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Discussion: Laying Off Talent
As more organizations become conservative with spending, layoffs are necessary to help them preserve their future. The manner in which organizations lay off people, however, can affect their current and potential talent pool. There are substantial investments made to the recruitment and development of talent. Despite the substantial investment, when it comes to corporate cut backs, laying off employees is normally high on the list. Organizations have to be careful because laying off the wrong employee might negatively impact the organization’s future.
For this Discussion, you will examine current and past research on this topic and then answer the questions below. Be sure to support your postings and responses with specific references to the provided resources as well as relevant ones you find.
You will post a cohesive and scholarly response based on your readings and research this week that addresses the following:
Consider this statement: It has been argued that organizations that lay off employees frequently fail to improve their long-term performance.

Do you agree with this statement? Justify your response with references to the literature.
How might such a decision affect the management of the talent pool?
How can organizations best measure their talent to ensure that they are not laying off the the talent most critical to their future success?
How would a layoff impact the “Model for Building Functional Expertise” noted in your assigned reading.

Make sure to cite examples and reference the literature to support your answers.
By Day 3
Post a response that answers the above. APA format.

Unformatted Attachment Preview
What the best companies
know about their people—
and how they use that
information to outperform
Competing on Talent
by Thomas H. Davenport, Jeanne Harris, and
Jeremy Shapiro

Included with this full-text Harvard Business Review article:
1 Article Summary
Idea in Brief—the core idea
2 Competing on Talent Analytics
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Competing on Talent Analytics
Idea in Brief
Leading companies such as Google, Best
Buy, P&G, and Sysco use sophisticated datacollection technology and analysis to get
the most value from their talent.
These companies have taken the guesswork out of employee management by leveraging analytics to improve their methods of attracting and retaining talent,
connecting their employee data to business performance, differentiating themselves from competitors, and more.
In this article are six key ways to track, analyze, and use employee data: They range
from establishing simple metrics that monitor your organization’s overall health to
identifying talent shortages and excesses
long before they happen.
Companies that want to compete on talent
analytics must have access to high-quality
data and manage them at an enterprise
level, support analytical leaders, choose realistic targets for analysis, and hire analysts
with a broad base of expertise.
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What the best companies know about their people—and how they use
that information to outperform rivals.
Competing on Talent
by Thomas H. Davenport, Jeanne Harris, and
Jeremy Shapiro
Do you think you know how to get the best
from your people? Or do you know? How do
investments in your employees actually affect
workforce performance? Who are your top
performers? How can you empower and motivate other employees to excel?
Leading-edge companies are increasingly
adopting sophisticated methods of analyzing
employee data to enhance their competitive
advantage. Google, Best Buy, Sysco, and others
are beginning to understand exactly how to ensure the highest productivity, engagement, and
retention of top talent, and then replicating
their successes. If you want better performance
from your top employees—who are perhaps
your greatest asset and your largest expense—
you’ll do well to favor analytics over your gut
Harrah’s Entertainment is well-known for
employing analytics to select customers with
the greatest profit potential and to refine pricing and promotions for targeted segments.
(See “Competing on Analytics,” HBR January
2006.) Harrah’s has also extended this ap-
harvard business review • october 2010
proach to people decisions, using insights derived from data to put the right employees in
the right jobs and creating models that calculate the optimal number of staff members to
deal with customers at the front desk and
other service points. Today the company uses
analytics to hold itself accountable for the
things that matter most to its staff, knowing
that happier and healthier employees create
better-satisfied guests.
For example, Harrah’s used metrics to evaluate the effects of its health and wellness programs on employee engagement and the bottom line. Preventive-care visits to its on-site
clinics have increased, lowering urgent-care
costs by millions of dollars over the past 12
months. And because Harrah’s understands the
relationship between employee engagement
and top-line revenue, it can evaluate the program according to revenue contribution as well.
