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If you are a professional HR manager, who works for a reputable company, then you have firsthand knowledge of how difficult it is to evaluate the performance of the human resource department. On the other hand, you definitely realize the importance of doing that. Consequently, you do not have any other choice, but to look for the most effective tool that will simplify this challenging procedure for you and help make everything clear.

HR metrics may prove to be extremely helpful to you in this situation. Still, you will not get the desired result if you do not manage to select the most essential indicators that will be critical for the company’s business development. There is no doubt about the fact that it is not easy to decide what exactly you need to measure.  Furthermore, it is simply impossible to evaluate each human resource activity even if you passionately wish to do that. Actually, measuring all the activities is not even necessary. Therefore, you do not have a better option than selecting the most important HR metrics with regard to your business goals. For instance, you can easily assess the efficiency of recruitment strategies, compensation and profits, training and development and general performance management. If you cope with these four tasks successfully and get only positive results from each of these aspects , then you may be one hundred percent sure that it will lead to the improved productivity of your company.

As soon as you have the HR metrics on hand, you will need to present them in the most convenient way. The Balanced Scorecard system will appear to be helpful to you in this respect. Actually, you should know that each metric has a very important meaning for the analysis of the company’s functioning. This is because they provide a connection between human resource activities and your business goals. As a result, properly adopted HR strategies will ensure quicker and more effective accomplishment of the company’s objectives.

As far as the basic aim of implementing HR metrics is productivity, it is of paramount importance to realize this even prior to thinking over the most essential performance indicators. When you feel that you are ready to set up the metrics you have chosen, do not hurry to do that. Otherwise, you run the risk of overlooking significant aspects. It is highly recommended that you should have a strategic plan of their implementation, since this is the most reasonable way to make sure that your HR department really adds value to your company.

Is it possible to measure the contribution of the human resource department into the financial outcome of a company? A lot of business owners are concerned with this question and explore different ways of doing that. Actually, there is no need to look for dozens of options that will enable you to evaluate the performance of you HR department, since the Balanced Scorecard system and metrics it uses will allow you to do that quickly and effectively.

What makes HR metrics so valuable? The fact is that they make it possible to get evidence of the overall efficiency of the company’s human resource department, thus contributing to the improvement of its functioning.  Implementation of these metrics is frequently reported to be a significant part of human resource management. This is because they help make a reasonable assessment of indicators that show how well human resource activities accomplish the objectives of this particular department, which further affect other business goals you have set. Typically, the company’s managers can easily make use of valuable information they have managed to gain from the established metrics and review the strategic mission of the human resource department.

So, how exactly are these metrics organized? The best way to present them is to use the Balanced Scorecard system, which has already become popular in lots of business organizations. This tool specifies all strategic plans with regard to four basic perspectives, namely financial, customer, internal and organization learning. To understand the idea of the HR balanced scorecard system better, we should discuss each of these perspectives separately.

The financial perspective gives an answer to the following question: “What human resource strategies should the management of the company have in order to come up to the customers’ expectations?” The customer perspective, in its turn, is closely connected with the first one, since it is applied with the only purpose – to define what exactly the company’s clients wish to get from it. The internal perspective helps decide in what way it is possible to make the human resource function consistent with the customers’ needs. Finally, the organization learning aspect focuses on the professional enhancement of the company’s employees, which may affect long-term business objectives.  If you manage to consider all these human resource BSC perspectives and establish all the metrics used by this system correctly, it will contribute to the development of your business, thus bringing you the increased income.

Do you know how often a good HR department should measure its performance? This generally depends upon how productive its work is. Thus, if you instinctively feel that your company needs improvement, then you are bound to set up specific HR metrics that will help you identify those factors, which prevent you from reaching your business goals. These indicators will also show those areas, which may be successfully enhanced in order to meet the current needs of your company and personnel.

Actually, the choice of HR metrics is nearly unlimited nowadays. However, this does not mean that you should apply as many of them as you wish. The thing is that the more metrics you will select, the more puzzled you will be. This is because they will prevent you from getting an insight into the performance of your HR department. A better alternative is to establish only those HR metrics that have the most obvious impact upon your business.  With this purpose, you should consider not only the metrics you will use in the process of assessment, but also the methods of gathering the required data and the ways of calculation you will need. You should also decide how exactly you will interpret the results in order to solve the most urgent HR problems.

Some of the most widespread HR metrics found in lots of organizations include absence rate, program costs for one employee, total revenue and that for one worker, compensation rates, cost per hire, level of employee satisfaction, return on investments, training hours, utilization percent,  turnover rates, yield ratio etc. These are only a few metrics applied nowadays. However, not all of them are considered crucial enough to be established in each company.

