Dear All,
This is my first email. My name is Tamanna, and I work in GCI as HR-Corporate Recruitment.
I am seeking help from the HR Forum: I would appreciate it if anyone could guide me on measuring the performance of an HR department with the help of a matrix. It is easy to measure the performance of individuals, but can anyone guide me on how to analyze the performance of a specific department? How can we measure the performance of the HR department as a whole, rather than just focusing on individuals? Are there any tools available? Which matrix would help me in measuring the HR Department? I would appreciate any suggestions.
Regards, Tamanna
From India, Vadodara
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This is my first email. My name is Tamanna, and I work in GCI as HR-Corporate Recruitment.
I am seeking help from the HR Forum: I would appreciate it if anyone could guide me on measuring the performance of an HR department with the help of a matrix. It is easy to measure the performance of individuals, but can anyone guide me on how to analyze the performance of a specific department? How can we measure the performance of the HR department as a whole, rather than just focusing on individuals? Are there any tools available? Which matrix would help me in measuring the HR Department? I would appreciate any suggestions.
Regards, Tamanna
From India, Vadodara
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Hi,
There are various ways of evaluating the performance of the HR Department. A commonly used method is setting the KRAs for the whole department, establishing measurement criteria, and then evaluating the actual performance against the KRAs.
With regards,
Daleep
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4There are various ways of evaluating the performance of the HR Department. A commonly used method is setting the KRAs for the whole department, establishing measurement criteria, and then evaluating the actual performance against the KRAs.
With regards,
Daleep
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Hi!
Can you tell me what KRAs stand for? I'm new in this field and I'm also curious about the way we should evaluate an HR department. Is that the same way we evaluate any department in a firm?
Thanks,
Isabel
From Portugal, Lisbon
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Can you tell me what KRAs stand for? I'm new in this field and I'm also curious about the way we should evaluate an HR department. Is that the same way we evaluate any department in a firm?
Thanks,
Isabel
From Portugal, Lisbon
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Key Result Areas
“Key Result Areas” or KRAs refer to general areas of outcomes or outputs for which the department's role is responsible. A typical role targets three to five KRA.
Value of KRAs.
Identifying KRAs helps individuals: · Clarify their roles · Align their roles to the organisation's business or strategic plan · Focus on results rather than activities · Communicate their role's purposes to others · Set goals and objectives · Prioritize their activities, and therefore improve their time/work management · Make value-added decisions
Description of KRAs
Key result areas (KRAs) capture about 80% of the department's work role. The remainder of the role is usually devoted to areas of shared responsibility (e.g., helping team members, participating in activities for the good of the organisation).
================================================== ================
CORE KRAs of HR DEPARTMENT
-RECRUITMENT/ SELECTION
-WORKFORCE PLANNING/
-DIVERSITY MANAGEMENT
-PERFORMANCE MANAGEMENT
-REWARD MANAGEMENT
-WORKPLACE MANAGEMENT
-INDUSTRIAL RELATIONS
-SAFETY AND HEALTH WORKPLACE
-BUILDING CAPABILITIES AND ORGANIZATION LEARNING
-EFFECTIVE HR MANAGEMENT SYSTEMS , SUPPORT AND MONITORING
============================================-=======
KRAs [ KEY RESULT AREAS are managed by
-KPAs [ KEY PERFORMANCE AREAS]
-KPIs [KEY PERFORMANCE INDICATORS]
KEY PERFORMANCE AREAS
These are the areas within the HR DEPARTMENT, where an
individual or group, is logically responsible / accountable
for the results.
To manage each KRA/ KPAs, a set of KPI are set .
KRA and hence KPI is attributed to the department which
can have effect on the business results and is
self measured where applicable.
THE IMPORTANCE AND WEIGHTAGE OF THESE ELEMENTS
KRAs/KPAs/ KPIs ARE GUIDED BY THE
*VISION STATEMENT
*MISSION STATEMENT
*CORPORATE OBJECTIVES
*CORPORATE STRATEGY
*CORPORATE BUSINESS UNITS/ DEPARTMENTAL PLANS/STRATEGY.
