Category: HR Scorecard Metrics

How to measure HR performance at chemical enterprise

In the post crisis economy it is imperative to understand that personnel is the supreme value for any company.  Of course, there are businesses were human factor plays an important role and businesses with the automated production process.  However, in both cases humans play the most important role.  With a rapid development of IT technologies production enterprises require less work force as compared to 20th century.  But all those machines and robots are created by people and manage by ordinary people like us.  To that’s why ignoring needs and requirements of the personnel means plunging a company into the crisis.  By the way, recent economic meltdown proved that only those companies can survive that possess the most valuable intellectual capital.  Machines and robots can not invent new products, services, strategists in the market.  They cannot adopt decisions and assume responsibility.  So, human resources matter much.

If we’re talking about production enterprises which should take into account the fact that sometimes employees are working in very tough conditions.  It especially concerns chemical industry as employees may contact hazardous chemicals that can cause illnesses, injuries or even death.  Chemical industry is characterized by increased risk factor, and those people who come to work to chemical enterprises are made familiar with this fact.  Human resource department at the chemical enterprise should understand the risk workers are facing, when managing personnel.  And of course it is imperative that performance of HR department is carefully evaluated.  The following key performance indicators will be quite helpful when measuring HR performance with balanced scorecard system which is known as one of the best tools to link operational and strategic management:

  1. New hire retention.  When a person comes to working to chemical enterprise he sometimes changes his mind as to desire to make career in chemical industry.  Employees evaluate dangers and analyze their working conditions.  So, a person leaves the company having worked there for to three months.  In such a way, chemical enterprise loses money for recruiting and education of such an employee.  For this reason the indicator new hire retention must be properly and timely measured, possibly once a month/quarter.  HR managers need to track newly hired employees and help them integrate into the company.
  2. Employees on long term sickness leave.  If this indicator is constantly increasing it signals about dangerous working conditions, especially if we’re talking about illnesses related to production activity (poisoning, accidents etc).  Besides the company have to pay such employees while their positions should be substituted which also requires time and money.  If this indicator exceeds allowed limits a thorough investigation needs to be carried out to find out reasons for frequent sicknesses.
  3. Incident rate.  Unfortunately, accidents happen at production enterprises including chemical plants.  High traumatism decreases employee loyalty and satisfaction and increases medical costs for the enterprise.  Sometimes high incident rate is explained by frequent rules violation of production personnel.

Sure thing, there are more indicators which should be created taking into account peculiarity is of production process, company goals, structure etc.

HR evaluation in e-commerce

The recent decade saw a rapid development of Internet based businesses.  With the growth of Internet popularity offline business owners understood that the Internet is the perfect market with millions and even billions of potential customers.  At the same time the Internet gave birth to a number of businesses operating online only.  Despite the fact that these businesses are run own line, there are still people who work for such companies.  And as in any other business, online and Internet businesses must manage their personnel to get greater performance.

E-commerce is a very popular business time these days as it gives independence and financial stability.  Very often e-commerce business is a home based business.  Employees may work remotely from any part of the world.  This doesn’t mean that this personnel functions differently as compared to a traditional business.  Remote employees still have their needs and requirements as well as responsibilities.

Use of balanced scorecard system for evaluation of HR performance in e-commerce is highly recommended, especially for midsize and large companies geographically scattered throughout the country or even the world.  Balanced scorecard will help managers align HR goals with strategic goals, mission and vision of the company.  In other words, balanced scorecard communicates operational management with strategic vision.

