1 Human Resources Line of Business Performance Reference Model (PRM) Presentation to IT Performance Management Council July 20, 2006 Report Tile UNITED STATES OFFICE OF PERSONNEL MANAGEMENT
2 Agenda HR Line of Business (HR LOB) BackgroundHR LOB Enterprise Architecture Overview The HR LOB PRM v1 Approach Value Workshop Methodology Results Lessons Learned Questions
3 HR LOB Background
4 HR LOB Vision & Goals Vision:Governmentwide, modern, cost-effective, standardized, and interoperable HR solutions providing common, core functionality to support the strategic management of human capital. Goals: Improve the governmentwide strategic management of human capital Achieve or increase operational efficiencies in the acquisition, development, implementation and operation of human resources management systems Achieve or increase cost savings/avoidance from human resource solution activities Improved Customer Service
5 HR LOB – Two Dimensions Common Solutions StandardizationAddress distinct business improvements that have a direct impact on HR LOB performance goals Achieve economies of scale Utilize shared service centers Standardization Solutions are developed through a set of common and repeatable processes and tools that are compliant with the Federal Enterprise Architecture (FEA) guidance
6 Concept of Operations (CONOPS)The Shared Service Centers will take a phased approach to delivering HR services At a minimum, all service centers will offer the same common, core functionalities The solutions that operate at these service centers will be evaluated and recommended by a multi-agency steering committee that stresses scalability, interoperability, and portability Shared Service Center solutions can be COTS or GOTS and will be selected on a competitive basis Agencies will have choices when they shop around for the service centers that best meet their needs The shared service centers will leverage “plug and play” architecture concepts
7 Shared Service CentersSeptember 2004 five agencies submitted proposals to OMB to be HR LOB Shared Service Centers (SSCs) February 2005 OMB announced five “candidate” HR LOB SSCs March 2005 OPM established a multi agency Technical Panel and Advisory Board to evaluate the SSC candidates from an HR perspective August 2005 OPM and OMB announced the final selection of 5 HR LOB SSCs October 2005 a Shared Service Center Advisory Council (SSCAC) consisting of five HR LOB SSCs and four Payroll Providers was established Additional Federal and Private Sector SSCs may be announced in FY
8 OPM HR LOB Program Director OMB IEE Portfolio Manager,HR LOB Governance Director, OPM CHCOC Chair E-Gov Administrator OMB OPM HR LOB Program Director Co-Chair MAESC OMB IEE Portfolio Manager, HR LOB PMO Strategy / Policy, Planning & Oversight HR LOB Multi-Agency Executive Strategy Committee CIO Council Liaison CFO Council Liaison Budget Officers Advisory Council Liaison Federal Acquisition Council Liaison Small Agency Council Liaison OPM Ex Officio Seats AGENCY REPRESENTATIVES Requirements Board Management Improvement Program BRM Workgroup Requirements Work Groups PRM Workgroup DRM Workgroup User Requirements SSC Workgroup Configuration Control Board Indicates Inactive Governance Body SRM Workgroup] Information Security Practice Workgroup SSC Advisory Council / PAC Operations & Delivery Shared Service Center Shared Service Center Shared Service Center Shared Service Center Shared Service Center
9 HR LOB Enterprise Architecture
10 Results of the HR LOB EA approachAgency consensus in a variety of areas regarding government-wide view Common vocabulary for processes and activities Management tools Improved decision making Basis for standardization and common solutions Enhanced communication Consistent with OMB’s FEA rationale Alignment Integration Change Time to Market Convergence
11 The FEA consists of a set of interlinked reference models to facilitate cross-agency analysis & collaboration Core SRM TRM
12 Business Reference Model Sub-functions
13 Target Requirements The HR LOB Target Requirements:Focus on the common government-wide HR processes that may be delivered by shared service centers Utilize the HR LOB Business Reference Model (BRM) for processes and activities that have been identified to move to SSCs Identify a common view of the role of the SSC in Federal HR
14 DRM The HR LOB Data Reference Model (DRM):Identifies data needed to execute BRM processes Depicted at the conceptual and logical level – does not describe how the data will be implemented Enables the government to communicate more accurately and efficiently about the purpose, content and structure of human resources data Enables standardization for data descriptions, data context, and for data sharing Reflects a future target
15 SRM The HR LOB Service Component Reference Model (SRM):Uses FEA guidance to identify service components – potentially reusable self-contained business capabilities Organizes service components by service type and service domain using FEA as a guide Proposes a common view of service delivery Identifies generic enabling technology required to deliver service components to customers
16 HR LOB Performance Reference Model (PRM) Approach
17 Purpose of HR LOB PRM v1 Establishes a standardized set of measures based on Business Reference Model (BRM) processes against which to measure Human Resource Management (HRM) processes Develops a series of measures to assess the performance of services offered by Shared Service Centers (SSCs) Addresses the sub-function processes Develops a set of normalized measures across the Federal HR community Supports the objectives of Human Capital Assessment and Accountability Framework (HCAAF) The HCAAF offers guidance and integration for transforming human capital management and describes the expectations that guide the assessment of agency human capital efforts
18 Measurement IndicatorsFEA guidelines define the PRM for Human Resource Management based on the HR LOB Business Reference Model (BRM) Measurement Category Measurement Grouping Measurement Indicators HUMAN RESOURCE MANAGEMENT – HRM involves all activities associated with the recruitment and management of personnel HR Strategy Organization and Position Management Staff Acquisition Performance Management Compensation Management Benefit Management Human Resource Development Labor Relations Employee Relations Separation Management
