Dear Workforce How Do We Establish Realistic Goals for New HR Metrics

Dear Shooting High:

Setting up metrics for human resources is a big step toward becoming a high-performing organization. Research shows that companies using talent management metrics are far more likely to perform well in the marketplace.

But what things do you measure? It depends on your company’s size, its ability to capture meaningful data, and the goals established both for HR and the organization as a whole. Finding out from your internal customers where you stand, and then setting goals to strengthen the perception of HR as a service provider, is a logical place to start.

It also pays to think more broadly about measuring your company’s overall talent management. You can learn a lot by looking at your hiring process. How quickly positions are filled is only one way to look at hiring. Take it up a level and examine how well you fill open positions. To determine this, check the performance ratings of newly hired workers at 12 months. Then set a goal to improve the performance of new employees through more effective hiring processes, and measure new-hire ratings periodically to see how the company is faring. This takes the perspective off HR as a business partner, and gets the rest of the organization to “own” the process and align itself behind talent management.

Or you could look at turnover rate. It is easy enough to see changes in this number over time, but tracking “regrettable” turnover—employees who left whom you longed to retain—and setting goals to reduce that number through better management of talent will produce better organizational results.

To use metrics to become a top-performing company, keep in mind a few guidelines:

• Start by looking at your current workforce metrics. Can you organize your measures so they support one another and work together to create a coherent story? Can you explain how things work now by looking at the trend lines? Can you explain how improvements in one area lead to improvements in other areas?

• Determine what you want to accomplish. Work with senior management to help them understand HR metrics. Get their input to be sure your metrics align across the company. You will need to put resources behind the task of calculating the metrics you intend to watch, such as quality of hire or “regrettable” termination rate, so be sure to explain what you will measure and how you will measure it. Help your management to understand and buy into the concept of metrics.

• Put a plan in place to improve your metrics over time. Be aware that setting goals is rarely a 100 percent proposition. More likely, your goals should be based on where you are now, and where you reasonably hope to be as a result of planned improvements. This implies goals for continuous improvement. By working with senior management at the front end, you will be more successful in engaging managers across the organization in reaching improvement goals.

• Communicate results in a way the people can understand. Skip the heavy quantitative charts and paint a clear, simple picture so your metrics have meaning and impact. Publish success stories in your company newsletter. Focus on programs and actions that are making a positive difference to the company’s success. Show how things are changing for the better through the use of measurement.

SOURCE: Patsy Svare, managing director, the Chatfield Group, Northbrook, Illinois, July 6, 2010

LEARN MORE: Please read how to compare your company’s HR metrics against numerous widely respected benchmarks.

Workforce Management Online, August 2010 — Register Now!

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