What are the most vital HR metrics then? They are recruiting, retention, training and development and staffing. Let us provide a closer insight into each of them. Recruiting human resources metrics are meant to measure actions related to successful personnel employment. Managers, who are going to evaluate this process, typically make use of the following variables: turnover rates of new employees, recent hire effectiveness, poor hire effects, return on workforce investment etc.

HR retention metrics frequently evaluate significant turnover aspects by quantifying such variables as average tenure, turnover rate and its financial impact, the amount of veteran workers etc. As a rule, results obtained through this procedure show how much money a company invests into each employee and helps the managers work out plans that will help retain the most productive and proficient workers.

When it comes to training and development HR metrics, it is important to note that they are used to enhance learning and coaching processes. They involve such measurements as the amount of money and time spent on training activities, professional orientation etc. and demonstrate how efficient and successful the coaching processes are.

HR staffing metrics, in their turn, are used to calculate the total return on workforce investment. They involve the following indicators: cost per one hire, the ratio of recruiting effectiveness and the employee replacement cost. As you see, there are lots of HR metrics to be established for a quality HR performance analysis.

Are HR evaluation metrics as crucial for your business as they are assumed to be? Well, it depends upon how much you know about them and whether you establish them correctly or not.  Nowadays, HR Balanced Scorecard is much spoken about and there is nothing strange or unusual about that, because this tool is reported to be one of the most advanced methods of improving the productivity and effectiveness of the workforce management procedure. It also helps utilize the company’s human resources in the most reasonable way.

People who do not know much about human resources BSC, should realize that it is nothing more than just a method of personnel performance evaluation, the final objective of which is to improve the workforce management. It basically focuses on several aspects that are associated with the functioning of the HR department. These aspects include the customers, the financials, the company’s inner processes as well as learning and professional growth.

The introduction of the Balanced Scorecard system has made it possible to analyze the most significant assets of the company in order to define what aspects should be improved and what changes should be implemented  with the only purpose – to enhance the performance of the organization. Though it may initially seem that this task is quite simple, it is definitely a wrong assumption. That is why you are highly recommended to learn more about HR BSC.
Typically, there are 4 perspectives, without which the whole process of HR measurement will be senseless. These perspectives comprise costs, financial investments, outcomes as well as a set of other meaningful strategic aspects. Let us analyze each perspective more accurately.

To start with, you will not go without defining human resources costs, which involve money you have managed to acquire from the HR department. To analyze this perspective, you will have to use such metrics as remuneration and acquisition costs. In the next perspective (which is human resources investments), you will have to take into account professionalism and skillfulness of your personnel, since your employees are your main asset, which will help you withstand tough competition that exists in your particular business. Human resources outcomes, in their turn, will comprise such metrics as the workforce turnover rate, revenues and productivity enhancements.  Strategic aspects included into the final perspective will incorporate such indicators as customer satisfaction, strategic accomplishments, market share as well as the quality of services and products offered.

Having identified the most valuable HR metrics, you should arrange and analyze them within the Balanced Scorecard system.  This will give you an idea of how advanced the performance of your HR department currently is.

What makes human resources measurement imperative for any business? A lot of managers of small and large companies try to find the most reasonable answers to this question. Meanwhile, to realize the importance of this process, you first have to find out the main human resource function. As far as the performance of any enterprise or organization depends much upon the professionalism of its personnel, it becomes clear how significant the work of the HR department really is. It is they who should define the level of skillfulness and knowledgeability of the company’s workforce in order to manage them in the most effective way.

Generally, there are different techniques and strategies the HR department may implement with the purpose of identifying the personnel productivity. All of them have specific pros and cons and that is why it is of key importance to select those that will both simplify the procedure and make it efficient. At present, the most powerful HR measurement tool is the Balanced Scorecard system that applies a set of highly effective human resource metrics. This system enables business owners adopt decisions, which are primarily based on proven data rather than intuition, which is especially critical when it comes to the assessment of HR performance.

It is not a secret that each company, irrespective of the products and services it offers, sets certain business objectives. That is why any HR strategy should be inevitably connected with these goals as well. Only in this case, the company’s human resources measurement systems will prove to be highly effective.

The most crucial human resource practices are generally viewed from the following six perspectives: collegial administration, accountability and rewards, recruiting and retention, cautious application of the available resources, communications veracity and dedicated human resource service technologies. All HR metrics, in their turn, may be classified into the following categories: historical, current (or real-time) and goal-oriented (forward-looking). This subdivision is quite righteous, because it is impossible to evaluate the potential success of the company without the analysis of its historical data.