FOR THE BUDGET PERIOD, WHICH IS USUALLY 12 MONTHS.
================================================== ====
The evaluation of HR DEPARTMENT can have four levels of
perspective.
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
================================================== ======
HERE IS AN EXAMPLE, WHICH YOU CAN USE TO DEVELOP
OTHERS FOR YOUR ORGANIZATION.
CORPORATE OBJECTIVE / STRATEGY
-improve the company competitive positioning and productivity
by 10%.
HR DEPARTMENT'S OBJECTIVE
-Achieve high productivity level in all activities [ say by 10%]
KRA 1
-RECRUITMENT/ SELECTION
KPA 1 --RECRUITMENT
KPI ----reduce average time taken to fill vacancies by 15%
KPI ----reduce average cost per recruit by 10%
KRA 2
-WORKPLACE MANAGEMENT
KPA 1-labour turnover
KPI ---reduce the labor turnover by 20%
KPI ----benchmark total HR COSTS externally.
KRA 3
-SAFETY AND HEALTH WORKPLACE
KPA 1 ---workplace accidents
KPI ----reduce workplace accidents by 10%
KRA 4
-BUILDING CAPABILITIES AND ORGANIZATION LEARNING
KPA 1 ----TRAINING
KPI --- ALL WORKFORCE below middle management should
receive a minimum of 4 days of training.
=========================================
THIS IS , ROUGHLY, HOW HR DEPARTMENTS
KRAs / KPAs / KPIs ARE SET , MONITORED AND
EVALUATED.
regards
LEO LINGHAM
From India, Mumbai
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“Key Result Areas” or KRAs refer to general areas of outcomes or outputs for which the department's role is responsible. A typical role targets three to five KRA.
Value of KRAs.
Identifying KRAs helps individuals: · Clarify their roles · Align their roles to the organisation's business or strategic plan · Focus on results rather than activities · Communicate their role's purposes to others · Set goals and objectives · Prioritize their activities, and therefore improve their time/work management · Make value-added decisions
Description of KRAs
Key result areas (KRAs) capture about 80% of the department's work role. The remainder of the role is usually devoted to areas of shared responsibility (e.g., helping team members, participating in activities for the good of the organisation).
================================================== ================
CORE KRAs of HR DEPARTMENT
-RECRUITMENT/ SELECTION
-WORKFORCE PLANNING/
-DIVERSITY MANAGEMENT
-PERFORMANCE MANAGEMENT
-REWARD MANAGEMENT
-WORKPLACE MANAGEMENT
-INDUSTRIAL RELATIONS
-SAFETY AND HEALTH WORKPLACE
-BUILDING CAPABILITIES AND ORGANIZATION LEARNING
-EFFECTIVE HR MANAGEMENT SYSTEMS , SUPPORT AND MONITORING
============================================-=======
KRAs [ KEY RESULT AREAS are managed by
-KPAs [ KEY PERFORMANCE AREAS]
-KPIs [KEY PERFORMANCE INDICATORS]
KEY PERFORMANCE AREAS
These are the areas within the HR DEPARTMENT, where an
individual or group, is logically responsible / accountable
for the results.
To manage each KRA/ KPAs, a set of KPI are set .
KRA and hence KPI is attributed to the department which
can have effect on the business results and is
self measured where applicable.
THE IMPORTANCE AND WEIGHTAGE OF THESE ELEMENTS
KRAs/KPAs/ KPIs ARE GUIDED BY THE
*VISION STATEMENT
*MISSION STATEMENT
*CORPORATE OBJECTIVES
*CORPORATE STRATEGY
*CORPORATE BUSINESS UNITS/ DEPARTMENTAL PLANS/STRATEGY.
FOR THE BUDGET PERIOD, WHICH IS USUALLY 12 MONTHS.
================================================== ====
The evaluation of HR DEPARTMENT can have four levels of
perspective.
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
================================================== ======
HERE IS AN EXAMPLE, WHICH YOU CAN USE TO DEVELOP
OTHERS FOR YOUR ORGANIZATION.
