Metrics matter. The truism “what gets measured gets managed” is a truism for a reason. But there are a near infinite number of metrics that could be used to measure success. This is especially true in HR where our responsibilities are as varied as compensation, performance, training and development, benefits, employee engagement, and many more.
So how do we determine what metrics are the ones that truly matter? Today I present three perspectives:
1) The HR Practitioner/Generalist (and thought leader)
Kris Dunn, author of the HR Capitalist blog is well regarded in the industry for his common sense approach to HR and business. In a recent post, he shared this insight on HR metrics:
“When it comes to data, we are WAAAAAAAY too concerned about measuring what HR does in the organization. Time to fill, cost per hire, average merit increases, etc. I'm not sure anyone on the business side cares until something's broke. Then, they just want it fixed - they're not even that concerned about seeing the improvement in the metrics that we hold near and dear.
“I think the more powerful track when it comes to metrics and data out of the HR function is to measure what's happening in the business, then use what you measure in the business as a reason to partner with the most powerful people in your organization to fix what may be broken…
“Stop reporting about what you are doing and become the data nerd for the business, with a hat tip to the people side.”
Recommended Metrics: Business success metrics as they are influenced by HR functions.
2) The HR Industry Leader
Bette Francis is the current SHRM chairperson. At the SHRM 2014 annual conference, she discussed the barriers faced by HR, including:
“It’s ourselves. If we want HR to be the best we can, we must change our thinking. We need to get out of the HR-centric work ethic, (and) we must have a voice in the future of our business, (because) if we don’t speak for the human capital in our business, who will?”
Recommended Metrics: Business success metrics as influenced by human capital in the organization.
3) The Chief Executive Officer
What metrics matter to the CEO? Here’s one perspective on the proper use of metrics from Adam Nash, CEO of Wealthfront:
“If you don’t give people metrics, smart people will make up their own. In fact, there’s a lot of behavioral psychology around the fact that the smarter you are, the easier it is for you to make up metrics that make you think you’re doing the right thing. We can rationalize anything; it’s the great human gift.
“So if you have a company where everyone has their own ways of keeping score, you’ll get incessant fighting and arguments, and they’re not even arguing about what to do. They’re arguing about how to keep score. They’re arguing about what game we’re really playing. That’s all counterproductive.
“Most people think that metrics are something you use to control employees. I take the complete opposite view. I think metrics are actually the way that you can harmonize a large number of people, whether it’s dozens or even thousands, so that when they’re on their own and making their own decisions, they can be empowered to make those decisions, because they know they’re aligned with the rest of the company.”
Recommended Metrics: Business success metrics internalized by every employee so they know how to contribute best to company success.
The theme is clear. Whether on an individual, departmental or organizational level, metrics that matter are those that illuminate company success. The challenge lies in clearly defining what the business success metrics are, then translating them into departmental, team and individual goals. The even greater challenge is ensuring every person then understands how he or she contributes to those goals in their daily work. The fastest path to success is constant feedback. Praise when you’re on track and course correction when needed.
What metrics matter most in your organization? How do you measure your own, your team or your department’s success against those metrics?
As Globoforce’s Head of Strategic Consulting, Derek Irvine is an internationally minded management professional with over 20 years of experience helping global companies set a higher ambition for global strategic employee recognition, leading workshops, strategy meetings and industry sessions around the world. His articles on fostering and managing a culture of appreciation through strategic recognition have been published in Businessweek, Workspan and HR Management. Derek splits his time between Dublin, Montreal and Boston. Follow Derek on Twitter at @DerekIrvine.