HR Metrics and Financial Performance

Question: Discuss about the HR Metrics and Financial Performance. Answer: Introduction Human resource metrics are defined as the standards of measurement that are used to access the HR performance of the organization. It can be said that HR metrics should align with business and corporate strategy which add value to the strategic decision making process of the company as well as organizational effectiveness. The study will describe about the effect of various HR metrics in the decision-making process and return on investment in different human resource activities of organizations. The important metrics that HR professionals use while enhancing their strategic decision-making processes in the organizations are cost per hire, employee engagement, diversity, workforce productivity, performance, turnover, etc. Employee engagement- HR managers perform employee engagement metrics by that help the management in understanding the frustrations and challenges faced by employees. Leadership is responsible for the improvement in sales, organizational effectiveness and customer service. Companies like McDonalds use different activities of employee engagement that boosts their morale in the work. It will help in the improved decision-making process of the company at various strategic levels (Ulrich and Dulebohn 2015). Cost per hire- Cost per hire is an important metrics that affects the financial attribute of the company. The employers take account into several aspects such as maintenance of permanent workforce, expense of training, recruiting, etc. The factors that are included in the cost per hire metrics are time of the staffs for interviewing candidates, processing new employee, cost of new hire orientation, pre-employment assessments cost, etc (Sheehan et al. 2016). Diversity- HR metrics of diversity are maintained in all levels of strategic management of the socially responsible organizations. The HR professionals calculate the HR metrics for the purpose of the labour market while generating employee census reports. The disclosure measurements are responsible for the calculation of various veteran data (Dulebohn and Johnson 2013). It can be said that companies like Starbucks, Coca Cola, etc. are known for their diversity related programs in different human resource functions of their company. Performance- HR performance metrics are used in the organization in measuring various operational departments of the company such as customer service productivity, manufacturing production, and sales performance. Performance metrics are used in rewarding different types of people in the areas where people are successful in their area of expertise. Google, Samsung, Apple, etc. use performance metrics to measure the employee performance, as these companies are driven by innovation. Turnover- The aspect of the metrics of turnover is responsible for creating an impact in the decision-making, business strategy planning, etc. The managers must have to compare the turnover of the other companies in the industry in order to add improvement process (Sen and Haque 2016). The above metrics of HRM will help not only the HR manages but also to the managers of the senior management of the companies for making effective decision making process regarding various operational departments. References Dulebohn, J.H. and Johnson, R.D., 2013. Human resource metrics and decision support: A classification framework.Human Resource Management Review,23(1), pp.71-83. Sen, A. and Haque, S., 2016. HR Metrics and the Financial Performance of a Firm: A Case Based Approach.Journal of Management Research,16(3), pp.177-184. Sheehan, C., De Cieri, H., Cooper, B.K. and Brooks, R., 2016. The impact of HR political skill in the HRM and organisational performance relationship.Australian Journal of Management,41(1), pp.161-181. Ulrich, D. and Dulebohn, J.H., 2015. Are we there yet? What's next for HR?.Human Resource Management Review,25(2), pp.188-204.