HR Kpi Definitions

HR Key Performance Indicators

Frequently used HR Key Performance Indicators include:
FTE = full time employees
Revenue per Employee (FTE)
Assets per FTE
Training Hours per FTE
Training Costs per FTE
HR Department Cost per FTE
FTEs per HR Department FTE
Acceptance Rate
Average Cost per Hire
Absence Rate
Turnover Rate
Resignation Rate
Human Investment Ratio
Compensation & Benefits/Revenue
Average Remuneration
Time taken per recruitment
Cost per recruitment


THE CHOICE OF HR KPI WILL VARY FROM YEAR TO YEAR,
SUBJECT TO COMPANY'S
-STRATEGIC PLANNING
-CORPORATE STRATEGIES
-CORPORATE OBJECTIVES
WHICH IN TURN AFFECTS THE HR'S
-HR STRATEGIC PLANNING
-HRM STRATEGIES
-HRM OBJECTIVES
-------------------------------------------------------
The HR Balanced Scorecard is the measurement tool. It provides the management with a tool and a process to measure the performance of people practices and the HR function from multiple perspectives:
1. Strategic Perspective — the results of strategic initiatives managed by the HR group. The strategic perspective focuses on the measurement of the effectiveness of major strategy-linked people goals. For instance, the business strategy called for major organizational change programs as the business faced major restructuring and multiple mergers and acquisitions. In this context, the organization’s change management capability will be a key factor in the success or failure of its execution. Therefore, measuring the ability of the business to manage change effectively is the core measure of the effectiveness of HR and will be a key strategic contribution to the future success of the business.
EXAMPLES
-change management capability of the organization
-organization compensation and benefit package with respect market rate.
-organization culture survey
-HR BUDGET / ACTUAL
-HR COSTS BENCHMARK EXTERNALLY
-HR annual resource plan.
-skills/ competency level
etc
2.Operational Perspective — the operational tasks at which HR must excel. This piece of the Balanced Scorecard provides answers to queries about the effectiveness and efficiency in running HR processes that are vital to the organization. Examples include measuring HR processes in terms of cost, quality and cycle time such as time to fill vacancies.
EXAMPLES
-time taken to fill vacancies
-cost per recruitment promotions
-absenteeism by job category
-accident costs
-accident safety ratings
-training cost per employee
-training hours per employee
-average employee tenure in the company
-lost time due to injuries
-no. of recruiting advertising programs
-no. of employees put through training.
-turnover rate
-attrition rate
etc

3.Financial Perspective — this perspective tries to answer questions relating to the financial measures that demonstrate how people and the HR function add value to the organization. This might include arriving at the value of the human assets and total people expenses for the company. HR
EXAMPLES
-compensation and benefits per employee
-sales per employee
-profit per employee
-cost of injuries
-HR expenses per employee
-turnove cost
-employee '' workers compensation costs''
etc

4.Customer Perspective — this focuses on the effectiveness of HR from the internal customer viewpoint. Are the customers of HR satisfied with their service; are service level agreements met; do the customers think they can get better service elsewhere? Conducting an HR customer survey might typically arrive at this.
EXAMPLES
-employee perception of the HRM
-employee perception of the company , as an employer
-customer/market perception of the company, as an employer.
etc