CORPORATE OBJECTIVE / STRATEGY
-improve the company competitive positioning and productivity
by 10%.
HR DEPARTMENT'S OBJECTIVE
-Achieve high productivity level in all activities [ say by 10%]
KRA 1
-RECRUITMENT/ SELECTION
KPA 1 --RECRUITMENT
KPI ----reduce average time taken to fill vacancies by 15%
KPI ----reduce average cost per recruit by 10%
KRA 2
-WORKPLACE MANAGEMENT
KPA 1-labour turnover
KPI ---reduce the labor turnover by 20%
KPI ----benchmark total HR COSTS externally.
KRA 3
-SAFETY AND HEALTH WORKPLACE
KPA 1 ---workplace accidents
KPI ----reduce workplace accidents by 10%
KRA 4
-BUILDING CAPABILITIES AND ORGANIZATION LEARNING
KPA 1 ----TRAINING
KPI --- ALL WORKFORCE below middle management should
receive a minimum of 4 days of training.
=========================================
THIS IS , ROUGHLY, HOW HR DEPARTMENTS
KRAs / KPAs / KPIs ARE SET , MONITORED AND
EVALUATED.
regards
LEO LINGHAM
From India, Mumbai
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Hi Tamana!
I read what has been posted by Leo Lingham. I think it's an excellent presentation of HR Performance Management. The difficult part is the development of activities or tactics in order to achieve the objectives. It is answering the "How" question. For example:
WORKPLACE MANAGEMENT
KPA 1 - labour turnover
KPI - reduce the labor turnover by 20%
What are the action plans to achieve the KPI - reduce turnover by 20%?
- Increase salary?
- Change the way we manage or lead the organization?
- More training?
- Empowering? How are we going to do this?
- etc.
This makes the job of an HR manager even more challenging, don't you think? We have to do this, although the fact remains that many companies are still not doing this properly.
Good luck! I enjoyed the presentation.
Regards,
Joseph
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I read what has been posted by Leo Lingham. I think it's an excellent presentation of HR Performance Management. The difficult part is the development of activities or tactics in order to achieve the objectives. It is answering the "How" question. For example:
WORKPLACE MANAGEMENT
KPA 1 - labour turnover
KPI - reduce the labor turnover by 20%
What are the action plans to achieve the KPI - reduce turnover by 20%?
- Increase salary?
- Change the way we manage or lead the organization?
- More training?
- Empowering? How are we going to do this?
- etc.
This makes the job of an HR manager even more challenging, don't you think? We have to do this, although the fact remains that many companies are still not doing this properly.
Good luck! I enjoyed the presentation.
Regards,
Joseph
Acknowledge(0)Amend(0)
Dear Joseph,
I absolutely agree with you; it was an awesome explanation from Leo Lingham. His mail and his suggestion are valued. Hope to get much more knowledge from this Forum. I really appreciate all the help. Thank you!!
Regards,
Tamanna
From India, Vadodara
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I absolutely agree with you; it was an awesome explanation from Leo Lingham. His mail and his suggestion are valued. Hope to get much more knowledge from this Forum. I really appreciate all the help. Thank you!!
Regards,
Tamanna
From India, Vadodara
Acknowledge(0)Amend(0)
Hi,
Actually, measuring the performance of the HR department is one of the emerging issues because organizations want to convert the HR department from being a cost center to a profit center. As far as I am concerned, there is no industry-wide accepted way of measuring the performance of the HR department.
Another alternative model, besides what has been posted so far, is HRA, which stands for Human Resource Accounting. Based on HRA, certain external reporting criteria have been introduced by researchers, organizations, and countries. India has a strong background in HRA as well.
Regards,
Shamil
From Sri Lanka
Acknowledge(0)Amend(0)
Actually, measuring the performance of the HR department is one of the emerging issues because organizations want to convert the HR department from being a cost center to a profit center. As far as I am concerned, there is no industry-wide accepted way of measuring the performance of the HR department.
