Measuring HR Effectiveness

1
Measuring HR Effectiveness

• Audit Approach
• Personnel Indices
• Service/User Reactions
• Analytical Approaches
• Experimental Design
• Cost-Benefit Analysis - Utility Analysis
• Outcome and Process Criteria
• Benchmarking

2
Problems In Measuring HR Effectiveness

• Controlling for Firm and Industry Differences
• Benchmarking firms with different strategies
• Controlling or Individual and Unit Differences
• Turnover and Job Satisfaction Measures
• Cost Allocation Issues
• Lack of line management accountability

3
The Cure

• Identify Organizational Strategy and Objectives
• Low Cost Leadership
• Identify HR Drives
• Labor Productivity, Quality Circles
• Develop Metrics to Assess Key Drivers
• Labor Cost /Total Operating Expense, Turnover,
  Q.C. Suggestions Implemented

4
Bureaucratic View of HR

• Fragmented into sub functions
• Standards rules and procedure focused
• Centralized- coordinated by HR V.P.
• Turf Protectors- Knowledge Hoarders
• Focused on the minutiae of HR

5
HR as a Strategic Partner

• HR should do more and less
• More- strategic guidance
• Less- creation/administration of HR policy

6
Organizing HR Activities

• HR Strategy and Policies
• Implementing HR Strategies
• Record Keeping/Service Delivery

7
Formulating HR Strategy and Policies

• Design of the HR Strategy - Tailoring the
  strategy to specific organizational units
• Determine general policies (rules of HR
  management)
• Pay level, outsourcing, promotion, placement
• Ambiguous Problems, many internal and external
  interdependencies, noisy outcomes, and LT results
• Mixture of star and guardian roles
• Few activities but large proportion of value-added

8
Implementation of Human Resource Strategy and
Policies

• Nontrivial judgement decisions in fitting general
  policies to specific cases
• Who to hire, individual performance appraisals
• Less ambiguity, noisy outcomes, feedback delayed,
  internal interdependencies
• More guardian role

9
Record Keeping and Service Delivery

• Clerical duties
• Enforcing policies that limit managerial
  discretion
• Little ambiguity, immediate feedback, clear
  outcomes
• Mostly foot soldiers role
• Many activities but small proportion of
  value-added

10
Lowest Common Denominator Syndrome

• Too much time spent in record keeping role
• Easier to measure record keeping effectiveness
  than strategic effectiveness
• Attractive to employees with service and comfort
  orientation
• Problem not viewed as legitimate strategic
  partner

11
The Cure Part IDelegate the Mundane

• Outsourcing
• Exp. Benefit Administration Administration
• Employee Services Department
• Exp. Southwest Airlines
• Transfer Activities to Payroll/Comptroller
  Functions

12
The Cure Part 2SHRM as a General Management
Activity

• HR as Educators/ Advisors
• In-field HR Consultants
• Intervening in negative situations

13
Staffing HR

• Gen. Mgrs. with HR Training
• Problem Recruitment
• HR with Gen.Mgr. Training
• Problem Availability