1. National HRD Network
Rajiv Kapoor
JCB India Ltd.

2. 18 plants, 670+ Dealers, 1500+ Outlets, Presence in 150+ countries

3. India s Largest manufacturer of Construction Equipment
India’s
Location: Ballabgarh & Pune
World class facilities in India
2 out of every 3 machines sold is a JCB
2000 employees i I di
l in India
Self-
Self-Employment generation
Skill enhancement through CSR
h h h

4. ROI is derived from Finance.
None of the HR expense is booked as investment.
HR expenses are Costs
“Where is ROI in HR?”
Are we trying to prove a hypothesis null ab‐initio?
h h ll b ?
Difficult to determine returns for HR contributions which affect many
f f h b i
facets of the business
View of HR as a “cost center”

6. last 6-7 years
6-
◦ War on Talent
◦ Leadership
◦ Retention
◦ And the Best Employer is…….

7. ◦ Strategic
HR initiatives linked to Organizational goals
Planned
Measured
Evaluated
Synergized
Integrated
◦ Sporadic
Knee-
Knee-jerk
Fad based
Nice sounding
Sponge like – money, resources & time
Need for speed > Strategic importance
Intuition / Luck based

8. Successful Organizations:
◦ Think long Term Do the Mission, Vision,
◦ Align initiatives with Business needs Values touch the heart &
minds of employees?
◦ Focused
◦ Intermesh - Link
◦ Distraction free How does HR drive strategy?
◦ Not just Benchmarking
h k
◦ Sit on the Bench
Introspect
How does HR create synergy?
Analyze
……However, no bench warming

9. H R Stra
H R Stra tegy
R
R
Analytical Methodical Linked Measured Synergized Long Term
a
ategyy
y

10. ROI Methodology
ability HR Profit Center
Balanced Scorecard
HR Macro Studies
Human Capital Measurement
HR Accounta
Competitive HR Benchmarking
HR Satisfaction Surveys
HR Cost Monitoring
HR Key Indicators
HR Auditing
HR Case Studies
Feedback Surveys
MBO in Personnel
1960s 1970s 1980s 1990s 2000+

11. Activity Based Results Based
◦ No business need for the initiative ◦ Initiative linked to specific business
need
◦ No assessment of performance
issues ◦ Assessment of performance
effectiveness
◦ No spec c measurable object es
o specific easu ab e objectives
◦ Specific objectives for application &
◦ No focus on achievement of results
business impact
◦ No effort to provide supportive
◦ Target expectations communicated
environment
◦ Supportive environment prepared
◦ No effort to build partnerships
p p
between stakeholders ◦ Partnerships established between key
stakeholders
◦ No measurement of results or ROI
analysis ◦ Measurement of results & ROI
analysis
◦ Planning / reporting are input
focused ◦ Pl
Planning / reporting are outcome
i ti t
focused

12. Input
Measures inputs such as volume & efficiencies
Action
Measures participant’s reaction to the initiative
& captures planned actions
Learning
L i
Measures changes in knowledge, skills, attitudes
Application
A li i
Measures changes in on-the-job behavior / actions
on-the-
Business I
B i Impact
Captures changes in business impact measures
ROI Compares initiative b
C i i i i benefits to the costs / i
fi h inputs
Intangible Benefits
• Recruiting Success, Job Satisfaction, Operational Commitment, Career Enhancement &
Technology Upgrade

13. HR budgets continue to increase in most of the companies
A stronger link exists between HR and the strategic goals of the organization
The effort in developing an “HR profit center” intensified
p g p
More HR functions are being outsourced – focus only on core
There is increased interest in monitoring and managing human capital
There is increased interest in monitoring and managing human capital
More HR Managers have a business or operations background
HR evaluation is more systematic methodical and proactive
HR evaluation is more systematic, methodical, and proactive
ROI is growing in use as an HR evaluation tool

14. • Provides a balanced set of measures
• Offers a step-by-step process
• Bridges business evaluation and initiative evaluation
• Balances research/statistical methods with practical application
• Flexible for all types of initiatives
• Credible with Managers and administrators

15. 18.2%
18 2% Intuition and perception by senior
21.8% executives
Observations by management
and reactions from participants
and users
Improvements in productivity, cost
savings, quality, etc.
60.0%
Th t
The true measure of investment in HR, particularly training interventions, should be gained through
fi t t i HR ti l l t i i i t ti h ld b i d th h
improvements in productivity, cost savings, quality etc.
Over 80% of respondents in a survey conducted world wide by Deloitte use intuition, perception
and observations.

