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<i>Dear Workforce</i> How Do Our Metrics Compare With Our Competitors&#8217;

December 2, 2005
Dear Mystified:

First, let me caution you about the metrics you mentioned. Metrics come in two primary categories--those used for reporting purposes, and those used to power operational and tactical decisions. At best, the metrics you mentioned are operational in nature. While they may warrant cursory glances, they fail to tell a story, enable a decision or inform you regarding whether you measure up to the best practices.
Percentage of filled positions per month
This metric is a raw volume indicator that is both easy to manipulate and devoid of value. As a metric it completely ignores the most important goal of the staffing function: to recruit quality hires. Using only this metric and benchmarking it would be equivalent to a candy manufacturer producing the ordered quantity of candies without regard to their taste, appearance and safety. It's quite possible to fill every position with below-average people very quickly, but history tells us that wouldn't bode well for the company.
Percentage of performance appraisals completed on time
Again this metric ignores the quality of the appraisal completed. In many organizations, managers have been known to "Christmas tree," or copy, the previous year's appraisal just to meet the deadline. Of greater importance are answers to these two questions: 1) What percentage of the performance appraisals are accurate; and 2) Did the performance appraisals actually achieve the goal of changing the behavior and the results produced by the individual?
Retention might seem like a good measure, but retaining poorly performing employees is actually a negative. Consider tracking the voluntary turnover rate of key people in key jobs as well as measuring the turnover rate of bottom performers.
Getting comparison data
The best place for comparison data is your competitors, but getting that data can be a little tricky (competitors will generally supply it in an anonymous fashion if you also share yours with them). The second-best source is direct from other companies that share your interest in achieving world-class performance. Consider asking a local university professor to serve as the intermediary and form a consortium of companies willing to benchmark performance.
To entice others to participate, the metrics you want to benchmark must have value and look at more than raw volume. If that seems like too much work, pull out your checkbook. These days there are numerous sources of relatively high-quality benchmark information, but the data doesn't come cheap. Some sources to check out include:
  • The Saratoga Institute (now part of PricewaterhouseCoopers)
  • Corporate Leadership Council (CLCMetrics, formerly the HR Measurement Lab)
  • Watson Wyatt and other consultancies
  • APQC
  • Hackett Group
  • Staffing.org
  • PeopleReport (Restaurant Industry)
If your checkbook is a little short on funds, many industry associations track benchmark information and make it available to members. The SHRM/BNA Annual Survey provides some very broad benchmark numbers. Magazine articles also are a great source of benchmark information, albeit not a primary source. To find magazines that mention what you are searching for, try conducting a search on the Internet using the name of the firm you are interested in and the name of the measure.
On a closing note, remember that even when you get comparison information, it only tells you where you stand relative to the other parties providing the data. If they are mediocre and your results are better, you too may be mediocre.
SOURCE:Dr. John Sullivan, head and professor of the Human Resource Management College of Business at San Francisco State University, February 16, 2005.
LEARN MORE:All Numbers Are Not Metrics. Also information onquality of hire;Jac Fitz-enz;tying human resources goals to company success; and themetrics movement.
The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.
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