Taking into account specific remote character of running e-commerce business the following indicators would be very helpful in measurement of HR performance:

  1. Average estimated cost of employees that are teleworking.  An employee who is working remotely does not have to commute to work and have lunch at fast food or cafeteria.  In such a way he saves money and time.  By calculating how much employees save by working remotely it is possible to evaluate their loyalty, because such employees understand advantages of remote work.  It is also possible to calculate how much the company saves by hiring remote employees.  The company may use save money for development or special bonus and compensation programs for employees with high performance level well employees use save money for some other purposes, for example, self education, hobbies or rest which improves employee satisfaction.  This indicator is to be measured once a quarter or a year, depending on company accounting periods.
  2. Employees satisfaction with teleworking.  Remote work has many peculiarities and some negative aspects.  Without physical presence it is sometimes difficult to accomplish certain tasks.  That’s why it is important that employees are satisfied with remote work, approaches, evaluation methods, the ways problems are solved etc. Employees satisfaction with teleworking is measured through surveys and questionnaires.  It is recommended to conduct such surveys not too often in order not to distract remote employees from work.  Please, also keep in mind that such results may not be indicative since some employees may not tell the entire truth.  Of it is important to formulate questions in such a way so that clear answers provide a complete picture of employees’ attitudes, satisfaction and loyalty to the company.  One should also remember that online communication means make conversation of somewhat impersonal, and thus misunderstandings are quite possible.

HR assessment in education

Management of personnel is especially important in humanitarian areas.  In such fields as education, government or sports it is imperative to have well educated, satisfied and competent staff.  Interaction with people and learning requires excellent communication skills, deep knowledge of various issues as well as readiness to overcome obstacles.  Human resource management is about preparing personnel to work with people and sure finding competent employees.

Human resource management is an inseparable part of any management system.  It is impossible to reach strategic goals and local objectives without having the right people in the company.  Even the best managerial plan supported by sufficient investments will fail in case business or an organization doesn’t have efficient personnel.  Professionalism is not only about sound knowledge and excellent skills.  This is also about having the right attitude towards the business.

Human resource management in the field of education is a true art.  Usually, well-known professors and lecturers are very interesting and unusual people who require a special approach.  Moreover, the image of the university is partially formed by such professors and lecturers.  That’s why, it is important to retain personnel and the educational establishment for as long as possible.  Besides, there is a tough competition in the field of education.  That’s why most universities and schools improve professional level of their teaching staff.  In order to measure HR performance at the educational establishment of any level the following key performance indicators are recommended:

  1. Average tenure per employee. As already said above, universities are interested in retaining professionals.  To the longer professor or lecturer is employed with the university, of the better the image of the university.  When choosing educational establishment, students often look at the number of professors.  Those lecturers who have worked for the university for 20 of 30 years create the most positive image and provide students with high quality education.  Average tenure per employee indicates employee satisfaction is well.  If the person is staying with the same educational establishment for a long time or even his entire life, then he is satisfied with the working conditions and his compensation.  University is with great personnel turnover usually failed to offer students solid education.  For this reason, HR managers and universities should pay a special attention to such an indicator as average tenure per employee.
  2. Average number of training hours per employee.  Education and science are constantly evolving.  New inventions are made and new branches of science appear. Students demand different approaches.  That’s why education staff must undergo regular training to improve professional level, learn new teaching methods and techniques, exchange view viewpoints with colleagues etc.  A teacher working for 10 or more years at the same level without any training will not have any promotions and his career and is unlikely to offer modern students quality education.  So, average number of train hours per employee indicates professional level of education staff and their willingness for self education.

Finally, it should be repeated that approaches to personnel in the education area must be very smart and subtle.

Use the right KPIs in HR evaluation in call centers

Almost every respectable company that sells products or services has own call center or uses services of individual call centers.  It is so convenient to pick up receiver and order products or services by phone.  Besides, one should always remember that the quality and performance of call center often directly influences image of the company.  Existing and potential customers often form their judgment by their conversation with call center operators.  So, it is imperative to have well trained personnel working and the call center.

The ultimate goal of HR managers in call centers is recruitment and education of operators.  Most often sales call centers have certain tasks like implementation of sales plans, attraction of new customers, offering new products and services.  Skills and communication etiquette of call center operators play an important role here.

