Abc Of Hr Metrics 144

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  • Introduction – Icebreaker – Interaction Gary Chapman – Five Languages of Love Quality Time, Words of Affirmation, Gifts, Acts of Service, and Physical Touch Partners speak two different languages Everyone has a primary language and a secondary language The more we use the SL the more comfortable we become conversing in it Learn the language of those with whom we wish to communicate Learn to speak and effectively express what you want them to know To get understanding we must communicate in the PL of our partner Numerous dialects exist but five core areas Relate communication, primary language HR and ROI
  • HR’s role as an information analyst exist as we change from being cost centers to being strategic partners. Today we are going to learn how to speak the language of non-HR people in our organizations. Instead of talking programs and people we will train ourselves to start thinking about statistical figures and dollar signs. What are metrics? Why measure? What should we measure? How to measure? How to analyze the data we collect? How to report the data we collect?
  • HR Metrics is the name we apply to what we have probably been doing all along. Collecting data, producing reports, and monitoring HR activities.
  • HR Metrics should be commonplace for every organization, regardless of size, industry, location, or success. Come to the strategic table with facts, figures, and a business interpretation of why it pays to be caring toward employees and why it is important to invest in human resources.
  • You don’t have time to measure, but you can’t afford not to. Look at the number of organizations that have made the decision to outsource HR. The act of measuring helps. If you measure, performance improves. HR should measure outcomes not activity. If HR really wants to be a business partner, it must be judged by the same standards as everyone else in the organization.
  • A need to make HR more credible Need to be able to determine and measure what is creating value Perhaps they can help in the identification of success factors Individual ROI – Who is generating how much profit per dollar of the organization’s investment in salary, benefits, and training- and why – to make the best use of their human capital
  • Sound measurement centers around quality, efficiency, and service. To sustain a competitive advantage, you have to do unique things. Increase Effectiveness, Gain Competitive advantage, Boost Profits (EAP)
  • Watson-Wyatt did a study and it resulted in the Human Capital Index. Five key areas that boost shareholders value by up to 30%. Recruiting Excellence Collegial Flexible Workplace Communication Integrity Clear rewards and accountability Prudent use of resources
  • Identify what you want to measure and why Focus on what drive people to generate business success Get buy in Make sure your results will be practical enough to drive action Do not try to measure too much, especially at first Make sure you can find and collect the right data when you need it Interpret and present statistics in a way that will be easy for managers to understand Step back and reconsider, if you get stuck
  • What is Benchmarking? A point of reference from which measurement comparisons may be made Specifically, how an organization compares to others in hard data terms: Cost Time Quantity Quality Allows organizations to make decisions regarding: Quality Efficiency Effectiveness
  • The cost (money) The time to do it (fill time) The quantity involved (number of requisitions) The quality involved (quality of new hires) The human reaction (manager’s satisfaction)
  • 10 Key Human Capital Metrics Revenue Factor Voluntary Separation Rate HC Value Added HC ROI Total Compensation Revenue Percentage Total Labor Cost Revenue Percentage Training Investment Factor Cost Per Hire Healthcare costs per employee Turnover costs Fiscal accountability and quantitative assessment continue to be hot items for senior management Bad Example: personal internet and email use monitoring May damage culture and loyalty of employees
  • Total number of voluntary separations 13,894 – including interagency transfers Regular Headcount 141,277 The average number of regular employees, regardless of hours worked in the reporting unit (division or company) for the survey period
  • Determine what gets measured Is it time to start or time to hire? Can you look at trend data for your organization? Have you conducted a business process analysis on your current hiring process? Staffing.org’s survey of 1,500 firms indicates the average "time to start" is 70 days.
  • 76% retention issue 39% measure turnover 56% staffing cost reduction issue 29% measure cost per hire Contribution Utilization Productivity
  • Redefine business objectives CUP test Simple Historical - rearview Real-Time - snapshot Forward-Looking – trends for contingency planning 5. Benchmarking 6. Integrate data collection with other work 7. Graphs with short text descriptions for access and readability 8. Power to act 9. Review data and report changes
  • Uses of Excel – any data in dB can be exported to Excel or format that can be put into Excel, or you can enter it yourself. PEOPLESOFT – can get data from there into .csv file, import to Excel. Will assume for purposes of presentation that you can enter info into Excel yourself. My spreadsheet: Entered information about age and years of experience (may not be compliant with all HR laws!) Formulas – for any set of data. Just type =FormulaName(range). Use your mouse. See sigma button for commonly used formulas. Dates: =today() gets today's date. (/ by 365.25) for years of age. Sum – not useful for these purposes. Average – also called mean. Median – middle point Min, max, range. These may or may not be useful. 3 graphs I will cover: How to insert graph. Bar – called column in excel when vertical, bar when horizontal Pie – Useful for showing percentages. Scatter – useful for comparing two sets of numbers.