Nowadays, the most widely applied HR metrics are generally concerned with workforce attitudes, their level of skillfulness, turnover rates, service center functioning, outsourcing expenses, the amount of processed HR transactions, effectiveness of staff training programs and the very process of employment.  These metrics are used by lots of businesses today and each of them involves up to five key performance indicators, which provide more accurate and precise HR performance evaluation.

A lot of people wrongly believe that HR management should be applied in those industries, which mainly depend on the productivity and skillfulness of employees. The truth is, however, that this particular kind of management is highly popular in totally atomized businesses as well. As far as we live in the era of the advanced information technologies, the issue of hiring educated and responsible people remains one of the main concerns of business owners today.

Despite of the fact that IT industry generally involves highly functional software and special machines that perform all basic tasks, it is still the company’s workforce that develops IT utilities, programs and solutions. Therefore, managers of such organizations should not underestimate the importance of implementing human resource metrics, which may effectively help identify the level of skillfulness and productivity of their employees. The Balanced Scorecard system is the most powerful tool that may successfully contribute to personnel assessment and management. Furthermore, it does not only help evaluate the work of the company’s HR department, but enables business owners find reasonable ways to improve its performance as well.

So, how does this system work? HR Balanced Scorecard makes it easy to design special strategy charts, which represent the connection between the most important indicators and categories of this system with regard to the company’s specialization. It concerns the human resource department as well. As a rule, this system incorporates 4 basic categories, namely customer, financial, learning and professional growth as well as inner business processes. Each separate category, in its turn, involves a number of significant KPIs (key performance indicators) that represent the most influential factors critical for the particular kind of business.

When it comes to evaluating the HR performance within the IT industry, the most powerful KPIs are the average cost of equipment and that of the office area for one employee. Let us have a closer look at these indicators. As far as the cost of equipment is concerned, it seems important to underline that all utensils, computers and services applied by IT companies are quite expensive. Consequently, implementation of HR KPIs proves to be a reasonable solution, since it makes it possible to optimize the company’s financial expenditures, thus economizing money for other potentially important purposes.

The same is about the second indicator mentioned above. Though a lot of IT professionals consider it more convenient to work directly from their houses, many programmers still decide to work in the company’s offices. If applied correctly, HR KPIs may effectively help optimize the expenses for each employee with regard to the occupied office space, thus saving money, which may be further used for the implementation and development of coaching and training techniques for the company’s workforce.  These are the most reasonable factors that speak in favor of BSC implementation.

When we talk about the Balanced Scorecard there is always a question of motivation appears. People don’t want to work with a new system, top management is not committed, line level employees don’t like to be measured according indicators.

The new eTraining – Motivation for the Balanced Scorecard was released that addresses these and other issues.

Make a Public Promise. Another standard motivational tool  is the public promise.  For instance, an employee or a whole business unit can make a public promise to implement the Balanced Scorecard.  Ideally, this promise should include a timeline.  It should be detailed, and it should be action-oriented.  Make sure three things are clear: the final goal, how the business unit will achieve that goal, and when.

Learn more in the eTraining.

Any reputable company should value its personnel. There is nothing surprising about that, since properly trained and devoted staff can make a considerable contribution to the advancement of any business. Unfortunately, not all managers encourage their personnel to further training. Furthermore, a lot of them do not even consider it necessary to evaluate their productivity. That is why if you are really concerned about your company’s success and profitability, you are bound to apply HR metrics to define whether the level of skillfulness of your employees corresponds to your requirements or not. Moreover, you will be able to undertake special measures in order to upgrade your personnel based on the results of this analysis.

Human resource (HR) metrics can help find cost-effective solutions to enhance the overall performance of your company. Still, you have to learn how to apply them properly in order to achieve all business objectives you have set. The major benefit of these tools is that they help define if your workers are worth the financial investment you have made or not.  How else can you find out who is doing well at his/her position and who isn’t?

If you still have doubts concerning the implementation of HR metrics, you should identify how exactly your business will benefit from this process.  Thus, if you manage to measure knowledgeability and skillfulness of your personnel, you will be able to evaluate the contribution they make to the advancement of you business and see whether there are any weak points you have to improve for the benefit of your company. If established correctly, HR metrics may become unsurpassed tools that will provide you with meaningful and, what is even more important, trustworthy information, based on which you will not only make the required changes, but also save your money.

