HR is becoming a closer strategic partner of the typical organization, thanks to the very human nature of the pandemic and its impact.
Per some observers, however, the profession still deals with a crucial problem: it lacks a single, defined metric that allows it to quantify whether it has a positive impact on an organization's employee experience.
"When you look at a lot of these institutions like SHRM, they're heavily focused on the compliance requirements for HR," said Betsy Summers, principal analyst on the future of work team at advisory firm Forrester. "A lot of the education arm is built on the compliance side of HR, protecting the organization, protecting the employee, employee relations, contract labor, being very comfortable with all the rules and regulations — not on employee experience."
It is a dilemma that drove at least one mammoth HR vendor, ADP, to take a swing at a solution. Last month, the company published a report in which it described a series of studies of employees in 25 countries, the results of which yielded a statistical model — Human Resources XPerience Score, or HRXPS — that evaluates HR service quality for an employee's perspective.
The HRXPS Model
The project began as an internal query from ADP's own HR leadership, who sought a way to measure the department's impact on employee experience during a tight labor market, said Marcus Buckingham, co-author of the report and head of research, people and performance and ADP Research Institute.
Essentially, HRXPS examines how HR performs in five aspects of the employee experience:
- Meeting employees' basic needs.
- Ensuring employees feel safe in the workplace.
- Creating a sense that HR is "in the employee's corner," i.e. keeps promises and does the right thing.
- Providing opportunities for growth, development and advancement.
- Maintaining trust between employees and the HR function.
Underneath those five buckets are 15 items that HR teams can incorporate into their own census or representative sample of employees. HRXPS ultimately places employees into one of three categories:
- Value-promoting, which describes those who answer most positively and see the HR function as adding significant value to their experience.
- Performing, which describes those who see the HR function as performing its responsibilities effectively.
- Value-detracting, which describes those who see HR as detracting from their experience.
Buckingham said the lack of a similar industry-wide standard was a significant motivation for developing HRXPS. The goal, he added, is to "build a thermometer to take the temperature of people's experience with HR," a piece Buckingham believes HR lacks.
"There is a void," he said. "We don't have an industry standard way for holding ourselves accountable and seeing whether what we're doing matters."
"We don't have an industry standard way for holding ourselves accountable and seeing whether what we're doing matters."
Head of research, people and performance and ADP Research Institute
ADP's report portrays the employee experience as a series of sentiments, starting with "You give me what I need" at the base and ascending to "I trust you" at the top, a model that Summers compared to the hierarchy of needs framework articulated by psychologist Abraham Maslow. Buckingham acknowledged some similarities between the two models, but he insisted that "any social [or] psychological hierarchy will have more basic things at the bottom and more complex things at the top."
The report further identified specific workplace elements that correlated with either value-promoting or value-detracting responses. For example, ADP found that employees who had a single, designated HR contact were twice as likely as those with multiple HR contacts to say that HR had a positive impact on employee experience.
That finding surprised researchers, Buckingham said, in part because "HR is going ten thousand miles an hour opposite of that; if you want a leave of absence you go over here, performance management, go over here [...] we as individuals want somebody to be our quarterback."
HR technology has largely focused on automating tasks such as leave requests, payroll and benefits administration, among others, Summers said; "So much of what HR has been trying to do with technology is to make it easier for employees to get exactly what they need without having to email anyone, without requiring a personal relationship to service them."
But as ADP identified, tech solutions may be implemented in a siloed way that suggests "employees feel as though something important is missing," and it observed a relationship between single point of contact and higher HRXPS regardless of whether an employee reported being "fully engaged" at work.
Summers noted that this same finding, however, indicates that even a metric such as HRXPS is not solely dependent on the performance of HR. Tech solutions are often implemented in part by other departments, such as information technology, which plays an important role in determining which applications the enterprise is allowed to use, Summers said.
"If an HR organization is big enough to impact all of these things, that's a big HR function," she continued. "I have not seen that in a lot of organizations."
Yet, the same is true of other metrics, like turnover. Employees may not necessarily decide to leave an organization solely because of HR's performance; a bad manager or poor experience with a co-worker also may play a part. HRXPS is significant, Summers said, because it tasks HR with setting a higher standard for itself.
"This is a really high bar for HR, but it's good," she said. "It would be fantastic if the industry embraced something like this."
Not all are convinced that ADP's metric is revolutionary, though, and some are already suggesting edits.
For one thing, the report did not sufficiently convey a sense of how high-HRXPS HR practices directly translate to better business performance, according to Giovanni Gavino Everduin, head of strategy and transformation at Dubai-based Commercial Bank International. The report, Everduin said, failed to bridge a long-standing empirical gap between engagement and organizational performance; "The link is not necessarily there."
Summers suggested a small change, stating that the HRXPS model's questions on growth were "very focused on an employee's current job." At a time where Forrester clients have asked more and more questions about how they can encourage career growth and talent mobility as a retention strategy, she said this component of HRXPS could take a more forward-looking perspective.
"What do you want to do next?," Summers said, identifying potential alternate questions for employees. "What does one year, two years down the road look like for you? What skills do you want to dig into for your next move?"
Does HR service really need to be quantified?
Everduin echoed Summers in noting that the many of the items identified as HR practices within the HRXPS model are, in reality, impacted by business units outside of HR. Employees, he continued, expect HR technologies to work as they were intended, meaning it may be common sense to suggest that organizations whose HR services work well tend to have a better employee experience.
"Beyond that, if you're an employee, I don't necessarily think you want to have to go and talk to HR," he said. "Most of that stuff should be self-service anyway."
Everduin did not disagree with the report's findings that employees who experienced a more formal onboarding process, received more frequent attention to their performance and were offered health benefits from their organizations were more likely to report a more positive employee experience. "My point is kind of like, I really didn't need the report to know that."
He also agreed that organizations such as the Society for Human Resource Management could do more to establish standards for the profession. "They should be taking a larger role in some of this stuff," Everduin said. Additionally, he said organizations should approach models like HRXPS by first asking what problems they are seeking to address with data. "If the people on the floors are happy and everything is going well, do you really care if your HR experience is poor?"
Buckingham said that while it is important to ensure tech works, HR is at a crossroads comparable to what the financial services faced during the introduction of ATMs. Banks, he noted, quickly realized that they simply would not be able to replace branch personnel with machines entirely.
"Banks realized that ATMs can't be emotionally responsive," Buckingham said, adding that the same is true of HR when it comes to functions such as onboarding and enrollment. "If you disintermediate HR from the onboarding process, what we would expect is that turnover levels rise, which is not what CEOs want."
HRXPS, moreover, provides the HR profession something that it can aspire to, namely becoming a function that has earned the trust of employees, rather than another business unit that — rightly or not — downplays its own influence on an employee's decision to leave or stay, he continued.
"We as a discipline need to take responsibility for that," Buckingham said. "You can love your managers and hate HR, and if you do, you will be badmouthing the company and more likely to leave. This is a call to arms for the HR function."
If nothing else, metrics like HRXPS could give HR departments the opportunity to hold themselves accountable for meeting a higher standard, perhaps one higher than most are comfortable with.
"If [HR] want to have a seat at the table, they have to aim high and have to take big swings," Summers said. "This is a big swing."