Introducing HR Measurement and

Reporting
Ensuring Executive Alignment and
Understanding
 Critical Question

Why would we want to measure human

resources…what value does it add?
 Re-aligning the HR Contribution

 Enhance CEO/senior executive team understanding

 Demonstrate the opportunity available

 Re-align our thinking and contribution

Key performance indicators and detailed reporting

How CEOs and senior executives often view HR

Business partners
Change agents

Administrative
Administrative Employeeadvocates
advocates
Employee
specialists
specialists

David Ulrich — HR Champions: The Next Agenda for Adding Value & Delivering Results, 1996
How HR wants to be viewed

Business partners
Change agents

Administrative Employee advocates

specialists

David Ulrich — HR Champions: The Next Agenda for Adding Value & Delivering Results, 1996
How HR wants to be viewed

Businesspartners
Business partners
Changeagents
Change agents

==Missed
Missed
opportunity!
opportunity!

Administrative Employee advocates

specialists

David Ulrich — HR Champions: The Next Agenda for Adding Value & Delivering Results,
1996
Stages in Human Resources functional development

COMPETITIVE
ADVANTAGE  Total line manager accountability
 Internal consultants
(Consolidation)  Add value
 Integral to company success
BUSINESS  Long term vision and strategy
PARTNERS 
Integral contribution to business plan
(Integrated) 
Strong influence on other departments
 Member of top team
 Quality systems and processes
PROACTIVE  Service management
 Intellectual
(Rapid growth)  Customer/needs capital/knowledge management
focused
 Workforce
 Pro-active/improvement empowerment and teams
 Return
 Management on investment
development

 Leadership training analysis
Cost/benefit
INTERNAL
 Policies
 and  Comprehensive
manuals
Succession planning database
POLICE
(Emerging)  Controls — headcount,
 Workforce hiring,
planning
restructuring, travel, relocation
 Performance management
 Reporting systems & budgets
 Workforce productivity
 Basic measures — turnover,
KIND HEARTS
(Lending Support)  absenteeism
Cafeteria
 Technical and skills training
 Car 
park
IR disputes, grievances
BASIC  Security
 OH&S procedures
 Recruitment Gymnasium
NEEDS
 Induction  Social club
 Payroll  Christmas party
 Admin/Records
 Leave
 Human Resources transformation
From To
industrial enterprise knowledge-based enterprise

Service to individual employees stockholders

Service to regulatory authorities CEO

Creation of workplace policies business performance tools

Guardian of workplace stability core competencies
Chief workforce administrator finance officer for human capital
The global marketplace

Emphasis on product Squeeze on

innovation margins

Tighter cost
Price control
sensitivity

Shorter
Enhanced lead times
customer service

Workforce contribution?
Organisational critical success factors

Product quality

Staff capability
Competitive price

Product innovation
Cost of labour

Excellence in customer service

Workforce contribution?
CEO/senior executive team recognition...

To capitalise on workforce potential

The Human Resources contribution...

To optimise workforce performance

 Search for the ‘Holy Grail’ of HR management

Theory X & Y Hygiene and Motivators Emotional Intelligence

Management by Objectives
Matrix Kaizen Empowerment
Management Science
MBWA Customer Service EVA
Work Simplification
Self-Directed Teams
Hierarchy of Needs Benchmarking

?
Excellence
Plan-Organize-Direct-Control Delayering
Corporate Culture 7 Habits
Managerial Grid Intrapreneuring Diversification
Balanced Scorecard
Downsizing
Human Relations Organization Renewal
TQM Work-life Balance
Quality Circles
Portfolio Management Continuous Improvement
Relationship
Value Chain Marketing
Change Management Reengineering Rightsizing
Decision Tree
One Minute Managing

s 0ss s s s s oww
400ss 9 500s 6
0 97700s 9 800s 900s 0 00s N
o
9 5 9 8 9
119
4 119 119
6 119 119 119 220 N
Dilbert’s version of HRM!
HR perspective: organisational contribution

Productivity Capability

Workforce
Workforce

Wellbeing Satisfaction
HR perspective: organisational contribution

Productivity
Labour costs
Labour mix and utilisation
Staff rostering and utilisation
New technology application
Cross-functional project teams
Employee participation/teams
Workforce forecasting
Workforce
Workforce
HR perspective: organisational contribution

Capability
Performance feedback
Induction programs
Technical and skills training
Learning centres
Tertiary assistance/MBAs
Recruitment program
Role clarity

Workforce
Workforce
HR perspective: organisational contribution

Workforce
Workforce

Wellbeing
Leadership training
Non-discriminatory
workplace
Fair treatment process
Safe work practices
Equipment and physical
factors
Work–life balance programs
HR perspective: organisational contribution

