Accenture Human Capital Development Framework

Developed by the Accenture Human Performance Service Line & Accenture Institute for High Performance Business

Project Overview

Workforce and HR Performance are a top Executive Priority Yet few executive are highly ati fied with their progre the e initiative
Key HR nitiative
69%

on

Improving worker productivity

6%

Improving the adaptability of the business to new opportunities

68% 11%

66%

Facilitating organizational change

12%

Improving employee engagement with/advocacy for the company

65% 11%

64%

Improving the delivery of HR services

14%

Source: The Accenture High-Performance Workforce Study 2004

0%

10%

20%

30%

40%

50%

60%

70%

80%

Satisfaction with Progress

Importance

Accenture 2004 All Rights Reserved. Patent Pending.

High Performance businesses are characterized by leading edge human capital capabilities.
High Performance Framework Market Focus Human Capital Capabilities*

Workforce Adaptability

High Performance Anatomy

Leadership Capability

Talent Management

Employee Engagement

Ability to Change

Distinctive Capabilities

Human Capital Efficiency

Workforce Performance

* Tier 3

Accenture 2004 All Rights Reserved. Patent Pending.

Accentures Human Capital Development Framework

The Accenture Human Capital Development Framework is a tool to measure how well companies master these critical Human Capital Capabilities
Business Results
Revenue Gr th RO C r ROE ( nl ) T tal Return t hareh lders uture Value

Tier 1

Illustrative Business Measures

Tier 2

Key Performance Drivers

Pr ductivit Qualit nn vati n Cust ers

Human Capital Capabilities

Leadershi Ca a ilit W r rce Per r ance E l ee Engage ent W r rce Ada ta ilit A ilit t Change Talent Manage ent

Tier 3
u an Ca ital E icienc

Human Capital Processes

C etenc Manage ent Re ards and Rec gniti n Career Devel E l ee Relati ns ent Per r ance A raisal u an Ca ital trateg uccessi n Planning Recruiting W r rce Planning Change Manage ent

Tier 4
W r lace Design u an Ca ital n rastructure

Learning Manage ent

Kn ledge Manage ent

Accenture 2004 All Rights Reserved. Patent Pending.

The Framework produces a Scorecard indicating performance on all elements of the framework along with a detailed assessment of the results.

Business Results
nl )

Tier 1

Key Performance Drivers

Pr ductivit nn vati n Cust

Human Capital Capabilities

W r rce Ada ta ilit

Human Capital Processes

ent uccessi n Planning 3.2 Recruiting Kn ledge 3. Manage ent W r

Note: Numbers represent survey responses (means). Color codes indicate u an Ca ital performance compared to benchmarks E icienc
Accenture 2004 All Rights Reserved. Patent Pending.

Learning Manage ent

u an Ca ital n rastructure

B tt

Re ards 3.2 and Rec gniti n

3.4 ee Relati ns

2. u an Ca ital trateg

2. Change Manage ent

3.

Quartile

C etenc Manage ent

Career Devel

Per r ance A raisal

W r rce Planning

 

3.

3.0

3.

3.3

3.5

 

Leadershi Ca a ilit

E l ee Engage ent

  

3.2

3. W r rce Per r ance

3.

Qualit

3.4

3.2

2.

 

Revenue Gr

th

TR

RO C r ROE (

uture Value

Illustrative Business Measures

Tier 2
3.3

ers

Tier 3
3.2 3.2 Ability to Change 3.0 Talent Manage ent Human 3.7 Capital Efficiency

Tier 4
3.0 3.2 lace Design

Quartile 5

Initial implementations of the Framework reveal that financially successful organizations have more mature human capital processes
Companies with mature human capital processes have superior financial results
Human a ital trateg Hu an Capital Strategy .4

Employee Relations l ee Relati ns

2.2

Human Capital Infrastructure Hu an a ital

Career Development areer evel ent

earning anage ent Learning Management

rocess aturity core Process Maturity Score

Accenture 2004 All Rights Reserved. Patent Pending.

(score based on relative performance to peers in the benchmarkin g database)

P #

Immature I

2 2 Moderately Mature

Mature

Highly Mature H

A@9 7B FEIHG 8

A@9 7B 8

Q $ A@9 87B FEA 87@ADCB

A@9 766 8

XW TVUTS & % '

Knowledge n w

anage ent nagement

2.2

R$ Q

. 1.8

QQ $$

"

Succession Planning/ uccessi n eadershi evel ent Leadership Development

1.7 .

PQ #$

P #

. 1.

