Human Resources Metrics, Reporting and Financial Management

These flashcards cover key concepts and terminology from the Human Resources Metrics, Reporting and Financial Management lecture, aiding in exam preparation.

Human Resources Metrics

A cluster of competencies related to the ability to collect, manage, and synthesize information relevant to HR management.

Return on Investment (ROI)

A financial metric used to evaluate the profitability of an investment, calculated as (Benefit – Cost) / Cost.

HR Audit

A review of HR policies, programs, and processes to identify opportunities for improving efficiency and effectiveness.

Operational Metrics

Metrics that assess the efficiency and effectiveness of HR programs and services.

Strategic Metrics

Metrics that assess the alignment between HR programs and the organization's strategic goals.

Employee Self-Serve

A web-based system that allows employees to manage their own HR-related tasks.

Nominal Scales

A type of measurement scale that categorizes variables without a specific order or value.

Quantitative Research

Research that focuses on quantifying variables and generalizing findings across variables.

Qualitative Research

Research that focuses on understanding meaning and experience, often through interviews and observations.

Predictive Validity

The extent to which a score on a measure or test predicts future performance or behavior.

Retention Metrics

Metrics that track indicators of employee turnover, including resignations, retirements, and involuntary terminations.

Learning and Development Metrics

Metrics that assess training costs, participation rates, and the overall effectiveness of learning initiatives.

SWOT Analysis

A strategic planning technique used to identify Strengths, Weaknesses, Opportunities, and Threats.

Compensation Costs

Labour cost per FTE = Labour cost / FTE

Labour Cost Revenue Percent = labour costs/ revenue

Cost of benefits as a percentage of total labour costs = benefit costs/ labour costs.ER

Return on Investment (ROI)

Return on Investment = Benefit - cost/cost

Information Technology 

all the hardware and software including netting and communications technologies

Benefits of Information Technology

Operational (processes are more efficient) , relational (people are more connected), and transformational (the way work is done has changed)

Web- Based Systems

Emplployee self serve, manager self serve, HR portals. These systems allow employees and managers to access HR services online, improving efficiency and satisfaction.

Types of HR Management Systems

Enterprise Resource Plans (ERP), Stand alone (HRIS), and Speciality Products)

Factors to consider when selecting an HRIS system

Does what you need, can it be upgraded/customized, availability of tech support, user friendly, compatible with current systems, time requirement to implement, cost.

Informal and Legal Compliance

Federal and provincial legislation regulate what is collected, how it is stored, who has access, and how long it is retained.

Retention of HR Documents

CRA requires that documents for earning be retained for 6 years (income tax acc, employment insurance act, Canada pension act). Provincial jurisdiction also regulates information retention (employment standards, workers compensation, human rights, privacy, labour relation boards).

Employment Standards Act

Name, address, start date, hours worked, overtime, vacation time/pay..etc. Ontario requires info be retained for 3 years - other provinces its 2.

Human Capital Metrics

educational level, experience, skill inventories, performance scores, tenure or service. measures organizational talents

Human Resources metric

the efficiency and effectiveness of HR programs 

Efficiency metrics

Doing things right

Effectiveness metrics

doing the right things measuring outcomes/values and impacts of HR initiatives

Operational metrics 

Short-term impact. Assess efficiency and effectiveness of programs and services.

Strategic metrics

Long term impact. assessing the linkage between HR programs and services and the organization’s strategic goals.

MC Model of HRM impact

The MC Model of HRM impact evaluates HR effectiveness through various key dimensions such as compliance with laws, client satisfaction, management of organizational culture, control of costs, and contributions to business goals.

Metrics are used to

Establish base lines - to compare current practice with past practice.

Conduct benchmarking- to compare current practice with best practices outside the organization. 

track trends - including economic, demographic or workforce trends.

Justify strategic decision regarding talent management.

Service profit chain (Part of HR metrics)

engaged (satisfied) employees = engaged customers, = sustained profit & growth

HR Dashboard

tool that visually displays important HR metrics

Absenteeism measures

# of workdays missed due to illness per full time equivalent employee (FTE) = sickbays/ FTE

Overtime measures

average # of overtime hours worked by each individual contributor = overtime hours / individual contributor headcount.

Human capital ROI

Rate of returner each dollar invested in employee pay and benefits = revenue - (operating expenses - (compensation and benefits costs) )/ compensation and benefit costs.

Productivity metrics

absenteeism measures, overtime measures, Human capital ROI

compensation metrics

compa- ratio for an individual = individual salary/ midpoint of salary band - 

recruitment metrics

the % of positions being actively recruited for is the vacancy rate = # vacant positions /total # of positions.

external hire rate = # external hires/ all positions filled

average time to fill a position

cost of external hires

quality of external hires

retention metrics

Turnover rates, succession planned (improves retention rates)

labour relations metrics

grievance rate= # of open grievances / unionized headcount

% of grievances closed

arbitration grievance rate

learning and development metrics

costs metrics associated with training programs, employee development initiatives, and their impact on performance and retention.

