What does usually company management of the take when the company faces obstacles or even severe crisis? Top managers hold a meeting at which the attempt to find solutions to current problems. Sure thing, most of the solutions require investments, but still all decisions and ideas come from employees at all levels. Sometimes, the best and the most creative ideas come from ordinary front line managers who directly contact customers. But what should one do to create such conditions in which an employee feels free to express himself? An employee should be satisfied with his work, compensation and working conditions. The task of human resource management is to provide employees with excellent working conditions and organization climate and offer them competitive salary and bonus systems.
The problem is that human resource department is not earning money. That’s why inefficient human resource department only wastes money. For example, the company may spend too much to find and hire professional personnel in such expenses will not be justified in the long term. There is another example: human resource department conducts training session for employees but such training gives no visible results (increase of revenue, improvement in customer satisfaction etc). This means that the company wasted money which is unacceptable, taking into account global recession. That’s why the company should measure efficiency of HR department, as well as align HR measures and goals with the company strategy.
Different business areas required different approaches in evaluation of HR performance. However, most businesses are using balanced scorecard system as this is a perfect tool to measure business performance and link operational in strategic management. Differences in evaluation of HR in various business areas are choices of different key performance indicators. In wholesale business these KPIs may look like this:
- Average telecommunication costs per employee. Very often managers occupied in wholesale trade are looking for new customers via phone. They call companies and businessmen who might be potentially interested in the products wholesale company is offering. Telephone is a must have tools for any wholesale manager. Sometimes telecommunication costs constitute the bulk of expenses. Of course, there should be no restrictions as to communication via phone, but at the same time these expenses must be kept at a reasonable level. For example the company should encourage use of online communication means, e-mail etc. By optimizing telecommunication expenses the company can have additional costs which can be used for some other purposes (for instance, for bonuses and compensation packages).
- Revenue per employee. This is a very important indicator in HR evaluation in wholesale business. The wholesale company generates revenue by selling huge amounts of products. There are managers who are responsible for sales, and these managers bring money to the company. By tracking average revenue per employee it is possible to evaluate efficiency of sales managers. If this indicator is constantly going down then something is wrong with a sales process, pricing policy, sales methods etc. It is recommended to measure revenue per employee in the end of each reporting period.