4 5 and 6 - approaches to hr measurement

7/31/2019 4 5 and 6 - Approaches to HR Measurement

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Approaches to HR Measurement

5/20/20121

Session 3

IMT Measurement In Human Resource Management


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o Measure outcomes not activity

o Begin with efficiency measures

o Develop metrics geared towards your organizations goals and strategies

o Establish metrics to monitor key HR practices proven to grow human capital

o Use metrics that will encourage change and help us make better decisions about

human capital

What to Measure?



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For HR-measurement, demonstrating the link between HRM strategy and organizational

performance requires the measurement of some set variables.

What to Measure?



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o Assess your data

o Build your metrics

o Create meaningful measures

Getting Started



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o What do you already track?

o Where should you focus?

o What metrics would be useful?

Assessing Your Data



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o Quality of data is critical

o Garbage in.garbage out

o So..

o Check the math

o Watch out for zeros

o Compare results to each other

o Conduct a sanity test

Data Integrity



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o Once the data have been collected, the emphasis shifts to evaluation the ways in

which the data are used and analyzed to interpret the HRM-organizational link.

o There are a number of ways of evaluating HRM practices and the HRM system:

o Statistical evaluation

o Financial evaluation

o System evaluation

Approaches to evaluating HR strategy



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o Includes basic descriptive indices as well as statistics that allow us to make

statements about the relationship or correlation between HR practices and outcomevariables.

Statistical evaluation of the HR strategy



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o The basic approach is to calculate the cost of a HR intervention, such as training or an

employee participation arrangement, and to determine the benefit in monetary terms

or results such as improved productivity or a reduction in absenteeism, accidents andgrievances.

o To calculate the ROI of an HR intervention program, the manager calculates the total

costs and benefits of the program using the following formula

ROI = Net benefits

Intervention costs

Financial evaluation of the HR strategy



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o Generally accepted elements of HRM audit practice:

o Independence from the subject being audited

o Technical work in the form of a systematic gathering and analysis of data

o An evaluation of HR activities, policies and systems based on the evidence

o A clearly defined object of the process

o Action in response to audit findings

Evaluating HR management systems: HRM auditing



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Benefits of a HR audit



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o Benchmarking involves managers and non-managers learning and adopting so-called

best practices by comparing their HRM practices with those of other (moresuccessful) organizations. It serves a number of purposes:

o Organizations can gauge their own practices against those in excellent organizations and

can get an idea of how they compare

o Managers can learn from other organizations about effective HR strategies

o Benchmarking can help to create and initiate the need for change.

Evaluating HR management systems: HRM Benchmarking



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The benchmarking process



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o Determine your measures

o Select benchmarks for comparison

o similar services

o same size

o similar organizational structure

o similar budget

o Compare your results

Building Your Measures


4 5 and 6 - approaches to hr measurement

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