Evaluation and Measurement
A critical element of any HR activity or initiative is the evaluation and measurement of success or contribution to the business. HR activities can be measured both quantitatively and qualitatively and can be evaluated both on direct outcomes as well as the impact on organisational measures. This topic covers the different evaluation and measurement tools used by HR and the business to measure HR and people management effectiveness.
HR Metrics, Statistics and Ratios
This topic covers key metrics that HR can use to look at overall HR effectiveness in the organisation.
As a way to benchmark your company with others, it's important to gauge an understanding of industry averages. Without this information it can be difficult to view how your organisation is performing in comparison to your competitors/industry.
In saying this, there are many areas of HR that will differ depending on the size or type of organisation you are working in. For example, the number of HR staff an organisation should have is heavily dependent on the size of an organisation and its industry type. Ideally, there should really be one HR professional to 50 employees; however, we recognise this may not be a realistic expectation for many organisations; and one to 100 seems to be a more achievable goal. This would generally only refer to HR advisers or consultants (tactical, strategic and operational). Recruitment roles will depend on the volume of recruiting you require so would not fall under this ratio.
Key metrics include retention, diversity of employees and factors relating to recruitment processes.
Employee surveys are regularly used by HR to assess things such as engagement and organisational culture and climate. This section discusses methodology and usage as well as providing access to some free tools you can use in your own organisation.
HR audits are conducted by organisations in order for them to evaluate and assess their HR functions/activites.
Audit results can provide useful information around what functions are working well and what functions could be improved.