How to Use HR Metrics Effectively
How to Use HR Metrics Effectively
In a world where increasingly HR is asked to prove its value and provide measurable results, there is an ideal opportunity to align HR and organisational metrics to strategic business decisions. Having chosen the right measures there is often the even bigger challenge of using them to lever change, add business value and gain strategic advantage.
“We measure ourselves to death” and “What more do you want us to measure?” are comments we frequently hear. It is not, however, about taking a lot of measures and certainly not about taking more! It’s about taking very few measures, but making sure that those are the few that will truly add value.
Do you know why you take the measures you do? Do they provide key information that drives action? Do these actions result in changes? Generally the answer to these questions is a resounding ‘No’. Sometimes measures are taken simply because they can be collected, or because they were, at some point in the past, considered to be ‘useful’! What we measured last year is unlikely to be what we need to measure today! Once those measures are taken what happens to them?
Effective use of metrics provides an excellent opportunity for HR, and increasingly HR Business Partners, to engage with the line, focus efforts and deliver change.
1. Measure what is important
With so many measures to choose from the key is to make a direct link between these and the organisational goals. You should be prepared to change what you measure to keep pace with the organisation’s priorities.
And less is often more. Select a few meaningful measures that are more likely to be used effectively. Our experience is that organisations who have streamlined their HR metrics to five or six key measures are having real success in using them with their business clients.
2. Involve Key Stakeholders
Involve the key stakeholders early on in identifying these key metrics. This increases the likelihood of their buy-in and the chances of relevant actions being taken as a result. Help them to understand how having these in place will help them to make a difference. Most importantly, listen and respond to their views!
3. Work out the implications
Consider what an increase or decrease in the measures mean and identify the implications in terms of finance or service delivery. For example there might be a target to reduce absence by 10%, but what does that actually mean in financial terms. By translating the metrics into costs and targets and into organisational benefits it becomes much easier to engage the business in making the necessary changes to improve them.
4. Drill down to meaningful chunks
It is important that the measures mean something to the different areas within the organisation to which they apply and to the managers who will need to own the changes. It is a mistake only to measure in high-level terms, such as organisation wide recruitment figures. It is interesting perhaps for the Board and means you can track overall progress, but it is more difficult to effect change. By making sure that the measures are drilled down to meaningful chunks that relate to individual managers, it is easier to engage them in identifying appropriate solutions.
5. Convince and Influence – there is a problem worth solving
A key part of being an HR Business Partner is to influence the business. In the case of metrics it’s about making a business case and convincing the line why action is important. In an ideal world the numbers perhaps should speak for themselves – but there are often conflicting priorities in organisations and HR professionals have an important role in influencing action. HR can borrow a great deal from sales techniques here - action can be inspired through intelligent questioning – what the problem is and what the implications are of ‘not solving’ that problem. This can make the line sit up and take notice as something they need to address. Once you’ve got their attention and commitment – exploring the benefits and potential solutions becomes much easier.
6. Dig deeper and explore the root causes
When looking at metrics and headline numbers, it’s easy to leap to quick fix solutions. However, underneath most headline numbers the causes are often more complex. It is easy to focus on the numbers and actions to remedy them – potentially ignoring the root causes of the problem. For example, inability to keep staff can be blamed on local employers providing higher wages. However, upon further investigation, this can be due to first line managers making no real efforts to integrate the new starts into the business, leaving them instead to their own devices. Digging a little deeper can provide rich information! We recommend thoroughly exploring the issue to uncover the real causes, which are often dynamic across the whole organisational system.
7. Set achievable goals for improvement
A cornerstone of the change process is to set achievable goals. Measurement data is historical and not worth anything if nothing happens as a result. By setting achievable goals with a clear plan of action, activity can be focussed on making change happen and progress can be tracked.
8. Own the goals in partnership with the line
Although the goals can be owned in partnership between HR and the line, it is important that the line take the lead on them. If they are seen to belong solely to HR, managers will not have the same commitment to making the changes required. HR’s role is to facilitate the discussions and to provide support. Increasingly organisations are creating shared goals between HR and the line – ensuring a real Partnership approach.
9. Ensure action takes place as a result
Having set realistic goals it’s important to have a solid plan to ensure that action takes place. This is where change management and project management disciplines come into play. It’s not enough to just keep measuring things on a monthly or quarterly basis and hoping they will improve!
10. Keep the momentum going
Publicise success and encourage the activity to keep it going. Many initiatives run out of steam after the first wave of activity. The quick wins and sustained changes should be communicated and rewarded. The targets based on improving the measures and changing these should become ever more challenging. Reward success and publish ‘wins’.
develop uk’s Leveraging Organisational Metrics workshop takes place on 9 February 2006
Judith Strange and Shirley Dalziel www.develop.uk.com or email info@develop.uk.com
How to Use HR Metrics Effectively - To learn more about this author, visit Shirley Dalziel's Website.
