Of scenarios such as market disrupting changes in

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Unformatted text preview: wo years for strategic workforce planning. Measuring Employee Performance Traditional metrics, such as return on assets or return on equity, measure capital productivity. Such metrics are of little use in measuring employee performance. To identify where and how people are creating—or squandering— value, companies need performance metrics that are as rigorous as those used in the finance department but are designed to measure human productivity. As a senior executive from a global pharmaceutical company said, “We are trying to align our KPIs with the de facto strategy.” T B C G • W F P M A Lufthansa Technik Mitigating Capacity Risk Luhansa Technik, an industry leader in aviation technology services, has successfully incorporated a longerterm perspective into its strategic workforce planning. (See the exhibit below.) The airline created a taxonomy of approximately 230 job functions, 150 job families, and 90 job family groups. Individual job functions at the airline are highly specialized, yet the taxonomy allowed Luhansa Technik to identify opportunities for cross-divisional exchange of personnel as well as for training personnel to move up into more complex job functions. Luhansa Technik uses supply-and-demand modeling to forecast future gaps in the workforce and take the appropriate countermeasures. Supply modeling identifies the impact of personnel aging and retirements, employees moving among company divisions, and employees leaving the company, as well as other parameters that influence staff capacity at the job cluster level. Demand modeling requires precise knowledge of influencing factors and strategies; these insights result from discussions among HR, the business units, and the finance function. At Luhansa Technik, these conversations re- sulted in the maintenance services demand model being based on drivers such as aircra type, year of construction, maintenance measures, and efficiency increase. The degree of uncertainty that is always inherent in supply-and-demand modeling makes the simulation of scenarios indispensable. Through scenario simulations, market developments can be reflected in the strategic workforce plan along with the impact of corporate decisions, such as the introduction of new aircra types, on the workforce. Results from the supply-and-demand simulations are combined in a gap analysis to calculate the difference between the existing and the required workforce for each job cluster over a set period. The gap analysis provides a meaningful, quantitative foundation for taking actions to reduce Luhansa Technik’s capacity risk. For example, maintenance employees undergo five to six years of training beyond the vocational level so that they can be certified for aircra maintenance work. This investment offsets the risk associated with underestimating demand and suffering a critical capacity shortage in this job function that cannot be addressed on short notice— or, if it can, only at great effort and...
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