Now let’s talk about some useful HR metrics for large organizations, or criteria for measuring HR performance. Knowing about these metrics would help managers more accurately gauge their HR performance.
Management has grown to become more and more strategic and based on actual results and observations. To this end, the concept of metrics has been developed and applied with great success in many companies and organizations. Metrics, sometimes called measures, refers to particular standards which are used to gauge and communicate progress on different aspects of the business. These standards are quantitative, more often than not, and as such conveyed in numbers and percentages.
The adoption of this concept of metrics has helped to make managing an organization more objective and less vague. These metrics offer a structured and well-defined way of observing the progress and development of the organizationâ€™s various aspects. Decisions then become better-informed than before.
Not all metrics are going to be as useful for all organizations, however. Here we make a list of some of the most powerful HR metrics that are relatively easy to understand and implement.
First of all, the very best indicator of successful HR performance is workforce productivity. Productivity would not mean the same thing in different companies (and even in different departments within companies), but in any case there are already established measures of productivity that could be used. Some of the metrics to describe workforce productivity include the percentage improvement in workforce productivity and the currency value of this yearâ€™s increase in workforce productivity. Managers would of course seek to maximize these metrics.
Another important aspect of HR to measure is what is known as employee engagement. This refers to the relationship between employees and the management. High employee engagement would mean that employees tend to value their employment, and hence stay with the company as productive members. The metrics in this category take the form of employee survey results that can gauge employee satisfaction. For instance, the percentage of employees who look forward to coming to work is a useful metric, as is the percentage that feels comfortable with current management practices.
Recruitment is, of course, one of the main responsibilities of any HR department. To assess the effectiveness of recruiting, these simple metrics may be used. One is the average performance appraisal score of newly hired employees, which may then be compared to preceding yearsâ€™ results for the same position. Another is management satisfaction with these new employees, determined through surveys. The turnover rate of these new employees within the first year is also usually a good metric to take note of.
Finally, employee retention is another aspect of the business that HR should be well aware of. Useful metrics in this category include a performance-based turnover metric, especially in important positions. This is a weighted measure of turnover, with better performers being ranked as more important that worse performers. Management satisfaction with HR efforts with regards to employee retention, determined through surveys, may also be a somewhat useful metric to monitor.
These are just some of the simpler and more important metrics to consider when gauging HR performance. More sophisticated HR metrics are available and may also help, but implementing even just these simple ones is sure to make a big difference.