If you have decided in favor of applying these tools, you should keep in mind that there is no sense in using too many of them at the same time. Basically, eight or ten HR metrics will be enough to see what is going on in your company at the moment. In addition, you need to realize that the more metrics you will apply – the more time and money you will have to spend on their calculation (they are not cheap, by the way). Consequently, the better alternative is to learn the existing types of them and decide which ones may have greater impact upon your business performance. These may involve personnel productivity and recruiting, workforce retention, the level of manager satisfaction etc. You may also use other HR metrics, depending upon your particular business needs. However, no matter how many of them you have selected, make sure you use them correctly and in proper place. This is what really contributes to the effectiveness of this system.

There are different tools that help measure the performance of any company. The Balanced Scorecard (BSC) is rightfully considered the most effective of them. No wonder, it is applied in lots of reputable organizations nowadays with the basic purpose to make their management more expedient and task-oriented.

What is the main objective of this system? It aims at ensuring that all the goals of the company correspond to its strategies. In other words, if you manage to apply this system correctly, it will eventually help you reach your business goals instead of getting far away from your expectations.

Even some decades ago managers of large companies focused only on financial issues when it came to making serious decisions in order to make the company more reputable and successful. Actually, they made a huge mistake, because they overlooked other significant elements that affected the company’s performance, such as the quality of products and services provided, the productivity of employees etc. As a result, they frequently lost customers (even those that were devoted before), who were not satisfied with what they were offered. Everything changed, however, with the implementation of HR Balanced Scorecard concept, which involved thorough analysis of diverse business aspects that could seriously affect its effectiveness and overall performance.

These days, the BSC system is often used by conscientious business owners, who are primarily concerned with enhancing the productivity of their companies by means of improving inner processes. It especially concerns personnel productivity, because these people frequently feel that they do not contribute to the basic processes oriented on the achievement of business targets set by the company.  The Balanced Scorecard system generally tends to make those goals more practical and helps the company’s staff realize what exactly they are expected to do in order to improve the reputability and efficiency of the organization. In addition, it helps the managers of the company assess the personnel with regard to their skillfulness, knowledgeability and contribution to the advancement of the organization. As a result, it proves to be much easier to define how productive the personnel are and how much resources the business will require to reach the objectives they have set.

Basically, the HR BSC tends to quantify the most significant business aspects that affect its overall performance. The thing is that it is supposed that it is impossible to change anything until you analyze it properly. How else can you define whether your business needs improvement or not? That is exactly where the Balanced Scorecard can help.

Managers of all companies, (no matter how large they are) tend to employ new people in different ways. Unfortunately, they can never be one hundred percent sure that their personnel will be able to cope with all the tasks perfectly well. Instead, it frequently turns out that some employees are not ready to face new challenges, which prevents the organization from further development. There is no need to say that this is primarily reflected in the company’s performance and profitability.

Fortunately, there is a great way to reduce the effect of this “human factor”. It involves the implementation of the Balanced Scorecard system, which, in its turn, implies development of HR metrics. They are said to be very effective in defining the skillfulness and abilities of the workforce and their potential contribution into the company’s performance. Therefore, if you are a business owner, who wishes to protect the financial investments you have made, you are highly recommended to use this tool.

Human resources metrics constitute a set of valuable instructions, which can help a concerned business owner analyze the productivity of employees and define their weak and strong points without the necessity to hold time-taking interviews. Furthermore, this tool is effective in identifying if there is a need for improvement even before any problems will affect the company’s status and reputability. Successful establishment and implementation of HR metrics makes it possible to define whether the worker is worth their financial investments or not. As a result, it is easier to see the number of employees that should be retained in the organization and those, the productivity of which is doubtful. Obviously, the latter will not be hired and the company’s managers will proceed looking for more effective and devoted personnel.

The process of HR metrics implementation is performed in several steps. Everything starts in the Human Resource Department, the main task of which is to make sure they have all the required information concerning their new employees.  This is where background checks and interviews prove to be a necessity. However, make sure you are using only proven information, but not questionable background facts. Apart from this, the managers of the company should define diverse ways of strengthening its personnel. This step does not require much money to be made. What you will need, though, is a particular amount of time and effort to get the most out of this procedure.

When gathering your workforce information, you are highly recommended to work out specific criteria to stick to.  This is because there are plenty of facts you may find, which may hinder the process. So, it is better to consider not more than 10 metrics and analyze your workforce with regard to them. It is important to make the available updates and adjustments as well. Finally, make sure the HR metrics you are going to establish are in proper place. This will help you cope with this task successfully.