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BUSINESS SCHOOL Noida

MEASUREMENTS IN HR (HR711)
MODULE 2

Developing Measurement Metrics

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BUSINESS SCHOOL Understanding and Noida
Developing the Right Metrics

• Developing the right metrics is essential

for accurately assessing performance,
making informed decisions, and driving
success in both organizations and specific
departments like HR or marketing.
• Metrics serve as measurable indicators
that align with broader business goals,
allowing leadership to monitor progress
and adjust strategies accordingly.
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12 Characteristics
BUSINESS SCHOOL of Developing
Noida
Effective Metric Tools
1. Strategic
2. Simple
3. Owned
4. Actionable
5. Timely
6. Referenceable
7. Accurate
8. Correlated
9. Game proof
10. Aligned
11. Standardized
12. Relevant
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BUSINESS SCHOOL Implementing the Noida

Metrics
• Define Clear Objectives
• Develop the Metrics (SMART)
• Assign Ownership and Accountability
• Implement Data Collection Tools
• Communicate Metrics to Stakeholders
• Monitor Regularly
• Analyze Data
• Adjust Strategies Based on Results
• Review and Revise Metrics
• Report Progress
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BUSINESS SCHOOL Tools for Noida

Implementation
• HRIS (Human Resource Information
Systems) for HR metrics
• BI Tools (Business Intelligence Tools)
like Tableau, Power BI for tracking and
visualizing data
• Project Management Software like
Monday.com or Asana to integrate
performance data into workflows
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BUSINESS SCHOOL Tools to manage the Noida
Implementation of Strategy
• SWOT Analysis
• Balanced Scorecard
• PESTEL
• Ansoff Matrix
• Resource Allocation
• BCG Matrix
• Lean Canvas
• Strategic Allignment
• Strategic Plan
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Benchmarking in HRNoida
BUSINESS SCHOOL

• Benchmarking is a process in which an

organization compares its processes,
performance metrics, and practices
against industry standards or leading
competitors.
• The goal is to identify areas for
improvement, achieve best-in-class
performance, and maintain
competitiveness.
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BUSINESS SCHOOL Benchmarking Contd.Noida
• Definition: Benchmarking is a systematic approach
to measuring an organization's performance against
those of industry leaders or best practices from other
companies. This involves comparing key performance
indicators (KPIs) like cost, quality, productivity, and
customer satisfaction, to develop strategies that
improve efficiency and effectiveness.
• Example: For instance, a company might benchmark
its customer service response time against that of an
industry leader to identify areas where it can improve
its customer support processes.
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BUSINESS SCHOOLTypes of Benchmarking
Noida

• Internal Benchmarking: Comparison of similar

processes, departments, or operations within the
same organization. E.g. Comparing the efficiency
of two sales teams within the same company.
• External Benchmarking: Comparison of
processes and metrics against external
organizations, often direct competitors or industry
leaders. E.g. A company comparing its customer
service performance with that of a leading
competitor.
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• Competitive Benchmarking: A specific type of

external benchmarking focused directly on
analyzing competitors’ performance and
strategies. E.g. Studying a competitor's product
development cycle to improve speed to market.
• Functional Benchmarking: Comparison of similar
functions across different industries, rather than
just within one’s own industry. E.g. A hospital
benchmarking its inventory management practices
against a retail company known for operational
excellence.
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• Generic Benchmarking: Focuses on comparing

unrelated business processes or operations from
different industries to identify innovative
solutions. E.g. A manufacturing firm adopting
customer loyalty practices from the hospitality
industry.
• Process Benchmarking: Involves comparing
specific processes within the organization to
those of other organizations. E.g. Comparing
procurement processes to reduce costs.a
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• Performance Benchmarking: Involves

