Despite the growing strategic importance of the workforce, measuring the impact of Human Resource initiatives on key business results is far from common. In a recent survey of top executives only 18% regularly receive evaluations of the effectiveness of training interventions. 40% don't measure the impact of HR initiatives against employee turnover, employee satisfaction, productivity or quality. And yet we seem awash with performance data. Are we measuring the wrong things that do not add value to the organisation? Let's look at a few critical areas. Recruitment – Busy managers want to recruit appropriately skilled people quickly and efficiently. How long does it take to recruit a new employee in your organisation? You don't need a fancy computer system to dip sample the previous 12 months recruitment and measure from commission to the offer letter going out. I have worked in organisations where our first samples showed an average of 25 weeks which is shameful. We moved to 7 weeks within a few months by. Simplifying the commissioning process for managers to 1 side of A4. Agreeing shortlist and interview dates in advance and stating them in the recruitment literature. Completing all reference checks medicals etc as you go along not waiting for the end of the process. Hardly rocket science! We should then measure the effectiveness of our recruitment by asking candidates (unsuccessful as well as successful) what the experience was like for them. Recruitment is a key mechanism for improving the reputation of the organisation or damaging it when we do this badly. We then need to know if we recruited the right person and how they are performing. We also waste huge amounts of time and energy on appraisal. We reinvent systems on a never ending basis and record how many people have had one. This tells us nothing about individual team and organisational performance. We need to measure performance within the relevant context and this can only be done by managers working closely with their teams using open two way feedback and setting and agreeing expectations on a regular basis. The appraisal system is treated as if it is the Holy Grail for improving performance but it does nothing of the sort. Performance in organisations is improved by first understanding the context of the business by detailed analysis of the problem, and a shared view of what "good" performance looks like. This will usually identify a multitude of issues that will improve performance, including Strong leadership Clarity of accountabilities An open culture where staff can give of their best Two way feedback, And yet we continue to measure how many appraisals have taken place, what a waste of time. The best organisations measure the impact of their HR investments. They implement metrics that help them identify how their initiatives affect the way that groups and individuals operate and how that impacts on their customer base. The HR function is coming under increasing pressure to demonstrate that it adds value to the organisation. There is a move away from seeing people primarily as a cost towards showing in transparent terms how the right HR interventions and investment can add value to the business. We know that we spend up to 80% of our budgets on people related issues. Lets use the examples of successful businesses like Tesco's who recognise that the quality of the customer experience is the key to success and that by delivering against a number of "people promises" it seeks to create an environment characterised by loyal and motivated staff. So lets stop counting and measuring without thought and spend our time creating value for our customers through engaging our staff.
