bhr area dimensioning draft 2

Domenico Famà – Business Partner HR

1

METRICS FOR BHR AREA DIMENSIONING

D.Famà, BHR – November 2012


2

Index

• Abstract (purpose, method, constraints, results, risks/ opportunities) #3• BHR Area Dimensioning: the metrics #4,5• Step 1: Organizational Basic Scenario Assessment #6• Step 2: Dimensioning Optimization Considering Constraints #7

• Back up: Four Examples of the Method Application Basic Scenario - Middle Rank (2 transaction complexities) #10 Basic Scenario - Lower Rank #11 Coordinator Role Fine Adjustment #13


3

PURPOSE The proposed method is in testing phase. It’s main goal is to support a BHR area assignment not exclusively based on the Support-Ratio estimate. The proposed method is expected:

• to generate a homogeneous Org. Area rank distribution, possibly around the middle point of rank ‘2’ (see the metric – slide 4);

• if homogeneity isn’t possible, to assign the resulting Org Areas assuring that their ranks are coherent with BHR seniority/ capability: increasing awareness where the seniors are mainly challenged; assigning to juniors tasks with known progressive difficulty levels, and coaching them accordingly; dimensioning the risks/ opportunities related to Areas’ design far from optimum average sizing (‘2’)

EVALUATION METRICSThe under test method is obtained completing classical Volume consideration (the well known “Support- Ratio”): relevant Complexity and Risk metrics (slides 4 and 5) are added to it:

Variance - different business focus of supported org subunits of an OrgArea (increase the rank); Transaction - international relationships, &/or local fragmented transactions (increase the rank); Commonalities - processes or projects involving more subunits of the OrgArea (decrease the rank) ; Special Project - relevant Special Project impacting ‘Business As Usual rhythm’ (increase the rank); People Risk - level and the number of relevant people risks (see slide 5 for Risk Matrix) (increase the rank).

RESULTS and RISKS/ OPPORTUNITIESThe results (slide 7), in terms of proposal for BHR area assignments, are generated applying the method to a real case.A Basic Scenario (slide6: each organizational Area is evaluated in isolation from each other) generates the Proposed dimensioning highlighting:

BHR Coordination Role review of the BHR Coordination role (slide 13), concentrating here some key ownerships; Existing Constraints: like.: exclusive assignment asked by the internal customers, nr of BHRs available vs time, etc; Areas Synergies: suggestions for specific Areas’ merger (and space for further exploitations, changing the constraints).

In our opinion, the results show: acceptable coherence level with the seniority/ capability of the BHR available population; Areas where significant Volume risk need to be managed (right seniority/capability in place, Volume support…). Possibility to put in place professional growth opportunities (responsibility increases, job rotation vs other roles etc.).

Complexity

Risk

BHR Area dimensioning method: abstract


4

Parameter Rank- 4 3 2 1 0

* Variance: Nr of 1^ Units level in the Area with relevant business approach differences

>4 4 3 2 0

* Transaction Complexity: -Nr of reporting lines (direct or functional) to be managed outside the country on a regular base (reporting, info sharing, project involvement, process involvement – PD, Pay Round & Promotions … -)

- Fragmentation of direct transaction management

>8 8 - 5 4 - 3 1 - 2 0

Great Average Low

* Volume: Nr of Overall Employees > 401 400/ 301 300/ 201 200/ 101 <100

* Commonalities : if any None Limited Some Many

* Special projects impact 2012/13: Nr of relevant org changes, hc change (+/-), business transfer, portfolio or channel restructuring, deep key roles changes, process re engineering,….

>3 3 2 1

or Ops Support (*)

0

•Relevant People Risks: Nr/ rank of assessed People Risk (Volume Attrition, Key People Retention, Internal Fraud issues, process/ performance Compliance with People causes, deep role changes, )See slide 5 for the applied Risk matrix.

> 4/ At least one Severe

4/ At least one High

3/ At least one Major

2/ At least one Significant or (*)

0 /

Less than Moderate

Possible range for the “AREA RANK “ (mid point = ‘2’) (**) 4 – 0.3

BHR Area Metric

BHR Area Dimensioning: the Metrics(**) The Rank of an Area is calculated as the average of the scores assigned for each of the 6 parameters


5

CONSEQUENCES Comments

L

I

K

E

L

I

H

O

O

D

Extreme Very High Medium Low Negligible

Almost Certain

Severe Severe High Major Significant

Likely Severe High Major Significant Moderate

Moderate High Major Significant Moderate Low

Unlikely Major Significant Moderate Low Trivial

Rare Significant Moderate Low Trivial Trivial

For any ‘event’ (identified People Risk in the case), qualitative or quantitative evaluation (choosing the internal or external available to you relevant data sources) for:

Likelihood: of the eventConsequences: like: employees’ grievances; reputation impact; business target not met; key people attrition; engagement negative trend; etc.

