As the role played by the HR department becomes more important and strategic in nature, it is essential for the mgmt to control the functions and activities of this department. Recruitment and selection, training and development, attrition mgmt, welfare mgmt, and compensation mgmt are some of the areas over which the organization needs to exert control. One effective way of assessing HR function is used to matrix in the control process.
Control of the HR department’s functions
Applicable matrix for some HR functions Functions Metrics Recruitment and Selection
Recruitment and selection of employees are two of the key functions of the human resource department.
The HR manager has to ensure that all persons involved in recruitment are well trained in the process. The members involved in the recruitment process should also be aware of its specific goals and objectives. Procedures for the entire process should be clearly defined to ensure that the required standards are maintained. Care should be taken to prevent nepotism (favoring relatives) and ethnocentrism (believing in the superiority of one’s own social group) from creeping into the hiring process as they can drastically affect the outcome of the process.
The recruitment process can be evaluated using different types of parameters. The evaluation will help in exercising control over certain aspects of the recruitment process like costs incurred on it, the people involved, the quality the new recruits, the final number of recruits selected, and job portals. If there are any external agencies involved in the recruitment process, their performance can also be evaluated using similar parameters. Proper evaluation and control of the recruitment process will result in increasing the performance of the process and control any wasteful investment in it.
As organizations spend large amounts on training their employees, it becomes imperative for them to know how the resources spent on the training and development of employees are being utilized. The effectiveness of training and development activities of the organization can be assessed by monitoring job-impact indicators.
Job-impact refers to how much of an effect the training program has on the employees’ job performance. A well-executed training program should ultimately have a positive impact on job performance.
Training expenditure is viewed as a strategic investment for the future rather than as an expense for the organization. Hence it becomes necessary to measure the returns on the investment made on the training activities. Some of the quantitative tools used for measuring the returns are discussed here.
Attrition or turnover refers to the phenomenon of employees leaving the organization for various reasons like job satisfaction, low pay, non-conducive environment, or for better prospects. Keeping attrition levels to the minimum is one of the key responsibilities of the HR department. There are two metrics for assessing attrition level in an organization-employee turnover rate and employee retention rate. These metrics are periodically computed and values, compared with the industry average and with the past records of the organization. let us look at both these metrics in detail.
Welfare measures are undertaken by organization to keep employee happy with the expectations that there will be a consequent increase in employee productivity. These measures include both individual measures like providing insurance benefits to the employees as well as groups measures like providing reading rooms, golf clubs, and swimming pools to the employees.
To begin with, the priority areas are identified and the funds meant for welfare schemes are allocate to each priority area. Later, the utilization of funds is compared with the allocations to various areas.
It is important to gauge to employees’ level of satisfaction with the welfare measures. Moreover, it is important to re-examine whether the allocation of funds across the various welfare schemes was appropriate.
The equity theory states that employees should be equitably paid if they are to be satisfied and productive. Any perception of inequity among the employees regarding their compensation will have negative results on the performance of the affected employees and may result in high level of attrition
The employee’s preconceived notions regarding equitable compensation. these can be done on two basis-
Internal equity refers to the perception of employees on whether their compensation is equitable in comparison with those of their peers in the organization.
External equity, on the other hand, refers to the perception of employees on whether their compensation is equitable in comparison with those of their counterparts in other organizations. A negative perception of external equity may lead to high attrition rates in the organization.
Internal equity is more important than external equity in influencing the perception of employees regarding equity, as employees are usually less aware of the compensation paid in other organizations and corresponding of employment.
Selected techniques for assessing effectiveness of HRM
The responsibility of managing human resource is shared by the HR department and the line managers. Some of the techniques used for assessing the effectiveness of human resource management are:
According to the Great Place to Work® Institute, Inc. (GPWII), a great place to work is one in which you “trust the people you work for, have pride in what you do, and enjoy the people you work with.” Such a workplace scores high on the dimensions of credibility, respect, and camaraderie. GPWII defines these dimensions as described here.
Brodericke, R. and Boudreau, J.W. define the human resource information system (HRIS) as the composite of database, computer applications, and the hardware and software necessary to collect/record, store, manage, deliver, present and manipulate the data of human resources. Human resource information system is specialized application software built for implementing, monitoring, and benchmarking HR processes in any organization. The HRIS is generally a part of the management information system (MIS) of the organization which includes other function like accounting, marketing and production.
The HRIS enables the processes of salary planning, workforce (manpower) planning, and variance analysis that were discussed earlier. Let us now discuss how the HRIS is used for achieving the management control objectives of
System application and Products (SAP) its vision is “To develop standard application software for real-time business processing”
“ SAP uses a balanced scorecard framework, with predefine workforce scorecard that can be integrated in to department and individual management-by-objective (MBO) documents to align employee goals with corporate strategy”.