  • Abc Of Hr Metrics 144

    1. 1. HR’s Role As An Information Analyst
    2. 2. Today’s Objectives <ul><li>What are Metrics? </li></ul><ul><li>Why Measure? </li></ul><ul><li>What to Measure? </li></ul><ul><li>How to Measure? </li></ul><ul><li>How to Analyze Data? </li></ul><ul><li>How to Report Data? </li></ul>
    3. 3. What are HR Metrics? <ul><li>Relating to measures </li></ul><ul><li>Involving or proceeding by measurements </li></ul><ul><li>Method of tracking the effectiveness of HR </li></ul><ul><li>What you value about HR programs and </li></ul><ul><li>the equivalent monetary value </li></ul><ul><li>Language of management </li></ul>
    4. 4. HR Excuses Against Metrics <ul><li>“ You can’t measure what we do…” </li></ul><ul><li>Lack of clear purpose for measuring </li></ul><ul><li>Lack of cooperation between departments </li></ul><ul><li>Difficulty extracting data from multiple systems </li></ul><ul><li>Difficulty understanding and analyzing metrics </li></ul><ul><li>Numbers used to draw inaccurate conclusions </li></ul>
    5. 5. Why Measure? <ul><li>If you can’t measure it, you can’t understand it. </li></ul><ul><li>If you can’t understand it, you can’t control it. </li></ul><ul><li>If you can’t control it, you can’t improve it. </li></ul><ul><li>The Improvement Process </li></ul>Understand Measure Control Improve
    6. 6. Importance of HR Metrics <ul><li>Quantify the value of HR </li></ul><ul><li>Guide workforce strategies </li></ul><ul><li>Maximize HR’s return on investments </li></ul><ul><li>Provide measurement standards </li></ul><ul><li>Show what HR contributes to business results </li></ul><ul><li>Make the business case for HR’s objectives </li></ul>
    7. 7. Why Measure? <ul><li>Communicate performance expectations </li></ul><ul><li>Discover gaps in strategies </li></ul><ul><li>Make better decisions </li></ul><ul><li>Address the trend toward value reporting </li></ul>
    8. 8. What to Measure? <ul><li>Measure outcomes not activity </li></ul><ul><li>Begin with efficiency measures </li></ul><ul><li>Develop metrics geared towards your organization’s goals and strategies </li></ul><ul><li>Establish metrics to monitor key HR practices proven to grow human capital </li></ul><ul><li>Use metrics that will encourage change and help us make better decisions about human capital </li></ul>
    9. 9. <ul><li>Creating a measurement team is recommended </li></ul><ul><li>Communicate importance of metrics to team </li></ul><ul><li>Team should select metrics together </li></ul><ul><li>Determine how metrics will be defined </li></ul><ul><li>Obtain leadership buy-in </li></ul><ul><li>Disseminate the tasks </li></ul>Collecting Data
    10. 10. Strategic Relationships <ul><li>Process must be owned by Executives, Managers, HR, Finance, and IT </li></ul><ul><li>Takes time and will power </li></ul><ul><li>May require an investment in information technology support services to support human capital measurement and reporting opportunities </li></ul><ul><li>Requires the fostering of key strategic relationships to ensure favorable outcomes </li></ul>
    11. 11. Getting Started <ul><li>Assess your data </li></ul><ul><li>Build your metrics </li></ul><ul><li>Create meaningful measures </li></ul>
    12. 12. <ul><li>What do you already track? </li></ul><ul><li>Where should you focus? </li></ul><ul><li>What metrics would be useful? </li></ul>Assessing Your Data
    13. 13. <ul><li>Determine your measures </li></ul><ul><li>Select benchmarks for comparison </li></ul><ul><ul><li>similar services </li></ul></ul><ul><ul><li>same size </li></ul></ul><ul><ul><li>similar organizational structure </li></ul></ul><ul><ul><li>similar budget </li></ul></ul><ul><li>Compare your results </li></ul>Building Your Measures
    14. 14. <ul><li>Compare your value to the percentiles used by benchmarks </li></ul><ul><li>Assess desirability of your position in relation to your organizational goals </li></ul><ul><li>Develop metrics that assess efficiency, strategic value, and effectiveness </li></ul>Creating Meaningful Measures
    15. 15. Data Integrity <ul><li>Quality of data is critical </li></ul><ul><li>Garbage in….garbage out </li></ul><ul><li>So….. </li></ul><ul><ul><ul><li>Check the math </li></ul></ul></ul><ul><ul><ul><li>Watch out for zeros </li></ul></ul></ul><ul><ul><ul><li>Compare results to each other </li></ul></ul></ul><ul><ul><ul><li>Conduct a sanity test </li></ul></ul></ul>
