Wednesday, August 6, 2008

Activity vs. Value Measures

I have just read an article on HR Executive Online, entitled, Barriers to Becoming More Strategic. Here is an exert:

"HR should also develop a strategic plan with measurable performance metrics to demonstrate how their work contributes to the agency's mission. Potential metrics, Davidson says, include:

* Cost and time per hire.

* Number of employees who have attended diversity training.

* Number of employees who were hired from a specific target group -- veterans with disabilities, for example. "

I will argue that the above mentioned metrics will be a huge barrier to becoming strategic. Those metrics are just about activities . They are important to track regarding productivity, costs and compliance. They are important for an HR Department to monitor. But my question is, "What was the result?" It is like having half of the story.

What really matters are the results. To be strategic HR must focus on the Value Metrics.

So instead of cost per hire and time to fill, focus on performance, productivity and revenue increases of new hires.

Instead of #'s of employees that attended a training session, focus on what business results what achieved after that new knowledge was obtained (ROI).

Instead of just looking at hires from specific groups, look at retention and performance of those groups as well.

Wouldn't you rather go to your CEO and say, "AS a result of our Customer Service Training...our customer satisfaction index increased 5% last quarter and we are ahead of last year's budget on new business by 14%, our CSR retention rate is 87% resulting in an increase of revenue per employee of $1200.


You could say, "We trained 142 employees last quarter." I am sure that will get you invited to the next Executive Meeting that you have been dying to attend.

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