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Article No.: 13-8, August 1, 2013

Article Title: Measure What Matters: How HR Optimizes Business Capabilities

Author: Linda Gravett, Ph.D., SPHR, CEQC

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Many articles have been written about the importance of measuring the performance of the business.  I believe that in order to position ourselves as strategic business partners, Human Resource Management practitioners should measure how our actions optimize business capabilities.  After all, doesn’t much of what we do directly or indirectly affect our organization’s success?
 
Our 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.  To that end, 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 and set unmet expectations?
  • An HR metric is one that helps 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 through communication and employee relations activities.
  • Speaking of influence, consider what HR can truly influenceand 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 can 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 questions about this article, please click here to complete and submit our Contact form.  Linda is the Senior Partner of Gravett and Associates, a Cincinnati-based organizational development consulting firm, and CEO of Just the Basics, Inc., a Human Resource Management consulting firm headquartered in Northern Kentucky.

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