Investing in your workplace often means investing in HR so they have the resources to hire, train, and develop individuals to help the organization. Once you’ve made those investments, how do you ensure HR stays on track? How do you review HR’s performance?
While there are numerous ways to track the efficacy and efficiency of HR, quarterly reviews are one of the best methods you can choose. Unlike year-end performance review, quarterly reviews allow you to set goals based on the period, make changes to keep teams on track with total goals, and view how short-term changes have been implemented.
Set Quarterly Goals
It’s important to understand what you’re measuring before attempting to do so. If your HR teams are focusing on solving a specific goal, they likely won’t perform well in general metrics. For example, if your organization is suffering a talent retention crisis, you want HR to focus on that. Understanding quarterly goals will allow you to set baselines for what you measure, so you can better gauge if your teams are meeting those goals.
Measuring HR Outcomes
Measuring how well HR is performing involves measuring outcomes. This typically means setting KPIs around employee satisfaction, churn rate, absenteeism, and so on. You can typically measure these using metrics such as Employee Net Promoter Score, employee satisfaction (especially if you have an index), churn rate or attrition or average length of service, and employee productivity. These should be directly linked to existing and stated goals as well as to performance as a whole.
Reviewing HR Service
Is your HR team delivering quality service? How effective are onboarding programs? Are employees being developed and trained at a sufficient quality and scale? What is a sufficient quality and scale? How do employees feel about the service they receive? How do employees rate performance management? You can review metrics such as return on investment, failure rate of new hires, promotion rate (including into higher levels of technical skill), performance of new hires, employee net promoter score, and satisfaction regarding performance benefits.
Efficiency and Effectiveness
How effectively is your HR performing? Measuring efficiency often involves using external benchmarks, comparing results to that of an assessment center, or otherwise using existing baselines to determine what is good or desirable and why. Here, you want to look at return on investment, cost per hire, time to fill vacancies, and validation for processes. You can ask questions like “What channels are we recruiting through and why?”, “What are we paying per hire”, “how much do we pay in training costs”, “how effective is training”, and so on.
What About Compliance?
Compliance is one of the most important aspects of HR and it is one you should not ignore. Here, you want to look at policies and practices, how well employees are trained on those policies and practices, how well employees understand them, and how well HR meets equality and diversity obligations. Key metrics such as what percentage of employees who have taken training, diversity of employees, gender pay gap, diversity initiatives, and so on can be extremely useful.
Measuring HR performance can be difficult if you haven’t set goals or priorities, simply because you won’t know what to measure. In most cases, your HR teams should aim to offer a balance in recruitment, people development and training, leadership development, and managing policies, practices, and performance.