16. • Having a strategic focus:
- communicating clearly, fairly and unambiguously the Board’s current understanding
of the links between the HCM policies and practices, its business strategy and its
performance; and
- including information on:
the size and composition of the workforce; retention and motivation of employees;
the skills and competences necessary for success, and training to achieve these;
remuneration and fair employment practices; leadership and succession planning;
• Be balanced and objective following a process instead of taking metrics off the shelf
objective, shelf.
• Provide information in a form that enables comparisons over time and uses
commonly accepted definitions where available and appropriate.

18. Committed and Engaged Employees
Learning Organization Sense of Belonging World Class Organization Best Place to Work
lding
Competency Building
ding
ing
tems Build
Culture Buildi
itment Buil
TEAM
JCB
Syst
Commi
Faith & Trust

19. E=MC²
E=MC²
E= Energy to infuse “Sense of Urgency”
Urgency”
M= Motivate to win
C= Challenge
C= Care & Commitment
Our Core Values
•Hard Work
•S
Sense of Urgency
fU
•Ethical Work Practices
•Innovation
JCB in India “A World Class organization”

20. HR CHALLENGES
HR STRATEGY & POLICIES 1. Attracting and retaining skilled
professional workers
Recruitment JCB Business
2. Developing Managerial capability
Career Development Strategy
Succession Plan 3. Retaining high performers
Competency Framework 4. Developing succession pool depth
p g p p
Promotions & Transfers 5. Addressing shortages of management
T&D or leadership talent
PMS People Processes
Employee Participation
Communication matrix Effectiveness of CFTs
Reward & Recognition Participation in Suggestion
Performance schemes
DIMENSIONS OF ESS Measures % Job rotation done
Role Kaizen per employee
Work Processes Absenteeism rates
Relationship Accident rates
Compensation
C ti Medical data
Training & Development
Perception Grievance rates
Career Growth Indicators Recruitment cost and Hit rates
Image Attrition levels
Customer Focus Productivity
P d i i
Leadership Value Added per employee
ESS
Communication.
Exit Analysis

21. Not consistently evaluated at all
16.4%
20.0%
20 0%
4.5%
By evaluation forms submitted by
participants at the end of the
programme
Testing during the programme
Post-course assessment of business
59.1% impact
•Nearly 60% of respondents in a survey conducted by Deloitte use assessment of reactions
(happy sheets) to evaluate their initiatives But what about application back in the workplace?
initiatives.
•At JCB we are at 2nd level of Testing during the programme.
•We have implemented the 3rd level of Post assessment in few programs

22. T&D Evaluation Levels
Level Measurement Focus
KP Model
1. Reaction & Planned Measures participant satisfaction with Action the HC project
p p p j
and captures planned actions, if appropriate
2. g
Learning Measures changes in knowledge, skills, and attitudes related
g g , ,
to the HC project
3. Application Measures changes in on the job behavior or actions as the HC
Measures changes in on‐the‐job behavior or actions as the HC
initiative is applied, implemented or utilized
4. Business Impact
Business Impact Measures changes in business impact variables
Measures changes in business impact variables
5. Return on Investment Compares project benefits to the costs

23. Minimizes hard costs
Minimizes hard costs
Minimizes missed opportunity costs –unfilled position
Improves productivity and longevity
Drives organizational improvements, productivity and results

24. Issue Best practices to improve recruiting process ROI
Time-to-hire • Determine items critical to business success.
Quality-of-hire • Measure pre-process and post process or technology
Cost-per-hire implementation.
• Have vendors work to provide models and tools for collecting and
Longevity-of-hires
L it f hi evaluating data
data.
Recruitment source • Report performance regularly as part of standard management
effectiveness reporting package.
• Develop programs to address process deficiencies in individual
benchmark areas.

25. Diversity is about ‘otherness’ or those human qualities that are different than
our own and outside the group to which we belong, yet are present in other
groups. There are two dimensions to diversity –
◦ Primary Dimension – Disability, Age, Race, National Origin, Sex (gender), Color and
Religion, Sexual Orientation
◦ Secondary Dimension – More about creed, beliefs and norms that are nurtured,
cultural nuances and tendencies
Einstein – “We can't solve problems by using the same kind of thinking we used when
we created them."