R$ Q

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RQ $

Q $

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High Performers H f
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(organizations that scored in the top quartile of financial results)

) 0

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Low Performers w f (organizations that scored in the bottom quartile of financial results)
.6

Analysis of initial implementations of the framework have also answered important questions on the minds of executives today

. What are the e activities that lead t a

(see Outl 2005)

re engaged

rce?

article, Harnessing the Power of an Engaged Workforce, Fe ruar ,

2. Are assu ti ns a ut e ectivel anaging and devel ing hu an ca ital c rrect? What are the sur rising indings that g against c n isd ? st i act critical hu an ca ital ca a ilities li e 3. What r cesses r rce er r ance, r rce ada ta ilit , and leadershi ?
(see rthc ing Accenture hite a er, The Accenture Human Capital Development Framework: Assessing, Measuring and Guiding Investments in Human Capital for High Performance)

4. Where can invest in e

(see Outl

le t get

axi u

value

d llar?

article, Making the Right Investments in People, 2004)

Accenture 2004 All Rights Reserved. Patent Pending.

Appendix

The Accenture Human Capital Development Framework What: A diagn stic t l, that easures h ell a c an masters its hu an er r ance ca a ilit , and lin s the aturit the rgani ati ns hu an ca ital r cesses t usiness and inancial utc es. Why: Ena les rgani ati ns t set strateg , validate hu an ca ital invest ents and redirect invest ents r greater usiness i act. Uses e - ased surve s, executive intervie s, and inancial and R data r sheets t c llect erce tual and actual data. For use an organi ation that ants to use a comprehensive, repeata le, metrics- ased approach or managing their human capital programs and investments
9

How:

Who:

Accenture 2004 All Rights Reserved. Patent Pending.

The Accenture Human Capital Development Framework is much more comprehensive in scope than other frameworks.
Business Results Revenue Growth Key Performance Drivers Tier 1 TRS Tier 2

Innovation

Customers

Human Capital Capabilities

Tier 3

Survey House
B u s in e s s R e s u lt s T ie r 1

Employee Engagement Human Capital Processes Tier 4

R O IC o r C R O E ( F S o n ly ) TR S F u tu r e V a lu e Business Results Tier 1

G r o w th

K e y P e r f o r m a n c e D r iv e r s

P r o d u c tiv it ity

Q u a lit lity

In n o v a tio n n

H u m a n C a p it a l C a p a b i lit ie s

W or

o r c e A d a p ta ili ty

C a p a ility

Pe r o r m a n c e

En g a g e m e n t

C hange

Management

E ic ie n c y

Competency Management orc e W o r p la c e D e s ig n Rewards and Recognition

Career Development

Per ormance Appraisal

Recruiting

Wor orce Planning

C o m p e te n c y Management

C areer D e v e lo p m e n t

Pe r o r m a n c e A p p r a is a l

S u c c e s s io n P la n n in g

R e c r u itin g

W or

P la n n in g

Employee Relations

Human Capital Strategy

R ew ards and R e c o g n itio n

E m p lo y e e R e la tio n s

H u m a n C a p ita l S tr a te g y

L e a r n in g Management

K n o w le d g e Management

C hange Management

H u m a n C a p ita l n In r a s tr u c tu r e

Accenture Human Capital Development Framework HR Scorecards

Business Results

Revenue Growth

ROIC

TRS

Key Performance Drivers

Human Capital Capabilities

Human Capital Processes

Competency Management Rewards and Recognition

Career Development Employee Relations

Per ormance Appraisal Human Capital Strategy

Recruiting

Wor orce Planning

Accenture 2004 All Rights Reserved. Patent Pending.

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aaac

H u m a n C a p it a l P r o c e s s e s

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L e a d e r s h ip

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R evenue

T ie r 2

Revenue Growth

ROIC

TRS

Future Value

Key Performance Drivers C u s to m e r s

Tier 2

T ie r 3 Human Capital Capabilities T a le n t Tier 3

H u m a n C a p ita l

HR Boutique
Human Capital Processes Tier 4

fff

T ie r 4

Tier 1

Tier 2

Tier 3

Tier 4

10

Other diagnostic approaches do not track complete linkages and many do not provide evidence for the relationship to shareholder value
Human Capital Development Framework
B usiness R es ults R ev enue G row th R O IC or R O E (F S only ) TR S Future Value ROIC Tier 2 Key Performance Drivers Produc tiv ity Q uality Innov ation C us tomers Innovation H uman C apita l C apa bi lities Tier 3 Human Capi tal Capabi lities W or forc e Adapta ili ty Tier 3 Employee Engagement Human Capi tal Processes C ompetenc y Management R ew ards and R ec ognition C areer D ev elopment Employ ee R elations Performanc e Apprais al H uman C apital Strategy Learning Management Know ledge Management Suc c es s ion Planning R ec ruiting W or forc e Planning C hange Management W or p lac e D es ign H uman C apital Infras truc ture Tier 4 Customers Tier 2 TRS Tier 1 Business Results Tier 1

Gallup Q12 Engagement Survey

K ey Perfor mance D r ivers

Performanc e

Engagement

Hu ma a p i l Pr o e s e s n C t a c

Comprehensive model that distinguishes etween cause and e ect, or etween intermediate usiness results (tier 2) and current and uture-oriented inancial results (tier 1), and etween HC processes (tier 4) and HC outcomes (tier 3). Assesses the maturity of an organi ations processes, ena ling the HCDF to suggest prescriptive, actionoriented advice More accurate assessments ased on input from employees, HR executives, usiness leaders, internal data ases, and external enchmar s Using standard measures across firms, the tool can show which HC processes most impact usiness results.
Accenture 2004 All Rights Reserved. Patent Pending.

