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Introducing HR Measurement Introducing HR Measurement and Reporting and Reporting Ensuring Executive Alignment and Understanding
Introducing HR Measurement and Introducing HR Measurement and ReportingReporting
Ensuring Executive Alignment and Understanding
Critical QuestionCritical Question
Why would we want to measure human
resources…what value does it add?
Re-aligning the HR ContributionRe-aligning the HR Contribution
Enhance CEO/senior executive team understanding
Demonstrate the opportunity available
Re-align our thinking and contribution
Key performance indicators and detailed reporting
Administrative specialists
Administrative specialists
Employee advocates
Employee advocates
How CEOs and senior executives often view HRHow CEOs and senior executives often view HR
David Ulrich — HR Champions: The Next Agenda for Adding Value & Delivering Results, 1996
Business partnersChange agents
Business partnersChange agents
Administrative specialists
Employee advocates
How HR wants to be viewedHow HR wants to be viewed
David Ulrich — HR Champions: The Next Agenda for Adding Value & Delivering Results, 1996
Business partnersBusiness partnersBusiness partnersBusiness partnersChange agentsChange agentsChange agentsChange agents
Administrative specialists
Employee advocates
How HR wants to be viewedHow HR wants to be viewed
David Ulrich — HR Champions: The Next Agenda for Adding Value & Delivering Results, 1996
= Missed opportunity!
= Missed opportunity!
Stages in Human Resources functionalStages in Human Resources functional development development
COMPETITIVE
ADVANTAGE
(Consolidation)
Total line manager accountability Internal consultants Add value Integral to company success Long term vision and strategyBUSINESS
PARTNERS (Integrated)
Integral contribution to business plan Strong influence on other departments Member of top team Quality systems and processes Service management Intellectual capital/knowledge management Workforce empowerment and teams Return on investment Cost/benefit analysis Comprehensive database
PROACTIVE (Rapid growth) Customer/needs focused
Pro-active/improvement Management development Leadership training Succession planning Workforce planning Performance management Workforce productivity
INTERNALPOLICE
(Emerging)
Policies and manuals Controls — headcount, hiring, restructuring, travel, relocation Reporting systems & budgets Basic measures — turnover, absenteeism Technical and skills training IR disputes, grievances OH&S procedures
KIND HEARTS (Lending Support) Cafeteria
Car park Security Gymnasium Social club Christmas party
BASIC NEEDS
Recruitment Induction Payroll Admin/Records Leave
Human Resources transformationHuman Resources transformation
To knowledge-based enterprise
From industrial enterprise
individual employees
regulatory authorities
workplace policies
workplace stability
workforce administrator
stockholders
CEO
business performance tools
core competencies
finance officer for human capital
Service to
Creation of
Service to
Guardian of
Chief
The The global global marketplacemarketplace
Price sensitivity
Squeeze on margins
Emphasis on product innovation
Shorter lead times
Tighter cost control
Enhanced customer service
Workforce contribution?
Organisational critical success factorsOrganisational critical success factors
Product quality
Competitive price
Cost of labour
Staff capability
Product innovation
Excellence in customer service
Workforce contribution?
CEO/senior executive team recognition...CEO/senior executive team recognition...
To capitalise on workforce potential To capitalise on workforce potential
The Human Resources contribution...The Human Resources contribution...
To optimise workforce performance To optimise workforce performance
Search for the ‘Holy Grail’ of HR managementSearch for the ‘Holy Grail’ of HR management
1940s1940s
1950s1950s
2000s2000s
1990s1990s
1980s1980s
1970s1970s
1960s1960s
NowNow
Kaizen
TQM
7 Habits
Change Management
MBWA
Intrapreneuring
Hierarchy of Needs
Matrix Empowerment
Delayering
Quality Circles
One Minute Managing
Theory X & Y
Plan-Organize-Direct-Control
Rightsizing
Emotional Intelligence
Customer Service
Self-Directed TeamsWork Simplification
Human RelationsDownsizing
Reengineering
Excellence
Portfolio Management
Managerial Grid
Management by Objectives
Balanced Scorecard
EVA
Continuous Improvement
Corporate Culture
Organization Renewal
Value Chain
Management Science
Work-life Balance
Benchmarking
Relationship Marketing
Diversification
Hygiene and Motivators
Decision Tree
?
Dilbert’s version of HRM!Dilbert’s version of HRM!