Workforce
Workforce

Satisfaction

Career path options

Internal communication plan
Remuneration and incentives
Recognition and reward programs
Effective payroll
Human resources policy manual
CEO/senior executive perspective: ownership of workforce issues

Employees

Senior executive team HR department

HR perspective: senior executive team accountabilities

Senior executive team

Budget centres
Hiring and firing

Organisational charts
Pay and promotions
HR perspective: ownership of workforce issues

Employees

Senior executive team HR department

 Human Resources
Key Performance Indicators
HR Key performance indicators

Objectives and purpose

To highlight to the senior executive team:

• areas where the organisation is performing well
• areas where intervention is required
HR key performance indicators

Key principles

 One page, once per month

 Measuring organisational performance, not
that of the HR Department
 Must be ‘big ticket items’ (business-linked)
 Must be user friendly and easy to understand
 Supported by detailed tables and/or graphs
HR key performance indicators

Key principles (continued)

 Contain credible/reliable information (start off

slowly...be willing to amend/change)
 Progressively introduce agreed targets (internal,
then external)
 Must become institutionalised within the senior
management team
 HR team must be fully conversant
 Example KPI report

HR Key Performance Indicator Report

For Period ended

This YTD
Criteria Measure Description Associated report Last period Change
period (avg)
Number of FTEs Changes in w orkforce numbers and Workforce Headcount Report
Headcount
Total hours utilised hours utilised by employee category Workforce Utilisation Report

Workforce turnover % of total w orkforce terminating Turnover performance and cost

Workforce Turnover Report
(unplanned) Total $ cost of turnover impact upon the organisation

Workforce % total hours lost to absenteeism Absenteeism performance and cost

absenteeism Workforce Absenteeism Report
Total $ cost impact upon the organisation
(unplanned)

Number of lost time injuries (LTI)

Number of lost time days Occupational Health & Safety

Occupational health and safety
Workers Average duration rate of LTI Report
performance throughout the
com pensation
Frequency rate of LTI organisation

Workers Compensation Costing

$ cost of w orkers compensation
Report
Number of discrimination complaints rec’d

Number of sexual harassment complaints rec’d

Number of physical harassment complaints rec’d

Equal employment opportunity and
Equal em ploym ent Number of w omen in management positions
affirmative action performance ER Status Report
opportunity
- senior management throughout the organisation

- middle management

Ratio of female appointments vs male

% of w omen returning to w ork after mat leave

Example KPI report (continued)

$ labour cost as % of sales

Revenue generated per FTEs

Workforce productivity/employee
Unit production per FTEs
relations performance
Productivity and Labour utilisation rate
utilisation
Quality reject rate (employee error)
Number of credit returns (linked w ith employee
error) Employee satisfaction
Number of customer complaints (employee levels/organisational culture
related)
Recruitm ent Average days vacancy duration - management

Average days vacancy duration - staff Recruitment performance throughout

Average cost recruitment - management the organisation

Average cost recruitment - staff

Recruitment Status Report
% new hires achieving 6 months service

% new hires achieving 12 months service Staff retention performance

% new hires achieving sat. appraisal at first
assessment
Average $ cost per vacancy filled
Company training expenditure (% of salaries &
w ages)
Average training hours per employee
% training course participant satisfaction
% training course attendance
Number of employees completing sponsored
tertiary studies
Training and
developm ent Number of employees completing sponsored MBA
programs
Learning centres
throughout the organisation
Average cost of vacancies filled
$ commitment to staff training and Training & Development
development Expenditure Report
Time commitment to staff training and
Training Hours Allocation Report
development
Participant satisfaction w ith training
courses provided
Training Performance Report
Participant attendance at training
courses provided
Commitment to professional
development of staff throughout the
organisation

- number of courses offered

- % course participation Learning centre effectiveness

- Internet hours utilised throughout the organisation

- e-learning courses utilised

- % e-learning pass rate

Example KPI report (continued)
% of internal appointments above level __
Succession Planning Status
Succession planning Avg length of service of staf f appt’d above level Succession planning ef fectiveness
Report
___
Number of unfair dismissal claims

Workf orce lost time (hours) ER Status Report

Employee relations perf ormance
Number of f ormal union grievances
throughout the organisation
% w orkf orce on individual contracts

Internal communications

- number of bulletins issued

Staff alignment and commitment to the
- number of emails issued
organisation
Em ployee relations - number of staf f briefing sessions conducted

Work/lif e balance

- number of active flexible w ork agreements Organisational success in providing an

- number of active w orking from home eff ective w ork/lif e balance program
agreements f or all employees

- number of active job sharing agreements

Workf orce teams

Organisational ef fectiveness in
- number of active teams creating and sustaining a team-based
structure/culture
- number of team meetings