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By Judith Strange and Shirley Dalziel – develop uk, the specialists in HR Business Partnering (www.develop.uk.com)
In a world where increasingly HR is asked to prove its value and provide measurable results, there is an ideal opportunity to align HR and organisational metrics to strategic business decisions. Having chosen the right measures there is often the even bigger challenge of using them to lever change, add business value and gain strategic advantage.
“We measure ourselves to death” and “What more do you want us to measure?” are comments we frequently hear. It is not, however, about taking a lot of measures and certainly not about taking more! It’s about taking very few measures, but making sure that those are the few that will truly add value.
Do you know why you take the measures you do? Do they provide key information that drives action? Do these actions result in changes? Generally the answer to these questions is a resounding ‘No’. Sometimes measures are taken simply because they can be collected, or because they were, at some point in the past, considered to be ‘useful’! What we measured last year is unlikely to be what we need to measure today! Once those measures are taken what happens to them?
Effective use of metrics provides an excellent opportunity for HR, and increasingly HR Business Partners, to engage with the line, focus efforts and deliver change.
1. Measure what is important
With so many measures to choose from the key is to make a direct link between these and the organisational goals. You should be prepared to change what you measure to keep pace with the organisation’s priorities.
And less is often more. Select a few meaningful measures that are more likely to be used effectively. Our experience is that organisations who have streamlined their HR metrics to five or six key measures are having real success in using them with their business clients.
2. Involve Key Stakeholders
Involve the key stakeholders early on in identifying these key metrics. This increases the likelihood of their buy-in and the chances of relevant actions being taken as a result. Help them to understand how having these in place will help them to make a difference. Most importantly, listen and respond to their views!
3. Work out the implications
Consider what an increase or decrease in the measures mean and identify the implications in terms of finance or service delivery. For example there might be a target to reduce absence by 10%, but what does that actually mean in financial terms. By translating the metrics into costs and targets and into organisational benefits it becomes much easier to engage the business in making the necessary changes to improve them.
4. Drill down to meaningful chunks
It is important that the measures mean something to the different areas within the organisation to which they apply and to the managers who will need to own the changes. It is a mistake only to measure in high-level terms, such as organisation wide recruitment figures. It is interesting perhaps for the Board and means you can track overall progress, but it is more difficult to effect change. By making sure that the measures are drilled down to meaningful chunks that relate to individual managers, it is easier to engage them in identifying appropriate solutions.
5. Convince and Influence – there is a problem worth solving
A key part of being an HR Business Partner is to influence the business. In the case of metrics it’s about making a business case and convincing the line why action is important. In an ideal world the numbers perhaps should speak for themselves – but there are often conflicting priorities in organisations and HR professionals have an important role in influencing action. HR can borrow a great deal from sales techniques here - action can be inspired through intelligent questioning – what the problem is and what the implications are of ‘not solving’ that problem. This can make the line sit up and take notice as something they need to address. Once you’ve got their attention and commitment – exploring the benefits and potential solutions becomes much easier.
6. Dig deeper and explore the root causes
When looking at metrics and headline numbers, it’s easy to leap to quick fix solutions. However, underneath most headline numbers the causes are often more complex. It is easy to focus on the numbers and actions to remedy them – potentially ignoring the root causes of the problem. For example, inability to keep staff can be blamed on local employers providing higher wages. However, upon further investigation, this can be due to first line managers making no real efforts to integrate the new starts into the business, leaving them instead to their own devices. Digging a little deeper can provide rich information! We recommend thoroughly exploring the issue to uncover the real causes, which are often dynamic across the whole organisational system.
7. Set achievable goals for improvement
A cornerstone of the change process is to set achievable goals. Measurement data is historical and not worth anything if nothing happens as a result. By setting achievable goals with a clear plan of action, activity can be focussed on making change happen and progress can be tracked.
8. Own the goals in partnership with the line
Although the goals can be owned in partnership between HR and the line, it is important that the line take the lead on them. If they are seen to belong solely to HR, managers will not have the same commitment to making the changes required. HR’s role is to facilitate the discussions and to provide support. Increasingly organisations are creating shared goals between HR and the line – ensuring a real Partnership approach.
9. Ensure action takes place as a result
Having set realistic goals it’s important to have a solid plan to ensure that action takes place. This is where change management and project management disciplines come into play. It’s not enough to just keep measuring things on a monthly or quarterly basis and hoping they will improve!
10. Keep the momentum going
Publicise success and encourage the activity to keep it going. Many initiatives run out of steam after the first wave of activity. The quick wins and sustained changes should be communicated and rewarded. The targets based on improving the measures and changing these should become ever more challenging. Reward success and publish ‘wins’.
develop uk’s Leveraging Organisational Metrics workshop takes place on 9 February 2006
Judith Strange and Shirley Dalziel www.develop.uk.com or email info@develop.uk.com
How to Use HR Metrics Effectively - To learn more about this author, visit Shirley Dalziel's Website.
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