Monday, April 25, 2011

5 HR Metric Pitfalls to Avoid










Over the last few years, I have seen many dashboards, scorecards and metrics from a wide range of companies. The lessons learned leading up to a dashboard are so valuable. So for those of you that are just starting your metrics journey, I have a list of 5 pitfalls that if avoided can make your journey a lot more successful.

1) TOO Many Metrics
2) Ignoring your metrics
3) Measuring the WRONG things
4) Metrics that are not understandable by Joe Manager
5) No accountability

Let's briefly take a look at these...

Too many metrics: I never will forget asking a HR VP to see her metrics last summer. She in turn handed me an Excel workbook with almost 500 measures. Who can focus on 500 measures at a time? I asked who received these metrics and she told me they went to the Executive team, but they never did anything with them. Shocker! LESSON LEARNED: Make sure your metrics are reasonable in number and are tied to organizational strategy (closely related to point 3 above). I get asked all the time what is the right number of metrics? I don't know that answer as it depends on industry, strategy, organization size, etc. I know it's not 500 no matter how big you are!

Ignoring your metrics: I can remember another instance when asking about metrics and the HR VP told me she wasn't sure why they kept measuring as no one did anything with the data. Getting the right measures is just HALF the battle. Making sure ACTION is taken on the results is the other half of the battle. It is all well and good that you have a nice, new dashboard, but if no one cares or takes any action, that effort is all in vein. How can you get management engaged? LESSON LEARNED: Show them WIIFM. If they know how those metrics DIRECTLY impact their department and/or their goals and objectives, then a crazy thing happens...managers will pay attention. And if you hold them accountable...they HAVE to pay attention. (see point 5)

Measuring the wrong things: This pitfall is the most frequently occurring. I see this time and time again. An HR professional understands the need for metrics and/or the CEO has asked for them. The HR person then googles HR metrics and picks out some that "look good." Bad process. You must start at your organizational strategy and work your way down from there. If metrics are not linked to where the organization is going....then you may as well measure nothing. Sure, you have tracking measures like time to fill and cost per hire, but those are linked to HR efficiency that has a link to financial performance, which is a part of any strategy. But understanding how a company's human capital is contributing to goal attainment is critical. LESSON LEARNED: Use a strategy mapping process to ensure you are measuring what matters.

Metrics that are not understandable by Joe Manager: Many times we are so involved in our own data that we forget that it needs to be "consumed" by others. In the HR arena, that usually is line management. For managers to take action on things like turnover or engagement, they need to actually be able to understand the data. Distributing huge reports with tables and rows of data is not an effective way to communicate with managers. LESSON LEARNED: Use the KISS and Killer Slide concepts. Keep data simple by using color and pictures. Keep the "big aha" to 1-2 slides, showing impact rather than just data.

No accountability: This one makes me crazy. If you don't hold people accountable for actions, then guess what... nothing happens. It is just like when I was a little girl and was told don't leave your yard. That was all I was told. So, what did I do...bolt every time. Had I been told, if you leave the yard, "you will get the biggest spanking ever," that might have had a bearing on my decision. Seriously, if we tell managers to reduce turnover and increase engagement but don't back that up with rewards and recognition, do you think they will work hard at doing those things? LESSON LEARNED: Make sure metrics are linked to your performance management and rewards and recognition programs.

What other pitfalls have you encountered in your experience? There are others....I just wanted to start the conversation...do tell!!!

7 comments:

Traci Cuthbertson said...

Re: Joe Manager - Not only should we make it easy for him to understand the data, we must also make sure he knows how to turn what he learns into a plan of action.

Too often the focus is on staying off the exception list, rather than how to use the data to make a more informed decision.

Cathy Missildine-Martin, SPHR said...

Traci:

Thanks for reading and providing your feedback. I so agree. Don't you think that action planing piece is a great way for HR to provide expertise to line management? Managers are so busy managing that they often do not spend much time on the planning piece. What are your thoughts?

Cathy

Anonymous said...

Great stuff! WFM (Workforce Management) is the overall goal of both HR, Operations and Finance. whether you look at it from a performance, cost or production management viewpoint, it is all WFM. As you pointed out, the metrics measured must be put into action and HR plays a significant role in both developing the metrics, training managers to use them and helping devlop action plans to make their business better - from all 3 viewpoints above. What a great way to solidify your seat at the Executive Table.
Thanks for the post Cathy!

Cathy Missildine-Martin, SPHR said...

Thanks for reading and commenting. I agree there is no better way for HR to be strategic than making sure action is taken so performance is increased.

Cathy

Traci Cuthbertson said...

Cathy,
Yes, I certainly agree that these are opportunities for HR and Training to step up to the plate and add value.

While we're doing a better job of answering, "so what?"--such as my involuntary turnover of new hires was higher than company average and it's affecting my P&L bottom line.

We need to take that one step further and answer, "now what?"--Are we attracting the right talent? Do I need to improve my interviewing skills? Do we need to revise the onboarding and new hire training process?

Anonymous said...

I couldn't agree more in terms of the importance of making sure that the metrics used are understood by all levels from employees to management.

Before identifying metrics, it's important to analyze the strengths, weaknesses, opportunities or threats within the department. Bring these to your meeting. Then use strategy mapping the processes.

Perhaps management doesn't fully understand the current process in place or how each individual department affects another.

It's possible that HR is hiring quality people but that the problem resonates from an upper level management issue that you are completely unaware of. You said involuntary turnover is higher than the company average. So why is this the case?

At this point unless the various levels are brought together as one to discuss the possibility, it may or may not be a HR issue. It's difficult to identify if it's completely an HR issue. (I'm not saying it is or it's not but providing another option)

Management and team members must understand the problem that exists within each level. In this particular situation, assuming we are only viewing it from HR, the HR management, supervisor team must define the problem. Then identify criteria that will be used to measure progress at all levels.This is where the metrics are clearly identified. Remember each member MUST understand the metrics and the relationship it has in terms of measuring whatever it is we are measuring. These metrics must be consistently used on a continuous basis to determine progress. So that solutions within the department are quickly identified and improvements can be made. The tools and tactics used in the department place need to align with the department/organizations overall goals.

Yes, managers are busy, but as we all know, training employees and hiring them is not cheap. We can't afford not to hold ourselves to a higher level of accountability.

Do you need to improve your interviewing skills? I believe that any improvements that are necessary will be clearly identified in the research phases. Find out if turnover is high for a specific reason? Do you follow up with supervisors to find out if the employee was just not a fit for the organization? Do you find out what the employee's perspective was? Are they leaving because of a root problem being supervisor issue, supervisor's perspective? Is it a problem within the company or is it economics that are leading to the high turnover? What types of training do we offer? Are you cutting corners when hiring? Have you looked at what similar organizations of your size are doing and measured your current status against theirs? Look at your ability to compete with them, are they doing anything differently than you are? There are many different ways to identify and measure these questions, the right one just may have to be found in a meeting.

Perhaps process mapping will help this too. Take post it notes and look at what the hiring process in place is write each one down and put it on the board or wall in front of the meeting, identify time spent at each level, look for any issues or concerns, problems etc. Identify the cost of hiring, losing employees. What type of employees are being hired? This may also help.

The problem may be found easily by using this tool. Either way, I'm sure you will determine what is and isn't a problem within the department. Think of it in terms of a process led cause and effect analysis. Measure processes using the right tools and metrics then continuously track progress resulting in improving HR's value and obtaining quality results.

Cathy Missildine-Martin, SPHR said...

Thank you so much for reading and providing such thoughtful feedback. I love the tools you mention especially the strategy and process mapping. WE use those a lot.

Thanks again
Cathy