Monday, April 25, 2011

5 HR Metric Pitfalls to Avoid

Over the last few years, I have seen many dashboards, scorecards and metrics from a wide range of companies. The lessons learned leading up to a dashboard are so valuable. So for those of you that are just starting your metrics journey, I have a list of 5 pitfalls that if avoided can make your journey a lot more successful.

1) TOO Many Metrics
2) Ignoring your metrics
3) Measuring the WRONG things
4) Metrics that are not understandable by Joe Manager
5) No accountability

Let's briefly take a look at these...

Too many metrics: I never will forget asking a HR VP to see her metrics last summer. She in turn handed me an Excel workbook with almost 500 measures. Who can focus on 500 measures at a time? I asked who received these metrics and she told me they went to the Executive team, but they never did anything with them. Shocker! LESSON LEARNED: Make sure your metrics are reasonable in number and are tied to organizational strategy (closely related to point 3 above). I get asked all the time what is the right number of metrics? I don't know that answer as it depends on industry, strategy, organization size, etc. I know it's not 500 no matter how big you are!

Ignoring your metrics: I can remember another instance when asking about metrics and the HR VP told me she wasn't sure why they kept measuring as no one did anything with the data. Getting the right measures is just HALF the battle. Making sure ACTION is taken on the results is the other half of the battle. It is all well and good that you have a nice, new dashboard, but if no one cares or takes any action, that effort is all in vein. How can you get management engaged? LESSON LEARNED: Show them WIIFM. If they know how those metrics DIRECTLY impact their department and/or their goals and objectives, then a crazy thing happens...managers will pay attention. And if you hold them accountable...they HAVE to pay attention. (see point 5)

Measuring the wrong things: This pitfall is the most frequently occurring. I see this time and time again. An HR professional understands the need for metrics and/or the CEO has asked for them. The HR person then googles HR metrics and picks out some that "look good." Bad process. You must start at your organizational strategy and work your way down from there. If metrics are not linked to where the organization is going....then you may as well measure nothing. Sure, you have tracking measures like time to fill and cost per hire, but those are linked to HR efficiency that has a link to financial performance, which is a part of any strategy. But understanding how a company's human capital is contributing to goal attainment is critical. LESSON LEARNED: Use a strategy mapping process to ensure you are measuring what matters.

Metrics that are not understandable by Joe Manager: Many times we are so involved in our own data that we forget that it needs to be "consumed" by others. In the HR arena, that usually is line management. For managers to take action on things like turnover or engagement, they need to actually be able to understand the data. Distributing huge reports with tables and rows of data is not an effective way to communicate with managers. LESSON LEARNED: Use the KISS and Killer Slide concepts. Keep data simple by using color and pictures. Keep the "big aha" to 1-2 slides, showing impact rather than just data.

No accountability: This one makes me crazy. If you don't hold people accountable for actions, then guess what... nothing happens. It is just like when I was a little girl and was told don't leave your yard. That was all I was told. So, what did I do...bolt every time. Had I been told, if you leave the yard, "you will get the biggest spanking ever," that might have had a bearing on my decision. Seriously, if we tell managers to reduce turnover and increase engagement but don't back that up with rewards and recognition, do you think they will work hard at doing those things? LESSON LEARNED: Make sure metrics are linked to your performance management and rewards and recognition programs.

What other pitfalls have you encountered in your experience? There are others....I just wanted to start the tell!!!
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