This document discusses the challenges of quantifying how human resources impacts an organization's financial performance. It argues that HR decisions around hiring, training, and retention cost money, so HR managers must use metrics to demonstrate how certain initiatives provide a return on investment. The document provides examples of how organizations can measure soft skills that drive revenue and analyze productivity data to motivate employees. It concludes that understanding human capital's monetary value allows HR to conduct sensitivity analyses and optimize initiatives for greater financial returns.
HR departments will become more focused on the outcomes of their actions — the effect
of what they do on the corporation versus the effect of what they do on HR.
HR departments will become more focused on the outcomes of their actions — the effect
of what they do on the corporation versus the effect of what they do on HR.
Putting the "Strategic" in Strategic Business PartnerVisier
Deloitte University Press’s recent “Global Human Capital Trends 2014” report identified that re-skilling HR is a “top three” priority for enterprises worldwide. Yet only 15 percent of organizations say they are ready to respond to this trend, and even fewer (11 percent) say they are ready to implement workforce analytics.
What is driving this trend? How does the re-skilling of HR relate to workforce analytics? Find out how to put the "strategic" in Strategic Business Partner.
View the full webinar recording here:
http://www.visier.com/lp/putting-strategic-in-strategic-business-partner/
Our major goal is to help you achieve your academic goals. We are commited to helping you get top grades in your academic papers.We desire to help you come up with great essays that meet your lecturer's expectations.Contact us now at http://www.premiumessays.net/
Unlocking people data possibilities can shape your
strategy and help you make more informed decisions in your organization. Gut feel is good but data-driven is better.
Strategic Workforce Planning: Key Principles and Objectives, Paul TurnerThe HR Observer
Making sure that we have the right people in the right place with the right level of skills at the right time to deliver both short and long term objectives requires information and insight. This need has sparked a growing interest in workforce planning. Organisations have identified a compelling need to be able to ‘shape’ and skill themselves to deal with both expected and unexpected events: as well as to control costs without damaging competitiveness. Strategic Workforce Planning (SWP) supports these objectives in the quest to become flexible and agile. SWP is a core process of human resource management. It helps HR Professionals to provide insight to an organisation’s competitive advantage through people. This session will cover some of the objectives, principles and models used in SWP, together with case studies of best practice.
This presentation was used at HR Summit and Expo 2013 www.hrsummitexpo.com
How can HR move the needle for the business?
The competition for talent has gone global; turnover is rising; and employee engagement is stagnant at best. Companies have never had a greater need to understand with precision what it takes to recruit, retain, and motivate employees. As a result, never before has HR had such an opportunity to move the needle for the business it supports.
As highlighted in a recent Harvard Business Review paper, HR Joins the Analytics Revolution, “a growing number of corporate boards, CEOs, and CHROs understand that by applying data-driven solutions to improve decisions about talent, they can improve revenues and profits.” But what does this “datafication of HR” mean for the HR Business Partner and Practitioner?
View the full webinar recording here:
http://www.visier.com/lp/hr-can-move-the-needle-for-business/
Putting the "Strategic" in Strategic Business PartnerVisier
Deloitte University Press’s recent “Global Human Capital Trends 2014” report identified that re-skilling HR is a “top three” priority for enterprises worldwide. Yet only 15 percent of organizations say they are ready to respond to this trend, and even fewer (11 percent) say they are ready to implement workforce analytics.
What is driving this trend? How does the re-skilling of HR relate to workforce analytics? Find out how to put the "strategic" in Strategic Business Partner.
View the full webinar recording here:
http://www.visier.com/lp/putting-strategic-in-strategic-business-partner/
Our major goal is to help you achieve your academic goals. We are commited to helping you get top grades in your academic papers.We desire to help you come up with great essays that meet your lecturer's expectations.Contact us now at http://www.premiumessays.net/
Unlocking people data possibilities can shape your
strategy and help you make more informed decisions in your organization. Gut feel is good but data-driven is better.