19 The strategic objectives span Human Resource Management and the HR LOB sub-functionsCompensation Mgmt Staff Acquisition Org & Position Management Benefits Mgmt HR Strategy Employee Relations Labor Separation Improved Management Operational Efficiencies Cost Savings/Avoidance Improved Customer Service Human Resource Development Performance Mgmt The strategic objectives address how the HR LOB contributes to the Management of Government Resources, one of the FEA measurement areas The PRM describes how each sub-function contributes to the strategic outcomes The BRM is the validated scope for Human Resource Management The HR LoB Strategic Outcomes (Improved Management, Operational Efficiencies, Cost Savings/Avoidance, Improved Customer Service) can be recommended as the Measurement Areas (consistency across BRM/PRM). This has not been defined by OMB. These outcomes are the ultimate measure of how the Line of Business should be evaluated. While the PRM is outcome oriented, it recognized 4 levels of measurement (area > category > grouping > indicators) OMB has defined the category as Human Resource Management – “Human Resource Management involves all activities associated with the recruitment and management of personnel”. So the BRM is the validated scope for that. OMB has defined groupings as the sub-functions as seen in the BRM. OMB has not defined indicators. This project will drill down on the indicators for the core sub-functions (Compensation Mgmt, Benefits Mgmt, and Personnel Actions)
20 Measurement Indicators Target Requirements for SSCsThe PRM is derived from the BRM and target requirements; it forms the basis for SSC service level agreements Measurement Category Measurement Grouping Measurement Indicators HUMAN RESOURCE MANAGEMENT – HRM involves all activities associated with the recruitment and management of personnel HR Strategy Organization and Position Management Staff Acquisition Performance Management Compensation Management Benefit Management Human Resource Development Labor Relations Employee Relations Separation Management BRM HR LOB PRM Target Requirements for SSCs 101 Collect all data and information, and process personnel actions in accordance with the Guide to Processing Personnel Actions published by OPM Policy Mandatory 102 The appointing officer makes final pre-appointment determinations regarding citizenship, veterans’ preferences, minimum and maximum age limits (where appropriate), suitability, qualifying experience and education. 103 Collect all data in the format required by the Guide to HR Data Standards published by OPM 104 Utilize automated workflow to route electronic personnel action through pre-determined levels of approval based on role and independent of organization or location Technical Critical Service Level Agreement Target Requirements
21 Development Process SSCAC, SSCWG reviewSub-Function Measurement Development (Feb – May 2006) PRMWG work session (Each sub-function goes through this process) 4 levels of analysis (brainstorming, definitions, alignment, review) PRMWG review and comment PRMWG comments integrated into results Present to MAESC MAESC monthly meeting – high level Posted to QP for detailed review and comment of PRM measures MAESC comments integrated into results MAESC approval of PRM measures PRM Report Development (May – June 2006) SSCAC, SSCWG review Present Report to MAESC Posted to QP for detailed review and comment of PRM report (4 weeks) MAESC approval of PRM report Publish PRM report (target date June 30, 2006)
22 Work Session Process
23 The recommended PRM measures are the result of four levels of analysis1 2 3 First level provides Metric definition by activity Alignment to measurement characteristics Second level provides Consolidation of common metrics Alignment with design principles Highlights metrics specific to the potential SSC roles Third level provides Alignment to HCAAF’s Human Capital ‘systems’ and/or Business Results Final level addresses manageability Selection of the ‘most relevant’ measures Strategic Objectives HR Strategy Org Position Mgmt Staff Acquisition Performance Mgmt Compensation Mgmt Benefits Mgmt HRD Employee Relations Relations Labor Separation Mgmt Improved Mgmt Operational Efficiency Cost Savings/ Avoidance Improved Customer Service The first step for Volume 1 of the PRM is looking at the processes and activities in the Core Business Areas (Compensation, Benefits Management, and PPA). The objective of this step of the analysis is to develop two to 4 metrics for each activity. Before this work moves to the next level, a review of the metrics chosen against the measurement characteristics will take place. (reliable, valid, based in reality, etc) The second level of analysis compiles the metrics from the 1st step. The objective of this step is to consolidate and align the metrics. The review will align the metrics with HR LOB strategic objectives and ensure that there is a mix of leading and lagging metrics. Also included in this step is calling out those measure which could be unique to a service center. (as a reminder – there are NO mandatory performance expectations in this model, however, this model could be used as an input to SLAs between SSCs and Agencies). A review of the metrics in light of the design principles will also take place. The objective of the 3rd step is to align the metrics with the HCAAF ‘systems’ and/or the business results (mgmt of gov’t resources or customer service). 4
24 First step: Defining relevant metricsAn activity template was presented to the PRMWG during the working sessions The PRMWG will brainstormed to develop the metrics for each activity, including definitions Agreed upon a few (up to 4, but at least one) potential measures for each activity We evaluated potential measures against the Measurement Characteristics What questions are answered? Do we have a standard definition of the metric? Are these sound metrics for this process? Measure the output Measure what’s important Do these metrics fulfill the measurement characteristics?