HR department, as any business unit in the company, will certainly have own calls and objectives which have to be integrated into the system of core values, mission and strategic goals of the company.  That’s why, use of Balanced Scorecard system is highly recommended for HR managers who want to improve performance of a call center.  To do that one needs to select the right indicators to be evaluated to track progress of a call center.  Let’s review a couple of indicators that might be helpful for HR managers.

  1. Percentage of employees satisfied with existing bonus system.  Sales call center sells products and services via phone.  Often, call center operators receive bonuses or percentage from each completed sale.  There may be different compensation and bonus system.  For instance, call center operators receive bonuses only if the entire department has implemented specified tasks.  However, this system may be not fair as some operators may do a great job while others just have fun to work.  So, there should be a comprehensive and clear bonus system that encourages call center operators for better performance.  This may be a combination of individual bonuses and percentage from total sales revenue for the entire department.  If an employee is not properly motivated he will not bother much to sell something or offer new products and services to existing and potential customers.  This indicator is measured through surveys and questionnaires.  It is recommended to perform such measurement once a quarter.  It is also important to ask employees about their vision of possible bonus system on ways to enhance performance and increased sales volumes.
  2. Average cost to recruit per position.  Jobs with call centers are often regarded as temporary of part time jobs.  These vacancies are mostly taken by young people who are only beginning their career.  So personnel turnover rate is rather high.  That’s why it is imperative to decrease average cost to recruit per position, as there will be many new hires but call centers.  HR managers should also keep in mind that the company will have to spend money to educate call center operators to deliver existing and potential customers with high quality services and provide them with the complete information on products and services.

HR KPIs for customer support service

In today’s highly competitive markets it is imperative to evaluate all business aspects.  Even if it seems impossible to measure such things as customer satisfaction or employee efficiency it is still important to do so. Modern business world accepts no excuses.  Of running business without a strategy is a business suicide.  As a rule, businesses consist of various departments which may have different goals, priorities, tasks etc.  If these goals conflict with the company strategy, mission and values it is very difficult to achieve success.  This also concerns human resource management, as an inseparable part of any business strategy.  Intellectual capital is the most valuable asset a company has.  It is important to understand it and use human resources in an efficient and productive way.  Paying employees who do not drive company to success is a waste of money.

When using Balanced Scorecard in HR evaluation for customer support services it is necessary to take into account specific nature and tasks for this department.  The ultimate goal of any customer support service or helpdesk is to answer questions and resolve problems related to products or services offered by the company.  Every company wants to have satisfied customers, and tech support plays an important role as it is located at the front line with customers.  Effective personnel in customer support service needs very little time to resolve problems, answer questions or even offer new products and services to the customer.  As known as satisfied customer usually becomes a regular customer for the company.  So, how to evaluate HR efficiency in a customer support service?  Here are several sample indicators:

  1. Personnel turnover rate.  Many people consider their employment with customer support service as a part time job.  Very often students were young people go to work there.  The ultimate task of HR department is to decrease personnel turnover rate.  Customer support service operators need to possess specific knowledge on the products and services and they can’t get such knowledge outside the company.  So, when there are many new hires it is necessary to educate them which costs money.  Creation of suitable working conditions and introduction of a fair compensation system is likely to decrease personnel turnover rate.  Experienced operators can instruct and coach newcomers right in the work in place, so there is no need in special training sessions and seminars.  For example, a person who has answer questions on HP laptops (for example) knows everything about this brand, most typical Problems and universal solutions.
  2. Average telecommunication costs.  A quality headset and a quality telephone line are must have tools for any tech support operator.  However are, the row ways to decrease average telecommunication costs.  For example, one and done calls decrease total number of calls, so the company spends less.  By decreasing time on hold a call center operate and decreases total communication time which decreases call costs.  Of course, everything should be in moderation, and excessive savings on communication costs may lead to tech problems and poor line.

In evaluation of HR performance at customer support services it is imperative to remember that call center operators directly contact with customers form their judgment based on communication experience.