HR perspective: organisational contributionHR perspective: organisational contribution
Productivity
Wellbeing Satisfaction
Capability
Workforce Workforce
HR perspective: organisational contributionHR perspective: organisational contribution
Labour costsLabour mix and utilisationStaff rostering and utilisationNew technology applicationCross-functional project teamsEmployee participation/teams Workforce forecasting
Productivity
Workforce Workforce
HR perspective: organisational contributionHR perspective: organisational contribution
Performance feedbackInduction programsTechnical and skills trainingLearning centresTertiary assistance/MBAs Recruitment programRole clarity
Capability
Workforce Workforce
HR perspective: organisational contributionHR perspective: organisational contribution
WellbeingLeadership trainingNon-discriminatory workplaceFair treatment processSafe work practicesEquipment and physical factors Work–life balance programs
Workforce Workforce
HR perspective: organisational contributionHR perspective: organisational contribution
Satisfaction
Career path options Internal communication plan Remuneration and incentivesRecognition and reward programsEffective payrollHuman resources policy manual
Workforce Workforce
CEO/senior executive perspective: ownership of workforce issuesCEO/senior executive perspective: ownership of workforce issues
Employees
HR departmentSenior executive team
HR perspective: senior executive team accountabilitiesHR perspective: senior executive team accountabilities
Senior executive team
Budget centresHiring and firing
Organisational charts
Pay and promotions
HR perspective: ownership of workforce issuesHR perspective: ownership of workforce issues
Senior executive team
Employees
HR department
Human Resources Human Resources
Key Performance IndicatorsKey Performance Indicators
To highlight to the senior executive team:
• areas where the organisation is performing well
• areas where intervention is required
HR Key performance indicators HR Key performance indicators
Objectives and purpose
One page, once per month
Measuring organisational performance, not that of the HR Department
Must be ‘big ticket items’ (business-linked)
Must be user friendly and easy to understand
Supported by detailed tables and/or graphs
HR key performance indicators HR key performance indicators
Key principles
Contain credible/reliable information (start off slowly...be willing to amend/change)
Progressively introduce agreed targets (internal, then external)
Must become institutionalised within the senior management team
HR team must be fully conversant
HR key performance indicators HR key performance indicators
Key principles (continued)
Example KPI reportExample KPI report
HR Key Performance Indicator Report
For Period ended
Criteria Measure Description Associated report Last periodThis
periodChange
YTD (avg)
Number of FTEs Workforce Headcount Report
Total hours utilised Workforce Utilisation Report
% of total w orkforce terminating
Total $ cost of turnover
% total hours lost to absenteeism
Total $ cost
Number of lost time injuries (LTI)
Number of lost time days
Average duration rate of LTI
Frequency rate of LTI
$ cost of w orkers compensationWorkers Compensation Costing Report
Number of discrimination complaints rec’d
Number of sexual harassment complaints rec’d
Number of physical harassment complaints rec’d
Number of w omen in management positions
- senior management
- middle management
Ratio of female appointments vs male
% of w omen returning to w ork after mat leave
Absenteeism performance and cost impact upon the organisation
Headcount
Workforce turnover (unplanned)
Changes in w orkforce numbers and hours utilised by employee category
Turnover performance and cost impact upon the organisation
Workforce absenteeism (unplanned)
Workforce Turnover Report
Workforce Absenteeism Report
Workers compensation
Occupational health and safety performance throughout the organisation
Occupational Health & Safety Report
Equal employment opportunity
Equal employment opportunity and aff irmative action performance throughout the organisation
ER Status Report
Example KPI report Example KPI report (continued)(continued)
$ labour cost as % of sales
Revenue generated per FTEs
Unit production per FTEs
Labour utilisation rate
Quality reject rate (employee error)
Number of credit returns (linked w ith employee error)
Number of customer complaints (employee related)
Recruitment Average days vacancy duration - management
Average days vacancy duration - staff
Average cost recruitment - management
Average cost recruitment - staff
% new hires achieving 6 months service
% new hires achieving 12 months service
% new hires achieving sat. appraisal at f irst assessment
Average $ cost per vacancy f illed Average cost of vacancies f illed
Company training expenditure (% of salaries & w ages)
$ commitment to staff training and development
Training & Development Expenditure Report
Average training hours per employeeTime commitment to staff training and development
Training Hours Allocation Report
% training course participant satisfactionParticipant satisfaction w ith training courses provided
% training course attendance Participant attendance at training courses provided
Number of employees completing sponsored tertiary studies
Number of employees completing sponsored MBA programs
Learning centres
- number of courses offered
- % course participation
- Internet hours utilised
- e-learning courses utilised
- % e-learning pass rate
Training Performance Report
Productivity and utilisation
Workforce productivity/employee relations performance
Employee satisfaction levels/organisational culture
Training and development
Recruitment performance throughout the organisation
Staff retention performance throughout the organisation
Recruitment Status Report
Commitment to professional development of staff throughout the organisation
