algorithm, which predicts which candidates has the highest probability of succeeding in the company. They have calculated that the value of an exceptional technology employee versus an average one is as much as 300 times higher. This is a great example of why Google has such an involved human resource management technology infrastructure and utilize such a large amount of resources to hire, retain and develop their employees. It makes fiscal sense to do this. They also make sure to introduce fun and learning into the work environment. The great thing about this analytic approach is that programs and initiatives do not have to be persuaded to the managers of the company because the data and analysis alone convinces the managers of the potential successes (Sullivan).
This type of human resource management is very exciting because it uses information on the employees of the company to analyze and develop solutions. Since technology has streamlined so many other parts of the business, it makes sense that it also streamlines human resources as well. Google's enormous success can be tracked back to this analytical way of recruiting, hiring, retaining and developing employees. A company that thrives on their internal innovation and this innovation is their key to their competitive advantage in so many ways. This is the most likely format for human resource management to function in all business in the future. Google's success shows that this is a very beneficial format and works for so many reasons.
Companies really should consider this analytic approach to human resource management. The challenges for management of business would be decided if, how, and when to implement this analytic approach to human resource management. They will have to decide whether or not to use a contract company to provide the service, or just provide the implementation, but leave it up to the business to maintain it. There are many considerations into how they would develop and implement the new system. People in human resources and software/database developers would need to collaborate to develop the systems to work best for their company. The key to success would be the correct development and implementation of the system so that it works best for the organization.
Sullivan, John. "How Google Became the #3 Most Valuable Firm by Using People Analytics to Reinvent HR." ERE Media. 25 Feb 2013.
http://www.ere.net/2013/02/25/how-google-became-the-3-most-valuable-firm-by-using-people-analytics-to-reinvent-hr/
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