Hr Metrics and Its Value

Topics: Management, Measurement, Strategic management Pages: 2 (627 words) Published: June 24, 2013
Do you consider the metrics organizations measure to be valuable?

In order to develop a valuable HR metrics/performance measurement system it is imperative that organizations focus on their competitive strategy and operational goals, and should clearly define what employee competencies and behaviors are required to attain the above objective. (Becker, Huselid, & Ulrich, 2001, p. 52)

Metrics are valuable if the actions and decisions which develop the metrics also develop the firm’s strategic objective. For example, if we take a sales team and a product development team, the metrics measured would be slightly different. A sales team directly affects revenue by its selling effort. Revenue, or sales time margins, might be a good metric for the sales force. The product development team also affects revenue, but less directly and less immediately. Near-term revenue is a reasonable metric, but the firm may also want to use another metric, such as customer satisfaction, to represent long-term revenue. The firm might also include metrics such as cycle time, development cost, and synergies with other products in the line. The team can affect these directly and, if they are chosen carefully, the actions the team takes to affect these metrics are the same actions that produce long-term profit for the firm. (John R. Hauser and Gerald M. Katz, 1998, p. 7)

Another way to add value to metrics that organizations measure is to align it with corporate and business strategy. When a company decides to change its goals, the metrics should also change accordingly. For instance: A bank decided to shift the focus of its retail business from service to sales. Though the key performance drivers of the firm was now, increased cross selling to customers, teller product knowledge and sales skills, it still used service related metrics and continued practices like; hiring based on service competencies, low pay and benefits for teller, service based training programs etc. Due to this...
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