HR  Metrics:  Safeguarding    HR’s  Value  Through  HR  Metrics  

Thursday,  May  14,  2015    

Presenter:  Kendra  Q.  Dodd,  SPHR,MHRD  

HR  Director  

WELCOME  

Why should Human Resources

have a concern for metrics?

HR Metrics Is one of the

Game Changers

Human  Factor    

People  are  either  the  largest    or  the  second  largest  

 expense  of  an  organization      

Human Capital Analysis Measure Significance 1.  If you don’t measure it, you don’t know what is

actually happening. §  Anecdotal reports and personal observations are full of errors and

lead to misinterpretation

2.  If you don’t understand it, you can't control it. §  How can you control a situation that has been viewed subjectively,

vaguely, and inconsistently?

3.  If you can’t control it, you can’t improve it. §  Management is about dealing with and promoting positive

change. This demands standardized benchmarks.

Learning  Objec:ves  

§ Understand  the  value  of  metrics    

§ Learn  a  variety  of  methods  to  measure  impact  of  HR  and  apply  them  to  your  situaGon  

§ Develop  guidelines  for  developing  metrics  

§  IdenGfy  ways  to  make  data  gathering  easier  

HR HISTORY

Find & Hire Payroll

Labor Policy/

Training Gov’t & Regs. Efficiency,

Change RIF, More w/Less

# of EE’s Work Hrs./Production

AA/EEO, Appl. Track Work Comp.

$$

Cost, $$ Infractions No. Attending

Productivity

Current State of HR §  HR as valuable internal advisor, consultant and broker

§  Need to maximize all resources, including human §  Need to compete for resources

§  Traditional HR functions transferred to line managers §  Make managers more responsible §  HR provides training, templates and support

§  HR Services outsourced §  94% of large employers report they outsource at least

one HR activity (Hewitt Associates)

§  HR at a crossroads - part of problem or part of solution

Potential Horizon for HR? § Need to demonstrate its contribution

§  Less than 50% of HR departments do not measure anything! §  Competition for resources requires proof of value

§  Increasingly complex work environments §  From empowered to agile workforce §  Best practices goes global §  Self-directed learning §  Increasing diversity

Changing HR Role Operational Strategic

Policing Partnering

Administrative Consultative

Function Oriented Business Oriented

Reactive Proactive

Activity Focused Solutions Focused

It’s Nice & We Know it It’s Beneficial & We Show It

“What gets measured, gets managed”

~  Peter  Drucker  

Purpose of HR Metrics §  Document Activities §  Explain Function §  Demonstrate Relationship to Organization Outcomes §  Evaluate HR Performance

§  Identify Strengths and Areas for Development in HR §  Measure Progress

Make HR Metrics Fit Your Organization

§  What business are you in?

§  What “language” does your organization speak?

§  How does the organization measure success? §  Revenues §  Profits §  Number of Customers §  Satisfaction of Customers §  Return on investment

HR Measures §  Select Optimal Metrics to monitor the “key” processes and

plans §  Determine how you will monitor §  Determine how you will interpret

§  Key understanding of “why” the metrics are behaving as they are §  How will you bring all together

§  What story is being told? §  This all should tell a story §  Single Document

§  What is happening to primary processes

Develop HR Plan §  Tie HR plan to organization’s plan

§  Set goals and measurements

§  Think results, not activities

§  Focus on issues that make a difference

§  Strong Customer Focus

§  Seek Input

§ Measure

2011   2012   2013  10%   9%   10%  

Years  of  Service  

2011   2012   2013  

0  -­‐  1   30%   31%   28%  

1-­‐2   25%   23%   26%  

2-­‐5   21%   23%   25%  

5-­‐10   15%   15%   14%  

10+   6%   5%   4  

ALL   10%   9%   10%  

Averages  Turnover  by  Year  

Be  Mindful  of  Averages  

Department   Age  60+  Finance   65%  

Human  Resources   63%  

Sales   58%  

OperaGons   22%  

Warehouse/DistribuGon   26%  

ALL   10%  

Averages What  is  the  story?    ............  Dig  Deeper  

Sample: HR Metrics

Wri:ng  Behavioral  Objec:ves    

S Specific – objectives should specify exactly what the learner will accomplish as a result of the training.

M Measurable – objectives should indicate measurable standards by which results can be evaluated.

A Action-oriented – objectives should specify exactly what the learner will be able to do after the training.

R Realistic – objectives should be attainable within the timeframe of the training.

