Need Help with HR KPIs: Can Anyone Share Their Insights or Examples?

Can anyone send me some KPIs for the HR department?

Hi sfkmujahid,

Some of the KPIs for the HR Department could be Employee Turnover, Employee Satisfaction, Absenteeism, and Staff Competency.

Regards,
Leena

I am a new entrant in the field of HR.

So, can you please tell me what does KPI stand for and what is its significance in HR?

Sorry for asking such a silly question...

Hi Kankana,

Let me try to help you.

KPI stands for Key Performance Indicator. They are not specifically linked only to HRD but have to do with the entire organization. Each department/division of an organization usually has set and identified KPIs, which are measurable and quantifiable in nature to measure the success of the organization in terms of the organization's mission and goals. Hence, KPIs can be defined as measurements for an organization's success. KPIs are also known as KSIs, which stand for Key Success Indicators.

For instance, the HR Department could have Employee Turnover as one of its KPIs. The goal for setting this KPI would be to reduce employee turnover. It could be defined numerically for better definition, such as to reduce employee turnover by 5% every year. This KPI could be defined as the total of the number of employees separated from the organization for reasons of resignation or termination divided by the number of employees at the beginning of the year. It could be measured on a fixed time schedule like every month or every quarter.

I guess this will give you a basic idea. If you need any further clarification, feel free to ask.

Regards,

Leena

HR Key Performance Indicators

Frequently used HR Key Performance Indicators include:

FTE = full time employees

Revenue per Employee (FTE)

Assets per FTE

Training Hours per FTE

Training Costs per FTE

HR Department Cost per FTE

FTEs per HR Department FTE

Acceptance Rate

Average Cost per Hire

Absence Rate

Turnover Rate

Resignation Rate

Human Investment Ratio

Compensation & Benefits/Revenue

Average Remuneration

Time taken per recruitment

Cost per recruitment

THE CHOICE OF HR KPI WILL VARY FROM YEAR TO YEAR,

SUBJECT TO COMPANY'S

-STRATEGIC PLANNING

-CORPORATE STRATEGIES

-CORPORATE OBJECTIVES

WHICH IN TURN AFFECTS THE HR'S

-HR STRATEGIC PLANNING

-HRM STRATEGIES

-HRM OBJECTIVES

-------------------------------------------------------

The HR Balanced Scorecard is the measurement tool. It provides the management with a tool and a process to measure the performance of people practices and the HR function from multiple perspectives:

1. Strategic Perspective — the results of strategic initiatives managed by the HR group. The strategic perspective focuses on the measurement of the effectiveness of major strategy-linked people goals. For instance, the business strategy called for major organizational change programs as the business faced major restructuring and multiple mergers and acquisitions. In this context, the organization's change management capability will be a key factor in the success or failure of its execution. Therefore, measuring the ability of the business to manage change effectively is the core measure of the effectiveness of HR and will be a key strategic contribution to the future success of the business.

EXAMPLES

-change management capability of the organization

-organization compensation and benefit package with respect market rate.

-organization culture survey

-HR BUDGET / ACTUAL

-HR COSTS BENCHMARK EXTERNALLY

-HR annual resource plan.

-skills/ competency level

etc

2.Operational Perspective — the operational tasks at which HR must excel. This piece of the Balanced Scorecard provides answers to queries about the effectiveness and efficiency in running HR processes that are vital to the organization. Examples include measuring HR processes in terms of cost, quality and cycle time such as time to fill vacancies.

EXAMPLES

-time taken to fill vacancies

-cost per recruitment promotions

-absenteeism by job category

-accident costs

-accident safety ratings

-training cost per employee

-training hours per employee

-average employee tenure in the company

-lost time due to injuries

-no. of recruiting advertising programs

-no. of employees put through training.