hhh

ggg

Leaders hip C apa ility

W or forc e

Employ ee

A ility to C hange

Talent Management

H uman C apital Eff ic ienc y Tier 4

hhh

ggg

Assesses one human capital capa ility only: employee engagement. Simple and easy to implement 12 question survey administered to employees only. Questions are very general and are una le to suggest the root cause of low or high levels of employee engagement, or suggest action-oriented advice concerning how to improve it. Using standard measures across firms, Gallup has shown a correlation (not causality) etween high levels of engagement and some intermediate and financial usiness results.
11

Other diagnostic approaches do not track complete linkages and many do not provide evidence for the relationship to shareholder value (continued)
Watson Wyatt Human Capital Index
usines s Resu lts ier

HR Scorecard/Huselid
usines s Resu lts

Revenue rowt h

ROIC

TRS

Revenue rowt h

ROIC

TRS

Future

alue

ey er for mance r iver s

ey er for mance r iver s

ier

Human Capi tal Ca pa i litie s

Human Capi tal Ca pa i litie s

ier

Human Capi tal Competency Management Rewards and Recognition

r ocess es Career Development Performanc e Appraisal Human Capital Strategy

Competency Management Rewards and Recognition

Career Development

Performanc e Appraisal Human Capital Strategy

Recruiting

or force Planning

Recruiting

mployee Relations

mployee Relations

Lin s some human capital processes directly to financial results. Is not as comprehensive in its coverage of HC processes as the HCDF. Does not distinguish etween HC processes and outcomes capa ilities, and does not include intermediate usiness results. Assesses the effectiveness of HR programs y collecting data from HR personnel only. This ena les some prescriptive advice a out HR solutions, ut it fails to assess the effectiveness of the programs in supporting employees. Using standard measures across firms, the Human Capital Index has shown correlation (not causality) etween HC practices and financial results.
Accenture 2004 All Rights Reserved. Patent Pending.

Does not use standard measures across firms, and thus can not offer users validation that human capital processes and capa ilities impact usiness results. Rather, it offers a tool to e customi ed for the organi ation similar to the Balanced Scorecard. Over time, if oth HC processes and usiness results improve in a single organi ation, a logical ( ut not statistical) connection may e made. However, one of the developers of the HR Scorecard, Mar Huselid, has pu lished research that shows a correlation (not causality) etween some HC processes and financial results.
12

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Human Capi tal

r ocess es

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or force Planning

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ier

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q q

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q q

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Data is collected through web enabled surveys, executive interviews and financial data worksheets.
Audience Time Commitment 30 - 45 minute structured interviews At least three executive interviews, one of which will e with an HR executive who can articulate the HR strategy, and two of which will e with usiness executives who can articulate the organi ations strategy .

Executives

5 15 HR Executives Project Manager

45 minute we

ased survey

Factual data collection (may e delegated) usiness financial data (access financial Controller) HR data we survey Provide employee information for those ta ing the survey Schedule interviews with executive committee 1.5 days wee for 3 wee s then .5 days for 5 wee s to help manage effort Employees without supervisory responsi ilities (~70 ): 20 minute we - ased survey Employees with supervisory responsi ilities (~30 ): 30 minute we - ased survey

Cross section of 50 or more employees

Accenture 2004 All Rights Reserved. Patent Pending.

13

The first execution of the framewor identifies strengths and opportunity areas. Su sequent executions measures the impact of human capital programs over time and allows identification of causal lin s.
First Execution
Identify strengths, wea nesses, and process maturity in ey human capital capa ilities Esta lish a aseline for measurement that ma es it possi le to trac financial impacts over time Develop recommendations on specific actions to ta e to improve capa ilities Provide a comparison of where the organi ation stands compared to enchmar s Identifies wor force performance opportunities

Second Execution
Same as first execution plus

Predictive Quality of Human Capital Investments

Identify causality etween the tiers, not just correlation

Measure changes over time related to the effectiveness of human capital measurement Use as a significant input to operational fiscal planning Predict output of human capital investments
14

Framework 1 2 3 4 5 6 7. Execution Company/Industry Data Collection

Accenture 2004 All Rights Reserved. Patent Pending.

The Accenture Human Capital Development Benchmarking Database

The benchmarking database consists of approximately 35 organizations across 16 companies, across industries.

 Staffing firm  Motorcycle manufacturer (Harley-Davidson)  Professional services engineering construction firms (2)  Equipment manufacturer (Briggs and Stratton)  Canadian utility  South African utility (Es om)  Spanish utility  Software company (SAP America)  Mobile phone manufacturer  Government administration agency  Government defense agency  Investment ban  Insurance company  Retail commercial ban  Health insurance provider

Accenture 2004 All Rights Reserved. Patent Pending.

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