Learning centre effectiveness throughout the organisation
Example KPI report Example KPI report (continued)(continued)
% of internal appointments above level __
Avg length of service of staff appt’d above level ___
Number of unfair dismissal claims
Workforce lost time (hours)
Number of formal union grievances
% w orkforce on individual contracts
Internal communications
- number of bulletins issued
- number of emails issued
- number of staff briefing sessions conducted
Work/life balance
- number of active flexible w ork agreements
- number of active w orking from home agreements
- number of active job sharing agreements
Workforce teams
- number of active teams
- number of team meetings
% compa ratio
$ pay for performance gaps
$ pay equity gaps
% employee share scheme take-up rate
Level of outstanding annual leave liabilityOrganisation performance in managing annual leave
Accrued Annual Leave Report
Number of manual payroll adjustments Payroll performance
Number of employees aged under 25
Number of employees aged 25–35
Number of employees aged 35–45
Number of employees aged 45–55
Number of employees aged over 55
Avg length of service (current employees)
Avg length of service (terminating employees)
% ratio of salaried staff to w aged staff
% ratio of surplus staff to required staff
Organisational success in providing an effective w ork/life balance program for all employees
Employee relations performance throughout the organisation
Organisational effectiveness in creating and sustaining a team-based structure/culture
Organisational competitiveness and equity in remuneration packaging/policy
Administration
Organisation profile
Demographic profile of employees by age across the organisation
Average length of service of employees across the organisation and terminating
Adequacy of w orkforce planning
Succession Planning Status Report
Succession planning Succession planning effectiveness
ER Status Report
Staff alignment and commitment to the organisation
Employee relations
Remuneration
Example KPI report Example KPI report (continued)(continued)
Number of FTEs in HR Workforce Headcount Report
HR FTEs as % of total w orkforce (FTEs)
HR labour cost as % of sales/revenue
HR $ cost as % of total w orkforce (FTEs)
Level of satisfaction w ith w ages/salary/benefits
Level of satisfaction w ith conditions/physical w ork environment
Level of satisfaction w ith job
Level of satisfaction w ith personal relations
Level of satisfaction w ith participation and recognition
Level of satisfaction w ith opportunities for development
Number of employees w ho w ould recommend company
Number of employees w ho w ould seek re-employment w ith company
% of appraisals completed on time
Number of formal staff grievances raised
% of individual training plans completed
% of employees above competent
% of employees below competent
Average satisfaction % vs norm
Average satisfaction % vs previous survey
Exit interviews
Staff satisfaction levels w ith the organisation and reasons for leaving. (This section may not be reported on a regular monthly basis, dependent upon the volume of exit interview s received and the need to create meaningful data and protect employee confid
Exit Interview Report
HR headcountHuman resources eff iciency/cost effectiveness
Staff satisfaction levels w ithin the organisation. (This section is likely to be produced on an annual basis.)
Workforce attitude surveys
Performance appraisals
Performance management effectiveness throughout the organisation. (This section is likely to be produced on an annual basis.)
Example headcount reportExample headcount report
WORKFORCE HEADCOUNT REPORT
Period ending:
FT PT Cas Con O/T FT PT Cas Con O/T FT PT Cas Con O/T FT PT Cas Con O/T FT PT Cas Con
M'gment
Staff
Total
M'gment
Staff
Total
M'gment
Staff
Total
M'gment
Staff
Total
M'gment
Staff
Total
M'gment
Staff
Total
Variation on budget ( + or - )
Budgeted headcountHeadcount at end of last
periodHeadcount at end of this period
Variation on last period ( + or - ) Department
Example workforce utilisation reportExample workforce utilisation report
WORKFORCE UTILISATION REPORT
Period ending:
FT PT Cas Con O/T FT PT Cas Con O/T FT PT Cas Con O/T FT PT Cas Con O/T FT PT Cas Con O/T
M'gment
Staff
Total
M'gment
Staff
Total
M'gment
Staff
Total
M'gment
Staff
Total
M'gment
Staff
Total
Total company
Department
Hours utilised last period
Hours utilised this period
Variation on last period
( + or - )Budgeted hours
Variation on budget ( + or - )
Example workforce turnover reportExample workforce turnover reportWORKFORCE TURNOVER REPORT
Period ending:
Summary results Current Period Year-to-date
Total management cost $ $
Total staff cost $ $
Total company cost $ $
Department$ Cost of Turnover
Avg headcount for period
Terminations for period
Turnover % for period
Total cost for period
$
Avg headcount
YTD
Total terminations
YTD
Turnover % YTD
Total cost YTD
$
M'gment
Staff
Total
M'gment
Staff
Total
M'gment
Staff
Total
M'gment
Staff
Total
M'gment
Staff
Total
Total company
Year-to-dateThis period
Example workforce absenteeism reportExample workforce absenteeism report
WORKFORCE ABSENTEEISM REPORT (Unplanned Absenteeism)
Period ending:
Input values Summary results Current Period Year to Date
Management standard hours per day $ $
Staff standard hours per day $ $
$ $
Hrs % Hrs % Hrs % Hrs %Cost
$Hrs % Hrs % Hrs % Hrs %
Cost $
M'gment
Staff
Total
M'gment
Staff
Total
M'gment
Staff
Total
M'gment
Staff
Total
Total company
Total hours available for period
Department
Total company cost
Total staff cost
Total unplanned absenteeism
Sick leavePaid leave
(other)Unpaid leave
$ Cost per day
Current period
Paid leave (other)
Total unplanned absenteeism
Year-to-date
Unpaid leave
Sick leaveTotal hours available for
YTD
Total management cost
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