Here’s how other organizations use analytics
to improve their management of human capital:
Almost every company we’ve studied says
it values employee engagement, but some—
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Competing on Talent Analytics •• •T HE B IG I DEA
Thomas H. Davenport (tdavenport@ is the President’s Distinguished Professor of Information Technology and Management at Babson
College and the author, coauthor, or editor of 13 books. He is also a cofounder
and the research director of the International Institute for Analytics. Jeanne
Harris (
is an executive research fellow and a senior executive at Accenture’s Institute for
High Performance. She and Davenport
are the coauthors of Analytics at Work
(Harvard Business Review Press, 2010).
Jeremy Shapiro (jeremy.shapiro@ is an executive director in human resources at Morgan
Stanley and a coauthor of Ultimate Performance (Wiley, 2007).
harvard business review • october 2010
including Starbucks, Limited Brands, and
Best Buy—can precisely identify the value of
a 0.1% increase in engagement among employees at a particular store. At Best Buy, for
example, that value is more than $100,000 in
the store’s annual operating income.
Many companies favor job candidates with
stellar academic records from prestigious
schools—but AT&T and Google have established through quantitative analysis that a
demonstrated ability to take initiative is a far
better predictor of high performance on the
Employee attrition can be less of a problem
when managers see it coming. Sprint has identified the factors that best foretell which employees will leave after a relatively short time.
(Hint: Don’t expect a long tenure from someone who hasn’t signed up for the retirement
Professional sports teams, with their outsize
expenditures on talent, have been leading
users of analytics. To protect its investments,
the soccer team AC Milan created its own biomedical research unit. Drawing on some
60,000 data points for each player, the unit
helps the team gauge players’ health and fitness and make contract decisions.
What’s driving this shift to analytics? Certainly, companies today want more from their
talent. That’s why some are reinventing a
whole range of people practices: Netflix has
tossed aside traditional HR absence policies,
and Best Buy’s corporate office eschews standard work schedules. Analytics takes the guesswork out of fresh management approaches. At
the same time, voluminous “digital trails” of
data from knowledge management systems
and social networks are now available for analysis. The public relations firm Ketchum, for example, analyzed personal networks in its London office to learn how easily information
flowed across teams. Cognizant, a U.S.-based
professional services firm with many employees in India, analyzed social media contributions, particularly blogs. It found that bloggers
were more engaged and satisfied than others
and performed about 10% better, on average.
In our work with companies like these, we
have seen best practices emerge for using analytics to manage people.
Six Uses of Talent Analytics
Analyzing talent is not significantly different
from analyzing customer relationships or supply chain management. It starts with the delivery of historical facts (“What happened?”) and
ends with real-time deployment of talent
based on rapidly changing needs. The six kinds
of analytics for managing your workforce,
from simplest to most sophisticated, are
human-capital facts, analytical HR, humancapital investment analysis, workforce forecasts, the talent value model, and the talent
supply chain.
Human-capital facts are a single version of
the truth regarding individual performance and
enterprise-level data such as head count, contingent labor use, turnover, and recruiting. Companies should carefully consider what facts will
give them that version. For some, one or two
data points may indicate overall health. For example, JetBlue created an employee-satisfaction
metric around its people’s willingness to recommend the company as a place to work. This
“crewmember net promoter score” (modeled
after the customer-satisfaction metric) has been
used to study the impact of compensation
changes and to help determine executive bonuses. Employees are asked annually on their
hiring date if they would recommend the company, so JetBlue can effectively monitor employee engagement monthly.
JetBlue and other successful organizations
are transparent with end users about the process: Any manager or employee may see how
the data were collected, what formulas are
being used, and, most important, why the data
matter to the operation. For example, Harrah’s
provides documentation in its HR scorecard to
ensure that all readers understand how
human-capital facts are created and what they
mean for daily management.
Analytical HR collects or segments HR data
to gain insights into specific departments or
functions. For example, a manager might be
able to see that staff-turnover intervention is
needed for the East Coast sales team but not the
West Coast team. Analytical HR integrates individual performance data, such as personal
achievement in key result areas, with HR process metrics, such as cost and time, and outcome
metrics, such as engagement and retention.
