Introducing HR Measurement and Reporting

Ensuring Executive Alignment and Understanding

Critical Question

Why would we want to measure human

resourceswhat 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 specialists

Employee advocates

David Ulrich HR Champions: The Next Agenda for Adding Value & Delivering Results, 1996

How HR wants to be viewed

Business partners

Change agents

Administrative specialists

Employee advocates

David Ulrich HR Champions: The Next Agenda for Adding Value & Delivering Results, 1996

How HR wants to be viewed

Business partners

Change agents

= Missed opportunity!

Administrative specialists

Employee advocates

David Ulrich HR Champions: The Next Agenda for Adding Value & Delivering Results, 1996

Stages in Human Resources functional development

COMPETITIVE ADVANTAGE (Consolidation) Total line manager accountability Internal consultants Add value Integral to company success Long term vision and strategy

BUSINESS PARTNERS Integral contribution to business plan (Integrated) Strong influence on other departments Member of top team Quality systems and processes Service management PROACTIVE Intellectual capital/knowledge management (Rapid growth) Customer/needs focused Workforce empowerment and teams Pro-active/improvement Return on investment Management development Cost/benefit Leadership training analysis INTERNAL Comprehensive database Policies and manuals Succession planning POLICE headcount, hiring, (Emerging) ControlsWorkforce planning restructuring, travel, relocation Performance management Reporting systems & budgets Workforce productivity Basic measures turnover, KIND HEARTS absenteeism (Lending Support) Cafeteria Technical and skills training Car IR disputes, grievances park Security OH&S procedures BASIC Recruitment Gymnasium NEEDS Induction Social club Payroll Christmas party Admin/Records Leave

Human Resources transformation

From industrial enterprise To knowledge-based enterprise

Service to

individual employees regulatory authorities workplace policies workplace stability workforce administrator

stockholders CEO business performance tools core competencies finance officer for human capital

Service to
Creation of Guardian of Chief

The global marketplace

Emphasis on product innovation

Squeeze on margins

Price sensitivity

Tighter cost control

Enhanced customer service

Shorter lead times

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
Management by Objectives Hygiene and Motivators Emotional Intelligence

Matrix Empowerment Kaizen Management Science MBWA EVA Customer Service Work Simplification Self-Directed Teams Hierarchy of Needs Benchmarking Excellence Delayering Plan-Organize-Direct-Control 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 Marketing Value Chain Rightsizing Change Management Reengineering Decision Tree One Minute Managing

Dilberts version of HRM!

HR perspective: organisational contribution

Productivity

Capability

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

HR perspective: organisational contribution

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

Workforce

HR perspective: organisational contribution

Workforce

Wellbeing
Leadership training Non-discriminatory workplace Fair treatment process Safe work practices Equipment and physical factors Worklife balance programs

HR perspective: organisational contribution

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 Criteria Number of FTEs Headcount Total hours utilised Workforce turnover (unplanned) Workforce absenteeism (unplanned) % of total w orkforce terminating Total $ cost of turnover % total hours lost to absenteeism Total $ cost Number of lost time injuries (LTI) Number of lost time days Workers com pensation Average duration rate of LTI Frequency rate of LTI $ cost of w orkers compensation Number of discrimination complaints recd Number of sexual harassment complaints recd Number of physical harassment complaints recd Equal em ploym ent opportunity Number of w omen in management positions - senior management - middle management Ratio of female appointments vs male % of w omen returning to w ork after mat leave Equal employment opportunity and affirmative action performance throughout the organisation ER Status Report Occupational health and safety performance throughout the organisation Occupational Health & Safety Report Measure Description Changes in w orkforce numbers and hours utilised by employee category Turnover performance and cost impact upon the organisation Absenteeism performance and cost impact upon the organisation Associated report Workforce Headcount Report Workforce Utilisation Report Workforce Turnover Report Last period This period Change YTD (avg)

Workforce Absenteeism Report

Workers Compensation Costing Report

Example KPI report (continued) HR Key Performance Indicator Report

For Period ended Criteria Measure Description Associated report Last period This period Change YTD (avg)

$ labour cost as % of sales Revenue generated per FTEs Unit production per FTEs Productivity and utilisation Labour utilisation rate Quality reject rate (employee error) Number of credit returns (linked w ith employee error) Number of customer complaints (employee related) Recruitm ent Average days vacancy duration - management Average days vacancy duration - staff Average cost recruitment - management Average cost recruitment - staff % new hires achieving 6 months service % new hires achieving 12 months service % 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 Number of employees completing sponsored MBA programs Learning centres - number of courses offered - % course participation - Internet hours utilised - e-learning courses utilised - % e-learning pass rate Learning centre effectiveness throughout the organisation Staff retention performance throughout the organisation Recruitment Status Report Recruitment performance throughout the organisation Employee satisfaction levels/organisational culture Workforce productivity/employee relations performance

