Sunday, March 14, 2010

Making Your HR Metrics Matter?

As I prepare for a presentation to Dulles SHRM this Wednesday on "Making HR Metrics Matter, " I am reminded of a question that usually comes up during the presentation. Why should HR be concerned about metrics? At the HR Florida conference last year, that very same question was raised, click on the video below to hear the responses from that audience.




The next question I get is usually around "which metrics should I be using?" I respond to this question the same way every time. Although there are common HR metrics that most companies use like turnover or cost per hire, YOUR metrics are very dependent on YOUR company's strategy. So, in order to develop HR Metrics that Matter to your company you must start with strategy and make sure HR is aligned with the organizational strategy.

For example, if your company has a strategy to be innovative and develop new products, you would need metrics that measure how well you are doing against that strategy. So perhaps HR should make sure that ideas, suggestions, and successful product launches are rewarded and recognized appropriately in the performance management system and compensation philosophy. HR could then determine which metrics are appropriately linked to their people strategy. In this environment maybe metrics like # of new ideas per quarter, % of new ideas that are implemented, and satisfaction rating with new products.

Contrast the innovative environment just discussed with an organization that has a growth strategy. As you can imagine the metrics should be VERY different. In a growth oriented business metrics like revenue per employee, profit per employee, % of salespeople exceeding quota and market penetration measures would be important.

So, start with strategy to get to your Metrics that Matter...

What are you measuring in HR today? How do you know if your metrics matter?

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