Peculiarities of HRM in construction business

Human resource management in the sphere of industry and construction business differs from that applied for white collars working in offices.  This is explained by difference in working conditions, requirements for personnel, personal motivation and specific character of work.  Human resource managers need to understand that construction workers mostly work in the open year, sometimes during heavy rains or wind.  This is a heavy work which not everybody can perform.  It is crucial to create suitable working conditions for builders, otherwise there will be a great turnover of personnel which is not good for any business.

It is important to align human resource objectives with the company strategy so that when builders reach their personal goals they automatically approach company to its strategic objectives.  This is where Balanced Scorecard becomes a great management tool.  One should be aware that management of personnel is a very subtle thing, especially when this concerns people who have tough working conditions and a very hard work.  That’s why it is important to keep balance between interests of the company and requirements of the personnel.

As known, Balanced Scorecard communicates operational in strategic management through measurement of key performance indicators which are chosen individually for every specific business type.  Much depends on the choice of indicators and that’s why this stage is considered to be one of the most important in BSC implementation.  Here are a couple of examples for HR key performance indicators in building/construction field.

  1. Percentage of employees that are in unions.  A Trade Union is a tricky thing.  Some employers consider them to be their worst enemies.  If something happens to the construction worker (injury or even death) a trade union will do everything possible to punish such an employer and making pay as much money as possible.  At the same time, membership in trade unions makes a good reputation and a positive business image for employer.  To this means that employer is socially responsible and its employees are protected.  By keeping track of the number of employees participating in trade unions it will be possible to track attitude of employees to was the company and see what can be done to improve labor relationships.  By the way, the dissipation trade unions and loyal attitude of employer to them, improves employee loyalty towards the company since construction workers will field care and production.  At the same time it is imperative not to let trade union become the boss.
  2. Job satisfaction index.  As already said in the beginning of this article, construction business is not an easy one especially for ordinary builders and workers.  That’s why it is important to have satisfied employees.  This satisfaction implies satisfaction with compensation and bonus system, vacations, working conditions, insurance policies etc.
  3. Traumatism rate. Unfortunately, accidents at construction sites happen more often than in other business areas.  That’s why it is imperative to keep track of this indicator, and keep it as low as possible, otherwise trade unions and social organizations will wipe the company out.

To sum it up, it needs mentioning that human resource management in construction sphere requires understanding of the hard work and the risks involved.

HR evaluation in banks

Evaluation of HR department performance is especially important in that area of finance, banking and accounting.  The point is that in these types of businesses people play the most important role contrary to industrial enterprises when most of the work is performed by robots and machines.  Of course, bankers and finance specialists have proper IT support, but still employees are those who perform actions, make decisions and assume responsibility for adopted decisions.

Even if bank has huge capital, attractive credit and deposit offers and many potential customers who might be interested in these offers, the bank may fail just because its personnel does a poor job.  Management of personnel in financial institutions is an inseparable part of any business management system.  Moreover, human resource absence must comply with the company strategic goals, its mission and core values.  Only in such a case all human resource campaigns will turn out successful and help company reach strategic goals (in banks these are mostly financial objectives).

Balanced Scorecard is perhaps the most effective and simple tool to measure HR performance.  The greatest advantage of this system is its ability to communicate operational in strategic management through evaluation of key performance indicators which must be carefully selected by those who implement BSC in the bank and assume responsibility for implementation results.  It is very important to select the right indicators otherwise balanced scorecard may entirely fail.

  1. Task completion ratio.  Bankers face multiple tasks during their working day.  They have to deal with customers who have different requirements and demands, and thus the need different banking products and services.  That’s why, if a banker undertakes to complete certain tasks he should do that within a certain period of time.  It is imperative that a customer timely receives products or services he needs.  That’s why task completion ratio is a very important indicator in evaluation of HR performance in banking.  This indicator is calculated as ratio of total tasks and completed tasks.  The higher the ratio, the better the performance and the greater revenue.  It would be reasonable to measure such an indicator as often as possible.  Bank employees may compile daily reports and submit it to chief manager.
  2. Time spent on priorities.  Sure thing, every bank employee has primary and secondary tasks.  And of course all tasks must be fulfilled.  However, priority tasks should be given a special attention and a greater amount of time.  For example, there may be very profitable customers asking for a business loan or wishing to deposit their money.  Thus, a banker should spend more time to serve the customer belonging to primary target group.
  3. Employees who signed business conduct and ethics policy.  Bankers have access to confidential information of the bank itself and customers.  This is sensitive information that should not go to third parties.  For this a reason it is important that bank employees are familiar with ethics policy of the bank otherwise offended customers may go to competitors which means loss of money.

