Developing human resources key risk indicators – Know Your Staff (KYS) practices

ABSTRACTHuman resources (HR) management is a research area that has attracted significant interest over the past decade. In spite of this, little consensus has been reached as to what are the essential ingredients for the effective management of the human factor. The challenge, which is undertaken in this paper, is to provide a comprehensive analysis of the contribution of the HR unit in improving upon personnel management throughout the organization. The paper proposes a well thought out approach to the effective management of staff, which is based on the principle and practice of “Know Your Staff†(KYS). The framework establishes three levels of information acquisition and handling for each member of the bank’s workforce: the HR unit, the operating business unit and the immediate supervisor. The first level covers the employee’s official employment and medical records, and the remaining two levels cover a wide range of performance-based data. The data can be used to build a better understanding of the HR environment at the business unit level and to develop HR key risk indicators to be able to predict employee behavior and conduct, and thus improve upon organizational effectiveness. However, the practice, which is advocated in this document, is not intended to change or otherwise modify any law, regulation, procedures, or collective bargaining agreement that govern the collection and/or safekeeping of staff records at the bank. The paper is spread over six sections: Section 1, the “Introduction†, highlights the importance of the human factor in the production and delivery process of a service, and introduces the fundamentals of people risks; Section 2 introduces current practices in the collection and management of HR data, and rationalizes the need for an alternative approach to staff records management; Section 3 brings to the forefront the real challenges facing human resources professionals as a result of the dynamic changes that the financial sector has had to cope with in recent years; Section 4 presents the KYS framework turning the attention to the type of HR data that needs to be collected, and the structure and location of each component of the personnel records; Section 5 brings a new dimension to existing HR practices: the administration and management of staff records calling for the need for careful guidelines for access, maintenance, transfer, audit and disposal of staff records; Section 6 closes the paper by highlighting the risk of doing nothing.