% compa ratio

$ pay for performance gaps Organisational competitiveness and

Rem uneration equity in remuneration
$ pay equity gaps packaging/policy

% employee share scheme take-up rate

Organisation perf ormance in managing
Level of outstanding annual leave liability Accrued Annual Leave Report
Adm inistration annual leave
Number of manual payroll adjustments Payroll performance

Number of employees aged under 25

Number of employees aged 25–35

Demographic profile of employees by
Number of employees aged 35–45
age across the organisation
Number of employees aged 45–55

Organisation profile Number of employees aged over 55

Avg length of service (current employees) Average length of service of

Avg length of service (terminating employees)
% ratio of salaried staff to w aged staff
% ratio of surplus staf f to required staff
employees across the organisation
and terminating
Adequacy of w orkforce planning
Example KPI report (continued)

Number of FTEs in HR Workforce Headcount Report

HR FTEs as % of total w orkforce (FTEs) Human resources efficiency/cost

HR headcount
HR labour cost as % of sales/revenue effectiveness

HR $ cost as % of total w orkforce (FTEs)

Level of satisfaction w ith w ages/salary/benefits

Level of satisfaction w ith conditions/physical

w ork environment
Level of satisfaction w ith job Staff satisfaction levels w ith the
organisation and reasons for leaving.
Level of satisfaction w ith personal relations (This section may not be reported on a
Exit interview s Level of satisfaction w ith participation and regular monthly basis, dependent upon Exit Interview Report
recognition the volume of exit interview s received
Level of satisfaction w ith opportunities for and the need to create meaningful
development data and protect employee confid

Number of employees w ho w ould recommend

company
Number of employees w ho w ould seek re-
employment w ith company
% of appraisals completed on time

Number of formal staff grievances raised Performance management

Perform ance effectiveness throughout the
% of individual training plans completed
appraisals organisation. (This section is likely to
% of employees above competent be produced on an annual basis.)

% of employees below competent

Average satisfaction % vs norm Staff satisfaction levels w ithin the

Workforce attitude
organisation. (This section is likely to
surveys Average satisfaction % vs previous survey be produced on an annual basis.)
 Example headcount report
WORKFORCE HEADCOUNT REPORT
P e rio d e nding :

Headcount at end of last Variation on last period Variation on budget

Headcount at end of this period Budgeted headcount
Departm ent period ( + or - ) ( + or - )

FT PT Cas Con O/T FT PT Cas Con O/T FT PT Cas Con O/T FT PT Cas Con O/T FT PT Cas Con

M'gment

Staff

Total

M'gment

Staff

Total

M'gment

Staff

Total

M'gment

Staff

Total

M'gment

Staff

Total

M'gment

Staff

Total
 Example workforce utilisation report
WORKFORCE UTILISATION REPORT
P e rio d e nding :

Variation on last
Hours utilised last Hours utilised this Variation on budget
period Budgeted hours
Departm ent period period ( + or - )
( + or - )
FT PT Cas Con O/T FT PT Cas Con O/T FT PT Cas Con O/T FT PT Cas Con O/T FT PT Cas Con O/T

M'gment

Staff

Total

M'gment

Staff

Total

M'gment

Staff

Total

M'gment

Staff

Total

M'gment

Staff

Total

Total com pany

 Example workforce turnover report
WORKFORCE TURNOVER REPORT
Period ending:

S umma ry re s ults Current Period Year-to-date

Total management cost $ $
Total staff cost $ $
Total company cost $ $

This period Year-to-date

Avg Total cost for Avg Total Total cost

$ Cost of Term inations Turnover % Turnover
Departm ent headcount period headcount term inations YTD
Turnover for period for period % YTD
for period $ YTD YTD $

M'gment

Staff

Total

M'gment

Staff

Total

M'gment

Staff

Total

M'gment

Staff

Total

M'gment

Staff

Total

Total com pany

 Example workforce absenteeism report
WORKFORCE ABSENTEEISM REPORT (Unplanned Absenteeism)
Period ending:

Input values S ummary re s ults Current Period Year to Date

Management standard hours per day Total management cost $ $

Staff standard hours per day Total staff cost $ $
Total company cost $ $

Current period Year-to-date

Paid leave Total unplanned Paid leave Unpaid Total unplanned

Department Total hours Sick leave Unpaid leave Total hours Sick leave
$ Cos t pe r (other) absenteeism (other) leave absenteeism
available available for
day
for period Cost YTD Cost
Hrs % Hrs % Hrs % Hrs % Hrs % Hrs % Hrs % Hrs %
$ $
M'gment

Staff

Total

M'gment

Staff

Total

M'gment

Staff

Total

M'gment

Staff

Total

Total company
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