People are the key asset of any business organisation. For a business to be profitable we need to manage resources effectively, especially Human Resources.
Years of management practice, organisational research and psychology, and explorations into the characteristics of leadership have generated vast swathes of knowledge that have been, and will continue to be, discussed and debated at length.
Approaches to management can vary from the very scientific, using quantifiable processes, to the intuitive, focusing on human-centric behaviours and the interplay between people in their daily working lives. Some managers hare highly trained in a variety of approaches, whereas others have a tendency to learn from experience.
And of course, there are people that manage their staff using a collection of approaches, that might be context or time-dependent.
Irrespective of your own tendency, it is generally accepted that measurement is a vital function in business. No matter how nebulous our work environment might be at times, we still need to ensure that the organisation is profitable now and in the future.
So, when a business cannot make a profit, it is no longer sustainable. The default action in such circumstances is to ensure that there are measures in place, and that these are used to target the source of the challenges.
When it comes to people, measurements can be motivational and also demoralising. The context within which the measurements are deployed has a large bearing on this, but it can also be the way that the measurement and monitoring is communicated.
An experienced manager understands that their staff are all individuals, and that there should be tailored approaches to each of them.
Problems can arise when attempts to introduce a more quantifiable management approach, that invariably uses measures. Such initiatives are fraught with difficulty. Staff can react in unpredictable ways, or the measures might stimulate unintended behaviours that can undermine any well-intentioned objectives.
But, if an over-zealous manager can disrupt the daily goings-on with measurements and targets, think of the chaos that is possible if they graduate to the use of analytics.
The ability to automate reporting, and calculate descriptive statistics on employee performance can contribute to a potentially toxic environment, which is the last thing that we need.
One of the promises of analytics is the ability to use data to prescribe behaviour – model different outcomes from the existing data and then make an outcome happen – and this is referred to as prescriptive analytics.
Prescriptive analytics provides foresight, and it assumes that you have mechanisms for insight (diagnostic analytics) and hindsight (descriptive analytics) already in place.
This journey towards behaviour change is something that people managers acquire in time, with experience. It is therefore attractive to make this journey as quickly as possible, and if tools can help, all the better.
So, if you have a problem with sickness absence, you can try and ask a few questions to see what might be going on. You are relying on the answers to be informative and accurate. You can’t necessarily ask all of the questions that you might want to, and you are left trying to piece together what the underlying problem might be, based on your own mental models of the staff and how they behave.
This is clearly a case for diagnostic analytics, to help you gain insight as to what the root causes of the sickness absence are. You can’t hope to start predicting behaviour until you understand the data upon which you will base your predictions.
Staff engagement is another measure that is prominent in larger organisations. How will you engage your staff better with the data you receive from an annual survey?
The answer is complex. We need to make sense of data that is probably not yet sufficiently joined-up and accessible. The data exists, but it isn’t “to hand”. As managers we need to ensure that our enthusiasm for improving operations through the use of data, does not lead to Management By Objectives (MBO) on steroids; we don’t want to create an over-bearing environment where everyone is functioning only to serve the measures. This stifles creativity and creates stress (that might be the cause of the sickness absence rate…).
But we have evidence of predictive analytics approaches making tangible improvements to sales, logistics, plant maintenance and other industrial operations. Why not human resource analytics as well?