    16. 16. Data Sources <ul><li>HRIS (PeopleSoft, SAP, CostPoint, etc.) </li></ul><ul><li>Surveys </li></ul><ul><li>Interviews </li></ul><ul><li>SHRM </li></ul><ul><li>Watson-Wyatt </li></ul><ul><li>WorldatWork </li></ul><ul><li>Mercer </li></ul><ul><li>Saratoga Institute </li></ul><ul><li>IPMA </li></ul>
    17. 17. What Can Be Measured? Staffing and Hiring Work Processes Competent Employees Turnover Rates Reduced Time-to-Fill for Vacancies Training Costs Number of Employees Trained Cost per Hire Voluntary Separations
    18. 18. Who’s Measuring What? <ul><li>Georgia Technology Authority </li></ul><ul><li>New Hire Quality </li></ul><ul><li>Internal Promotions </li></ul><ul><li>Training Impact </li></ul><ul><li>Voluntary Turnover </li></ul><ul><li>Alternative Work Schedule Participation </li></ul><ul><li>Employee Satisfaction </li></ul><ul><li>Performance Plans Developed </li></ul><ul><li>Development Plans Implemented </li></ul>
    19. 19. <ul><li>Formula: </li></ul><ul><li>Total Voluntary Separations / Regular Headcount </li></ul><ul><li>Purpose: </li></ul><ul><li>Voluntary Separation Rate looks at the percentage of regular headcount that voluntarily left the organization. </li></ul><ul><li>This metric is an excellent indicator of problems within the organization, including but not limited to inadequate compensation and/or benefits, lack of opportunities for promotion, low employee morale, inadequate training, and/or improper assessment of employee's qualifications (over or under qualified). </li></ul>Voluntary Separation Rate
    20. 20. Voluntary Separation Rate <ul><li>Calculation: </li></ul><ul><li>13,894 / 141,277 </li></ul><ul><li>Total Voluntary Separations / Regular Headcount </li></ul><ul><li>= </li></ul><ul><li>9.8% </li></ul>
    21. 21. <ul><li>Formula: </li></ul><ul><li>The number of business days to fill a vacant </li></ul><ul><li>position. This is counted from the day the </li></ul><ul><li>position becomes vacant to the date a new </li></ul><ul><li>employee starts in the job. </li></ul><ul><li>Purpose: </li></ul><ul><li>Time to Hire shows length of time it takes to fill vacant positions. </li></ul><ul><li>This metric is an indicator of organization's ability to recruit and hire new employees. </li></ul>Time to Hire - Definition
    22. 22. Time to Hire - Calculation <ul><li>11/1/2006 - 8/1/2006 </li></ul><ul><li>Date of Hire - Date of Vacancy </li></ul><ul><li>= </li></ul><ul><li>65 business days </li></ul>
    23. 23. <ul><li>Formula: </li></ul><ul><li>Total Training Cost / Regular Headcount Trained </li></ul><ul><li>Purpose: </li></ul><ul><li>Training Cost Factor - average dollars spent on </li></ul><ul><li>training for each regular employee receiving training </li></ul><ul><li>This metric is an indicator of the organization's investment in training and can also be used to </li></ul><ul><li>monitor training costs and the organization's </li></ul><ul><li>return on investment. </li></ul>Training Cost Factor - Definition
    24. 24. Training Cost Factor - Calculation <ul><li>$31,131,631 / 249,700 </li></ul><ul><li>Total Training Cost / Regular Headcount Trained </li></ul><ul><li>= </li></ul><ul><li>$124.68 </li></ul>
    25. 25. Pulling it All Together <ul><li>Can you explain it in one sentence? </li></ul><ul><li>Is the area it measures high priority for the </li></ul><ul><li>organization? </li></ul><ul><li>Can people in the organization remember </li></ul><ul><li>and explain it? </li></ul><ul><li>Is the number simple to get and understand? </li></ul><ul><li>Does the source for the data have credibility? </li></ul>
    26. 26. Key Thoughts <ul><li>Take “baby steps” by starting with a few key metrics. </li></ul><ul><li>You don’t have to change the whole organization at once. </li></ul><ul><li>Measurement and management go hand in hand. </li></ul>
    27. 27. Analyzing Data <ul><li>Microsoft Excel </li></ul><ul><li>Formulas </li></ul><ul><ul><li>Sum </li></ul></ul><ul><ul><li>Average & Median </li></ul></ul><ul><ul><li>Time Calculations </li></ul></ul><ul><li>Charts & Graphs </li></ul><ul><ul><li>Pie </li></ul></ul><ul><ul><li>Bar </li></ul></ul><ul><ul><li>Scatter </li></ul></ul>
    28. 28. Reporting Data <ul><li>Microsoft Word </li></ul><ul><li>Reports </li></ul><ul><ul><li>Tables </li></ul></ul><ul><ul><li>Graphs </li></ul></ul><ul><ul><li>Charts </li></ul></ul><ul><li>Microsoft Access </li></ul><ul><li>Database </li></ul><ul><ul><li>Tables </li></ul></ul><ul><ul><li>Queries </li></ul></ul><ul><ul><li>Reports </li></ul></ul>
    29. 29. PowerPoint <ul><li>Inserting graphs </li></ul>

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