10/16/2016

What are Metrics?

A Metric is a quantifiable measure that is used to track and
Definition
assess the status of a specific business process.

Standards of measurement by which efficiency, performance, progress, or

Definition
quality of a plan, process, or product can be assessed.

• Metrics are numbers that tell you important information about a process under question.
• They tell you accurate measurements about how the process is functioning.
• They provide base for you to suggest improvements.
• Using a combination of metrics is a good strategy to measure the effectiveness of the process.
• Metrics are used to drive improvements and help businesses focus their people and resources on
what’s important.

Ultimately, metrics will help tell the organization:

Minhaj Azeem Abbasi Where it has been
BM-26539 Where it is heading
Accompanied by Sir Vijay Kumar Whether something is going wrong
IBT-Gulshan Campus When the organization reaches its target

Defining a metric is similar to telling a joke – if you have to spend too much time explaining it then it will not work.!!!

What are Metrics? continued.

What are Metrics? continued.

Key Aspects Types of Metrics

• Data is consistent, cheap, and quick to collect. • Marketing Metrics
• You can measure results within a week. • Sales Metrics
• You can replicate the process. • Financial Metrics
• Drive the strategy and direction of the organization. • Social Media Metrics
• Provide focus for an organization, department or employee. • Performance Metrics
• Help make decisions.
• Make the process objective and drive performance. Metrics vs KPIs
• Change and evolve with the organization.
• Produce good internal and external public relations. • Business metrics are used to track all areas of business.
• KPIs target critical areas of performance.

You can’t pick your data, but you must pick your metrics.
Metrics can be a powerful tool for informing and guiding decision making at
all levels of an organization. They can, however, be detrimental if not
designed and implemented properly. In order for metrics to deliver value
rather than distraction, they must be clearly defined, completely
understood and broadly communicated, as well as focused on the areas that
are most important to the success of an organization.
There is a difference between numbers and numbers that matter. This is what separates data from metrics.

HRM Metrics HRM Metrics - Functions and Impact

The human resources function in business generates costs but rarely generates any
revenue. This creates constant pressure on them to show their value and contribution in
organization success.
HR metrics involve compiling and analyzing specific data and information culled from various
sources to gain a better understanding of how HR is contributing to the business side of a company.
HR metrics are powerful tools to show us areas where we could improve and better
meet the needs of our organization and its employees.

These measurements demonstrate how effective the efforts of the human

resources department are to the overall success of the organization.

Not only can the effectiveness of HR be demonstrated in quantitative terms, it must be in order to
explain its importance. Compiling and communicating metrics is a requirement for HR strategists.

For Organization For Employees

Get a pulse on the health and stability of your workforce.
Informed HR decisions to recruit and retain the best staff.
Understand if HR initiatives are working.
Set a foundation for long-term growth.
Intelligent Investments in HR.
Develop clarity on what counts most in their organization.
Use the information garnered to assess the impact of
activity and inform their decision-making.
See organizational priorities within a wider picture to
direct and manage themselves with more awareness.

If you can't measure it, you can't improve it. - Peter Drucker “If you're not keeping score, then you're just practicing.”

1
 10/16/2016

HRM Metrics - Categories HRM Metrics

Productivity
Performance based on Profit, Revenue and Capital Employed. Metric Name Description Formula
Productivity
The number of dollars of revenue from operations
Revenue per HC* Revenue/HC
Compensation Labor cost Analysis i.e. Salaries, wages and benefits. generated per HC.

The number of dollars of profit generated per HC. (Revenue-Operating

Recruitment Vacancy, Turnover with in a Year, External; Diversity and Gender Equality. Profit per HC
(Based on pre-tax profit) Cost)/Total HC

Retention Turnover, Age group calculation, Resignation and Retirement Rate. The number of work days missed due to illness per
Absenteeism Rate Sick Days/HC
HC.
Labor Relations Grievances and Union association Percentage.
Human Capital The rate of return for each dollar invested in
{(Revenue - (Operating Cost -
Return on employee pay and benefits. (Based on pre-tax Labor Cost))/Labor Cost} - 1
HR Efficiency HR Turnover, Cost, Head counts. Investment profit)

Learning and Compensation

Investment, Cost etc. in relation to Total Payroll and Revenue.
Development
Metric Name Description Formula
Workforce Labor Cost per HC The average labor cost to the organization for each HC. Labor Cost/HC
Promotion, Career Path, Churn over, Gender and Diversity.
Demographics
Labor Cost The total labor costs as a percentage of organizational
Labor Costs/Revenue
Revenue Percent revenue.
“Without context, metrics are just numbers.” *Head Count

HRM Metrics
Recruitment
Metric Name Description Formula
The percentage of positions being actively
Vacancy Rate Count of Vacant Positions/HC
recruited for at the end of the reporting period.

People hired externally as a percentage of

External Hire Rate New Hire Total/HC
headcount.

Retention
Metric Name Description Formula
Employees who left the organization, either (Resignation + Retirements +
Turnover
voluntarily or involuntarily, as a percentage of HC. Involuntary Terminations)/HC

(Cost per hire+termination

Cost of Employees who left the organization, either
Turnover Cost cost+vacancy cost)/total
voluntarily or involuntarily, as a percentage of HC.
number of terminations

*Head Count