Measure What Matters: Ways that HR Can Optimize Business Capabilities
by Linda Gravett, Ph.D., SPHR, CEQC
Many articles have been written about the importance of measuring the performance of the business. Additionally, I believe in order to position ourselves as strategic business partners, Human Resource practitioners need to measure how our actions optimize business capabilities. After all, doesn't much of what we do directly or indirectly affect our organization's success?
Time is precious, though, and it's important to take the time to measure the right activities and results that demonstrate effectiveness rather than efficiency. I believe there are a few considerations that are important:
- Commit to being an integral part of the business, rather than "just visiting". If you do, your tendency will be to work on the business rather than work in the business.
- Measure only the results that you plan to take action on. If you don't plan to do something about the results you measure, why take the time?
- An HR metric should help your organization define and evaluate its success in relation to leveraging its human resources to meet business imperatives.
- Explore and measure the drivers of results over which HR has influence. Examples are motivated employees; well-trained staff; and excellent recruitment methods. You're probably measuring the results (such as employee retention) already; I'm suggesting you dig a little deeper.
- Don't worry if your measures are in conflict with one another; worry about balance across the measures. Cycle time may be in conflict with quality and employee satisfaction may be in conflict with productivity. HR can influence how the organization can find an appropriate balance.
- Speaking of influence, consider what HR can truly influence - and has absolutely no control over. If you want to measure HR's impact, measure what HR can either control or influence, including policy and process changes.
- Performance measures will change over time, as your company's needs change. If you have measures that you established five years ago, I encourage you to revisit them and determine if they're still appropriate for today.
In summary, metrics should help organizations measure and record results of human resource behaviors and establish a framework for motivated, results-driven employees. Consider whether the measures you're using have these three characteristics: strategic importance; financial significance; and widespread impact.
If you have any questions or comments, don’t hesitate to contact me at Linda@gravett.com.