Key Considerations for World-Class HR Metrics
Does the metric align with company performance?
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Many HR metrics are process and performance measures (e.g., training hours on specific subjects, attendance, performance appraisals, recruiting cycle time, grievances, turnover). Those are reactive metrics, says Buchman who is President and CEO of Hayward Enterprises Inc. and co-author of the Balanced Scorecard Strategy for Dummies.
What’s important is directly aligning HR metrics to strategic goals, objectives, and business performance metrics (e.g., profitability, cost control, cash, capital, ROI, OBIT/OBITA, market penetration), says Buchman, who offered his metrics tips at a recent BLR-sponsored webinar.
For example, says Buchman, we know there are relationships between:
- The right staffing and optimal performance
- Low turnover and profitability
- Technological competency and market leadership
- Smooth value stream performance (good handoffs, no rework, short cycle times) and logistical market dominance
- Competitive benefits and attraction/retention of high potential performers
HR’s Opportunity
Always be questioning future goals. Is new technology coming? New products or services being planned? HR needs to jump in here to be seen as a strategic resource, says Buchman.
“I can see the process side—what we want to do and why, but let’s think about the challenge of HOW the organization is going to achieve these goals. What competencies do we need our employees to have to make that happen? And what steps must we take to develop/hire people with those competencies?”
Jump at the Paradigm Shift
If you have done this kind of forward thinking, says Buchman, when there is a major change, you and your organization will be ready to jump on it. A paradigm shift is a golden opportunity for an organization to become a leading player because everyone goes back to zero. And that’s a golden opportunity for HR.
To merit increase or not to merit increase? Learn how to make that decision on September 25, 2014, with a new interactive webinar Merit Increases: How to Accurately Budget for Performance-Based Raises. Learn More.
Building Better HR Metrics
- We must bridge HR metrics with business performance KPIs and integrate total capability with results.
- We must be integrally involved in defining BOTH the business processes AND the knowledge, skills, and abilities required to perform them.
- We must go beyond on-boarding new employees in measuring career competence and progression, not just to enable growth, but for critical position succession planning and sustainment (high early turnover is an important indicator).
- We must continually solicit feedback and survey to capitalize on critical thinking and broad perspectives about how the company is doing, how well our workforce is involved in key decisions and continual improvement, and what we can do better. The customer perspective is important, and the employee perspective is critical.
- Ultimately, we must implement KPIs and metrics that provide forward-looking insight into how we can capitalize on best practices, reduce/eliminate poor practices, and flex our workforce to support business needs of the future.
Where to Start
Buchman’s question for HR managers:
Can you identify what information would be useful to have, in advance, and what decision processes need to be in place, in order to best leverage the information available to the advantage of the business, in both the short and long term?
Buchman says that a great way to begin to answer this question is to start with the desired end result: a capable, competent workforce, highly involved in continually improving the quality of work performed, enabling higher than expected levels of performance in cost, quality, and delivery, along with growth and impact.
Then, ask what KPIs and metrics can provide evaluative intelligence about how well this is planned and executed over time.
Caveat
As you start relying on your metrics, says Buchman, don’t forget to ask: How good is your data?
What data do you have to help determine your merit increase plan and budget? Challenging, right? Fortunately, there’s timely help in the form of BLR’s September 25 webinar—Merit Increases: How to Accurately Budget for Performance-Based Raises. In just 90 minutes, learn how to accurately budget for performance-based raises at your organization.
Register today for this interactive webinar.
One of the many challenges facing employers and HR professionals in retaining talented, productive employees is how to budget for merit-based raises. Clearly, a raise can motivate a top performer to stay in your organization rather than jump ship. But with the current economy, how can you find the money to ensure keeping valuable human capital? How should you handle expectations of merit increases and leverage increases to retain talented employees? How should you make merit increase decisions that stand up to scrutiny?
Join us for an in-depth webinar on September 25 for a real-world look at salary increases across a range of organizations and jobs. The webinar will provide tips and strategies to guide you through this tricky territory with much-needed insight and guidance on how to manage salary budgets and use merit increases effectively.
Register today for this interactive webinar.
Trouble allocating merit increases? Join us September 25 for a new interactive webinar, Merit Increases: How to Accurately Budget for Performance-Based Raises. Earn 1.5 hours in HRCI Recertification Credit. Register Now.
By participating in this interactive webinar, you’ll learn:
- How to know if only top performers should get merit increases, and what to do about employees in critical jobs or with lower-than-market compensation.
- Whether you should carve out a portion of the budget for the highest performers.
- How to tell if you should provide annual increases—will this become an expected entitlement, despite employee performance? And, how to successfully address that issue.
- How to communicate to employees so they understand the reasoning behind merit increases.
- The role higher minimum wage laws in some states may play in salary budgets and what’s budgeted in terms of merit increases.
- How much of an increase is necessary to motivate employees.
- Alternatives to salary increases to consider.
- And much more!
Register now for this event risk-free.
Live webinar coming Thursday, September 25, 2014
1:30 p.m. to 3:00 p.m. (Eastern)
12:30 p.m. to 2:00 p.m. (Central)
11:30 a.m. to 1:00 p.m. (Mountain)
10:30 a.m. to 12:00 p.m. (Pacific)
Approved for Recertification Credit
This program has been approved for 1.5 credit hours toward recertification through the Human Resource Certification Institute (HRCI).
Join us on September 25—you’ll get the in-depth Merit Increases: How to Accurately Budget for Performance-Based Raises webinar AND you’ll get all of your particular questions answered by our experts.
Train Your Entire Staff
As with all BLR/HR Hero® webinars:
- Train all the staff you can fit around a conference phone.
- Get your (and their) specific phoned-in or e-mailed questions answered in Q&A sessions that follow each segment of the presentation.
BONUS: All webinar registrants will receive BLR’s Merit Increase Guidelines Calculator, a 5-tier performance rating and budget allocation tool for determining where your merit increase dollars are best applied. This handy Excel work tool takes your employee data and applies sound financial metrics to show you and your organization’s supervisors how to make smarter pay increase awards.
I think some people go into HR because they think it’s the “people” part of business–but you still need to speak (and understand) the language of business.