HR Essential Metrics

Human Resource is one of the mainly vital and incorporated divisions for any trade organization. It engages learning the special features of an organization in relation to its employees and also studies the workers on individual and cooperative basis. It typically engages indicators which are vital to recognize and examine; worker approaches, worker ability levels, worker earnings, recruitment procedure, training plans, promotions etc. These metrics relate to approximately seventy five percent of trades. Although the choice of building modified indicators is also accessible in the balanced scorecards.
Each of the indicators holds up to five act indicators  like worker outlooks metric comprises; Job satisfaction, director satisfaction and so on as for worker earnings in typically fashions rate per hire, publicity, relocations, income rate, length of service etc. the key metrics for enlists comprise; vacant period, presentation assessment of the new employs monetary collision of poor employs.
Under the maintenance metrics worker income, avoidable earnings, the issue that studies causes why the worker left and managing procedures, variety income and monetary crash of worker earnings are measured. Diversity income takes into explanation portions as; specialized, administrative and industrial positions.
Being one of the most significant metrics, preparation and growth is given high significance to include indicators as; knowledge and expansion chances, number of workers pleased with the chances given, on-job guidance approval, new hires expansion chances etc.
in spite of the reality that although all associations use these ordinary position of HR metrics, the exceptionality that sets balanced scorecards separately is the mechanism of these metrics. For instance price per hire is a comprehensive look into the range of features of operating cost from; publicity to online services, surroundings checks to recruiter expenses.

In the similar way staffing and employment are given exact mechanism other than the ordinary ones to recognize the cause of employment and the growth of the personnel appoints through it.
Not just the associations, but the administration on the whole can gather the profits of balanced scorecards. It permits the higher administration the capability of on time evaluation to recognize areas of development in its human resource pond. It is a rapid method to recognize matters related to absence and output and save a trade unit from expensive operating cost. This

HR associated data is also functional in making monetary information in order to connect human possessions capacity to asset return. This data permits the change of human resource abilities to planned values which due to its currently enumerated nature becomes simple for convenience and readability. Balanced scorecards is a agenda planned to help association and the administration with the troubles that may be troubling their personnel and gives break by receiving to the origin of human supply management matters with additional  viewpoint.

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Human Capital ROI

Human Capital indicators provide an organization with an accurate profile of its workforce effectiveness.

Although Human Capital is a crucial asset of any organization, there are no generally accepted principles defining its real value, as well as common strategies to optimize its performance. Therefore, most organizations have to define and develop their own measures for managing HC performance using a limited amount of information.

The Human Capital expense is one of the most significant components of the profit and loss account in the organization. It can reach up to 30-50% of the total business costs. Besides, organizations have to optimize the expenses generated by the Human Capital, and to assess the impact of strategic decisions, not only on sales and marketing but also on the Human Capital. That is why objective measurements of the Human Capital are particularly valuable.


Human Capital measurements cover a wide range of aspects, including compensation and benefits, financial impact, productivity, HR function, absence ratios, resourcing, learning and development, and personnel structure. The core Human Capital measurement is the Human Capital Return on Investment (HC ROI). It is defined as Revenue minus Non-wage expenses, divided by Compensation and Benefit costs.

The Human Capital ROI should be considered as an added-value metric rather than a measure of productivity. Low HC ROI value usually indicates that the organization’s workforce structure is not efficient or the organization has inappropriate product offering or pricing strategy.

In today’s competitive environment, financial Balanced Scorecard should aim to integrate Human Capital metrics. These measurements, similarly to HR indicators, will have a demonstrable impact on business growth.

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Cross-functional representation in HR management

Cross-functional HR unit is essential for the streamlining of processes and applicable skills within an organization.

Cross-functional involvement in HR activities provides a greater understanding of HR services such as recruiting, training and performance management.

As new trends in business operations take hold, the need for a redefinition in HR function within an organization seems imminent. HR departments are becoming more involved in strategic decision-making, which translates into enhanced attunement between workers’ and organizations’ needs and workers’ work-life balance. HR is turning into a cross-functional unit with HR specialists, managers from various departments of the organization, and HR employees responsible for the administrative part of the job.


