Good leaders make good decisions. In each situation, they must decide on the most optimal solution, based on known information and experiences. With increasing access to a large amount of information about their employees, many would anticipate that their decisions will be easier and better. However, this is not always the case. Even a good set of data can be completely useless if we do not take into account an additional variable - the human factor.
People analitycs is the future of HRM
Personnel decisions in HR have not been made only »by feeling« for at least several years thanks to the data collected from employees and teams. Based on the results, we are able to make decisions about hiring, managing noticed talents, conducting training and education. This process is called people analytics, which Bauer and others (2019) define as "the process of collecting, analyzing, interpreting and reporting human data to improve decision-making, achieve strategic goals and maintain a competitive advantage".
With people analytics, HR employees can make decisions based on objective data, where personal relationships, experiences and fear do not influence decisions. In their research, McAfeee and Brynjolfsson (2012) proved that companies that base their business decisions on people analytics are as much as 5% more productive than others.
But don't forget your intuition!
People analytics offers exceptional HRM solutions. The Economist Intelligence Unit’s study, named »Decisive action: How businesses make decisions and how they could do it better«, found that most companies make decisions based on data. Nevertheless, the vast majority (87%) would review or collect additional data again if they did not conform to their intuition. Furthermore, as many as 73% of all respondents rely on their opinion in decision-making. Leaders highly value analytics and the human factor in decision-making.
According to R. Cooper (2014), poor matching of data with experience also indicates the most pressing problem in data collection and processing - reliability and quality of information. Relying solely on data without a human factor can thus lead to erroneous information, inadequate analyzes and unsubstantiated conclusions. Therefore, before you make a decision based only on data, always think twice and trust your intuition. Remember, even great data cannot replace human thoughts.
Similar conclusions were reached by TM Tobias (2017) in his book, where he advises companies and organizations to combine the two approaches; data and human factor. The data will not replace experience or the human factor, but it will be an innovative force for those staff who will be able to take advantage of it. Along with the changes in the company, HRM will also be able to change for the better.
Data: catalyst, not human factor substitute
K. Yoong points out that data is the starting point and the human factor is the main decision maker. In many companies nowadays, some parts of HRM are already automated and technologically independent, while for some companies they are just helpful.
Think of the mountains of application forms that a human resources employee needs to review. They are much easier to review with the help of data and human factor (experience and intuition of the employer) at the same time, both influencing the final decision. Although the data and their processing relieve staff, they still are not left without work. The time gained with data can now be used for new opportunities and processes that require a high degree of personalization and involvement.
M. Zarembo emphasizes the example of personalized training and lectures for each employee, according to their interests. This also improves the company culture and stakeholder relationships in the long run. HRM has been monitoring employees and measuring their productivity for a long time. By using data, HRM can upgrade its findings and optimize working conditions, identify key employees and also improve teamwork.
Summarized according to the Human Resource Competency Study, HR EMPLOYEES WORK WITH DATA AT EVERY STEP:
- They identify important information that the organization needs,
- They ensure that the information gathered is used in decision-making
- They are involved in identifying important data patterns in the organization’s decisions
- They share information with other employees in the organization
- They use data to create a competitive advantage
- They lay down rules on employees’ access to information
- They review the actual implementation of data in business and personnel decisions
The data will therefore not replace the human factor, but support and strengthen it. With its help, the human resources department can expand its work, focus on employees and improve the functioning of the entire organization. Technology is thus only part of the solution.; the second part is the human element. And here lies the future of HRM.
Quantifly - A good desicion
At CirrioSoft, we have found out a long time ago that personnel decisions cannot be made »by feeling«. Decisions must be based on results and professional analysis. Otherwise, resentment and poor work of teams can occur very quickly.
In order to get better results without guessing, we have developed the quantifly diagnostic tool, which collects employee data using online questionnaires. When processing data, we change subjective opinions of employees into objective, statistically reliable data. Based on the analysis and expert report of our psychologists, you receive:
- Insight into the dynamics and structure of the team
- An overview of the company's health
- An overview of the competencies and untapped potential of employees
- Concrete proposals for improvement
- Individual assessment of each employee
The quantifly diagnostic tool thus combines data technology with the human factor for better decisions and increased added value of each team.
Yoong, K. (n.d). The Need for People Analytics: Driving Data in a People-Based Industry. Business Management. Retrieved from https://hospitalityinsights.ehl.edu/human-resource-management-people-data-analytics
Bridgwater, A. (5.11.2018). When Will Computers Replace Human Resources Managers? Forbes. Retrieved from https://www.forbes.com/sites/adrianbridgwater/2018/11/05/how-far-will-computers-replace-human-resources-managers/?sh=3527c2dd7284
Cooper, R. (18.6.2014). Big Data Can't Replace the Human Factor. The U.S. Chamber of Commerce Foundation. Retrieved from https://www.uschamberfoundation.org/blog/post/big-data-cant-replace-human-factor/41530
Ghosh, P. (11.3.2021). What Is People Analytics? Definition, Process, Trends, and Tools. HR Analytics. Retrieved from https://www.toolbox.com/en/en-analytics/articles/what-is-people-analytics/
Scholz, T., M. (2017). Big Data in Organizations and the Role of Human Resource Management. Berlin, Germany: Peter Lang Verlag. http://dx.doi.org/10.3726/b10907
The Economist Intelligence Unit. (2014). Decisive action: How businesses make decisions and how they could do it better. APT: Washington DC
Zarembo, M. (2.8.2017). 6 Ways Big Data Will Change HR. Aberdeen Strategy & Research.