Human Resource Metrics

Introduction

 Human resource metrics (HR Metrics) are measures that are used to determine the effectiveness of human resources in generating the results required. The origin of measures to determine the effectiveness of an organization’s workforce can be traced to the scientific management period. The measures continued being used during world war II and throughout the industrial expansion period after the war. During this period, most of the HR metrics in use today were developed. The HR Metrics need to show that the organization is utilizing human capital effectively and that it attracts, acquires, and develops a suitable workforce. HR Metrics that are needed by a mid-sized company are key to the organization’s decision making are as explained below.

Mid-Sized HR Metrics

Employee turnover rate measures the frequency of employees exiting the organization. This is determined by dividing the number of staff who have quit by the average number of staff in the firm. This data can be sourced from the company’s books. A high turnover rate is an expense to the organization as it means a high number of employees have quit. The cost of finding a replacement is high, and it also lowers productivity in the company. Turnover may be either voluntary or involuntary (Kavanagh & Johnson, 2017). Voluntary turnover rate points to management issues, while the involuntary turnover rate suggests the company is hiring the wrong workforce. Mid-sized companies should strive to maintain a low turnover rate by ensuring good policies on retention strategies.

Overtime Cost metric is the cost of pay for the overtime the employees put in the organization. When the cost is high, it may signify that there is an issue of scheduling or that the workforce is below the required level in the organization. There is also the butterfly effect of employee turnover when there is excessive overtime for long periods of time. The cost can be mitigated by having a scheduling system that favors all employees in the short run. When there are persistent overtime costs, the company can hire additional employees.

Revenue per employee is used to measure the amount of profit that the employees generate for the company. This metric is arrived at by dividing the total profit and the average number of staff in the company. This is a measure of much each staff is contributing or has achieved in the company (Wolf, 2016). The desired ratio is that each staff should generate more revenue than what was used to hire and train each employee. This ratio justifies that the employee is right for the job he or she was hired for.  There are various reasons for the decline of the profit per employee, such as the exponential growth of the company, lack of proper training to employees, or obsolete cost control measures. 

Absenteeism from the organization can be used as a measure of wellness of the workforce. The data can be sourced from the organization records of how many hours each employee puts in a specified period of time. This is used to determine the productivity of the existing employees.  When the absenteeism rate is high, it may point to issues of unfavorable

work climate or stress in the workplace. The management hence can put in place measures to improve the work conditions in order to improve the productivity of the workforce.

The comparative-ratio metric is the measure of how far the salary the organization’s salaries are from the market salary range for similar positions in other companies. This ratio helps the company to know if they are compensating their employees appropriately in comparison with the market standards. The ratio is 100% when the organization is compensating the employees according to the market range. An organization risks losing high-quality employees and attracting lower quality employees when the employee compensation ratio is low. High compensation rates show that the company is mismanaging resources, which may result in reduced revenue to the organization.

Sources of Comparative Human Resource Metrics Data

Comparative human resource metrics data can be sourced from public or private sources that are internal and external sources. The sources provide data that organizations can use for comparability in order to determine the HR metrics suitable for the growth of the company (Iwu & Kapondoro et al. 2016). Sources of such data are; websites of the companies, employee work tenure, details got from the recruitment process for new employees, interviews for the existing and exiting employees, direct observation, and conducting surveys and questionnaires. 

This data provides the organization with the quantifiable data that can be used to determine the metrics that are working in the company, and the loopholes the management should strive to fill. The sources provide raw information; hence the company has the obligation of interpreting the information in the right way to draw a statistical analysis that can help in identifying the problems which could affect employee motivation and productivity and the company at large. For mid-sized entities, the direct observation method of sourcing the metrics is recommended. This ensures that the data is got directly from the activities of the business hence able to come up with a good statistical analysis on which metrics the company has in place and those that the company needs in order to thrive in the market and plan accordingly.

 

Conclusion

HR metrics serve as actionable evidence for the company decision making process as they enable companies to track trends in the company. These trends help the organization measure the organization’s resources spent on human resource management training and initiatives. Organizations deploy different types of HR metrics based on the overall business needs as a company. Each organization should source its data and perform a comprehensive analysis to determine which type of metric can favor it positively hence utilize it to improve the productivity of the organization.

References

Wolf, R. (2016). Dashboard design: using metrics to drive business performance. Strategic Finance, 97(12), 20-28.

Kavanagh, M. J., & Johnson, R. D. (Eds.). (2017). Human resource information systems: Basics, applications, and future directions. Sage Publications.

Iwu, C. G., Kapondoro, L., Twum-Darko, M., & Lose, T. (2016). Strategic human resource metrics: a perspective of the general systems theory.

Calculate your paper price
Pages (550 words)
Approximate price: -

Why Us

Outstanding Academic Writing Service

At MyMasterPapers.com, you are assured of professional essay writing help from the leading experts online. Quality comes at the forefront of our custom writing service to ensure that all our customers are satisfied with the work delivered. We value repeat customers. For this reason, we ensure that each task is completed to perfection for high scores.

Top Writers

Our hiring process is highly intensive. The writers are exposed to a strict selection procedure before hiring to ensure that we acquire the most qualified, well-educated and experienced writers. Our team of writers, professors, editors and researchers will ensure that you get incredible results.

Plagiarism-Free Papers

We highly discourage plagiarism. For this reason, we have trained our writers in such a way that all the papers are written from scratch and are free from plagiarism. We also pay attention to ensure that each paper is completed as per the instructions provided. Referencing and citations are done as per the paper format selected by the customer. These include: APA, MLA, Chicago, Harvard, Turabian among others.

24/7 Customer Support

You can contact our support team via the chat window at the bottom right corner. Alternatively, feel free to email us via our support email: support@mymasterpapers.com. Our team is available 24/7 to respond to your queries and guide you though where need be.

Swift Delivery & 100% Money Back Guarantee

Simply choose the desired deadline when placing the order. The task is assigned to the most qualified writer as soon as the order is successfully placed. All the papers are delivered to you within the deadline selected. In case a paper cannot be delivered within the deadline selected, we request for a deadline extension within the shortest time possible.

Free Unlimited Revisions

Our customers can always request for a revision in case they feel that something needs to be added or changed after the final paper has been delivered. We do not charge for revisions. However, we highly discourage our customers from misusing this policy.

Try it now!

Calculate the price of your order

Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

Mymasterpapers.com specializes in custom essay writing for all level of students. Simply relax as we get your paper done within the timeline indicated.

Essays

Academic Help Service

Our team of skilled writers and researchers is readily available to get any type of academic paper completed. We deliver high quality papers and projects to our customers to ensure that we maintain a long-term relationship that will shine your academic career.

Admissions

Admission Essays & Professional Writing

An admission essay allows you to express yourself by providing personal details that wouldn’t have fit on other areas of an application. We have a team of experienced writers who will get you to the desired academic level through a professional and a personalized admission essay.

Reviews

Editing & proofreading

Are you seeking for editing or proofreading help? We have a team of editors who will ensure that any issue within you paper has been addressed. Upload the paper to be cleaned up and relax as we get the job done.

Reviews

Revision Support

At mymasterpapers.com, you can always ask for revision in case you want some changes in you paper. We focus on ensuring that the grammar, research and formatting are done as per the latest academic writing standards.