Monday, May 20, 2013

Now is NOT the Time for A Basic Approach to HR Measurement

My colleague Ed Nangle, sent me a link to a blog, entitled, "HR Metrics: Is it Back to Basics?" Of coarse that title got my attention.  I read the blog, and then read the research referenced in the blog the Hackett Group.

This is the paragraph that really perplexes me:
The Hackett Group's research identified a "back to basics" trend in HR measurement. While cost remains the most common measurement across HR, there is a significant increase in the proportion of companies measuring employee engagement, as HR leaders try to document the value they add. At the same time, the proportion of companies measuring HR transaction errors increased significantly, showing greater efforts to balance cost and quality.
I am dying to know what questions they asked of the survey recipients and even better, how did they reach the conclusion that HR Metrics are getting back to basics.  Back to basics in HR Metrics is definitely not a good thing.  I have spent the last 15 years immersed in this topic.  I have been "preaching" to thousands of HR professionals to "up their game" as far as metrics are concerned.  I am also trying to understand why an increase in measuring employee engagement signifies a "back to basics" approach.

I have a feeling semantics are playing a role in the confusion over this topic.  To me, by definition HR metrics are those that just track activity and costs.  HR Analytics speak to a much higher level of data analysis:

HR Analytics-is the process of combining data mining with business analytics techniques to analyze human resources data.  The goal of human resources analytics is to provide an organization with insights for effectively managing employees so that business goals can be reached quickly and efficiently.  Analytics is also predictive in nature thus allowing for better business outcomes.

So, by just reading the definition for analytics, you can see that there is no way we can get back to basics, that would be like going back to the HR planning picnics.  HR professionals have made so many strides on the analytics front, we have to keep moving forward pressing ahead with valuable insight gathered from the vast amounts of people data we store.

I believe there is definitely a vital need for HR metrics.  We must be sure that all are trains are running on time and running efficiently.  Just like any other department we need our operational data.  But we also must be looking ahead to understand what makes the company profitable and what drives profits in terms of people's productivity, skill sets and behaviors.  Think about if we had accounting data but no financial planning/predications to compliment the accounting side.  What if we had marketing data that only spoke to activities instead of predicting consumer behavior...where would we be?

Now, is not the time to take two giant steps back in terms of metrics/analytics...not when progress is being made and HR's reputation is on the upswing.  It's time to provide the business with the best people inteliigence we that decisions about investments and people can be made with reliable, accurate information.

1 comment:

paraman52 said...

Great article, Cathy! Agree that this is a terminology issue. The companies that are attempting to measure a complex concept like employee engagement are by definition not just dealing with activities and costs (i.e., HR metrics). Employee engagement and its consequences belong to the realm of HR analytics.