Monday, January 16, 2012

What is HR's Moneyball Metric?




I finally watched Moneyball this weekend and what a movie that was. Of course, all the way through the movie I am thinking how does this apply to HR and companies in general.

It was so interesting that the team was using anecdotal data to "hire" new players. I loved it when the data geek talked about players potential and hidden nuggets of gold that went unnoticed due to poor batting averages. He pointed out it is not necessarily about batting average, but really about getting on the base. It was a metric in baseball, that no other team was using. Historically, the players with the highest batting averages were making the most salary. Since the Oakland A's had a small budget they had to figure out how to win ball games, within these parameters.

Do we do the same think in HR and/or our organizations? Do we hire for things like, "He went to Auburn." or "She used to work for Bain and Co." Are we overpaying A-players in our organizations just because they have a great batting average?

As soon as the Oakland A's started hiring and measuring against on base percentage there was a huge backlash from the players, the coaches and even the fans. "It's just not how they did things at the A's. They base new talent on gut feel based on many years of scouting experience for the team." So, how did that legacy practice work for them?

Again, is that a similar story to what we do in HR? Do we make hiring decisions based on old policies, practices and measures that are no longer relevant?

What could be a Moneyball metric for HR? For some positions this task is easier than others. For sales, it's a no-brainer...$ of sales. Which metric could we use for new hires? How about existing employees?

Another big lesson for me that was reiterated in Moneyball was the issue of nonperformance. When you have a metric that points straight to performance and winning, it makes the "your fired" conversation so much easier. It becomes literally black and white. "Your number is X and we needed Y." Time to change teams...

If you haven't seen the movie, I encourage you to rent it...I hear the book is excellent as well!

What are your Moneyball metrics you are using to make sure you get the best and keep the best talent?

5 comments:

John Cousineau said...

Cathy, great questions you've posed here. In sales, I believe, it's a no brainer that we need better, faster, metrics than $'s of sales to guide recruiting + performance reviews.

IMO, what's needed are metrics more akin to the on-base %'s that the Oakland A's used to re-define the keys to victory. They found if they were getting on-base, they weren't getting out + still had a chance to go on and score runs. Sales needs the equivalent on-base %'s as leading indicators of future sales success. Metrics that eliminate the need to patiently wait weeks, months, or quarters for sales to materialize which, with better leading indicators, we'd discover stand little chance of ever materializing.

Trust this adds some value. - John

Cathy Missildine-Martin, SPHR said...

John:

Thanks so much for reading my blog. I do agree with you about a leading indicator for sales. What do you think that metric is? Is it # of proposals for an on base %, is it # sales calls??? I don't know that answer but I agree there has to be something tied directly to sales revenue. It could be the skill set of the salesperson. For example, if they have x, y and z skill they close more business.

Interesting conversation.....

Cathy

Yes, it added a lot of value

Hannah Miles said...

I like your post! Well, I actually liked it on my FB status. Check it on my wall http://www.facebook.com/people/Hannah-Miles/100003347333093
Well, I get interested in watching the movie Moneyball since I'm also incline with human resource systems. I get intrigued with such metrics :-)

Cathy Missildine-Martin, SPHR said...

Thanks Hannah for reading on posting on your FB page. I appreciate that.

Hope all is well down under!!

Cathy

Unknown said...

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