Analytics uses statistic to look at patterns of data: BIG Data

• What drives employee engagement?

• What impact is training having on the bottom line?

• What factors are contributing to turnover rates?

• What characteristics predict the best leaders?

• What sources produce the best candidates? 

Research Process

Used to predict and measure the value of an initiative. HR needs to be able to propose evidence-based solutions that can be measured for effectiveness.

Why is it difficult to measure the value of an HR program?

1. HR initiatives do not occur in a vacuum.

2. HR initiatives are mostly “qualitative” as opposed

   to “quantitative.”

3. HR professionals are too busy to conduct research or are unaware of how to do so.

Research Process

•  Identify the problem -  Need more sales.

• Review the situation - Identify factors that affect sales.

• Formulate the hypothesis - Better customer service = increased sales.

• Design program - Establish a service budget, provide training, introduce tracking process and incentive bonus.

• Implement program - Introduce into just a few stores.

• Evaluate program - Track sales transactions, volume of sales # of customer service interactions, $ spent and compare to stores where program was not implemented.

Dependent variable

Sales - what you are trying to impact

Independent variable

customer service - the variable that has an impact on the dependent variable

Four common research designs

surveys, experimental, qualitative, existing research

Surveys

Used to assess change or create change.

Sampling

involves deciding who and how many people should participate.Types of sampling include:

• Random sampling – a group of employees chosen at random from the whole organization or population.

• Stratified sampling – a group of employees who represent the organization in some way (i.e. gender, department, location, occupation, etc.).

• Sampling error – sample is insufficient to reflect the entire population.

Structured questions

easy to analyze and limited in scope

open-ended questions

difficult to analyze and not restrictive in scope

Acquiescence response styles

• When a person gives the same favorable response to every question.

• To avoid, word some questions positively and some negatively in order to change the scale.

Social desirability

• When a person gives the answer they think you want

  to hear.

• To avoid, use a forced choice behaviourally anchored check-list.

Experimental Design

find relationships between one or more variables.

Developing Research Measures

• Criterion measures – ensure we are measuring what is important (i.e., the competencies related to a job when conducting interview assessments).

• Criterion relevance – ensures the criteria are relevant to what we are trying to predict (i.e., all the right competencies are assessed).

• Criterion deficiency – occurs when we haven’t assessed all the necessary criteria (i.e., an important competency is missing from our assessment).

• Criterion contamination – occurs when we measure things that are irrelevant.

4 types of measurement scales

1. Nominal Scales – a list of variables that have no “value” (e.g., department name).

2. Ordinal Scales – a list of variables that have an order (e.g., what employees like best or least; or what the want most, etc.).

3. Interval Scales – a scale that tells us the mathematical difference between two responses (e.g., the Likert Scale).

4. Ratio Scales – show the relationship between two variables (e.g., sales per employee).

Validity

ensures the measure is accurately assessing what it is supposed to measure

Reliability

ensures the consistency of the measure

Types of Validty include

1. Content Validity – ensures the measure accurately measures what it is supposed to.

2. Criterion-relatedValidity – ensures that what is being measured is relevant.

3. Predictive Validity – ensures that the measure can predict the dependent variable.

4. Construct Validity – measures abstract constructs, such as IQ and Personality Type.

5. Concurrent Validity – when it can be shown, for example, that current high performers also do well on the test, it is said to have concurrent validity.

Types of Reliability

1. Test-retest Reliability – when a person achieves the same score when tested twice using the same test.

2. Split-half Reliability / Internal consistency Reliability – when the score a person achieves on one-half of the test is the same as the score they receive on the other half of the test.

3. Inter-rater Reliability – ensures reliability across raters; for example, when two different raters have scored a candidate similarly.

General topics in statistics

• Measures of central tendency - mean mode and median

• Measures of variability

• Measures of association - show connections between two variables 

• Regression analysis 

Regression Analysis

• Regression analysis uses correlations to predict an outcome.

• Regression can be used in behaviour research, for example to predict employee turnover.

• Regression is most often used in job evaluation to predict job value in terms of a competitive market salary.

Analytical Tools

• Affinity Diagrams / Mind Maps – enable us to look at groups of related issues as a whole.

• Cause and Effect Diagrams / Fish Bone Diagrams – are used to identify a problem, sorting causes into four categories (machinery, methods, materials, people).

• Gantt Charts – chart activities against dates.

• Critical Path – minimum time between start and finish of a project.

• Delphi Technique – brainstorming using a questionnaire.

• Nominal Group Technique – when voting follows a brainstorming activity.

• SWOT Analysis – examining Strengths,Weaknesses Opportunities or Threats.

• Utility Analysis – assessing the dollar value of an initiative in terms increased productivity or performance.