What’s Wrong With HR Metrics? Pretty Much Everything!

人力资源不能提供即时警报 甚至是最好的前瞻性的预测分析不能预测中存在的一些主要问题或机会。在这些情况下,人力资源能力的度量标准必须提醒决策者,这样他们就可以立即行动。在案件的机会,这可能包括后立即通知经理招聘功能知道关键员工的竞争对手是离开(以便它们可以被招募的,即使在征收打开),或当一个竞争对手要进行一项大裁员,使招聘剥夺了他们的人才容易多了。

Or why HR metrics need to focus on helping managers to improve their people management decision-making For at least the last decade, HR departments around the world have been pouring tons of time and money into developing HR metrics. Unfortunately, that effort has largely led to continued levels of frustration and, at best, a large number of what I call so-what metrics with little strategic impact. It doesn t matter whether your HR metrics were provided as part of the software that you purchased or if they came from a major HR consulting firm; the results have been the same: dismal at best. After three plus decades of thought leadership and research in HR metrics, I ve concluded that the current approach is an abject failure and that HR simply can t continue on this current painful path. The time has come to completely disregard today s approach and to look to other functions that have had significantly better luck influencing executives with their metrics (i.e. customer service, supply chain, branding, and finance, to name a few). Even if you are currently happy with your metrics, this article should provide you with sufficient reasons as to why you should rethink your approach and to shift toward what I call people management decision-making metrics, a far superior approach that focuses on helping managers improve their people-management decision-making. The Top

20 Major Faults With Most HR Metric Approaches It is possible to avoid metrics altogether. For example, you can find out how well you re doing in HR simply by counting your budget increases, your new headcount increases, or tracking how often you are mentioned in the annual report. However, if your goal is to improve the quality of your people management decisions and be metric driven, you need to assess your current metric approach using the following

20 faults as assessment factors. Past vs. Forecasting Faults Reporting what happened yesterday has little value Almost all HR metrics report history, because they tell you what happened last quarter or even last year. Learning that your turnover rate was 6% last year has little value in a fast-changing world where your turnover rate could double next quarter. The best metrics cover your current time period. We don t provide forward-looking metrics or predictive analytics Even today s metrics may be of less value than future forecasts. This is because every decision-maker really wants to know what problems or opportunities will occur over the next week or months so they can work to prevent them. However, HR simply doesn t provide these forward-looking predictors, which are known as predictive metrics or analytics. As a result, decision-makers are forced to quickly react to suddenly occurring people-management problems because they weren t given a chance to prevent or mitigate them as a result of forecasts. HR needs to implement predictive HR (which follows the predictive policing model), where analytics tell HR and managers where they can most likely expect today s and tomorrow s people-management problems. Business Impact Faults We don t provide dollar and goal impacts in our metrics Long before there was an HR function, executives and managers have been in love with dollars. At least outside of HR, everyone knows that a problem or opportunity won t be considered by executives as critical unless it has a direct dollar impact on corporate goals (i.e. revenues, sales, or profit, all of which are measured in dollars). HR does report less-important cost metrics (i.e. cost of a hire), but cost metrics do not impact topline growth (i.e. revenue growth), the single metric that CEOs care most about. HR needs to calculate its direct dollar impact on each major corporate goal like revenue, but also customer service, innovation, and quality. Although almost everyone in HR assumes that this can t be done, other soft business functions like branding and customer service have successfully worked with the CFO s office to translate their standard what-happened metrics so that they reveal their dollar impact on revenue and business goals (I call them business case metrics ). You can, for example, report that your employee turnover has increased 12% until you re blue in the face and no one will pay much attention. But the minute you translate it into dollars, losing key staff reduced revenue by $17.2 million everyone will demand a solution immediately. Continually providing business case metrics will not only increase HR s credibility but will also increase your funding. HR doesn t calculate the dollar cost of doing nothing and excessive cost-cutting Weak metrics and delayed reporting together can result in simple people-management problems exploding into major catastrophes, because no action was taken. One of the best ways to speed up decisions and action is to calculate and report the cost of slow decision-making or doing nothing. Just like a cancer in the body, delayed decision-making can turn solvable problems into catastrophes. In the same light, HR must reduce uninformed HR cost-cutting decisions by calculating and reporting the dollar impact of excessive cost-cutting in people-management programs (e.g. reducing safety training may save a few dollars in the short term but the long-term increase in accident costs and insurance make the initial savings insignificant). We don t calculate risk metrics One of the hottest areas in business is calculating metrics for major business risks. Unfortunately, most HR departments simply don t have a capability in the risk area. I m not referring to potential legal risks. Instead, we need to calculate the major risks involved in more impactful problems like key employee turnover, weak hiring, poor employee development, a lack of leaders, and the tremendous cost associated with retaining bad-managers. The most common business metric, ROI, isn t even calculated -- The most important and commonly calculated metric in any business function or program is its ROI, which is simply the ratio of its cost compared to the dollar of return from that expenditure. Unfortunately, most HR functions don t even calculate their ROI. The formula for this primary HR metric (a.k.a. workforce productivity) is the ratio of corporate profits compared to total labor and HR costs combined. Not only should this powerful ratio improve each year but it should be superior to the workforce productivity results produced by your competitors. Decision-making and Action-related Faults HR metrics do not drive action One of the primary reasons for developing metrics is to drive actions that result in continuous improvement. In fact, I classify HR metrics into two types, 1) so-what metrics (i.e. that s interesting) and 2) action metrics, which result in someone taking an action after reading them. If HR metrics don t actually change behavior, why do we have them? It s quite easy to determine if your metrics drive action. Simply distribute your metrics in the normal way and then interview your users a month later and ask them simply what major actions did you take as a result of these metrics? If they didn t act or change their decision-making (which is the normal answer), you have failed. HR metrics are not designed for decision-making To further complicate the metric problem, when HR reports its metrics, they are not even provided in a decision-making format. The metrics from HR are not accompanied by information that can drive decision-making (i.e. what decision must be made?;