26. Marketplace impact
Marketplace impact Stockholders/Investors
◦ Products/services, brand ◦ Increased revenue and ROIs
differentiation ◦ Decreased litigation and negative
◦ Customer public relations
acquisition/retention/satisfaction
Community
Employees ◦ More community investments
◦ Competition for talent
Competition for talent ◦ M
More employment opportunities
l ii
◦ Employee satisfaction score increases ◦ Societal corporate responsibilities
◦ Organizational effectiveness due to upheld
increased productivity
◦ Better communications
◦ Retention

27. Companies provide anecdotal evidence only and have no real data available to
support their ROI arguments.
The data is available; however, HR doesn’t know where to find it.
The ROI models are theoretical.
Models are too complex and take too long to complete.
Models do not use real client data.
Models fail to address the critical business issues in the organizations.
organizations.

28. Human Resource: Compensation:
◦ Training / employee ratio ◦ Payroll to Revenue ratio
◦ Training expense ◦ Percentile benchmark
◦ Training spread Separation:
p
Talent / capability: ◦ Attrition rate
◦ Percentage of critical roles filled ◦ Natural / involuntary
internally
◦ Competency analysis / gaps
◦ Fast access to right talent
Defined Measurable

29. Access to business information to facilitate
Distribution of performance appraisal ratings
decision making
Competency development expenses per
Adherence by the workforce to core values
employee
Average change to performance appraisal
Firm salary/competitor salary ratio
rating over time
Incentive compensation differential
Climate survey
Number and quality of cross functional teams
Customer satisfaction with hiring process
Number and type of special projects to develop
Effectiveness of performance appraisal
high potential employees
processes for dealing with poor performers
Number of suggestion generated and or
Employee competency growth
E l t th
implemented
Employee satisfaction
Percentage of employee whose pay is
performance contingent Employee turnover
Percentage of employee with development plan
f l hd l l Extent f
E t t of cross functional teamwork
f ti lt k
Quality of employee feedback systems Extent to which employees have ready access
to the information and knowledge that
Back up talent ratio
they need
Range in merit increase granted b classification
d by l f
Percentage of employee making suggestion

30. Absenteeism rate by job category Number of training days and programs per
Accident costs year
Average employee tenure Percentage of and number of employees
involved in training
l d
Average time for dispute resolution
Percentage of correct data in HR information
Compliance with Govt. regulation bodies
system
Compliance with technical requirements of
Percentage of performance appraisals
affirmative action
completed on time
Cost of HR related litigation
Response time per information request
Cost of injuries
Time to fill an open position
Cost per grievance
Turnover cost
HR department budget as a percentage of
Cost per hire
sales
Turnover rate by job category
HR expenses per employee
Speed of salary action processing
Interview per offer ratio
Number of applicants per recruiting source
Number of safety training and awareness
activities

31. 2009 OBJECTIVES : HR & IR Green On Target
Amber Behind but recoverable
INDIA HOD : RAJIV KAPOOR Red Behind & not recoverable
Status
S No BSR Business Unit Key Measures Comments/Remarks
Q1 Q2 Q3 Q4
Availability in
1 Clear & Fair HR policies Updation
Net
Grade
G d
2 Fairness in Compensation Salary Survey
Structure
Competency Mentoring &
3 Competence & Career Development
Framework Coaching
4 Effective PMS Improvement Not Planned in Q1
Service Family Value
5 Belongingness of Employees
Anniversary Involvement actualization
New
6 Employee Engagement Sports Review R&R ESS
Initiatives
Common Common
7 Facilitating Pune Integration
Forum Structure
8 EHS
9 Risk Management Ongoing
Productioniza Manpower Productivity
10 World Class Culture DWM
tion Utilization Benchmark
11 Better Cash Management Ongoing
12 CSR Ongoing
O i
Inauguration Visits to
13 PR Management
of new facility Institutes
14 Facility Management New Canteen
15 Visits Ongoing
16 Expat Management Ongoing
17 Best Employer Start Start in Q2

32. Deliverable Measures Status Remarks
Career & Succession Identification of: Identified Plan for HIPO being
Plan • Successors implemented
• HIPOs
Developmental Training & •Quarterly Target •75% Coverage
Inputs
p Development,
p , achieved
5 Mandays •Development
Centre scheduled in
Q3
Mentoring & Establishment of •Start by Q2 end
Start •New Process
New
Coaching process
Developing internal Numbers of •17 Internal •Starting week
faculty
y • Internal Trainers Trainers identified Beginning 11th May
g g y
• Sessions • 22 Sessions 2009
Conducted planned

33. “An organization's success is the product of
its people competence. That link between
people and performance should be made
visible,
visible and available to all stakeholders ”
stakeholders.
-John Sunderland, Executive Chairman, Cadbury Schweppes
This is effective ROI