Establishing HR Metrics Related to Organizational Goals

Instructor: Jennifer Murnane

Jenny has taught and developed college level Business, Finance, Management, Human Capital, and Leadership and has an MBA and PhD

The role of human resources (HR) is to support the overall workforce and align with the goals of the organization. HR metrics are established to support that alignment.

HR Metrics Drive Organizational Success

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.

HR metrics are key to proper management
hr

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.

Organizational Goal Linkage to HR Metrics

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.

Setting Metric Targets

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.

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