-turnover rate

-attrition rate

etc

3.Financial Perspective — this perspective tries to answer questions relating to the financial measures that demonstrate how people and the HR function add value to the organization. This might include arriving at the value of the human assets and total people expenses for the company. HR

EXAMPLES

-compensation and benefits per employee

-sales per employee

-profit per employee

-cost of injuries

-HR expenses per employee

-turnove cost

-employee '' workers compensation costs''

etc

4.Customer Perspective — this focuses on the effectiveness of HR from the internal customer viewpoint. Are the customers of HR satisfied with their service; are service level agreements met; do the customers think they can get better service elsewhere? Conducting an HR customer survey might typically arrive at this.

EXAMPLES

-employee perception of the HRM

-employee perception of the company , as an employer

-customer/market perception of the company, as an employer.

etc

All four components of the scorecard are used to define and measure the effectiveness of people-management activities and how the HR function executes them. This provides a strategic measurement and management process to show the connection between a company's business strategies and goals and its HR strategies, activities, and results. The Balanced Scorecard can provide an ideal approach to measure the contribution that human resource management makes to business success.

With the HR Balanced Scorecard in place, it can assist organizations to easily monitor the workforce indicators that are key to their business success. Such solutions enhance HR's ability to provide counsel to line management and deliver results that make a difference to the achievement of their goals and strategy and thereby to shareholders.

The apparent and inherent values that the HR Balanced Scorecard brings include:

Measurement provides the data and facts to support business decisions, giving credibility to HR recommendations and initiatives;

Collecting and using data to make decisionsregarding retaining and motivating the

workforce, giving the organization a competitive advantage in the marketplace;

The right mix of lead and lag measures helps the business assess its strategic

alignment and progress towards its objectives;

HR will be proactive in identifying potential improvements and bringing suggestions

to the business that improve bottom-line results; and

A business and linked measurement framework focuses activity on those tasks

that contribute to organizational success. This process lifts the role of HR from being viewed purely as a cost centre to that as strategic business partner.

regards

LEO LINGHAM

Some of the KPIs may be:

- Canteen Cost
- Employee Cost
- Safety (e.g., Number of Accidents, Mandays Lost)
- Absenteeism
- Mandays lost due to labor problems
- People Development (e.g., Number of Training Programs, Number of Participants, etc.)
- Employees involved in SGA
- Special projects (e.g., programs for Community Development, Environment Management, etc.)

Regards,
Aniruddh

Hi there, I am Urvashi, a new entrant to this site. I work with Torrent Pharma and am currently responsible for the Performance Management System. I can assist you in understanding a few KPIs of the HR department. For example, if the KRA is:

1. Saving 20% of the budget for Recruitment Expenses, then the KPI could be:
- 20% (excellent)
- 15% (good)
- 10% (satisfactory)
- 7.50% (needs improvement)

2. Improving the Recruitment timeline (average) to 60 Days from vacancy creation, then the KPI could be:
- 45 Days (excellent)
- 60 Days (good)
- 75 Days (satisfactory)
- 90 Days (needs improvement)

KPI's are specific measures of KRA, indicating the successful achievement of the KRA. KPIs could be a percentage of decrease, an amount of time, a cost-saving, date of completion, among others. I hope this information helps you understand better.

Urvashi

Thank you so much for your help in explaining the concept and the practices. Thanks to Leena, Anirudh, Leo, Urvashi, and the others who have helped me get a better grasp of the concept.

Regards,
Kankana

Hi Leena,

Thanks for the valuable information. Can you please let me know how to set the KPIs for certain areas that are not measurable? For example, the KRA is Implementation of HR Process & Policies - what would be the KPI for this KRA? Expecting your reply.

Thanks,
Suman

There are plenty of KPIs available for each department, but the real value and importance for any organization lie in selecting the right set of KPIs for individual functions. KPIs help ascertain the health of an organization and assist the top management in keeping a finger on the pulse of the organization.

Ambarish

When looking to fine-tune performance, determining metrics such as time spent on a page, the keywords used to deliver the traffic, which related keywords are relevant and overlapping. Determining the existing bounce rate or engagement metric for the page and what calls to action exist on the landing page in question.

Managing those factors allows you to create a base-level KPI analysis to improve performance individually or across all of these metrics simultaneously. However, without analytics or performance tracking, you are just grasping at straws when it comes to delivering or reproducing consistent or future sales volume.