Lockheed Martin built a performance
management system to link each employee’s performance to organizational objectives. The automated system collects
timely performance-review data throughout
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Competing on Talent Analytics •• •T HE B IG I DEA
the year. The data can then be compared with
knowledge management information, such as
who has undergone formal training in specific
areas. With the system, Lockheed Martin can
identify its high potentials for special programs or monitor employees who need improvement in certain areas.
Human-capital investment analysis helps
an organization understand which actions
have the greatest impact on business performance. One leader in this area is Sysco, the
$36.8 billion Fortune 100 global food-service
company. Sysco is a complex organization
made up of nearly a hundred autonomous operating units and about 51,000 full-time employees serving approximately 400,000 customers. The company began its workforce
analysis with three gross measures for each operating unit: work climate and employee satisfaction, productivity, and retention. It has
drilled deeper to understand, measure, and
manage seven other dimensions of the work
environment, including frontline supervisor effectiveness, diversity, and quality of life.
Sysco’s analysis revealed that operating units
with highly satisfied employees have higher
revenues, lower costs, greater employee retention, and superior customer loyalty. The company can efficiently identify what actions by
management will have the greatest impact on
the business. For example, in six years it has improved the retention rate for delivery associ-
ates—who provide customer service and build
customer relationships—from 65% to 85%.
Sysco tracks the group’s satisfaction scores, and
when they dip, it institutes immediate improvements to get them back on track. By retaining
this key talent, Sysco saved nearly $50 million
in hiring and training costs for new associates.
Workforce forecasts analyze turnover, succession planning, and business opportunity
data to identify potential shortages or excesses
of key capabilities long before they happen. As
Vinay Couto, Frank Ribeiro, and Andrew Tipping wrote recently in Strategy + Business, Dow
Chemical has evolved its workforce planning
over the past decade, mining historical data on
its 40,000 employees to anticipate workforce
needs throughout the chemical industry’s volatile business cycles. It forecasts promotion
rates, internal transfers, and overall labor availability. Dow uses a custom modeling tool to
segment the workforce into five age groups
and 10 job levels and calculates future head
count by segment and level for each business
unit. These detailed predictions are aggregated
to yield a workforce projection for the entire
company. Dow can engage in “what if” scenario planning, altering assumptions on internal variables such as staff promotions or external variables such as political and legal
considerations. Workforce forecasts can be
used to staff up in key growth areas or identify
knowledge management risks for retiring em-
Applying Talent Analytics
Six kinds of analytics can help companies answer critical talent questions—listed here from simplest to most sophisticated.
Human-Capital Facts
Human-Capital Investment Analysis
Talent Value Model
What are the key indicators of my organization’s overall health?
JetBlue analysts developed a metric—the
“crewmember net promoter score”—that
monitors employee engagement and predicts financial performance.
Which actions have the greatest impact on
my business?
By keeping track of the satisfaction levels of
delivery associates, Sysco improved their retention rate from 65% to 85%, saving nearly
$50 million in hiring and training costs.
Why do employees choose to stay with—
or leave—my company?
Google suspected that many of its lowperforming employees were either misplaced
in the organization or poorly managed. Employee performance data bore that out.
Analytical HR
Workforce Forecasts
Talent Supply Chain
Which units, departments, or individuals
need attention?
Managers at Lockheed Martin use an
automated system to collect timely
performance-review data and identify
areas needing improvement.
How do I know when to staff up or cut
Dow Chemical has a custom modeling tool
that predicts future head count for each
business unit and can adjust its predictions
for industry trends, political or legal developments, and various “what if” scenarios.
How should my workforce needs adapt to
changes in the business environment?
Retail companies can use analytics to predict
incoming call-center volume and release
hourly employees early if it’s expected to
harvard business review • october 2010
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Competing on Talent Analytics •• •T HE B IG I DEA
ployees before they are clear to managers.
