Back To CourseSenior Professional in Human Resources - International (SPHRi): Exam Prep & Study Guide
10 chapters | 86 lessons
Jenny has taught and developed college level Business, Finance, Management, Human Capital, and Leadership and has an MBA and PhD
Can human resources really help drive the success of overall organizational strategic goals? You bet! The human resource (HR) function supports the overall organization with its management of the people side of the organization. Establishing HR metrics is a key part of ensuring proper management and continued support of overall organizational goals.
The first step in establishing HR metrics is knowing what the overall organizational goals are, either through strategic planning documents or discussion with organizational stakeholders in other areas of the organization, including executives and key team members from finance, operations or other critical areas of the organization.
Some examples of organizational goals could include sales or revenue targets, customer service scores, or industry quality award recognition. As part of the discovery process of determining organizational goals, how the organizational stakeholders see HR supporting these goals must be determined.
Once the organizational goals and HR support of these goals are determined, HR metrics can be established. Some examples of HR metrics include things like employee retention percentages, employee satisfaction surveys, employee engagement scores, training outcomes, recruitment rates or other employment statistics. The metrics selected should be easily linked back to the organizational goals in terms of the HR metric being able to impact the organizational goal.
For example, if an organizational goal is to 'achieve an average customer satisfaction score of 90%', a linkage can be established to determine an appropriate employee satisfaction score or measure, since happy, satisfied employees can impact the satisfaction (and overall satisfaction scores) of their customers.
After the linkage of the HR metrics to organizational goals has been completed, it is time to set quantifiable targets for each of the HR metrics. These targets can again be determined through discussions with stakeholders or any historical data that is available on the targets.
Using the example of customer satisfaction score goal of 90%, a target employee satisfaction score could be set. This score should be linked to the customer satisfaction scores and determined based on historical data or past numbers and goals for where the organization needs to be to support these customer satisfaction numbers.
Once the HR metrics and targets are established, an ongoing way for monitoring the targeted metrics can be created. This can be done on a spreadsheet, whiteboard, dashboard software or any other means to keep these ongoing targets top of mind for the HR team This allows HR to see where they are at a point in time with the metrics and make adjustments if necessary, such as talking to employees or stakeholders to see how improvements can be made.
It also allows HR the opportunity to make adjustments, as necessary, to the goals. HR can see where it is at any point in time with achieving an employee satisfaction score, retention percentage, or training and development outcomes. Positive outcomes of improving HR metrics are the opportunity for organizational analysis and calculation of return on investment (ROI), so the organization can see how its activities are contributing to the growth of the organization.
Establishing HR metrics starts with determining what the organizational goals are. From there, with the help of organizational stakeholders, a linkage should be determined to establish HR goals that could support the organizational goals. Using stakeholder input and/or historical data, quantifiable target metrics for these HR goals can be set. These metrics should be continuously monitored to determine achievement of the targets and ensure HR's role in contributing to overall organizational goal achievement.
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