Strategic Workforce Planning: Key Principles and Objectives, Paul TurnerThe HR Observer
Making sure that we have the right people in the right place with the right level of skills at the right time to deliver both short and long term objectives requires information and insight. This need has sparked a growing interest in workforce planning. Organisations have identified a compelling need to be able to ‘shape’ and skill themselves to deal with both expected and unexpected events: as well as to control costs without damaging competitiveness. Strategic Workforce Planning (SWP) supports these objectives in the quest to become flexible and agile. SWP is a core process of human resource management. It helps HR Professionals to provide insight to an organisation’s competitive advantage through people. This session will cover some of the objectives, principles and models used in SWP, together with case studies of best practice.
This presentation was used at HR Summit and Expo 2013 www.hrsummitexpo.com
How can HR move the needle for the business?
The competition for talent has gone global; turnover is rising; and employee engagement is stagnant at best. Companies have never had a greater need to understand with precision what it takes to recruit, retain, and motivate employees. As a result, never before has HR had such an opportunity to move the needle for the business it supports.
As highlighted in a recent Harvard Business Review paper, HR Joins the Analytics Revolution, “a growing number of corporate boards, CEOs, and CHROs understand that by applying data-driven solutions to improve decisions about talent, they can improve revenues and profits.” But what does this “datafication of HR” mean for the HR Business Partner and Practitioner?
View the full webinar recording here:
http://www.visier.com/lp/hr-can-move-the-needle-for-business/
The Bristol Post is a newspaper covering news in
the city of Bristol, including stories from the whole of Greater Bristol, Northern Somerset and South Gloucestershire. It was titled the Bristol Evening Post until April 2012. http://www.bristolpost.co.uk
The Bristol Post is a newspaper covering news in
the city of Bristol, including stories from the whole of Greater Bristol, Northern Somerset and South Gloucestershire. It was titled the Bristol Evening Post until April 2012. http://www.bristolpost.co.uk
The Bristol Post is a newspaper covering news in
the city of Bristol, including stories from the whole of Greater Bristol, Northern Somerset and South Gloucestershire. It was titled the Bristol Evening Post until April 2012. http://www.bristolpost.co.uk
Allan Baitcher - Bid on It Magazine ArticleAllan Baitcher
Allan Baitcher solicits bids for a suit of armor during an auction at King Galleries in Roswell. Baitcher is an auctioneer and appraiser from Atlanta, Ga. Magazine article by Adina Solomon.
The Year of People: How HR is Evolving in 2020Tamar Kuyumjian
This year forced companies all over the world into a remote work pilot study. Sharing their insights from the front lines, Aptology spoke with leaders in HR like CHROs and marketers in HR tech about how HR is evolving in 2020. They covered: How do we understand and measure the employee experience? What pre employment screening data do we need to get visibility for better talent acquisition and DEI efforts? What tools and behavioral assessments do we need for internal sources of recruitment? How does our understanding of people and communication need to change? Prepare to take notes as this guide gives tactical advice for HR professionals in talent management, learning and development, succession planning, and talent acquisition.
MacroEnterprises Case StudyHRM498Miriam Dozier.docxsmile790243
MacroEnterprises Case Study
HRM/498
Miriam Dozier
INTRODUCTION
Human resource is a management function that aims at maximizing employees performance with regard to the organization’s set objectives.
Focuses on the management of individuals within an organization.
Human resource exists as one of the departments within a given organization.
It performs various activities ranging from recruiting employees, development and training, performance appraisals to monitoring employee benefits.
It also look into matters concerning industrial relations, organizational change and transformations.
Human resource management covers the following areas, job designing and analysis, workforce planning, selection and recruitment, development and training, compensations and legal issues. Human resource management walks hand in hand with human relation movement and focuses on issues of strategic management.
2
WHY HR SHOULD BE A STRATEGIC PARTNER AT MACROENTERPRISE
Some people might argue that human resource management is not an important part of a vast business , the truth is, HR plays an important role in macro enterprises.
Human resource enhances the skills of employees within an organization, through this, the employees are able to meet the demands of the business.
Meeting the business demands by employees results in the rise of profit margins.
Human resource helps in improving the productivity of a given firm and employee satisfaction as it decreases the chances of employee stagnation and monotony.
Human resource boosts productivity through training of employees. Training helps employees to acquire confidence thus making them ready to handle challenges associated with business demands and production, the end result of all this is that, the organization ends up making lots of profits.