comparing performance indicators such as
productivity, quality, or cost. E.g. Comparing
operational costs per unit produced with industry
averages.
• Strategic Benchmarking: Comparing strategies
and approaches used by other organizations to
achieve their objectives. E.g. Benchmarking the
digital transformation strategy of a tech leader to
refine your organization’s strategic roadmap.
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BUSINESS SCHOOL Steps of Benchmarking Noida
Process
1. Determine processes to be benchmarked.
2. Determine organizations to be
benchmarked.
3. Gather data.
4. Locate deficiencies.
5. Determine future trends.
6. Reveal results and sell the process.
7. Achieve consensus on revised goals.
8. Establish procedures.
9. Implement procedures and monitor results.
10. Recalibrate benchmarks.
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BUSINESS SCHOOL Best Practices Noida
Example
A vivid example of a best practice is demonstrated by
SRC in Springfield, Missouri. Convinced that everyone is
responsible for the company's success, SRC's
management team trained every employee in "cash
flow management," a tool that has enabled the
company to generate double-digit growth every year
since its founding 12 years ago. SRC has grown in 12
years from one company of 100 employees to 12
employee-owned companies in 16 sites with 750
people. SRC has been named the "Entrepreneurial
Company of the Year" by Inc. magazine for the last
three years. The current turnover rate is less than 1
percent.
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BUSINESS SCHOOL Benchmarking StrategicNoida
Planning
A Few words of caution
•Adopting so-called best practices is a follower’s strategy
•An organization that simply adopts another’s practices
will never be a leader and is likely not to be innovative,
agile or fit for the future
That’s not to say that benchmarking and adoption of best
practices are a waste of time. Its just that they need to
be done with thought and consideration of where and
when they might add value. When used to stimulate
ideas and create changes in outcomes they certainly
have their place.
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BUSINESS SCHOOL Benchmarking HR Noida

1. Identify Key HR Areas to Benchmark

– Recruitment and hiring
– Employee retention and turnover
– Compensation and benefits
– Employee engagement and satisfaction
– Training and development
– Diversity and inclusion
– Workforce productivity
– Performance management
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2. Define HR Metrics for Benchmarking - Select relevant

HR Key Performance Indicators (KPIs) to benchmark:
– Time to fill (average time to hire a candidate)
– Cost per hire
– Employee turnover rate
– Absenteeism rate
– Employee engagement scores
– Diversity ratio (gender, age, ethnicity)
– Training investment per employee
– Average tenure of employees
– Revenue per employee
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3. Choose Benchmarking Partners - Select

organizations for comparison that are similar
in size, industry, or geographic location. HR
benchmarking can involve comparing to:
– Competitors within the industry
– Best-in-class organizations known for
strong HR practices
– Industry reports or databases that provide
benchmarks on HR metrics
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4. Collect HR Data - Gather data internally (from

your HR system) and externally (from
benchmarking partners, industry reports, or
surveys). This could include:
– Employee surveys
– HRIS (Human Resource Information Systems) data
– Industry reports from firms like SHRM, PwC,
Mercer, etc.
– Compensation and benefits data from salary
surveys and benchmarking databases
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5. Analyze Gaps and Identify Improvement

Areas
– Compare your organization’s HR metrics with the
benchmark data
– Identify performance gaps in key areas like
turnover, time-to-hire, or compensation structure.
– Use qualitative analysis to understand the
reasons behind these gaps (e.g., inefficiencies in
the recruitment process, inadequate employee
engagement strategies, etc.).
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6. Set HR Improvement Goals - Based on

the gap analysis, set specific, measurable,
and actionable goals for improving HR
performance. For example:
– Reduce turnover by 15% over the next year
– Cut the average time-to-hire by 10 days
– Increase employee engagement scores by
20% over two years
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7. Develop Action Plans - Create an HR improvement
plan that outlines steps to close the gaps. This may
involve:
– Improving recruitment strategies (e.g., leveraging new
hiring technologies or enhancing employer branding)
– Revamping onboarding programs to improve retention.
– Enhancing employee benefits or compensation packages.
– Fostering diversity initiatives through inclusive hiring
practices.
– Improving employee development programs through
more targeted training and leadership development.
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8. Implement HR Initiatives
– Execute the action plans, ensuring HR teams
are aligned with the new strategies
– Communicate changes to employees and
provide training if necessary to improve
adoption.
– Utilize technology, such as HR software, to
track changes and automate processes (e.g.,
recruitment software for time-to-hire).
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9. Monitor Progress and Adjust - Track