Cross-functional HR teams provide essential information for the decision making process. Although in isolation, none of HR figures are very strategic, they act as building blocks to create effective HR Balance Scorecard program. HR measurements are based on Transactional Metrics, HR Operational Metrics and Workforce Effectiveness Metrics.

Transactional Metrics are meant to quantify various HR activities, for example, head count, number of training hours, payroll, number of performance reviews submitted, as well as active head count. HR Operational Metrics are used to monitor HR performance in terms of employee satisfaction and process outcomes. These metrics include time to hire, talent retention and employee satisfaction with training programs. Workforce Effectiveness Metrics are based on transactional and HR operational metrics as well as other business KPI (key performance indicators) outside the HR function. They collect essential information to support strategic decision making. Most common Workforce Effectiveness Metrics include total cost of turnover, business effect of transferring key accounts to the high sales performers, effect of a Six Sigma certification program on operational efficiency and the recognition of managers with sufficient training skills.

Although cross-functional HR management in an organization does not necessarily require a substantial physical restructuring, it provides numerous opportunities to initiate dramatic progress in organizational operations, HR department performance, and the increase in the levels of job satisfaction among employees. It is the key to lasting and increasing excellence in business operations.

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Business Intelligence approach to HR strategy

HR analytics software helps make strategic decisions with greater insight and accuracy.

Human Resources metrics have always been linked to other key performance indicators such as revenue and profitability. However, applying measurements systems, including Balanced Scorecard, to people management is always a challenging task.

HR is not usually viewed as a source for hard measures. In order to analyze the return on all workforce investments, such as recruiting, developing capabilities, compensation and directing behavior, HR function should understand the business challenges of its entire organization.

Human Capital Management

HR professionals must understand the organization’s business plans and the operational, financial and customer-facing goals they are expected to achieve. Then they should associate these goals with the existing workforce metrics.

In many cases, HR information is scattered, which leads to non-systematic hiring, training, performance management and compensation processes. Detailed HR measurement data is essential these days, as globalization, tight labor markets and an aging workforce are causing many businesses to more closely inspect the performance of their largest investment: the workforce whose compensation represents 60 percent to 70 percent of the general expenses.

New Business Intelligence technologies offer HR departments the ability to invest in Human Capital Management analytics solutions designed to yield the insights essential for making informed decisions on HR.

Business Intelligence allows HR departments to become a strategic asset within the organization. It helps boost the efficiency within the HR department and make key decisions around recruitment, planning, and budgeting to support the strategic goals.

Business Intelligence systems help HR professional access information from data warehouses and other sources, structure analyses to find areas of improvement, and communicate the results in a way that is convincing to others.

HR function in the organization is not limited by administrative issues. HR department should use a fact-based systematic approach to solve business problems and offer a longer-term viewpoint in order to adjust to environmental changes. The key task of the HR professional is to proactively produce solutions to strategic business issues facing the organization.

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HR unemployment metrics

KPI Name: Unemployment Balanced Scorecard Metrics

Related KPIs: Social Security

Customers also viewed: Financial Crisi

Sample reports:

Some reports were generated with Balanced Scorecard Designer for the Unemployment Balanced Scorecard Metrics KPI to show both – Balanced Scorecard Designer functionality and a part of KPI content:

Balanced Scorecard Designer Screenshot:


The Balanced Scorecard Designer software was used to create this KPI.

Description by authors:

It goes without saying that unemployment is one of the greatest roadblocks in any economy’s growth path. Removal requires arranging substantial amount of funds for offering either the ‘immediate relief’ or ‘providing job to earn their living on own’. Social Services Organizations shoulder this responsibility by running schemes for various target groups of society that require employment. Various challenges standing in the way of such organizations make it necessary to structure a scorecard to draw all aspects ‘that matter’ together.

The perspectives that can serve the purpose relate to- Strategy, Finances, Internal Operations and Success Evaluation.
The indicators for Strategy Perspective are- Policy Alignment, Number of people who were provided employment: Total registered people, Target Groups, Percentage increase in full-time and part-time employed people.

