Human resource management implies the assessment of a company’s workforce. The HR department is primarily responsible for personnel selection, training, attraction, evaluation and rewarding as well as overseeing organizational culture and leadership in the company. This division also ensures compliance with labor and employment laws.
HR managers have one basic objective, which is to hire qualified employees and help them get proper training so that they could use their skills, knowledge and experience for the benefit of the company. Needless to say, this task is not as easy as it may seem at first glance. This is where human resource metrics generally come in handy. The fact is that measurement of business efficiency is that very point, which should be performed regularly and with regard to basic key performance indicators. What are these KPIs? Why should they be measured and how is it possible to define them in each separate business? Let us search for the answers to these questions below.
Key performance indicators are effective tools, which help conduct a timely and quality monitoring and evaluation of all processes that are going on in a company at a particular period of time. The obtained results can further be applied to define the factors that affect the overall company performance. In other words, these results can be used to implement adequate changes in those spheres, where the organization is having problems. However, it is of paramount importance to identify those KPIs that are more critical for your company before proceeding to its evaluation. To do that properly, you need to consider a set of factors, such as turnover rate and expenses, cost per hire, business environment, time to fill, employee satisfaction and knowledgeability etc. Each of these indicators is equally significant. Furthermore, a lot of them are interrelated and affect each other. Unfortunately, some HR managers believe that business environment (company climate) and level of employee satisfaction are not relevant. Meanwhile, it is not so, because the company’s personnel are dependent upon the overall organization climate. So, if there is something wrong with it, it would prevent the employees from maximizing their performance.
What you should keep in mind is that there is no sense to measure the above mentioned KPIs separately. Instead, you should put them together in order to get a full picture of what is going on in your business. For instance, you will be able to see what investments of the human resource department do not pay off and change the situation for the better.