By Kyla Nicholson, CHRP Candidate

In Organizational Development (OD), what we perceive to be of value to our organizations perhaps isn’t, or is it just that we don’t know how to measure the bottom line impact?

New research, Choosing Organizational Development Initiatives Relevant to Small & Medium Sized Enterprises (SMEs), has focused on analyzing the perceived value of various OD initiatives from the perspective of organizations that employ them across the province. HR professionals made up the majority of survey respondents.

Reviewing the results, the summary of perceived high versus low value initiatives for public, private, and not-for-profit sector organizations surveyed may not be surprising when the purposes and drives of these organizations are taken into consideration.

What is perhaps a more interesting finding is the apparent gap between the perceived value of various OD initiatives, and the measurable financial return. Meaning that, according to the research, OD initiatives which are perceived to be of high value to the organization and individuals in the organization, and which survey respondents would similarly like to place future investments in, are not seeing a similar measurable financial return.

While this trend was particularly evident in SMEs, it was also seen across large organizations.

“What this may suggest is that organizations, and those people typically responsible for OD initiatives, may not fully understand and/or appreciate the financial implications of the various initiatives,” said research author David Baspaly, PhD & CMC, Principal of Infocus Management Consulting. “If this is true, a major recommendation from this study would be some form of education for human resource professionals designed to better connect OD initiatives to the value they provide from a financial perspective.”

So, what were some of the top OD initiatives employed and perceived to have value, and how could you measure them in such a way as to bridge the gap between perceived value and financial measurement?

SMEs & Large Organizations
For both SMEs and large organizations the following were distinct gaps between perceived value and financial measurement: 

• Coaching
• Leading
• Training & Development

Linking back to financial measurement for these OD initiatives is ultimately grounded in measuring the intended outcome of the initiative, and linking that outcome back to financial results.

For example, if a coaching initiative is undertaken to support a manager who is experiencing high turnover to better engage and retain his or her staff, then the ultimate measure of the success of the coaching is the difference in turnover metrics and the associated financial impact of the change in the turnover metrics. Similarly, if a training and development initiative is employed with the intended outcome of increasing the sales of the sales team, then sales generated revenue is the ultimate route to measurable financial return.

SMEs
For SMEs some of the distinct gaps between perceived value and measurable financial return are found in:

• Delegating – The ultimate goal of delegating is increased efficiency (time and cost) to the organization. The measurable financial return is located in the difference in the cost of one employee’s time, skill set and rate of pay to complete a task versus another employee’s.
• Performance Management – What is the difference in the dollar value associated with a low, medium, and high level performer in your organization? Depending on the nature of your organization, different metrics will determine these values, but regardless, performance management is initiated to ensure this ultimate goal is achieved.
• Establishing Performance Goals – The ultimate objective of performance goals is to target performance for on-time, high quality delivery. The measurable financial return is the difference in meeting versus missing these targets.

Large Organizations
For large organizations some of the distinct gaps between perceived value and measurable financial return are found in:

• Mentoring – Check out Measures of Mentoring by Helen Luketic, Manager of HR Metrics at BC HRMA for some specific tips and tricks to quantify the impact of your mentoring initiatives.
• Succession Planning – Succession planning can be looked at as a risk management strategy with metrics associated with succession planning rate, employee engagement scores, and career opportunity metrics linked back to shareholder value to create a financial measure.
• Employee Assistance Programs (EAPs) – Health and wellness metrics such as absenteeism rate, Short Term Disability Costs and Long Term Disability are commonly linked to EAP measurement. If the goal of an EAP is to facilitate return to work at healthy performance levels, then the measure is found in the costs associated with the return to work time. For example, if a bank is robbed and an EAP program facilitates an employee to return to work faster and in a healthy manner following that event, then the financial return is found in the difference in the return to work time.

For an abridged version of Choosing Organizational Development Initiatives Relevant to Small & Medium Sized Enterprises (SMEs), BC HRMA members can visit the library in the online community. Check out the Organization Development Framework & Recommendations Section at the conclusion of the research for a quick summary of results.

For more information on HR Metrics, please visit www.hrmetricsservice.org.