Measurement in HRM

- Neha Agrawal

Amity Global Business School, Pune

Measuring HR Alignment

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Organizations and employees fundamentally exist within a holistic and symbiotic "eco-system" that needs to be aligned to be effective.

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What is Alignment
Human resources alignment means integrating decisions about people with decisions about the results an organization is trying to obtain. Alignment with vision, mission, organizational goals and objectives

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Vertical & Horizontal Alignment

Vertical Alignment: the degree to which the content of an HRM practice focuses on, embeds, and communicates the desired performance competencies

Horizontal Alignment: the degree to which HRM practices are mutually supportive and reinforcing

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Why Alignment?
Biggest Asset-Human Capital

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HR Link to Organizational Performance

Example-

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Requisites
A clear understanding of the value chain: What kind of value the organization generates and exactly how that value is created. Describe how ultimate financial goals are linked to key success factors at the levels of customers, operations, people, and IT systems.

Shared understanding of the value-creation process-through which the organization can design a strategy implementation model that specifies needed competencies and employee behaviors.
The HR system can be geared toward the generation of these competencies and behaviors.

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+ Results

HR Alignment

Behaviors +
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Methods of Measuring HR Alignment

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1. Objectives & Measures

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2.Integrating HR into Value Creation

HR deliverables : Outcomes of the HR architecture that serve to execute the firms strategy.

HR doables: HR efficiency & activity counts. HR performance drivers: core people-related capabilities or assets. HR enablers reinforce performance drivers (moderators whose presence activates the HR
performance drivers).

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3. Benchmarking
It is a systematic process of measuring an organizations products, services, and practices against those of a like organization that is a recognized leader in the studied area.

The study helps to gauge HR alignment through decision support categories such as: resource planning organizational planning, and strategic HR planning
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4. The Balanced Scorecard

Framework used to translate strategy into operational terms by measuring a full range of perspectives: Financial customer internal learning and growth.
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5. Activity Based Costing (ABC)

is a method of cost management that determines the true cost, including overhead, for a service or product.

Finding the true cost allows agencies to discover cost improvement opportunities prepare and actualize strategic and operational plans improve strategic decision-making. It involves identifying activities, determining activity costs, determining cost drivers, collecting activity data, and calculating the service cost.
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6. Job Analysis and Competency Modeling

Identifies job responsibilities, tasks, and employee attributes needed on different jobs to assure mission-critical goals. Competencies are used as a firm and consistent foundation for organization/job design, staffing, placement, appraisal, development, performance management, succession and compensation.
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7. Talent Audits and Bench Strength Analysis

Identifies and prioritize talent gaps for different jobs.

Goals often include: 1) identification of mission-critical positions and other workforce areas with talent gaps; and 2) developing clear and measurable action plans for closing them.
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8. HR Alignment Process
Assessing HR Alignment
Individual results w/ business goals Talent levels w/ business objectives Individual w/ career goals Team & unit w/ business objectives Culture w/ business objectives Process w/ business objectives

Architecting HR Process Alignment

Talent Management Performance Management Employee Selection & Placement Succession Planning Rewards & Recognition

Building HR Alignment
Assuring person job fit Optimizing human performance Assuring bench strength Intentional culture shaping Organization and job design

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Measuring Hiring & Staffing

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Hiring & Staffing

Recruitment and staffing provide the overall framework for the process of planning, recruiting, selecting, and hiring employees.

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Why is it important?
The goal of recruitment and staffing is to identify the smartest, most versatile employees you can find. Retention of your best employees starts with your effective recruitment and staffing process, strategies, policies and procedures.

Whom you choose to give entry to, will define how should he/she be managed
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The Virtuous Triangle

Speed of hiring and cost containment are important and measurable drivers

In contrast, quality of hire presents a more nebulous metric to define and measure, but is the critical measure to take into account.
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Methods of Measuring Hiring & Staffing

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QoH- Quality of Hire (Lou Adler)

How well a new person meets the performance needs of the job using the following 1-5 yardstick: Level 1.0: Underperforms on all core performance requirements of the job. Level 2.0: Reasonable match on most job needs, but needs extra management, direction, or coaching to meet the basic performance standards. Level 2.5: Average performance. Meets basic requirements of the job with a normal degree of management coaching and direction. Level 3.0: Solid performance. Meets significant performance requirements of the job on a consistent basis with minimal management direction and support. Level 4.0: Consistently exceeds significant performance requirements of the job on measures of quality and/or quantity. Level 5.0: Far exceeds significant performance requirements of the job on a consistent basis. While typical interview and assessment tools can differentiate between above and below average performance, they dont do too well in determining if someone is a Level 3, 4 or 5 ---- Use Talent Score Card
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Talent Score Card

10 Factors rates on a scale of 1-5 Technical Skills & Abilities Motivated Team Skills (EQ) Problem Solving Managerial Fit Achieved Comparable Results Planning & Executing Comparable Work Environment & Cultural fit Trend of growth over time Potential
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Return on Workforce (Taleo)

It is the ratio of outcome measured in operating income to input, measured as the total labor cost (full time and contingent). Operating income --------------------------Labor costs

ROW =

The ROW ratio brings a better depiction of todays workforce reality and consequently translates into better financial performance for the organization using it.
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Cost per Hire (CPH)

It is a common recruiting effectiveness measuring tool. A valuable tool but does not take into account the length of time it takes to fill the position and quality of the hire. In addition cost per hires will drastically differ from position to position. For example, a cost per hire for a senior executive position will be drastically different from a nonexempt position.
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Calculating Cost per Hire (CPH)

Eg-

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Time
"Time to Fill"
is a calculation that tracks the number days from the created date of the job, up until the hired date of the applicant.
"Time to Hire"

is a calculation that tracks the number of days from the created date of the applicant, up until theyre hired
shows how many days the candidate was in your system before they got hired

shows how many days it took to hire a candidate in a job

.

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Supply Chain Measurement: Yield

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References
http://hralignment.net/HR-Metrics.htm http://www.hr.com/en/communities/organizational_development/alignment_eacxs746.html http://www.smhc-cpre.org http://www.slideshare.net/cheerupitsanewday/measuring-hr-strategic-alignment-through-the-hrscorecard-presentation http://www.opm.gov/studies/alignnet.pdf http://www.maverickec.com/index_files/Aligning%20HR%20Strategy%20epulse.pdf http://59.67.71.238:8080/004/wenxian/pdf/17.pdf http://www.ere.net/2011/09/16/measuring-and-maximizing-quality-of-hire/ http://www.adlerconcepts.com/index.php/article-topics/quality-of-hire/729-how-should-youmeasure-quality-of-hire http://www.taleo.com/researcharticle/staffing-focus-quality-hire-how-measure-it http://www.investopedia.com/terms/r/revenueperemployee.asp#axzz1pxJRzfb4 http://www.esrcheck.com/articles/Safehiringaudit.php http://www.recruitersnetwork.com/resources/costperhire.htm http://www.teksystems.com/Services/Staffing-Services/Hire-Model.aspx http://cs.icims.com/public/w/faqs/what-is-quot-time-to-fill-quot-versus-quot-time-to-hirequot.aspx http://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi?article=1078&context=cahrswp http://www.hrmreport.com/article/Recruiting-Metrics--the-Rules-Have-Changed/
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Thank You

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