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11 Cards in this Set
- Front
- Back
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importance of measuring effectiveness |
1) Links policies, practices and programs to the organization’s business strategy 2) Identifies gaps or weaknesses 3) Provide the opportunity for improvement 4) Identifies effectiveness 5) Demonstrates HR professionals’ value as strategic partners - deliverables matter! |
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challenges to evaluation |
1) HR managers may resist measuring policies and programs 2) Limited knowledge or measurement models and skills in measurement design 3) HRIS needs to integrate with finance, sales, operations 4) Even if a consultant is hired to do the measurements, HR needs to be able to understand, interpret and explain the measurements 5) Some HR activities cannot be measured or accurately measured 6) Measuring is expensive |
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9 reasons for measuring effectiveness |
1) Labour costs are most often a firm’s largest controllable cost. 2) Managers recognize that employees make the difference between success and failure and so good performance can be rewarded objectively. 3) Organizations have legal responsibilities to ensure compliance with laws governing the employer-employee relationship. 4) Evaluations are needed to determine which HR practices are effective (and not fads). 5) Measuring and benchmarking HR activities will result in continuous improvements. Performance gaps can be identified and eliminated. 6) Audits will bring HR closer to the line functions of the organization. 7) Data will be available to support resource allocations 8) Investors want this information. 9) HR managers are more likely to be welcomed at the boardroom table and to influence strategy, if they use measures to demonstrate the contribution of their function. |
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5C Model of HRM Impact |
1) compliance (H&S, equity, EE relations, industrial relations - save on fines, legal costs) 2) client satisfaction - exceed expectations, increases credibility of HR 3) culture management - influence employee attitudes through the development of an appropriate culture that will support optimum performance. HR practices can have a positive influence on employee attitudes, which in turn influence employee performance and behaviour. JOB SATISFACTION/ENGAGEMENT SURVEYS. 4) cost control - employees investments, not expenses. labour costs = employees wages, benefits, cost of absenteeism, and the cost of turnover 5) contribution - HRM practices shape the behaviour of employees. increase KSAs, improve motivation, reduce absences, and increase retention of top talent. can be measured with ROI, ROE, whether business survives or not (financial). |
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methods of measuring client satisfaction |
1) informal feedback - not easily measurable, face to face makes it difficult for honesty 2) surveys - measurable, larger number of responses, anonymous info more reliable 3) critical incident - Clients or stakeholders are asked to describe a situation when, how and why the HR department services was helpful and met expectations, and another situation when, how and why the service expectations were not met. |
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ways to reduce labour costs |
1) outsourcing 2) downsizing 3) increase usage of technology Other: 4) increase efficiency (time, volume, cost) 5) reduce cost of employee behaviour, i.e. reducing absenteeism, turnover, occupational illness/injury |
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approaches to measuring HRM practices (measuring impact) |
1) Activity-based measures = Number of people that participated in the activity, i.e. # of people completing training or getting hired 2) Costing measures - Measures demonstrating the added value (increases in profits, sales, or customer satisfaction for examples). 3) Client satisfaction - meeting expectations |
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approaches attempting to prove value |
1) cost-benefit analysis- measure benefits, measure direct costs (hard costs measured by expenditure), measure indirect costs (soft costs not easily measured), compare them 2) utility analysis - Method of determining the gain or loss to the organization that results from different courses of action. Identify costs, costs are amortized over employee's working lives. choose alternative with highest net value. 3) Auditing - measurement method that assesses progress against a plan 4) benchmarking - Comparison of processes, products, and performance 5) HR Scorecard - balanced set of measures (financial, customer, internal, and innovation perspectives) to show key performance indicators to measure the organizational performance, and identifies areas for improvement (how do customers see us, what must we excel at, can we continue to improve and create value, how do we look to shareholders?) |
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4 sources of benchmarking partners |
1) Internal 2) Competitive 3) Sector 4) Best-in-class organization |
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challenges in measuring impact of HRM |
1) universality of best practices - There is not a single best practice that would work in every situation, org. structure/goals vary. 2) separation of cause and effect - Causes of behaviours cannot be specifically linked to other behaviours 3) costly 4) time consuming 5) is data accurate and unbiased? |
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characteristics of successful measurement |
-Alignment with the organization’s strategy or goals -Actionable measures of which action plans can be developed to improve performance -Tractability over time -Comparability internally against business units/departments or externally against best-in industry/sector -Drill down – continuing researching to find detailed information that provides information to support making strategic decisions -Report and communicate a limited number of measures (3-7 ideally) -Include lag and lead measures -Key metrics usually provided: Employee engagement, Retention rates by occupation and unit/department, Absenteeism by occupation and unit/department, Productivity measures, Cost-benefit analysis |
