Possible Metrics for Measuring the Human Resource Function

Author: David Reis, 847-818-5033

Items are grouped by HR process and could also be grouped by:

• balanced scorecard metrics, such as financial (e.g., cash flow, operating income, ROCE/EVA, sales growth), customers (e.g., satisfaction, retention, market share), internal processes (e.g., manufacturing excellence), innovation/learning (e.g., understanding of competitive environment, new product introduction vs. competition)
• employee satisfaction, customer satisfaction, and business/financial performance (GE approach).
• staffing, development, utilization, exit
• information needed for: planning, control of human resource costs, control of turnover cost, evaluation of management effectiveness, board and stockholders.

Should also include normative information and benchmarks/goals. Could also provide modeling information (e.g., projected costs/benefits from a layoff or staff expansion, costs/benefits of additional training or a compensation increase). The number of metrics used should be limited. Metrics should be based on the SMART concept: specific, measurable, attainable, result oriented, and time bound.

Human Resource Processes

• selection/recruitment/staffing: recruitment costs per hire, cost per applicant, acceptance rate, number of applicants per hire, initial orientation/training costs, percent of newly promoted employees performing well after 6 months, percent of temporary/contract employees, number of employees hired by customers, percentage of positions filled from within, time to fill positions
• compensation: percent of employees satisfied with how pay decisions made, percent of employees who leave co. for compensation reasons, average salary per employee by division or class or employee, total payroll and benefits as a percentage of sales, benefits as a percentage of payroll, labor cost to total production cost, percentage of variable compensation, percentage of employees owning company stock, positional replacement costs, measures of compensation relative to the marketplace
• performance management: teamwork effectiveness, percentage of employees meeting goals for customer satisfaction, percentage of employees with individual goals, percentage of employees who meet goals, percentage of employees using 2 or 3 way feedback, percentage of employees with formal performance appraisals
• education: percent of employees with degrees/advanced degrees
• training/development: change in job performance for people receiving training, percent of employees who report training has improved their effectiveness, percent improvement in key indicators of customer satisfaction, training days/employee, training dollars per employee, percentage of employees meeting skill requirements for their position, percentage of employees with language skills
• workforce planning/career management: promotability/transferability indices, rate of progress on developmental plans, employees per supervisor, employee turnover, direct labor utilization, production per direct labor hour, sales per employee, percentage overtime worked, direct labor hours as a percentage of total factory hours, percentage of employees working in teams, average number of work days missed per year (vacation, holiday, sick, other) , percentage of workers promoted in a year, percentage of workers rotated to a different department, number of international transfers, percentage of returned expatriate employees still with co. after 2 years, EEO statistics, exit interview statistics
• employee relations/communications/culture development: percentage of employees who rate culture as positive (satisfaction with fellow workers, superior, job, organization, pay, progress made, future prospects), percentage of employees who feel they are empowered (involved in goal setting, employees asked for their ideas, etc.), percent of executives with culture change goals, percent of employees satisfied with information sharing practices, percentage of customers who believe their issues are listened to and addressed, percentage of employees with flexible work schedules, number of labor grievances
• HRIS/reengineering/general management: payroll checks processed per processor, costs/payroll transaction, HR function costs as percent of sales, HR employees as percent of total employees, HR costs per employee, percent of time employees say they spend on analysis/performance improvement vs. "routine" tasks, human assets as percentage of total assets, vendor management statistics (cost, quality measures), governmental compliance measures, ROI on human capital investment