progress using the established KPIs to ensure
that the changes lead to desired
improvements. Regularly measure:
– Turnover rate after implementing new retention
strategies.
– Time-to-hire post-implementation of new
recruitment tools.
– Employee engagement scores after launching
a new initiative.
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BUSINESS SCHOOL Noida

10. Review and Continuously Improve

– After the benchmarking cycle is completed,
review the overall impact and ensure that
continuous improvement practices are in
place
– Regularly revisit the benchmarking process as
industry standards evolve and as the
organization grows
– Consider periodic benchmarking to maintain
HR excellence
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Critical
BUSINESS SCHOOL Success Requirements
Noida
for Benchmarking
• Clear Objectives and Focus
• Top Management Commitment
• Adequate Resources
• Selection of the Right Benchmarking Partners
• Accurate and Comparable Data
• Process Understanding and Mapping
• Actionable Insights and Analysis
• Continuous Monitoring and Review
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BUSINESS SCHOOLBusiness ScorecardsNoida

• A scorecard is a performance
management tool used to track, measure,
and evaluate the performance of various
activities, processes, or functions within an
organization. It provides a comprehensive
overview by breaking down objectives into
key performance indicators (KPIs) and
metrics that align with the organization's
strategic goals.
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BUSINESS SCHOOL Types of ScorecardsNoida
There are 3 main types of business scorecards:
1.Strategic (balanced) - The strategic scorecard allows
businesses to align strategic goals with tactics while
tracking results over time.
2.Operational - An operational scorecard provides a
snapshot into daily activities, helping organizations monitor
operations, identify risks and optimize performance at any
particular moment.
3.Financial - A financial scorecard gives a big view of an
organization’s finances by examining overall financial data
such as sales volumes, profits, and losses over different
fiscal periods.
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BUSINESS SCHOOL Balanced scorecardNoida
• Overview
• The Balanced Scorecard (BSC) is a strategic
performance management tool used to monitor and
manage an organization’s performance across multiple
dimensions, ensuring that both financial and non-financial
aspects are aligned with the overall goals of the business.
• The BSC helps organizations track key performance
indicators (KPIs) in four critical areas: financial, customer,
internal processes, and learning & growth.
• This multi-dimensional approach provides a holistic view of
organizational performance, moving beyond traditional
financial metrics.
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BUSINESS SCHOOL BSC - Origin Noida

• The Balanced Scorecard was introduced in 1992 by Robert

Kaplan and David Norton in their Harvard Business Review
article titled "The Balanced Scorecard—Measures that Drive
Performance."
• Kaplan and Norton developed the BSC in response to the
limitations of relying solely on financial metrics to measure
organizational success.
• The original idea evolved from the concept that financial
indicators measure past performance, whereas organizations
need forward-looking indicators to ensure sustained success.
• The Balanced Scorecard has since become one of the most
widely adopted performance management frameworks
globally.
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BUSINESS SCHOOL
•
BSC - Definition
The Balanced Scorecard is defined as a strategic planning and
Noida