Average cost of vacancies filled $ commitment to staff training and development Time commitment to staff training and development Participant satisfaction w ith training courses provided Participant attendance at training courses provided Commitment to professional development of staff throughout the organisation Training & Development Expenditure Report Training Hours Allocation Report

Training Performance Report

Training and developm ent

Example KPI report (continued)

For Period ended Criteria Measure
% of internal appointments above level __ Succession planning Avg length of service of staff apptd above level ___ Number of unfair dismissal claims Workforce lost time (hours) Number of formal union grievances % w orkforce on individual contracts Internal communications - number of bulletins issued - number of emails issued Em ployee relations - number of staff briefing sessions conducted Work/life balance - number of active flexible w ork agreements - number of active w orking from home agreements - number of active job sharing agreements Workforce teams - number of active teams - number of team meetings % compa ratio $ pay for performance gaps Rem uneration $ pay equity gaps % employee share scheme take-up rate Level of outstanding annual leave liability Adm inistration Number of manual payroll adjustments Number of employees aged under 25 Number of employees aged 2535 Number of employees aged 3545 Number of employees aged 4555 Organisation profile Number of employees aged over 55 Avg length of service (current employees) Avg length of service (terminating employees) % ratio of salaried staff to w aged staff Adequacy of w orkforce planning % ratio of surplus staff to required staff Average length of service of employees across the organisation and terminating Demographic profile of employees by age across the organisation Organisation performance in managing annual leave Payroll performance Accrued Annual Leave Report Organisational competitiveness and equity in remuneration packaging/policy Organisational effectiveness in creating and sustaining a team-based structure/culture Organisational success in providing an effective w ork/life balance program for all employees Staff alignment and commitment to the organisation Employee relations performance throughout the organisation ER Status Report Succession planning effectiveness

HR Key Performance Indicator Report

Description

Associated report
Succession Planning Status Report

Last period

This period

Change

YTD (avg)

Example KPI report (continued) HR Key Performance Indicator Report

For Period ended Criteria Measure Description Associated report Last period This period Change YTD (avg)

Number of FTEs in HR HR FTEs as % of total w orkforce (FTEs) HR headcount HR labour cost as % of sales/revenue 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 Level of satisfaction w ith personal relations Exit interview s Level of satisfaction w ith participation and recognition Level of satisfaction w ith opportunities for development Number of employees w ho w ould recommend company Number of employees w ho w ould seek reemployment w ith company % of appraisals completed on time Number of formal staff grievances raised Perform ance appraisals % of individual training plans completed % of employees above competent % of employees below competent Workforce attitude surveys Average satisfaction % vs norm Average satisfaction % vs previous survey Staff satisfaction levels w ithin the organisation. (This section is likely to be produced on an annual basis.) Performance management effectiveness throughout the organisation. (This section is likely to be produced on an annual basis.) Staff satisfaction levels w ith the organisation and reasons for leaving. (This section may not be reported on a regular monthly basis, dependent upon the volume of exit interview s received and the need to create meaningful data and protect employee confid Human resources efficiency/cost effectiveness

Workforce Headcount Report

Exit Interview Report

Example headcount report

WORKFORCE HEADCOUNT REPORT
Period ending:

Departm ent

Headcount at end of this period FT M'gment Staff Total M'gment Staff Total M'gment Staff Total M'gment Staff Total M'gment Staff Total M'gment Staff Total PT Cas Con O/T

Headcount at end of last period FT PT Cas Con O/T FT

Variation on last period ( + or - ) PT Cas Con O/T FT

Budgeted headcount PT Cas Con O/T FT

Variation on budget ( + or - ) PT Cas Con

Example workforce utilisation report

WORKFORCE UTILISATION REPORT
Period ending:

Departm ent

Variation on last Variation on budget period Budgeted hours ( + 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 Hours utilised last period Hours utilised this period 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: Summary results Total management cost Total staff cost Total company cost Current Period Year-to-date

$ $ $

$ $ $
This period Year-to-date Total cost for period $ Avg headcount YTD Total term inations YTD Turnover % YTD Total cost YTD $

Departm ent M'gment Staff Total M'gment Staff Total M'gment Staff Total M'gment Staff Total M'gment Staff Total Total com pany

$ Cost of Turnover

Avg headcount for period

Term inations for period

Turnover % for period

Example workforce absenteeism report

WORKFORCE ABSENTEEISM REPORT (Unplanned Absenteeism)
Period ending:
Input values

Summary results
Total management cost Total staff cost Total company cost

Current Period

Year to Date

Management standard hours per day Staff standard hours per day

$ $ $
Year-to-date

$ $ $

Current period Department Total hours available for period Sick leave Hrs % Paid leave Unpaid leave (other) Hrs % Hrs % Total unplanned absenteeism Hrs % Cost $ Total hours Sick leave available for YTD Hrs %

$ Cost per day

Paid leave (other) Hrs %

Unpaid leave Hrs %

Total unplanned absenteeism Hrs % Cost $

M'gment Staff Total M'gment Staff Total M'gment Staff Total M'gment Staff Total Total company

Instructions

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