Ambarish

The Role of Human Resources in Achieving Organizational Goals

The primary role of the Human Resources function is to support the achievement of organizational goals by ensuring that relevant and innovative people policies, practices, and systems are in place. This enables the organization to attract, retain, and develop outstanding staff. Below is a list of 75 KPIs that a Human Resources department could use to track its performance regarding this role.

These metrics are split into 14 categories: recruitment, training, health & safety, performance, employee loyalty, working time, HR efficiency, compensation, labor relations, regulation compliance, employee satisfaction, HR budget, job leaving, and workforce information.

1. Recruitment Metrics

- Recruitment cost per employee
- Average time to recruit (per position)
- Number of CVs per channel
- Number of interviews per submitted CV
- % of new hires achieving 24 months of service
- % of new hires achieving satisfactory appraisal after the first assessment

2. Training KPIs

- Training expenditures/total salaries and wages
- % of HR budget spent on training
- % of employees who have gone through training
- Number of training hours per employee
- Employee satisfaction index with training
- E-learning course utilization
- % e-learning pass rate

3. Health and Safety Metrics

- Number of accidents per year
- Percentage of employees with adequate occupational health & safety training
- Health & safety prevention costs per month
- Lost time (in hours) due to accidents per year
- Percentage of issues raised by health & safety representatives

4. Performance KPIs

NB: Competence focuses on capability, including knowledge, abilities, and skills to perform tasks, while performance focuses on the result of tasks.

- % of appraisals completed on time
- % of employees above competence (and those below)
- % of low-performing employees (and high-performing)
- % of employees with performance decreased compared to last month (and increased)

5. Employee Loyalty Metrics

- Employee turnover (total staff recruited/total staff planned)
- Rate of life cycles of employees (total time served in the company of all staff/total staff recruited)

6. Working Time Indicators

- % of total hours lost to absenteeism
- Average overtime hours per person
- % of man-days lost due to strike
- Total time lost by work late
- Lost time due to non-fatal accidents or accidents per year

7. HR Efficiency Metrics

- Sales turnover per employee (or Full Time Equivalent: FTE)
- Profits per employee
- Administration cost per employee
- Labor cost as % of sales

8. Compensation KPIs

- Salary rate/sales turnover
- Cost rate of workers' compensation
- Cost rate of social insurance
- Cost rate of medical insurance
- Cost rate of benefits
- Average income per employee by month
- Average income per employee by hour
- Average income per employee by position

9. Labor Relation Metrics

- Number of emails issued
- Number of staff briefing sessions conducted
- Number of team meetings
- Number of unfair dismissal claims
- Number of active flexible work agreements

10. Regulation Compliance KPIs

- Number of violations per year (by sector). Metric to split: small, medium, strong violation.
- Costing lost by violation
- Time lost by violation
- Violation rate by department

11. Employee Satisfaction Metrics

- % average satisfaction (to be split by department, by position, by tenure, etc.)
- % average satisfaction by field (compensations and benefits, training, recognition, opportunities for development, leadership, work environment, personal relations, etc.)

12. HR Budget Metrics

- Average cost of recruitment per year
- Average cost of recruitment per staff
- Average cost of training per year
- % training cost/sales turnover
- Training cost per employee
- Salary budget ratio/sales turnover
- Health safety cost per year
- Human resources cost per sales turnover
- Compensation and benefit cost/sales turnover per year

13. Job Leaving KPIs

- Job leaving ratio per year
- Job leaving ratio per department
- Average age of employees that retire
- Percentage of early retirements
- Attitude of employees who leave the job (satisfaction ratio with the following: salaries, benefits, work environment, opportunities for development, personal recognition, job, personal relations, etc.)

14. Workforce Metrics

- Number of FTEs in HR
- HR FTEs as % of total workforce (FTEs)
- Percentage of outstanding employee probation reports
- Number of Full Time Employees
- Number of Part Time Employees
- Number of employees per age category (with pyramid)
- Average length of service (current employees)
- Average length of service (terminating employees)
- % ratio of salaried staff to waged staff