T Timely – objectives should have immediate application to the work setting.

Measure at All Levels HR  AcGvity  (OperaGons)    

• Number  of  posiGons  filled  

• Claims  filed  • Cost  of  service  

HR  Results  (TacGcs)  

• Results  from  training  

• Completed  reviews  

OrganizaGon  Results  (Strategic)  

•  Improved  EffecGveness    

•  Customer  Service  EvaluaGons  

•  Saving  the  Cost  of  Failure  •  LiGgaGon  •  Low  morale  

Ease Challenge

Opera:ons  -­‐  Cost  of  Hire  Direct  costs  •  Ads  •  RecruiGng  fees  •  Assessments  •  Background  invesGgaGon  

Indirect  costs  

•  Time    • Preparing  ads  • Preparing  interview  guide  • Manager’s  Gme  

•  Lost  ProducGon  

 Results  of  HR  Driven  Programs  

Performance  Management  Program  

Number  of  Reviews  Completed  On  Time  

DistribuGon  of  RaGngs  

Development  Plans  ResulGng  From  Reviews  

EvaluaGon  of  HR  Assistance  in  Review  Process  

Safety  Training  

Number  aeending  

Change  in  their  safety  records  

Test  Scores  

Days  Lost  

Cost  of  Work  Comp  

Strategic  Goals  

• Measure  or  Describe,  Monitor  and  Report  

Most  Organiza:on’s  Goals  Have  HR  Component  

•  Lower  cost  for  overGme  •  Full  Training    • Reduced  errors  • Higher  ProducGon  

Result  of  Trained,  Capable  Staff  

•  Lower  Turnover  • Higher  Morale  • Beeer  Employee  Feedback  Results  in  Beeer  ProducGvity  

Effec:ve  Management    

• Manager  and  Employee  Feedback,  $’s,  #’s)  Suppor:ve  Environment    

Quan:fy  the  Qualita:ve    Measuring  Value  Added  

§ Quan9ta9ve  Measures  §  How  ohen?  §  How  well?  §  Numbers  driven  

§ Qualita9ve  Measures  §  Feedback  §  ObservaGon  

§  Number  of  Hires  §  SaGsfacGon  with  Placement  §  Cost  per  Hire    

§  Turnover    §  Voluntary  vs.  Involuntary  §  Tenure  

 §  Par:cipa:on  in  Development  Programs  §  Performance  EvaluaGon  of  

ParGcipants  §  Changes  in  ProducGon  

Formulas (What, Who, When, Why, Which One & How)

§  Revenue per employee = Revenue Total FTE

§  Total Labor Cost % = Comp + Benefits + Other Labor Costs Revenue

§  Individual Productivity Rate = Total Compensation Number of FTE

§  Attendance Rate= Number of days absent Number of days worked

§  Average Medical Claim = Total Medical Claims Number of Claims

Scorecards vs. Dashboards Communicating  and  Displaying  Data  Effectively  

Scorecards

A true Balanced Scorecard should always include these components: §  Perspectives §  Objectives §  Measures §  Indicators

Dashboards Dashboards  are  more  loosely  defined.  Most  dashboards  are  simply  a  series  of:  •  Graphs  •  Charts  •  Gauges  •  Visual  Indicators  

(this  is  chosen  by  the  user,  therefore  some  maybe  strategically  important  and  others  not.)  

Scorecards Dashboards

As time progresses, these terms are used interchangeably.

They are significantly different with purpose and effect.

When  to  Use  Which  Metric    If you can count it

•  Count it! •  Display the numbers in

meaningful ways •  Communicate it

If you can’t count it, but you can see it

•  Describe why it is important and its impact on the organization

•  Communicate observations

If you can’t count it and can’t see it

•  It isn’t important enough to warrant attention

If you’ve been counting it and no one cares, STOP!

Making Metrics Easy §  Build in process of gathering data when project is planned

§  Use technology whenever possible

§  Keep up to date on measurements

§  Review to determine if metrics are still adding value

§  Revise as needed

NEXT STEPS: Your Plan §  What can be measured that isn’t being measured?

§  What measurements can be improved?

§  How can communication of the metrics be improved?

§  What methods can be used to describe those items that can’t be measured?

§  What will I do within a week? A month?

Objectives for Today…….

§ Understand the value of metrics

§ Learn a variety of methods to measure impact of HR and apply them to your situation

§ Develop guidelines for developing metrics

§  Identify ways to make data gathering easier

✓

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