To sum it up, it needs saying that effective HR policy in the bank results in revenue increase since satisfied employees directly contact with customers.  It is well known that satisfied employees have the most satisfied customer.  It is that simple.

HR measurment in automotive industry

It is well known that even the best company will not survive if it has on professional personnel or existing work force is used in an inappropriate way.  This to say that human resource management is important in all business areas.  Of course, we’re talking about midsize and large companies with a great number of employees.  Even many million investment programs will fail unless the company has qualified and professional personnel.

Efficient human resource management is a must for all industrial enterprises, especially large ones.  It is unacceptable to waste money spent on recruitment and training of personnel because of tough competition in all industrial markets.  That’s why human resource departments and industrial enterprises aimed at reduction of costs relating to human resource management.  At the same time one needs to keep balance since cost saving may have negative consequences.

In automotive industry efficiency of human resource management results in better production output, improved customer satisfaction and higher employee performance.  All these are key success factors in this industry.  It is important to understand that most of work is done automatically (production, assembling etc).  At the same time, human resources play a crucial role in automotive industry.

So, what key performance indicators may be used in evaluation of HR performance at automobile enterprise?

  1. Absence rate.  Very often enterprises work round the clock or have a very intense production cycle.  Absence of several employees may result in downtime of the entire line.  Even if those who did come to work cover duties of absentees this will surely affect their performance in a negative way.  That’s why absence rate is an important indicator at major industrial companies.  Even a short downtime may result in enormous losses for the plant or factory.  Absence rate is calculated as ratio of present and absent employees.  It would be a reasonable to assess these indicators 1-2 times a month.
  2. High performing employees rate.  Skills and knowledge is very important during the production process.  Employees with high performance benefit the company with better production output.  They are not spending time for secondary tasks and they know their job well.  Naturally, the higher the rate the better the performance of the entire tech and production personnel.  High performing employees are evaluated by midlevel managers, heads of workshops etc. High performance means production of a quality product at the minimal amount of time.  A quality product contributes to positive image of a company in the eyes of customers.
  3. Low performing employees rate. This indicator is the opposite to the high performing employees rate.  Of the lower the indicator the better for the company.  Of course, it is impossible to keep it at the zero level, but HR Dept must do everything possible to keep low.

It goes without saying that employee satisfaction is playing great role in production processes.  It is not an easy job and compensation as well as working conditions must be suitable for employees.  Automotive industry keeps constantly progress, so personnel should undergo regular training to improve professional level in order to create new products.

HR metrics for agriculture

As known, methods and approaches to evaluation of HR performance in different businesses somewhat differ.  No wonder!  Every business is individual and thus requires individual approaches to personnel.  It wouldn’t be  reasonable to measure human resource performance at an industrial enterprise and a web designing company with the same indicators since they have different goals, different success factors and different requirements to employees.  That’s why it is imperative to take into account all those subtle differences and nuances when measuring HR performance with Balanced Scorecard system (BSC). Balanced scorecard revolutionized evaluation of business performance since it added non-financial indicators and started measurement of intangible assets, including human resource performance.

Current economic situation and recent financial meltdown have vividly demonstrated that intangible assets and intellectual potential/capital are those drivers that enable businesses overcoming crisis.  Of people who work for the company are the primary value.

