HR Metrics

Lesson # 2
HR Metrics- Why?
• What caused an increase in interest for managers to go for
organizational data:
• Evidence based management
• Examining transaction level data
• Quality revolution
• Total Quality Management (TQM)
• Six Sigma
• Lean Manufacturing
• Financial/ Marketing/ Supply Chain
• Profitability ratios; Acquisition, retention, development; On-time shipping, Inventory
Velocity
• Generated interest in HR Metrics
What has changed?
• Infrastructure which supports HR metrics have changed in last 20
years
• Changing the way we look at metrics
• Previously focus was primarily on the data which is coming from accounting
systems
• Costs
• Revenue per employee
• Benefit costs as per percentage of revenue
• Expense per employee
Need of the hour
• Information systems can only have an impact on organizations if as a
result of the information they receive, managers make different and
better decisions than they would have without that information.
• Beneficial only if managers change their decision behavior for the
better.
• Efforts wasted if:
• managers do not make different and better decisions as a result of the
information reported to them, the time and effort expended in conducting
and reporting HR metrics and analytics is wasted
Study and practice of HR metrics
• Data
• Benchmarking
• Reporting
• Dashboards
Study and practice of HR metrics
• Data
• Getting the relevant data
• Finding correlation and patterns in data
• Don’t go for nonsensical relationships (taller employees are better leaders etc.)
• Benchmarking
• For comparable industries
• Reporting
• What metrics will be reported
• How info will be packaged
• Abstraction level (how, when and to whom it should be reported)
• Dashboards
• All organized metrics/KPIs on one single page
• Enriched component of reporting
• Interactive dashboards
Role of Data?
Role of Decision Modelling
Excellence in HR metrics requires..
• Centers of Excellence
• Having a good know-how of HR practices
• Well aware of latest advancement in field of HR
• Maybe full time staff or consultants from outside
• HR Business Partners Centers of
HR Business
Partners
• Works with other function heads Excellence (HRBP)
• Assessing function’s HR needs
• Overcoming operational problems in HR
Administrative
• HR Administrative Process Efficiency Process
Efficiency
• Repetition of specific process at one place
• For continuous quality improvement
Evolution of HR Metrics
• HR Efficiency Metrics
• the amount of resources used by HR programs:
• such as cost-per-hire, revenue per employee
• HR Effectiveness Metrics
• the outcomes produced by HR activities, such as:
• learning from training, retention rate, eNPS
• Predictive Analytics
• Correlation between variables
How HR metrics fit into a bigger picture
It’s a Journey, not a destination
• Be willing to learn
• Avoid making aggressive metrics of every thing
• If you only have a hammer, you tend to see every problem as a nail