25 Second step: Evaluating the metricsWhat questions are answered? Which Strategic Objective does this measure address? Do these measures comply with the design principles? Could this measure apply to SSCs?
26 Third step: Aligning measures to outcomesHCAAF Systems Strategic Alignment Agency human capital strategy is aligned with mission, goals, and organizational objectives and integrated into its strategic plans, performance plans, and budgets, and the agency has a workforce planning strategy. Leadership and Knowledge Management Agency leaders and managers effectively manage people, ensure continuity of leadership, and sustain a learning environment that drives continuous improvement in performance. Results-Oriented Performance Culture The agency has a diverse, results-oriented, high-performing workforce and has a performance management system that effectively differentiates between high and low performance and links individual/team/unit performance to organizational goals and desired results. Talent Management The agency has closed most mission-critical skills, knowledge, and competency gaps/deficiencies, and has made meaningful progress toward closing all. Accountability Agency human capital management decisions are guided by a data-driven, results-oriented planning and accountability system. What question is answered? How does the measure align to HC and/or agency results?
27 Final step: Provide a manageable set of standard measures1 2 3 Strategic Objectives HR Strategy Org Position Mgmt Staff Acquisition Performance Mgmt Compensation Mgmt Benefits Mgmt HRD Employee Relations Labor Relations Separation Mgmt Improved Mgmt Operational Efficiency Cost Savings/ Avoidance Improved Customer Service The result of the multi-level analysis is a concise set of standard measures that reflect the health of the sub-function as it relates to the HR LOB strategic objectives. Vol. 1 Scope (plus Personnel Processing) The alignment with HR LOB Strategic Objectives provides alignment to business results
28 Results
29 Measurement IndicatorsTypes of indicators for core areas “Tip of the Iceberg” – Indicators that reflect the health of the process to deliver results If the measure is not in the expected range, or changes drastically, additional analysis would be performed to understand the causes of the change Additional analysis may indicate an agency process issue, an SSC process issue, or a issue between the agency and SSC Transactional measure – Indicators track time or accuracy regarding completion of a task These measures are typically relevant to SSC service and/or processing If you chose to use these examples…. Tip of the Iceberg example: Compensation Management: amended or corrected time records (purpose: Potentially indicates a process issues at submitting agency or data capturing issues at the payroll provider) Transactional Measure example: Compensation Management: Time to resolve/respond to an inquiry (purpose: Shows the ability of the SSC handling inquiries to resolve them efficiently)
30 Common Themes in Compensation Management MeasurementsCustomer Service Measures that track transactional procedures which can reflect an organization’s ability to provide customer service. Timeliness Measure that track how long it takes to complete a task. The intent of these measures is to evaluate efficiency. Quality Measures that track errors over a period of time. By tracking quality, customers can better understand the impacts of delivering HR service efficiently and could affect the perception of employee- customers. Cost Measures that calculate the cost of a process or transaction. Cost metrics are essential in determining long-term benefits of new technology initiatives. METRIC EXAMPLES Customer Service Time to resolve payroll inquiry Timeliness Notification sent within a specified time frame (automated and non), % of transactions processed late Quality Percent of time records are returned for corrections, % of off-cycle payments due to errors Cost Examples: Cost per W2, Price per W2
31 Compensation Management Measurement IndicatorsStrategic Objectives Compensation Management Measures Improved Mgmt Total compensation as a percentage of agency budget Average compensation per agency FTE Employee satisfaction with compensation Compliance Operational Efficiency On time project performance Retroactive payroll adjustments Electronic access Amended/corrected time records Payroll certifications Timeliness: time to disburse off-cycle payroll transactions Cycle time: W-2 distribution Quality: W-2 corrections as a percent of total W-2s Cost Savings/ Avoidance On budget project performance Cost/price per W-2 Improved Customer Service Quality: Personnel Action corrections - bonus & awards Timeliness: Change Notification Customer Service: Time to resolve/respond to inquiry
