Developing KPIs at Southern Company
| Published date | 01 May 2005 |
| Pages | 28-31 |
| DOI | https://doi.org/10.1108/14754390580000804 |
| Date | 01 May 2005 |
| Author | Howard Winkler |
| Subject Matter | HR & organizational behaviour |
OUTHERN COMPANY IS THE holding
company for five electric utilities in the
southeastern US. As one of the largest investor-
owned utilities, it provides service to over 4
million customers and generates US$11 billion in
revenue on US$35 billion of investment. The company
has enjoyed substantial success financially and has been
listed numerous times among Fortune’s M ost Admired
Companies and at the top of J.D. Powers’ customer
service rankings1several years running. The company
employs over 25,000 workers in numerous occupations,
including linemen, plant operators, engineers and
customer service employees. Labor turnover is extremely
low at 4.4 percent.
In March 2004, Southern Company began a
comprehensive workforce measurement initiative. While
we developed different measures for different audiences,
the primary component was a series of key performance
indicators (KPIs) linked to our workforce strategy.
Measurement taxonomy
In developing a system of measures, it became clear
that various audiences needed different information.
(see Figure 1, below right).
•Senior management needs to know whether the
capabilities and characteristics of the workforce are
aligned with a workforce strategy designed to execute
business strategy. These are our KPIs and include
measures of culture, productivity, labor cost, bench
strength, diversity and leadership effectiveness.
•In addition to the information above, HR practitioners
need to understand the basic dimensions of the
workforce and whether issues are emerging that could
rise in significance to become KPIs. These are what we
call general indicators. Examples include workforce
demographics and measures of employee movement,
such as time in position, transfers and promotions.
•Line managers need to monitor tactical aspects of
their workforce to ensure that labor costs are
reasonable, their people are productive, and policies
are being adhered to. These measures will comprise
an automated dashboard that will be deployed to
managers’ desktops. When in place, managers will be
able to easily track overtime, attendance, pay levels
and turnover.
•Finally, HR managers need to monitor their own
processes and systems through a scorecard that
measures process efficiency, customer service,
strategic contribution and financial management.
These measures relate to the HR function, but are
not to be confused with workforce measures.
While these last two measures are still being developed,
the KPIs and general indicators at Southern Company
have been fully developed and deployed. This article
will focus on the KPIs and their emergence from the
company’s workforce strategy.
S
28 Volume 4 Issue 4 May/June 2005
Developing
KPIs at
Southern
Company
Creating key performance indicators
to measure strategy execution
In early 2004, Southern’s HR team began examining
the links between its business and workforce
strategies. Here, HR strategy director Howard Winkler
explains how a set of KPIs was developed to monitor
success and focus both HR and management on high-
priority issues.
Howard Winkler
Southern Company
© Melcrum Publishing Ltd. 2005 For more information visit www.melcrum.com or e-mail info@melcrum.com
To continue reading
Request your trial