<i>Dear Workforce</i> How Do We Develop Performance Yardsticks for Human Resources
April 29, 2005
Here you calculate the total cost of the human resources department, including salaries, divided by the number of full-time employees. It measures the cost of providing human resources services to each employee.
This is a measure of the ratio of human resources staff to employees, and is calculated by dividing the total number of employees by the number of human resources staff.
Make it an ongoing practice to measure the quality of service your human resources department delivers. Many organizations use annual surveys to gauge user satisfaction. Surveying people more regularly gives you an even better handle on service levels. Use follow-up surveys after individual human resources transactions. For example, send a brief satisfaction survey to the hiring manager and to a new employee regarding the recruiting process.
If you want human resources to be more than an administrative arm, you'll need to track the strategic value it provides to the organization. First look at what your organization's KPIs are and how they are influenced by the performance of the human resources department. For example, turnover can have a dramatic effect on many organization-wide metrics, such as revenue per FTE. If your human resources department helps curb turnover, then you should include it as a key performance yardstick. However you develop these principles, never lose sight of the reason behind your planning and strategy: to run your business more efficiently.