management system that helps organizations translate their vision

and strategy into actionable objectives and measures. It does this
by breaking down strategic goals into four perspectives:
1. Financial: Measures financial performance, including profitability,
cost-efficiency, and revenue growth.
2. Customer: Assesses customer satisfaction, retention, and market
share.
3. Internal Processes: Evaluates the efficiency and effectiveness of
internal operations that directly affect customer value.
4. Learning and Growth: Focuses on employee development,
organizational culture, and innovation to ensure long-term success.
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BUSINESS SCHOOL BSC - Key FeaturesNoida
• Holistic View: Balances both financial and non-
financial metrics.
• Strategic Focus: Links day-to-day activities with
long-term strategic objectives.
• Alignment: Ensures alignment across
departments by integrating diverse performance
indicators.
• Continuous Improvement: Supports
continuous performance review and
improvement through regular monitoring.
 Balanced Scorecard example:
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BUSINESS SCHOOL Strategic map for a JewelryNoida
store
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BUSINESS SCHOOLBalanced Scorecard example:
Noida
Strategic map for an E-Commerce
Business
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BUSINESS SCHOOL HR Scorecard Noida

• The HR Scorecard is a strategic tool used to

measure and align human resource activities
with the broader organizational objectives.
• It connects HR metrics, such as recruitment
efficiency, employee engagement, and talent
management, to the company's financial and
performance goals, ensuring that HR efforts
drive overall business success.
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BUSINESS SCHOOLHR Scorecard - OriginNoida
• The HR Scorecard was developed in the early
2000s by Brian Becker, Mark Huselid, and
Dave Ulrich in their book The HR Scorecard:
Linking People, Strategy, and Performance.
• The key motivation behind the creation of the
HR Scorecard was to bridge the gap between
human resources and business outcomes.
• Key Elements that Influenced Its Development:
– Balanced Scorecard
– Strategic HR Management
– HR as a Value-Adding Function
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Components
BUSINESS SCHOOL of HR Scorecard
Noida
• Financial Perspective – To arrive at the value of the human
assets and total people expenses of the company. E.g.
Compensation and benefits per employee, turnover cost, cost of
injuries.
• Strategic Perspective – It focuses on the measurement of the
effectiveness of major strategy-linked people goals. E.g. HR
budget/actual, change management capability of the organization
• Operational Perspective – To assess the effectiveness and
efficiency in running HR processes that are vital to the
organization. E.g. training cost/employee, lost time due to injuries.
• Customer Perspective – To assess the satisfaction of customers
of HR with their services. E.g. employee perception of HRM,
employee perception of the company (as an employer).
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Benefits
BUSINESS SCHOOL of HR Scorecard Noida

• Focus on leading indicators

HR decisions and Organization’s strategy
HR deliverables
systems implementation
• Encouraging “customers” of HR to become
more self-sufficient
• Providing focus for HR and OD staff
• Identifying the HR deliverables
• Demonstrating HR’s contribution
• Helping HR managers focus on and manage
their strategic responsibilities
• Encouraging HR flexibility and change
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BUSINESS SCHOOL Developing HR Scorecard Noida
• Identify Business Strategy and Goals. E.g. If the business strategy is
to increase market share, HR could focus on talent acquisition, skill
development, and employee retention as part of its strategy.
• Define HR Deliverables (HR outcomes). E.g. Improving employee
retention, increasing engagement, and enhancing leadership
development could be key deliverables.
• Determine Key Performance Indicators (KPIs) (quantifiable and
relevant). E.g. Time to Hire, Training ROI
• Set Targets and Benchmarks (clear, measurable). E.g. Reduce the
time-to-hire from 45 days to 30 days or improve employee engagement
from 75% to 85%.
• Develop Data Collection Methods. E.g. tools such as HRIS,
Performance Management System
• Monitor and Analyze performance. E.g. If employee turnover remains
high despite engagement initiatives, further analysis may reveal
underlying issues such as inadequate compensation or poor
management practices.
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BUSINESS SCHOOL Developing HR ScorecardNoida
Contd..
• Adjust HR Strategies Based on Findings. E.g.
If training ROI is low, consider revising the
training program or investing in new
technologies to enhance learning outcomes.
• Report and Communicate Results. - Regularly
share the results of the HR scorecard with key
stakeholders such as senior leadership and
department heads. Use dashboards or charts to
present KPIs and progress in an easy-to-
understand format.