Another alternative model, besides what has been posted so far, is HRA, which stands for Human Resource Accounting. Based on HRA, certain external reporting criteria have been introduced by researchers, organizations, and countries. India has a strong background in HRA as well.
Regards,
Shamil
From Sri Lanka
Acknowledge(0)Amend(0)
Typical key result areas at the corporate and some functional levels.
JUST LIKE HR DEPARTMENT'S KRAs AND KPIs,
A COMPANY CAN DEVELOP KRA AND KPI
FOR OTHER FUNCTIONAL DEPARTMENTS.
SOME EXAMPLES
1. CORPORATION AS A WHOLE
-corporate objective / actual results
-sales growth %
-gross profit % of sales
-market share growth %
-return on assets
-return on investment
-corporate image index improvement
etc etc
===================================
2.MANUFACTURING
- Unit volume level
- unit cost target
-production efficiency improvement
-productivity improvement
-quality improvement index
-capacity utilization
etc etc
==================================== MARKETING
-market share %
-new product launches success
-profit contribution by productlines
etc etc
=====================================
SALES
-sales against last year
-sales against target
-sales coverage improvement
etc etc
======================================
DISTRIBUTION
-market coverage
-customer coverage
-channel coverage
=======================================
CUSTOMER SERVICE
-CUSTOMER SERVICE IMPROVEMENT
-CUSTOMER SATISFACTION ACHIEVEMENT
ETC ETC
======================================
WAREHOUSING / TRANSPORTATION
-%ACHIEVED AGAINST ORDERS
-PICKING / PACKING RATE
-FINISHED GOODS INVENTORY LEVEL
-STOCK TURNOVER
‑====================================
FINANCE
-Cost of Capital USED
- Receivables leveL / against sales
-Bad‑debt level
-Debt‑equity ratio
=====================================
PROCUREMENT / SUPPLY
-raw material inventory levels
-cost saving target
etc etc
AS MENTIONED IN MY PREVIOUS POSTING,
THESE FACTORS ARE OUTCOME OF THE
CORPORATE OBJECCTIVES / STRATEGY.
REGARDS
LEO LINGHAM
From India, Mumbai
Acknowledge(1)Amend(0)
JUST LIKE HR DEPARTMENT'S KRAs AND KPIs,
A COMPANY CAN DEVELOP KRA AND KPI
FOR OTHER FUNCTIONAL DEPARTMENTS.
SOME EXAMPLES
1. CORPORATION AS A WHOLE
-corporate objective / actual results
-sales growth %
-gross profit % of sales
-market share growth %
-return on assets
-return on investment
-corporate image index improvement
etc etc
===================================
2.MANUFACTURING
- Unit volume level
- unit cost target
-production efficiency improvement
-productivity improvement
-quality improvement index
-capacity utilization
etc etc
==================================== MARKETING
-market share %
-new product launches success
-profit contribution by productlines
etc etc
=====================================
SALES
-sales against last year
-sales against target
-sales coverage improvement
etc etc
======================================
DISTRIBUTION
-market coverage
-customer coverage
-channel coverage
=======================================
CUSTOMER SERVICE
-CUSTOMER SERVICE IMPROVEMENT
-CUSTOMER SATISFACTION ACHIEVEMENT
ETC ETC
======================================
WAREHOUSING / TRANSPORTATION
-%ACHIEVED AGAINST ORDERS
-PICKING / PACKING RATE
-FINISHED GOODS INVENTORY LEVEL
-STOCK TURNOVER
‑====================================
FINANCE
-Cost of Capital USED
- Receivables leveL / against sales
-Bad‑debt level
-Debt‑equity ratio
=====================================
PROCUREMENT / SUPPLY
-raw material inventory levels
-cost saving target
etc etc
AS MENTIONED IN MY PREVIOUS POSTING,
THESE FACTORS ARE OUTCOME OF THE
CORPORATE OBJECCTIVES / STRATEGY.
REGARDS
LEO LINGHAM
From India, Mumbai
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HR department.zip
PERFORMANCE EVALUATION FORM.doc