Profitability is one of the fundamental reasons why human resources management should be a strategic business partner. Full participation of all departments within an organization through the collaborative actions of the human resource department, promotes maximum reaping of profits by an organization.
3
WHY HR SHOULD BE A STRATEGIC PARTNER AT MACROENTERPRISE
Another key reason as to why human resource should be a strategic partner at a macro enterprise relates to issues concerning funds within an a organization,
Human resource can justify the usage of funds within a business enterprise.
For instance, it can justify why a certain project requires a certain amount of funds and why a certain amount should be allocated to certain projects and not others.
It can help in proper distribution of an organizations financial resources.
Through human resource, funding of training, implementation of competitive salaries, employee development programs can be effected.
Human resource department, looks into the welfare of employees, through the implementation of beneficial activities, the companies competitiveness and position rises thus attracting ...
HR AND COMPETITIVE ADVANTAGE-A comprehensive guide to using HR activities to ...Summaya Sharif
The essay is written to answer the ubiquitous organizational query; “How HRM activities enable organizations to become more competitive in their markets?”. With this essay organizations can gain a comprehensive, intricate, and pragmatic knowledge on how they can use HR as a competitive advantage so that they’re capable of making the most out of their HR activities and boost their competitiveness to stand not just firm but sui-generis in the market.
6 Ways to change human resources in the millennial ageConduent
Work is changing faster than ever before. HR professionals know and live this every day. The head-on collision of digitization, disruptive business models, technology advances and powerful socio-economic forces are transforming every company in every market. Here's how to adapt and thrive.
6 Ways to change human resources in the millennial ageAlan Robinson
Work is changing faster than ever before. HR professionals know and live this every day. The head-on collision of digitization, disruptive business models, technology advances and powerful socio-economic forces are transforming every company in every market. Here's how to adapt and thrive.
how does hr contribute to business success.pdfSabuj Ahmed
HR contributes to business success by attracting and retaining top talent, fostering a positive work culture, ensuring compliance with regulations, and facilitating employee development. Effective HR practices enhance productivity, innovation, and employee engagement, directly impacting the overall success and sustainability of the business.
Helping HR to measure up arming the‘‘soft’’ function with hSusanaFurman449
Helping HR to measure up: arming the
‘‘soft’’ function with hard metrics
Kate Feather
Abstract
Purpose – The purpose of this article is to highlight the more strategic role HR departments can play in
their organizations. By prioritizing the measurement strategy in organizations, HR leaders can
demonstrate to leadership the impact employees have on the business and how an investment in
internal processes and programs can boost engagement – and ultimately business results.
Design/methodology/approach – This paper outlines a four-step process for effective employee
engagement measurement: use behavioral and emotional outcomes; correlate employee engagement
survey results to meaningful outcomes; focus improvement efforts and investments on the high
impact/low performing areas; and re-measure to assess success. A series of de-identified examples
from PeopleMetrics clients illustrate the importance of following each step in the process.
Findings – By measuring employee engagement, tying the results to other HR and business metrics
and using the findings to target improvement efforts, organizations are demonstrating to leadership the
impact employees have on the business and how an investment in internal processes and programs can
boost engagement – and ultimately business results. As more organizations recognize the value of
using rigorous metrics to evaluate and optimize their workforces, the HR function will benefit because it
will be serving a more strategic function than it has traditionally been associated with in the past.
Research limitations/implications – These findings are based on the fieldwork experience of
PeopleMetrics.
Originality/value – The paper provides a very useful perspective for HR managers to consider,
particularly within organizations with extensive measurement systems.
Keywords Employee development, Human resource management,
Human resource management research
Paper type Case study
Introduction
HR professionals looking to overcome the view that HR is a ‘‘soft’’ function for which there are
few hard metrics should focus on employee engagement as a measurement that can be
linked to other HR and business metrics and deliver improved business results. Kate
Feather, a director at PeopleMetrics, outlines the path to effective measurement and
demonstrates the theory in practice in a range of organizations.
