Five Phases of Strategic Human Resource Metrics Analytics

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  • 0:03 Introduction to Metrics
  • 0:38 Definition of Metrics
  • 1:19 Human Resource Metrics
  • 2:18 The 5 Phases of HR…
  • 4:39 Lesson Summary
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Lesson Transcript
Instructor: Noel Ransom

Noel has taught college Accounting and a host of other related topics and has a dual Master's Degree in Accounting/Finance. She is currently working on her Doctoral Degree.

This lesson provides an overview of the five phases of strategic human resource metrics analytics, describing each step in detail and the impacts of metrics on individual performance and overall organizational achievement.

Introduction to Metrics

Fred is an executive for a large corporation, and he is sitting in a board meeting today to hear an overview of his company's performance. The presenter announces the company increased their profits by 15% this year, and that sales goals are estimated increase next year by 20% because his sales team exceeded their goal by 20% this year. Finally, the presenter announces the company has a goal to reduce expenses next year by 10%.

The numbers Fred hears are called metrics. These metrics are measurements that his company uses to determine how well the organization has performed this year.

Definition of Metrics

Metrics are sets of data used as a standard of measurement. For example, Fred wants to know how long it takes his sales team to make a sale from the pitch to the customer purchase. Fred goes to his data team, and they tell him it takes approximately 45 days to complete one sale from start to finish. The 45-day cycle time (or number of days) is a metric.

Fred can use this metric to analyze his team's success. Is the 45-day cycle time too fast, too slow, or just enough time? Fred looks at his sales plans and sees that it should take his sales team an average of 60 days to make one sale! Wow, it's safe to say that Fred is pretty darn happy!

Human Resource Metrics

Fred just performed a metrics analysis of the sales cycle of his team. A metrics analysis is the process of evaluating various metrics against a specific benchmark or threshold and making decisions based on it. This is exactly what Fred just did. Business leaders can use metrics to evaluate the performance of employees, process, projects, programs, and various other corporate initiatives.

Human resource departments (or HR departments as they're commonly called) in an organization usually have several processes and initiatives that focus on attracting new talent, retaining existing employees, and training employees, to name just a few. Human resource analytics can be used to evaluate employee behavior to help organizations effectively manage talent.

In fact, there is a structured five-phase process human resource leaders use as a guide to assist them with identification and evaluation of the metrics for their program initiatives. Let's look at these phases in more detail.

The Five Phases of Human Resource Metrics Analysis

Meet Susan, a human resource director for a large financial services corporation. Susan is working on a project to determine how many employees have a high probability of leaving the company each year. She collects tons of data from her data analytics team that shows the dates each employee left the company. She also has data that shows each employee's job function, title, and even how long each person worked at the company.

Good grief, that's a lot of data! Susan is completely overwhelmed. All of this is great data, but just the metrics don't provide any answers. Susan uses human resource analytics to take the data and determine a pattern or behavior of each employee.

There are five phases of human resource metrics analytics she follows:

1. Justification: Raw data collection. Susan is simply collecting as much data as she can about her employees. During this phase, Susan is tracking and collecting metrics.

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