Demonstrating the Value of HR Flashcards
What are some important benefits of measuring and reporting results for HR?
Reinforcing HR’s role in strategic development by measuring the effectiveness of HR strategies and senior management’s implementation of those strategies, Identifying opportunities for redirection and improvement through periodic measurement of progress on strategic objectives, Strengthening HR’s relationship with internal business partners, and Supporting future investment in HR programs.
What are KPIs and how are they established?
Key Performance Indicators are sometimes established by applying a balanced scorecard approach to the function’s mission. The function then collects data to compare performance with these KPIs and other metrics. Assessments can include variance analysis of outcomes or results or assessment of processes.
___________ _______provides a concise yet overall picture of an organization’s performance. They can be used to focus organizations and functions on key strategic activities, craft responses to goals, and create metrics to assess the effectiveness of these responses.
Balanced scorecards
By linking clearly defined _______ _______ and _______ to the company’s strategic business goals, a balanced scorecard for HR can serve as a way of focusing human resource staff on activities that will support the company’s goals. An HR-balanced scorecard also demonstrates HR’s strategic value by defining and measuring HR’s contribution in concrete, clearly understood terms.
department objectives and performances
What are the four perspectives of a balanced scorecard?
Financial, customers, internal business processes, and learning and growth.
In the financial perspective part of a balanced scorecard, how does this perspective contribute?
Financial: develop alternative staffing strategies to provide more flexibility to meet shifts in production demands.
In the Customer perspective part of a balanced scorecard, how does this perspective contribute?
Customers (other functions and employees): Provide easier access to HR services, including consultation with functional leaders.
In the Internal business processes perspective part of a balanced scorecard, how does this perspective contribute?
Internal business processes: apply technology to increase efficiency and capture data.
In the Learning and growth perspective part of a balanced scorecard, how does this perspective contribute?
Learning and growth: make sure that future leaders will be available across functions, throughout the organization.
For an HR balanced scorecard to be effective, it must:
Contain accountability and measurable results that contain understandable measures, metrics, and targets aligned with the objective and can be supported with solid data.
Contain only those measures that are most important to the objective and the organization’s strategic plan; that is, the measures must result in actionable items.
Focus on results. More meaningful measures that are aligned clearly with the organization’s strategic plan include productivity and retention.
Be carefully planned and executed.
_____ _____ focus on traditional measures of efficiency and effectiveness (such as budget performance, hiring ratios and costs) as well as strategic HR activities (for example, metrics indicating increased employee engagement, such as reduced absenteeism or discipline issues, or reduced risk, such as accident rates and compliance audit results).
HR Metrics
Ratio of lost days to number of employees
Absence Rate
Comparison of budget to actual assignee costs
Accruals
Percentage of applicants who proceed to the next step of the selection process
Applicant Yield Ratio
Total costs of hiring divided by number hired
Cost per hire
Measure of various different customer opinions across services offered by HR
Customer Satisfaction
Ratio of the number of HR staff retained to number of overall full- time staff retained
HR staff per full-time employee
Ratio of employment-related expenses to revenue minus nonemployment expenses
Human capital return on investment
Revenue minus nonemployment expenses divided by number of full-time employees
Human capital value added
Percentage of key talent retained
Key talent retention
Percentage of internal promotions
Promotion pattern
Proportion of selected applicants who are later judged to be successful on the job
Success ratio
Economic benefit of enhanced performance minus costs of developing, producing, and delivering training
Training return on investment
Number or percentage of employees moving across divisions to new jobs
Transfer
Costs associated with separation, vacancy, replacement, and training
Turnover costs
Proportion of exiting employees to all employees
Turnover rate
Costs of substitute labor (temporary workers, contractors, outsourcing partners) minus wages and benefits not paid because vacant
Vacancy costs
In an ____ ____, an organization’s HR policies, practices, procedures, and strategies undergo a systematic and comprehensive evaluation to establish whether specific HR practices are adequate to achieve the function’s goals.
HR audit
What do audit results indicate?
They identify gaps, which can then be prioritized for corrective action.
List four common types of HR audits:
Compliance, best practices, strategic, and function-specific.
Focuses on the strengths and weaknesses of systems and processes to determine whether they align with the HR departmental and/or the organizational strategic plan - list type of HR Audit?
Strategic
Helps the organization maintain or improve competitive advantage by comparing its practices to those of employers identified as having exceptional HR practices - list type of HR audit.
Best Practices
Focuses on how well the organization is complying with current employment laws and regulations - list type of HR audit.
Compliance
Focuses on a specific area in the HR function (such as payroll, performance management, records retention, etc.) - list type of HR audit.
Function-specific
(HR Audit Process) - Identification of exactly what areas should be targeted for review (such as a comprehensive review of all practice areas or a limited review of the adequacy of a specific process or policy)
Determine the scope and type of audit
(HR Audit Process) - Development of a comprehensive document that elicits information during the inquiry (for example, a list of specific questions)
Develop the audit questionnaire
(HR Audit Process) - Use of the audit questionnaire as a “road map” to collect information
Collect the data
(HR Audit Process) - Comparison of the audit findings with HR benchmarks (such as results for other similarly sized employers, national standards, or internal organizational data)
Benchmark the findings
(HR Audit Process) - Review of data and presentation of summarized findings and recommendations (such as a written report and discussions) for the organization’s HR professionals and senior management team
Prioritization of recommendations based on the risk level (for example, high, medium, and low)
Development of a timeline for required action(s)
Provide feedback about the results
(HR Audit Process) - Development of action plans for implementing the changes suggested by the audit, with the findings separated by order of importance: high, medium, and low
Develop action plans
(HR Audit Process) - Constant observation and continuous improvement of the organization’s policies, procedures, and practices (such as continuous monitoring of HR systems to ensure that they are up-to-date and have follow-up mechanisms)
Foster a climate of continuous improvement