Successful businesses function around a set of core metrics supporting the view that what
gets measured gets managed. For a long time metrics such as revenue, costs, profits, units
shipped and defects have been closely monitored, analyzed and researched. During this
time, however, HR was dubbed a ‘‘soft’’ function, with the typical view being that people and
metrics do not mix. While HR has always known the value of its role, the problem has been in
quantifying return on investment for senior management.
Today, there is little doubt in the board room that people make a difference to business
...
Why hr is important in manufacturing industryOpportuneHR
When the HR plays a strategic role, it impacts the whole organisation. Production processes get smoother, new manufacturing practices gets accepted, unions and the workforce appreciate the respect shown by management, they understand the intent and reciprocate. Industrial relations improve and people feel a sense of pride and esteem working in the organisation.
When major strategic approaches like lean manufacturing, balanced scorecards, are adopted in the organisation, it isn’t possible without an active role of HR management.
1. Running head: HR FINANCE 1
The Challenges of Capitalizing on Human Resource Management
Amy K. Knight
Concordia University, St. Paul, HRG 560
Professor Phillip Hampton
February 4, 2017
2. HR FINANCE 2
Abstract
The goal of business is typically to make money. There are aspects of a business that directly
impact an organization’s effectiveness in bringing in revenue. Customer service efficiency,
supply and logistics, and sales are a few areas where analyzing the monetary impact that these
areas have on an organization is relatively straight forward. Although Human Resources, or lack
thereof, has a significant impact on the success of an organization, it is often difficult to know
how to measure the extent by which Human Resources impacts the bottom line. By assessing
the ways in which Human Resources is responsible for managing the overall effectiveness of the
human capital within the organization, it becomes clearer how Human Resources is instrumental
in the endeavor of increasing revenue. The key to this process is to begin to think numerically
by utilizing metrics that help place a dollar value on issues such as turnover, labor cost, training,
and recruiting so that decision makers can be confident in determining which Human Resources’
initiatives will positively impact the financial state of the organization. Doing so not only helps
decision makers know which direction to take the organization, but also assists in making the
most of an often-underutilized resource, namely its Human Resources.
Keywords: analytics, capital budgeting, finance, human capital, human resources, metrics
3. HR FINANCE 3
Human capital is a contributing factor when it comes to determining an organizations
financial effectiveness. Human Resources (HR) is entrusted with the responsibility of managing
an organization’s human capital. With that comes the responsibility of spearheading initiatives
relating to hiring, training, and retention. The problem is that these aspects of the business cost
money. Exhibiting how certain choices regarding these HR initiatives can provide a return on
investment is essential to ensuring that those initiatives receive adequate funding. To do that HR
managers must learn what metrics to rely upon and how to speak the language of finance.
Human Resources has been traditionally viewed as an expense incurred by the
organization, a necessary evil so to speak. However, the decisions that HR makes has a direct
impact on the overall success, or failure, of the human capital within the organization. The
problem lies in determining how to correlate the relationship between human resources and the
financial status of the organization. This is not an easy task. There are no sure-fire tools
available to measure HR’s effect on finance. Ladislav Sojka eloquently states, “If we accept the
assumption confirmed by several previous studies that human resources are the company’s most
important asset, then it is necessary to examine what is their true effect on the economic
performance of the firm” (2015, p. 88). Incorporating the appropriate metrics that measure HR
initiatives will get us closer to that goal.
Ratio metrics for HR management include formulas for determining things like revenue
to full time employees, turnover, operating expense to employee count, and personnel cost
compared to the revenue coming into the organization. Determining employee cost versus
revenue coming into the organization can be a starting point to gauging how human capital can
be translated into numbers for the organization. From there, decision makers can drill down to
factor in what aspects of expenses may be contributing directly to those costs. Once the cost per
4. HR FINANCE 4
employee is established, then the next step may be to examine how the human capital drives
revenue.
Determining how the human capital of an organization drives revenue is complex. There
are many factors that play a role in an organization’s success that are difficult to monetize, such
as soft skills and cultural fit, for example. Excelling in these areas can certainly contribute to an
organization’s competitive advantage. Ascertaining the extent to which they do so will help HR
in the undertaking of creating value added initiatives. One way to consider tackling this effort is
to consider looking at it another way. For example, soft skills are defined as “interpersonal,
human behavior, and leadership skills, often complement other characteristics and prompt
understanding individual job performance” (Mathis, Jackson, & Valentine, 2014, p. 250). By
dissecting the elements of performance that enhance the customer experience thereby increasing
revenue, one can then define that soft skill as a resource. Once it is determined which resources
(soft skills) are most valuable to the organization by producing the most desired impact, namely
increased revenue, then they become tangible and can be measured.
