7/28/2019 Human Resource Metrics

1/10

HUMANRESOURCEMETRICS

ROIN BANERJI

MBA II

7/28/2019 Human Resource Metrics

2/10

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.

7/28/2019 Human Resource Metrics

3/10

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

7/28/2019 Human Resource Metrics

4/10

Why Measure?

Communicate performanceexpectations

Discover gaps in strategies

Make better decisions

7/28/2019 Human Resource Metrics

5/10

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

7/28/2019 Human Resource Metrics

6/10

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

a new hire. It is not only important to know how much itcost 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 ratiobetween total company expense and HR expense. It

shows if the expenses on HR practices are too much

in terms of the whole company expense.

http://en.wikipedia.org/w/index.php?title=Cost_per_hire&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Expense_factor&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Expense_factor&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Cost_per_hire&action=edit&redlink=1

7/28/2019 Human Resource Metrics

7/10

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

7/28/2019 Human Resource Metrics

8/10

1.Training ROI: It is the total financial gain an organization have from aparticular 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 problemfrom the employees. It also reflects the effectiveness of the HR policies as

well as the companys own policies. It always goes along with employeesatisfaction

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

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

7/28/2019 Human Resource Metrics

9/10

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 lowerthe defect rate,the more effective the HR practices in developing companiescore

competencyin terms of reducing cost.

http://en.wikipedia.org/w/index.php?title=Revenue_factor&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Defects_rate&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Defects_rate&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Revenue_factor&action=edit&redlink=1

7/28/2019 Human Resource Metrics

10/10

THANKYOU