HRpepper has developed a proprietary model for calculating the effect of fluctuation on top management positions at a global retail group.
The comparatively autonomous business units of the group have full control over the staffing of their top management positions, without the involvement of corporate HR. To raise awareness for the issue among their directors, a model was to be designed to measure and visualize the monetary and non-monetary effects of fluctuation on the top management level. This model was to provide a basis for effective measures to be taken to improve the quality of recruitment processes and of appointments at the top level of the business.
Using relevant studies and expert contributions, HRpepper presented a concise overview of the effects of fluctuation on top management positions. The relevant facets were clustered, and calculatory models developed for the monetary dimensions. Custom parameters were applied to the originally generic model to produce approximate scores for key indicators concerning specific target positions (total compensation, leadership remit, area of responsibility etc.). The assumptions and calculatory models were fully verified in expert reviews.
The model allows a good approximation of the real-life impact of (impending) fluctuation on top management positions. Many clients are initially surprised at the level of the monetary effects, but the transparent calculation, reviewed in detail, often reveals that the assumptions applied in the model are actually conservative estimates.
The results of the model, presented in a concise and transparent report leads to new governance rules being introduced for top management appointments and to the application of new processes and instruments in top executives’ selection.