The talent value model addresses questions
like “Why do employees choose to stay with
our company?” A company can use analytics
to calculate what employees value most and
then create a model that will boost retention
rates. Such a model can help managers design
personalized performance incentives, assess
whether to match a competitor’s recruitment
offer, or decide when to promote someone.
Google uses employee performance data to determine the most appropriate intervention to
help both high- and low-performing employees
succeed. Laszlo Bock, Google’s vice president
of people operations, told us, “We don’t use
performance data to look at the averages but
to monitor the highest and lowest performers
on the distribution curve. The lowest 5% of
performers we actively try to help. We know
we’ve hired talented people, and we genuinely
want them to succeed.” The company’s hypothesis was that many of these individuals might
be misplaced or poorly managed, and a detailed analysis supported that idea. Under-
Talent Analytics at Google
Google’s highly analytical culture and
practices extend to its human resources
function. The company’s goal is to identify leading people-management practices and confirm them with data and
analysis. To achieve it, Google created a
people analytics function with its own
director and a staff of 30 researchers, analysts, and consultants who study employee-related decisions and issues. The
People and Innovation Lab (PiLab) conducts focused investigations for internal clients
Google has analyzed a variety of HR
topics and has often moved in new directions as a result. It has determined what
backgrounds and capabilities are associated with high performance and what
factors are likely to lead to attrition—
such as an employee’s feeling underused
at the company. It has set the ideal number of recruiting interviews at five, down
from a previous average of ten.
Google’s Project Oxygen—so named
because good management keeps the
harvard business review • october 2010
company alive—was established to determine the attributes of successful managers. The PiLab team analyzed annual employee surveys, performance
management scores, and other data to divide managers into four groups according to their quality. It then interviewed
high- and low-scoring managers (interviews were double-blind—neither interviewers nor managers knew which category the managers were in) to determine
their managerial practices. Google was
eventually able to identify eight behaviors that characterized good managers
and five behaviors that all managers
should avoid.
Google’s vice president of people operations, Laszlo Bock, says, “It’s not the
company-provided lunch that keeps people here. Googlers tell us that there are
three reasons they stay: the mission, the
quality of the people, and the chance to
build the skill set of a better leader or entrepreneur. And all our analytics are built
around these reasons.”
standing individuals’ needs and values allowed
Bock’s team to successfully address a number
of difficult situations.
The talent supply chain helps companies
make decisions in real time about talent-related demands—from optimizing a retail
store’s next-day work schedules, on the basis of
predicted receipts and individuals’ sales performance patterns, to forecasting inbound callcenter volume and allowing hourly staff members to leave early if it’s expected to drop. This
is the most complex of the six kinds of talent
analytics, because it requires particularly highquality data, rigorous analysis, and the integration of broad talent management and other organizational processes. Talent supply chains
are still in their infancy, but the early success of
some organizations, particularly in the retail
space, suggest that they will spread.
Mastering Talent Analytics
Unsurprisingly, building a capability in this domain requires the same fundamentals that
most other business analysis does. We summarize them with the acronym Delta (access to
high-quality data, enterprise orientation, analytical leadership, strategic targets, and analysts).
Data. Organizations can get increasingly
good HR data from their enterprise systems,
but they sometimes need to augment them
with new metrics, like JetBlue’s. At Harrah’s
many line managers, who are already on the
floor at its properties, observe and record the
frequency with which customer-facing staff
members smile, because that behavior is
highly correlated with customer satisfaction.
Data needn’t be perfect to be appropriate for
analysis—just sufficient to understand trends
that matter.
Enterprise. HR can no longer confine employee data to its silo; organizations need access
to those data to be successful. JetBlue, Best Buy,
and Limited Brands have observed an important statistical relationship between employee
satisfaction and company performance—usually at the station, branch, or store level. The
significance of the relationship motivated Best
Buy to make its employee engagement surveys
quarterly rather than annual.
Leadership. The success of almost any initiative depends on its leaders, and talent ana …
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