Demonstrating the Value of HR

Question 1

What are some important benefits of measuring and reporting results for HR?

Answer 1

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.

Question 2

What are KPIs and how are they established?

Answer 2

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.

Question 3

___________ _______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.

Answer 3

Balanced scorecards

Question 4

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.

Answer 4

department objectives and performances

Question 5

What are the four perspectives of a balanced scorecard?

Answer 5

Financial, customers, internal business processes, and learning and growth.

Question 6

In the financial perspective part of a balanced scorecard, how does this perspective contribute?

Answer 6

Financial: develop alternative staffing strategies to provide more flexibility to meet shifts in production demands.

Question 7

In the Customer perspective part of a balanced scorecard, how does this perspective contribute?

Answer 7

Customers (other functions and employees): Provide easier access to HR services, including consultation with functional leaders.

Question 8

In the Internal business processes perspective part of a balanced scorecard, how does this perspective contribute?

Answer 8

Internal business processes: apply technology to increase efficiency and capture data.

Question 9

In the Learning and growth perspective part of a balanced scorecard, how does this perspective contribute?

Answer 9

Learning and growth: make sure that future leaders will be available across functions, throughout the organization.

Question 10

For an HR balanced scorecard to be effective, it must:

Answer 10

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.

Question 11

_____ _____ 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).

Answer 11

HR Metrics

Question 12

Ratio of lost days to number of employees

Answer 12

Absence Rate

Question 13

Comparison of budget to actual assignee costs

Answer 13

Accruals

Question 14

Percentage of applicants who proceed to the next step of the selection process

Answer 14

Applicant Yield Ratio

Question 15

Total costs of hiring divided by number hired

Answer 15

Cost per hire

Question 16

Measure of various different customer opinions across services offered by HR

Answer 16

Customer Satisfaction

Question 17

Ratio of the number of HR staff retained to number of overall full- time staff retained

Answer 17

HR staff per full-time employee

Question 18

Ratio of employment-related expenses to revenue minus nonemployment expenses

Answer 18

Human capital return on investment

Question 19

Revenue minus nonemployment expenses divided by number of full-time employees

Answer 19

Human capital value added

Question 20

Percentage of key talent retained

Answer 20

Key talent retention

Question 21

Percentage of internal promotions

Answer 21

Promotion pattern

Question 22

Proportion of selected applicants who are later judged to be successful on the job

Answer 22

Success ratio

Question 23

Economic benefit of enhanced performance minus costs of developing, producing, and delivering training

Answer 23

Training return on investment

Question 24

Number or percentage of employees moving across divisions to new jobs

Answer 24

Transfer

Question 25

Costs associated with separation, vacancy, replacement, and training

Answer 25

Turnover costs

Question 26

Proportion of exiting employees to all employees

Answer 26

Turnover rate

Question 27

Costs of substitute labor (temporary workers, contractors, outsourcing partners) minus wages and benefits not paid because vacant

Answer 27

Vacancy costs

Question 28

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.

Answer 28

HR audit

Question 29

What do audit results indicate?

Answer 29

They identify gaps, which can then be prioritized for corrective action.

Question 30

List four common types of HR audits:

Answer 30

Compliance, best practices, strategic, and function-specific.

Question 31

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?

Answer 31

Strategic

Question 32

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.

Answer 32

Best Practices

Question 33

Focuses on how well the organization is complying with current employment laws and regulations - list type of HR audit.

Answer 33

Compliance

Question 34

Focuses on a specific area in the HR function (such as payroll, performance management, records retention, etc.) - list type of HR audit.

Answer 34

Function-specific

Question 35

(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)

Answer 35

Determine the scope and type of audit

Question 36

(HR Audit Process) - Development of a comprehensive document that elicits information during the inquiry (for example, a list of specific questions)

Answer 36

Develop the audit questionnaire

Question 37

(HR Audit Process) - Use of the audit questionnaire as a “road map” to collect information

Answer 37

Collect the data

Question 38

(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)

Answer 38

Benchmark the findings

Question 39

(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)

Answer 39

Provide feedback about the results

Question 40

(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

Answer 40

Develop action plans

Question 41

(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)

Answer 41

Foster a climate of continuous improvement