HUMAN RESOURCE METRICS

ROIN BANERJI MBA II

INTRODUCTION
HR metrics are specific measures tied to HR performance indicators. Metrics can be developed using costs, quality, time and other designated goals There are three kinds of metrics.

Importance of HR Metrics
Quantify the value of HR Guide workforce strategies Maximize HRs return on investments Provide measurement standards Show what HR contributes to business results Make the business case for HRs objectives

Why Measure?

Communicate performance expectations

Discover gaps in strategies Make better decisions

1st kind of metrics: Efficiency of the HR functions

It explains how well the HR is in doing their administrative work
The examples on efficiency of the HR functions: Cost per hire Time to fill up the open position HR expense factor

1. Cost per hire: It is the cost associated with

a new hire. It is not only important to know how much it cost in hiring, but it is also important to see if the money spent is used to hire right people.

2. Time to fill up the open position:

It is the total days to fill up a job opening per each job. The shorter the time, the more efficient of the HR department in finding the replacement for the job

3. HR expense factor: It is the ratio

between total company expense and HR expense. It shows if the expenses on HR practices are too much in terms of the whole company expense.

2nd kind of metrics: Effectiveness of the HR functions.

It shows whether the HR practices have a positive effect on the employees

The examples on effectiveness of the HR functions: Training ROI Absent rate Turnover rate

1.Training ROI: It is the total financial gain an organization have from a

particular training. It shows the effectiveness of the training program and how much it can benefit to the company after the training.

2.Absent rate: It determines the company is having an absent problem

from the employees. It also reflects the effectiveness of the HR policies as well as the companys own policies. It always goes along with employee satisfaction

3.Turnover rate: The ratio of the number of workers that had

replaced in a given time period to the average number of workers

3rd kind of metrics: Developing companys core competency

It helps to demonstrate the connection between HR practices and the tangible effects on organizations abilities to gain and sustain their competitive advantages

The examples formetrics that developing companys core competency

1.Revenue factor: It indicates the effectiveness of company operation with the use of
the employees as their human capital.

2. Defects rate: It indicates the number of defects products in the operation. The lower
the defect rate,the more effective the HR practices in developing companies core competency in terms of reducing cost.

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