What are HR Metrics: Common HR Metrics

Author: Ronald Adler
The goal of HR metrics is to help communicate the achievement of goals and to provide predictive business intelligence. As Jac Fit-enz, noted scholar and HR metrics expert, notes: “… 70% of communications are persuasive in nature…Success at HR requires using numbers to persuade others.” Here are a few facts about HR Metrics.
1. What Are HR Metrics
“HR Metrics” is Misnomer – should be “business metrics” that measure the impact of human capital Standards of measurement to assess Human Capital value, costs, productivity, efficiency, performance and progress, and human capital outcomes HR Analytics: The use of data and trends to predict future occurrences and the help management make better decisions
2. Trends in HR Metrics
The trends in HR Metrics are: Higher expectations for HR Professionals, greater attention to risk assessment and management, core competency for HR professionals (SPHR and PHR), increased standardization of the HR profession and transition from Cost/Efficiency Formulas to Impact Analysis, Risk Assessment and the development of priorities.
3. Importance of HR Metrics
The recession has refocused management’s attention on revenue generation, asset value, expense control, cash flow, profitability, competitiveness, and risk management. Metrics play a critical role in ensuring that management’s attention is focused on those factors that contribute to the organization’s survival, sustainability, and success. HR Metrics help the organization respond to a growing list of stakeholders.
4. Limitations of HR metrics
Unfortunately for HR practitioners, there are hundreds of HR metrics to choose from. Thus the data must be kept focused.
5. HR Metrics: Benchmarking
Benchmarking is the continuous study and process of comparing and assessing an organization’s practices, processes, and outcomes against internal standards and external “best practices.” Benchmarking is a learning process that emphasizes improvement.
6. Commonly used Business Metrics
The commonly used business metrics are: Total revenue, Operating revenue, Expenses, Operating expenses (OE), Profits, Net operating profits (NOP), ROI, Return on human capital (RoHC), Return on human asset (RoHA).
7. HR Metrics Best Practices
The best practices in HR Metrics are to create an HR-business metrics team, Identify and catalog HR-business metrics currently in use, determine how these metrics are currently being used; what message they convey about what the organization considers important; and what consequences – intended or otherwise – have resulted from their use, ensure that currently used or proposed metrics are aligned with current and FUTURE organizational objectives.

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