32 Common Themes in Benefits Management MeasuresCustomer Service Measures that track transactional procedures which can reflect an organization’s ability to provide customer service Timeliness Measures that track how long it takes to complete a task. The intent of these measures is to evaluate efficiency Quality Measures that track errors over a period of time. By tracking quality, customers can better understand the impacts of delivering HR service efficiently and could affect the perception of employee- customers Cost Measures that calculate the cost of a process or transaction. Cost metrics are essential in determining long-term benefits of new technology initiatives METRIC EXAMPLES Customer Service Time to resolve payroll inquiry Timeliness Notification sent within a specified time frame (automated and non), % of transactions processed late Quality Percent of time records are returned for corrections, % of off-cycle payments due to errors Cost Examples: Cost per W2, Price per W2
33 Benefit Management Measurement IndicatorsStrategic Objectives Benefits Management Measures Improved Mgmt Participation Rate Operational Efficiency On time project performance Timeliness: Agency-specific reports Electronic Access Cost Savings/ Avoidance On budget project performance Cost: cost of benefits per FTE Improved Customer Service Employee Satisfaction Quality: Communication Content Timeliness: Communication Delivery Employee Update Files Time to resolve benefit inquiry
34 Common Themes in Personnel Action MeasuresSelf-Service Measures that track the availability and usage of self-service applications. Customer Service Measures that track transactional procedures which can reflect an organization’s ability to provide customer service. Processing & Workflow Measure that track how long it takes to complete a task. Quality - Measures that track errors over a period of time. By tracking quality, customers can better understand the impacts of delivering HR service and could affect the perception of employee- customers. Evaluation & Compliance HR and SSC ensures that personnel actions are compliant with applicable standards, policies, rules, and regulations.
35 Personnel Action Measurement IndicatorsStrategic Objectives Personnel Action Processing Improve Strategic Management Reporting (regulatory, mandatory, agency-specific) Operational Efficiencies Process personnel transaction Implement mass action Cost Savings/Avoidance Self-service usage Self-service activation Personnel transaction corrections Improved Customer Service Time to resolve inquiries Time to respond to inquiries Change notification
36 PRM Report Results Developed measures across three sub-functions17 for Compensation Management 11 for Benefits Management 9 for Personnel Actions Some measures were recommended for use with more than one sub-function While the majority of measures had SSC involvement, some measures are relevant only to agencies. Measures are being leveraged in the SLA process development
37 Mission/ Business Results:Line of Sight Example Processes and Activities Customer Results Strategic Outcomes VALUE People Technology Other Fixed Assets Processes and Activities Mission and Business Line of Sight What: Mission/ Business Results: As the cost of HR is decreased, those savings can be reallocated to support agency mission objectives. Alternatively, cost savings may result in reduced agency budgets, thus passing benefits on to taxpayers. Process/ Activity Strategic Objective IT Investment: Self-Service application BRM Business Area: Personnel Actions PRM Measurement Indicator: Self-Service Usage HR LOB Strategic Objective: Cost Savings/ Avoidance INPUTS OUTPUTS OUTCOMES Cause And Effect
38 Value of the PRM v1 Provides a common language and set of definitions that can be used to accelerate the development of Service Level Agreements (SLAs) between agencies and SSCs. Creates a set of measures that are aligned to business results. Agencies can use to validate HR contributions to agency mission- critical results. Provides an opportunity to highlight significant process improvement opportunities. Provides agencies with an approach for developing measures that provide visibility to the business benefits of capital investments.
39 Lessons Learned Prepare to discuss many measures – hundreds of measures were considered, but didn’t meet characteristics threshold Start small – agencies agreed with the vision of developing a small, manageable set of measures that are likely to evolve as inputs and outcomes are aligned Prepare for further analysis – agencies are interested in decomposing the definitions to standardize cost information
40 Questions Kunal Suryavanshi – HR LOB PMO [email protected] Tim Biggert – EA Team Leader Melanie Meador – PRM Lead