As already said above, different business areas have different approaches and indicators in measurement of HR performance.  In agriculture and farming, methods and indicators of human resource management are dictated by specific nature of work in this area.  It is not easy to be a farmer and sometimes this is a very hard work especially at the height of the season.  The following indicators can be successfully used in HR measurement in agriculture:

  1. Job offer acceptance rate.  This indicator related to recruitment group demonstrates whether or not jobs with a company working in agriculture area are popular.  Very often, people who want to take jobs in agriculture then change their minds and reject job offers because of tough working conditions, over time work, dependence on weather conditions etc.  If job acceptance rate is low it means that something is wrong with the company attitude towards potential employees.  It means that something needs to be done to change the situation.  For example, HR managers may ask those who reject a job offers about reasons for such decisions.  Step by step, working conditions will be improved and job offered acceptance rate will go up which will in its turn lower recruitment costs.
  2. Very often people take part time jobs in agriculture sphere which is both good and bad.  Agriculture company needs extra personnel during harvest season.  But at the same time the number of part time employees should not be too high since if something goes wrong these people will be unavailable.  A fulltime employee is the person trusted by company management while part-time workers to consider their employment with agriculture company as a temporary job which is not good for the company.  A well balanced rate of full and part time employees must be kept.
  3. Satisfaction with bonus system.  Usually, people working in agriculture receive special bonuses after to the harvest season depending on the total revenue of a company.  That’s why, it is important that employees are satisfied with existing bonus and compensation system which motivates them to work better or faster.

To sum it up, it needs saying that HR managers and agriculture companies should make sure the employed people who love working on the land and who are well motivated to achieve the greatest performance.

HR evaluation in Arts and Entertainment

The way the company manages its personnel predetermines company success.  The recent decade proved that intellectual capital and intangible assets are all important.  Employees of the company are those people who drive it to strategic goals, solve problems, introduced innovations, make important decisions etc.  Management of personnel is called human resource management.  At the same time HR management begins even before a person is employed with the company.  Recruiting and headhunting has become extremely popular, especially in highly competitive markets.  Human resource management, as any process in the company, should be constantly measured.  HR managers do not produce anything, and thus they do not earn money but only spend it to recruit, employ, educate and retain personnel.  Thus, investments in human resource departments should pay back in future.  This is where Balanced Scorecard system is used.  First, BSC aligns HR tasks and goals with the general strategy of a company.  Secondly, balanced scorecard communicates strategic management and operational activity in HRM.

It is not a secret that different employees in different business areas require different approaches.  This is explained by specific nature of the work, company strategic goals and the markets the company operates in.

HR management evaluation in the field of Arts &Entertainment is very different from those of other business areas.  Arts &Entertainment is all about creativity.  Artists, singers, designers, cameramen, anchormen and other professionals value freedom and creative approach to work most of all.  That’s why they should be evaluated different.  What indicators are relevant here?

  1. Job satisfaction index.  And entertainment professional will never create a masterpiece if he is not entirely satisfied with the work and what he is doing in general.  That’s why, job satisfaction is extremely important.  Job satisfaction index is measured through surveys and questionnaires.  What is job satisfaction all about?  Well, this is satisfaction with working conditions and satisfaction with the contents of the work (what entertainment professional is doing).  If a singer or an anchorman does not like what he’s doing this will be just the mediocre performance that no one will really like it.  Thus, employers should always discuss directions of work and general approaches.  It is advisable to conduct such surveys not too often.
  2. Average sourcing cost per hire.  It is not easy to find entertainment professionals and artists.  That’s why sourcing costs per one employed person may be very high, and the ultimate goal of human resource department is to keep such costs low.  It would be good if the company working in the field of Arts &Entertainment is well reputed and thus it doesn’t need too much if advertising to attract new professionals.  Sometimes, existing employees recommend their company to their friends who then want to work for this company.  Personal connections in the showbiz will also be very helpful for HR managers in this business area.

The above mentioned key performance indicators for each eye valuation in Arts &Entertainment area crew that HR managers need to adopt a special approach to people working in this field as they work not with their minds but with their souls.