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Measuring the Effectiveness of Human Resource Management.


Measuring the Effectiveness of Human Resource Management.

 

In a world where everything is about organizations bottom line, it is important that the effectiveness of HRM systems are measured and evaluated from time to time. As it comes at a high cost and is needed to be updated as the everchanging pattern of global trends and needs vary instantaneously.

When it is ineffective, you’re at risk of hiring the wrong people and losing valuable employees. You might even waste time and money on various processes which are not in-line with the needs of your organisation.

The implicit assumption is that if HR is done well, this will somehow make organisations perform more effectively (Ferris et al., 1998)

How to measure HR effectiveness?

Figure 01

You will need to look at some key performance indicators (KPIs). The exact KPIs you choose might vary slightly depending on the goals of your company‌. 

Eg. A larger company could include internal mobility among these KPIs. But these numbers could mean little for a small start-up that has only been in business for a few years.


Figure 02

Key indicators of HR effectiveness -

  • Employee satisfaction - one-on-one meetings & exit interviews.
  • Time-to-hire – the ability to create systems to attract the best candidates.
  • Staff Turnover rates - this can reflect different problems in an organization from poor HR processes to defective company culture & pay inequities.
  • Diversity & inclusion metrics – measure the outcomes & progress of your DEI efforts, assign goals, develop accountability and ensure transparency.  

Generally, organization would retain their personnel for a specified period to utilize their skills and competencies to complete certain projects or execute tasks. In another word, we can understand it as employee retention where the scope of task, is however, often larger than a simple task and more preferably a job in real world. Retaining the desirable employees beneficial to an organization in gaining competitive advantage that cannot be substituted by other competitors in terms of producing high morale and satisfied coworkers who will provide better customer service and enhanced productivity, which subsequently resulting in sales generating, customer satisfaction, smooth management succession and improved organizational learning (M. Heathfield, 2005)

All of the above metrics help you to objectively determine how successful or unsuccessful key HR activities have been in your organization. They also help to give notifications on areas that need improvement, as well as strengths of your HR team. All of this intel can be used to make data-based decisions about HR team staffing, resources and strategic direction. 

Conclusion –

If the department in which your organization is empowered with handling your human resources which is the back bone of an organizations structure is ineffective.What can you except the outcome to be? 


Figure 03

References

Ferris, G.R., Arthur, M.M., Berkson, H.M., Kaplan, D.M., Harrell-Cook, G. and Frink, D.D. (1998). Toward a social context theory of the human resource management-organization effectiveness relationship. Human Resource Management Review, 8(3), 235-264.

Available at : https://comum.rcaap.pt/bitstream/10400.26/22837/1/DEVELOPMENT%20CIEO.pdf

[Accessed on  05.04.2023]

 

M. Heathfield. (2005)Effects of pre-interview beliefs on applicant's reactions to campus interviews. Academy of Management Journal, 40(4), 947-966.

Available at : https://comum.rcaap.pt/bitstream/10400.26/22837/1/DEVELOPMENT%20CIEO.pdf

[Accessed on  05.04.2023]

 

 


Comments

  1. Carolin RichwayApril 11, 2024 at 10:37 PM

    In today's profit-driven world, ensuring the effectiveness of HRM systems is paramount for organizational success. Regular measurement and evaluation of HRM practices are essential for aligning strategies with business objectives and optimizing performance. By prioritizing this evaluation process, organizations can identify strengths, address weaknesses, and ultimately enhance their bottom line.

    ReplyDelete
  2. Gayan AriyarathnaApril 14, 2024 at 10:53 PM

    We can use strategic table for measuring HR Effectiveness. we can add following success metrics to the table.

    Time-to-hire, Cost-per-hire, Employee engagement rate, Revenue-per-employee, Employee Net Promoter Score (eNPS), Regrettable turnover rate, Manager effectiveness

    ReplyDelete

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