Risk Level Matrix (used here for People Risk evaluation)


6

BHR Area Synopsis: basic hypothesis

Parameter

Rank

Area A Area B Product X

Product Y

Product Z - HQ

Sales Z – Area M

Sales Z – Area N

Sales Z – Area O

* Variance 3 3 2 1 0 1 1 1

* Transaction

Complexity 4 2 3 3 1 4 4 4

* Volume 2 1 1 0 0 2 2 2

* Commonalities 2 2 1 1 1 1 1 1

* Special projects

impact 2012/133 3 2 0 23 23 23 23

* Relevant

People Risks 1 1 1 3 3 3 3 3

AVERAGE AREA RANK 2.5 2.0 1.7 1.3 1.3 2.3 2.3 2.3

Main driver

(min rank = 3)

Variance, Transactions, Special Prj

Variance; Special Prj

Transactions Transactions;

People Risk

People Risk;

Special Prj.

Transactions, People Risks;

Special Prj.


Special Prj


Special Prj

Step1: Organizational Basic Scenario Assessment


7

AREA Rank Main DriversAssigned

BHR nameNotes Rank Main Drivers

Assigned BHR name

BHR Coordination 3.2

Variance, Transactions, Commonalities, Special Prj Owner, People Risk

AAA 3.2

Variance, Transactions, Commonalities, Special Prj Owner, People Risk Owner

AAA (Manager)

Area A 1.8 Commonalities BBB

Merger 2.5Variance, Transactions; Volume

BBB (Senior) + a Support for Volume transactions Area B 2.0

Variance; Commonalities;

Vacant

Position

Product Division X

1.7 TransactionsCCC +

1 SupportPossible synergies disabled by external constraints

2.7

Variance;

Transactions;

People Risk Support

Actual assignments for CCC/ DDD Sr

(less the Support)Product Division Y 1.3Transactions;

People RiskDDD

Pr.Divison Z - HQ0.8

People Risk;

Special Prj.SuppTo Be

merged

2^ Merger step

2.2

Transactions Volume+People Risk Support;

Special Prj.Support.

EEE. (Sr) + a Support for Volume transactions

Sales Z – Area M

1.7

Transactions

People Risks;

Special Prj. Supp

EEE

Sales Z – Area N

1.7

Transactions;

People Risks;

Special Prj. Supp

FFF

Sales Z – Area O 1.7

Transactions;

People Risks;

Special Prj.Supp

GGG (*) 1.7 Special Prj. Support FFF (Jr)

Step 2: Dimensioning Optimization Considering Contraints

BHR assignment to Area: after Coordination role definition

(*) Senior BHR ready for internal Job Rotation


8

BACKUP


9

Area Evaluation: Basic Scenario Samples


10

BHR Area A: Middle Rank (complexity due to international transactions)Parameter Rank Notes

* Variance = 43

Nr 4 areas

* Transaction

Complexity = 10 4

Nr 10 functions with international direct reporting line

* Volume = 3002

* Commonalities = Some2

Process involvement, vs IT in particular; Business “CR” perimeter

* Special projects

impact 2012/13 = 3 3Nr 3 Special Projects

* Relevant People

Risks = 1 Significant1

key people retention for 3 out of 4 areas

AVERAGE AREA RANK 2.5Main drivers (3 or higher):

Variance, Transactions, Special Projects

BHR Sales Z – Area M: Middle Rank (complexity due to local fragmented transactions)Parameter Rank Notes

* Variance = 21

Nr 2 direct channels

* Transaction

Complexity = Great 4

* Volume = 2462

* Commonalities = Many 1

* Special projects

impact 2012/13 = 2 23Portfolio and market coverage change

* Relevant People

Risks = 2 High3

Key People Retention; Deep role changes


Transactions, Special Prj, People Risks

Basic Scenario: Middle Rank Area examples


11

BHR Area Product X: Low rank Area

Parameter Rank Notes

* Variance = 32

Nr 3 areas

* Transaction

Complexity = 7 min 3

Nr 7 functions with international direct reporting line

* Volume = 1201

* Commonalities = Many1

Shared business processes, integrated targets,…

* Special projects

impact 2012/13 = 2 2Possible HC reduction 2013

* Relevant People

Risks = 1 Significant 1Don’t meet HC reduction target (without country restructuring plan in place)


Transaction

Basic Scenario: Low Rank Area example


12

Area Evaluation:Coordinator Role fine adjustment


13

Detailed Areas Evaluation: Coordination Role (1/1)

BHR Coordinator Role

Parameter Rank Notes

* Variance = 134

All Back & Middle office functions + all business lines + all direct channels

* Transaction

Complexity = 10 4

If related to Special projects:

10 impacted areas

* Volume = > 1000

Direct report + sum of people impacted by Special Projects

* Commonalities = None 4

* Special projects

impact 2012/13 = 6 4Nr 6 Special projects

* Relevant People

Risks = 3, of which 2 High 3

Key people retention in many Areas:

Deep Role change in Retail;

Target HC in Corporate


Variance, Transactions, Commonalities, Special Projects, People Risk