Internal Operations can be had with KPIs like- Frequency of Surveys, Employment Time lag, Mismatch between ‘expectations’ and ‘reality’ and number of factors considered for deciding the pay scale.

Financial Perspective can be analyzed with indicators such as- Training Expenses Incurred, Number of funding sources, fund utilization ratio and Research Share.

Finally, the success assessment is possible with ‘Cost of Living meeting’ ratio, percentage increase in funds and number of registrations.

KPI in Excel – Screenshot:

This is the actual scorecard with Unemployment Indicators and performance indicators.

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Key elements of HR outsourcing

HR outsourcing helps organizations free their internal resources for more strategic priorities and optimize investments in human capital.

The specific processes that are included within any outsourcing arrangement will vary from organization to organization. While some organizations may outsource nearly all of their HR processes, others choose specific components such as training, payroll or recruiting. High performing organizations typically use a combination of outsourcing and in-sourcing in order to gain competitive advantage.

HR outsourcing

Most organizations outsource various operational elements of delivering HR activities but retain control over general HR strategy and decision-making. These operational elements include: staffing, recruiting, training, and development; monitoring HR goals and strategies; benefits and compensation management; development of employee orientation programs.

In order to create outsourcing strategy, the organization should identify key areas for improvement and assess the scale and type of changes required within the HR function. The benefits of HR outsourcing include: reduced HR cost, increased efficiency, improved HR management information and HR metrics, access to advanced HR IT infrastructure without substantial investments, additional HR expertise, reduced risk, more “strategic” approach to HR management.

Before outsourcing, the organization should assess and analyze its current and future business strategy as well as the potential changes in the business profile by outsourcing provider. The outsourcing agreements are frequently long-term and may provide for five to ten years contracts. The changes of HR processes related to outsourcing usually include HR self-service systems and/ or a provision of HR contact centre for employees and managers. These changes require specific internal HR expertise as well as ongoing leadership and strategic direction.

The outsourcing arrangement requires continuous assessment against a set of specified metrics. Developing HR metrics balanced scorecard is an efficient way to monitor the success of HR outsourcing.

To learn more about HR metrics, see Measuring HR Performance.

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Talent Management Balance Scorecard

Talent management is important for recruiting and integrating new employees, retaining current workers as well as attracting highly skilled employees to work in the organization.

In order to show positive ROI from human capital investments, HR must evolve beyond managing administrative requirements, including payroll, benefits, and sick leave, and become a strategic partner in business performance. The key challenge of HR is to identify the skill gaps and talent risks within the organization. Effective talent management allows HR to assess the organization’s recruiting, staff transfer, and succession planning needs, as well as analyze which skills and qualifications meet requirements for today and tomorrow’s performance.

Talent Management

Talent management helps set planning goals and create scorecard metrics for critical performance appraisal elements, including employee satisfaction index, succession and talent gaps, average experience and skill rating, average tenure, and retirements. For more efficient analysis, these goals and metrics can be based on a number of dimensions, such as skill type, full time / part time, job grade level, job type, and division / department.

Metrics and goals can be used to monitor the success of HR activities and to measure the current performance. Furthermore, these scorecard metrics help distinguish key elements driving employee performance management in the organization. Identifying succession gaps helps determine which skills are required for future job candidates, and create the training program to develop those skills in-house. Talent gaps allow HR to develop recruitment programs for attracting future employees. Average skill rating is important to see the availability of the right skills required to achieve the organization’s short-term and long-term business goals.

See also: How to design HR Balanced Scorecard metrics

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The use of metrics system in performance appraisals

Metrics system helps develop standards to improve the effectiveness and efficiency of the organization’s performance appraisal.

Performance appraisal is an important way to ensure that the organization implements a comprehensible feedback process for its employees in order to promote personal and organizational future development. Most high-performing organizations have procedures in place to offer structured response of all employees on a regular basis as a means of capturing the effectiveness of individual performance. Revision of employee performance will help the organization to get involved in this crucial process of managing employees more fairly and effectively.

performance appraisals

The performance evaluators require special skills to effectively communicate with the organization’s employees and management. They need to know how to deliver positive feedback but also how to diplomatically deliver constructive criticism. The foundation of employee performance appraisals is a set of evaluation metrics which help analyze individual performance and develop standards. The strong feedback system is based on clear benchmarks, rating schemes, and measurable output schemes that tie to an organization’s overarching mission.

