By Helen Luketic, CHRP

Editor’s Note: This is the third of a six-part series.

In this six-part series, the research function of BC HRMA will provide a high-level outline of how to get started measuring HR.  The subsequent articles will delve deeper into each step in the process and explore issues that you should think of as well as tasks that you need to do. Here is a highlight of information to come:

1. Be your own personal cheerleader
2. Develop your measurement vision
3. What your organization’s strategy is telling you about your choice of metrics
4. Figuring out the gap between where you are and where you want to be
5. Moving from planning to implementation
6. After implementation there is more implementation

PART THREE:
What your organization’s strategy is telling you about your choice of metrics

The biggest mistakes made with HR metrics are:

1. using too many measures
2. reporting measures where the results cannot be actioned
3. reporting measures that have nothing to do with the organization or the bottom line
4. reporting metrics that have been tracked for years but their value is unknown
5. choosing metrics that cannot be easily benchmarked to the rest of the sector or industry
6. using metrics that take forever to calculate and even longer to explain

When metrics are used improperly, it results in wasted time and resources and ultimately does not bring HR any further credibility.

When BC HRMA surveyed its membership in August 2008, only 11 per cent of respondents said their metrics are aligned to their organization’s strategy and 70 per cent said that resources and budget are a challenge to developing and reporting the organization’s human capital measures. 

If you’re going to throw any of your valuable resources to the HR metrics game, you’ll want to make sure you’re using them wisely. Here’s your tool to help you choose your metrics and ensure they are strategically aligned.  This will be a value-added activity and not a cost-saving one.

Step 1 – Identify Your Organization’s Strategy

Write down your organization’s strategy. You should be able to concisely explain the high-level strategy in short phrases and clear terms similar to what you would see in a newspaper headline; if you can’t, you don’t understand the strategy well enough.  Understanding the organization’s strategy should be the goal of each HR professional. Here is an example:

• Lead the industry in innovation
•  Increase customer satisfaction

Step 2 – Define Your HR Strategy

Similar to the exercise in Step 1, identify your HR strategy.  The assumption here is that both your organization’s and HR strategies are defined and aligned. To prove that the strategies are aligned, draw a map with the strategies and their linkages.  Here’s another example:

Step 3 – Choose Your Metrics

*New hire turnover and leadership bench strength are correlated to leadership capability.

Use the table above only as a guide. Once you understand how to link your metrics to your strategy, only you will know the right metrics to track for your organization.  If you’re looking for a potential list of metrics to choose from, try one of the following sources:

•  BC HRMA HR Metrics Standards & Glossary (to be released November 19^th)
•   How to Measure Human Resources Management by Jac Fitz-enz

Now, ensure you’re avoiding common measurement errors by:

·         choosing one or two measures for each strategy that are balanced and will tell the story about whether or not you’re managing your strategy

·         picking those metrics that you know you can improve if you’re off target

·         getting rid of any old stat that you’ve been tracking but do not match with any of your strategies

·         choosing standard metrics so you can easily benchmark against other organizations

·         choosing measures that can be easily described to someone unfamiliar to HR metrics.

Once you wrap your head around the concept of linking metrics to strategy, this exercise should get easier.

Helen Luketic, CHRP brings more than nine years of HR experience to her current role as HRIS Analyst at Vancity, where she’s assisting the organization implement new HR systems and processes. For her innovative achievements at Vancity, Helen was the recipient of BC HRMA’s 2008 Rising Star Award. In her previous role as Manager, HR Metrics & Research at BC HRMA, she combined her CHRP, B.A. in Economics, HR information systems knowledge and experience in HR metrics to develop the HR Metrics Service and related workshops, presentations and webinars to teach HR professionals about HR metrics and benchmarking.