Providing an example will help to examine this idea of measuring soft skills in order to
place a monetary value on them. It has been determined that organization Z’s highest producers
who bring in the most revenue are individuals who are self-motivated. The organization has
discovered that these employees on average are within the top ten percent of its annual revenue
producers. Not only do they tend to be the highest producers, but HR has discovered that they
also have the lowest turnover. With this discovery, the organization has gathered that self-
motivation is a resource that they’d like to be able to continue to obtain and retain. By
conducting an analysis to determine that self-motivation is a viable resource for the organization,
5. HR FINANCE 5
they are now able to focus their efforts on recruiting and training initiatives that will capitalize on
the accumulation of this resource.
Effectively utilizing analytics in business starts with a mindful reset on the part of HR to
think in terms of how what they do impacts the organization financially. It is necessary to think
in terms of monetary value. To provide an example of a real company dealing with this issue,
PRIDE Industries, a non-profit with a mission of creating jobs for people with disabilities, has
employees who stock shelves in a grocery store. To meet maximum productivity, they must
stock no less than 30 cases an hour. If an employee stocks less than that, then the company does
not make any money and may in fact lose money. It is up to the HR professional supporting the
site where the stocking occurs to come up with ways to motivate the employees to be better
producers so that they can meet the minimum requirement of 30 cases stocked per hour. Unless
that HR professional understands the detrimental financial impact that the lower productivity has
on the organization, he/she may not be thoroughly invested to come up with a feasible solution.
Analytics help to illustrate HR’s value within the organization. Kapoor and Kabra define
HR analytics as “the integration of relevant HR data from different sources, the performing of
organizational and workforce analysis on this captured data, and ultimately the gleaning of
insights from the findings to shape decisions for better organization performance” (2014, p. 50).
Analysis can be used to determine past trends and drive desirable results moving forward. By
incorporating analytics and capital budgeting, which is the process of evaluating a budget
proposal, one can begin to understand the value that an initiative may bring. To adequately
demonstrate cost savings or return on investment potential, HR must be able to conduct and
provide a sensitivity analysis. A sensitivity analysis consists of best, most likely, and worst case
scenarios as a result of the initiative (P. Hampton, personal communication, January 24, 2017). It
6. HR FINANCE 6
is then that an HR professional can demonstrate that he/she understands the language of finance
and the role that HR plays in driving revenue.
Although determining how HR impacts an organization financially is a complex
endeavor, it is not impossible. HR must be a strategic partner that aligns its departmental values
with the organization. Steven Director notes that “HR strategy including employee selection and
employee compensation should be tailored to support the firm’s business strategy” (2013, p. 57).
Understanding the value of human capital within the organization and how to translate it in a
way that allows it to be measurable is an essential component to being able to demonstrate the
return on investment of HR initiatives. Once that is established, HR can then conduct and
present a sensitivity analysis to the decision makers. By following these key steps, HR has a
better chance of optimizing its efforts towards providing a greater return on investment for the
organization.
7. HR FINANCE 7
References
About PRIDE. (2017). Retrieved from http://prideindustries.com/about/
Director, S. (2013). Financial Analysis for HR Managers: Tools for Linking HR Strategy to
Business Strategy. Upper Saddle River, NJ: Pearson Education, Inc.
Kapoor, B., & Kabra, Y. (2014). Current and Future Trends in Human Resources Analytics
Adoption. Journal of Cases on Information Technology, 16(1), 50-59.
Mathis, R. L., Jackson, J. H., & Valentine, S.R. (2014). Human Resource Management (14th ed.).
Stamford, CT: Cengage Learning.
Sojka, L. (2015). Investigation the Relationship Between Human Resource Management
Practices and Firm's Finance Performance. European Scientific Journal, 11(34), 87-105.
.