Performance appraisals are almost a universal component of every functioning professional and administrative organization. Performance evaluators who have received the appropriate training are a key element of the organization’s human resources department as they help managers to develop measurable, attainable, and appropriate standards to assess employee performance, effectiveness, and output in a wide variety of job types.

For more information, see Measuring the Performance of HR Department.

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Company’s strategy implementation with HR BSC

The HR Balanced Scorecard helps HR professionals manage their strategic responsibilities more effectively.

The basis of a value-creating HR strategy is a management infrastructure that comprehends and is able to implement the company’s strategy.


The Balanced Scorecard is a powerful tool which emphasizes the importance of measuring organizational performance from the perspective of strategic implementation, rather than relying solely on financial outcome. The Balanced Scorecard methodology helps the company’s management assess important process measures and communicate the company’s performance based on these criteria to the employees, encouraging the active participation of the entire organization in the strategy implementation process.

In order to integrate HR into a business performance measurement system, the managers must determine the points of intersection (HR deliverables) between the human resources and the company’s strategy implementation plan. The HR deliverables are categorized into two groups, the performance drivers and the enablers. Performance drivers are core people-related assets such as employee productivity and satisfaction. Enablers reinforce these performance drivers. Each performance driver may have several enablers. For instance, if employee productivity is considered a performance driver, training and re-skilling are identified as an enabler.

HR scorecard measurement process is not a one-time event. It requires flexibility as well as continuous monitoring and re-thinking. HR professionals should regularly review the existing measures and analyze their impacts.

The benefits of HR Balanced Scorecard approach are: cost control and value creation opportunities, ongoing measurement of the leading indicators, assessment of HR contribution to the company’s strategy implementation, encouragement of flexibility and change.

Companies which need to create HR measurement strategy may use HR Balanced Scorecard Metrics Pack. This pack contains HR-related metrics which help evaluate leadership and motivation indicators and measure the performance of HR and HR management in the company. It includes 8 metrics solutions: HR, HR Hire, HR Training, Leadership, Motivation, HR Outsourcing, Awards, and Retirement. These Balanced Scorecard metrics are a useful tool to measure and control HR productivity as well as improve and manage HR-related business aspects.

  • For more information of the HR Balanced Scorecard Metrics Pack, click here.
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The Organizational Attitude Survey

The Organizational Attitude Survey is a crucial component of HR management program.

The Organizational Attitude Survey allows businesses to measure the gaps between employee perceptions of the organization’s reality and its desired position in several key organizational climate elements. Employee feedback helps create a framework for developing a solid action plan to address employee morale and the overall organizational effectiveness.

Attitude Survey

The survey helps organizations link HR initiatives with business results. It allows organizational management to set improvement targets for HR measures and integrate them into the balanced scorecard system.

Effective HR management is critical to the organization’s performance. Employee opinions can impact financial results by affecting customer retention, quality of work, morale, and productivity. Understanding HR drivers in the organization helps increase the engagement level of its personnel. This feedback allows organizational management to facilitate development and organizational change, increase its awareness of employee problems and internal health of the organization, and measure the effectiveness of current programs and policies. Besides, it can be used to motivate employees and improve job satisfaction.

Most organizations have various programs and systems in place focusing on the knowledge, skills and motivation of the individual performer. Organizational Attitude Surveys is an essential component of this approach. It can be used to solicit employee opinions on a variety of issues, including the organization’s success in communicating its mission to employees, as well as local issues such as quality of the working environment.

The Organizational Attitude Survey usually includes the following issues: employee satisfaction, senior management attitude, interpersonal relations, expertise, compensation, innovations, communication, teamwork, customer service, adaptability, staff development, etc. It helps enhance management/employee relations, evaluate training efficiency and current training needs, assess organizational climate and employee satisfaction. For more on HR productivity measurements, see The Top 10 Tips to Measure HR Productivity.

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