How to measure effectiveness of HR?

HR Effectiveness

I have noticed changes in measurement criteria of HR effectiveness from the time I started my career in HR in beginning of year 2001 to now in year 2013. In beginning of my career HR effectiveness was measured primarily on fast recruitment, attendance and payment management, liaison with government agencies which are mainly related to HR operations. Now the expectation from HR is entirely changed. Today a CEO expects much more than simple HR operation from HR department.

A CEO expects following from HR:

  • HR related operation work should be in place and executed well in time.
  • Getting right human resource for organization
  • Aligning human resource with business to create positive impact on business performance.
  • Creating work culture to nurture and engage human resources

HR related operation work should be in place and executed well in time

In today business scenario, HR Operation may not be priority of top management as far as expectation from HR is concern but this does not mean that it is not important. I personally believe that if HR operations of a company are not in place then HR cannot concentrate or progress on other HR aspects which are related to human resources.

Imagine that you are working with a company where you have not received your appointment letter yet, you do not get your salary slips on time, sometime your salary, reimbursements or incentive get delayed, no one explain you about your tax liability etc but HR talks about your career progression, employee engagement, performance management. You may not trust what HR promise as you have a bad experience in terms of basic hygiene factors which HR should take care.

If HR Hygiene factors are in place and then HR talks about your learning and development, this will surely make sense to you.

This proves that you as HR professional need to streamline your HR operation activities. There are many HR software which are available in the market which can simplify your work with better efficiency and low error rate. You should study and choose one such HR software depending upon your budget and need.

Getting right human resource for organization

Hiring candidates who are best fit to your organization is one of the critical expectations from HR. This falls under Talent Acquisition. Candidate should be screened for following before final offer from company:

  • Fitment to company culture
  • Match to work profile
  • Match of candidate’s expectation from company

You can read my blog post “HR Challenge-How to identify right fit for your company?”  to learn more about hiring right fit candidates for your company.

Aligning human resource with business to create positive impact on business performance

You must have heard this many a times now that HR should align human resources with business to create positive impact on business performance. But the question is how? Well, there is no one straight answer to it. HR has to work on 360 degree to actually get this impact.

HR has to work on each and every angle to ensure that human resource is directed for positive impact on business performance.

First and foremost, HR should have a mature performance management system as it forms base for everything else. To do so, HR should have understanding of each and every profile in their organization and their contribution in business. Once you understand the profiles, you along with line manager should frame methods to evaluate deliverables of each profile and share the same with employee. Discuss with them, make them understand the whole process of performance management, take their buy in and implement. End of month, evaluate them on these parameters and get performance rating of each individual which is based on these evaluation method and data driven. Read my blog post “How to Build mature performance management system without any automation software? -Part 1” and read all parts of this blog to know how to implement a mature performance management system.

Based on pattern of performance rating of an individual HR should take actions in both cases- good performance and poor performance. Read my blog post “6 Things to keep in mind while taking actions based on outcome of performance management system”

Learning and Development is another area where HR makes major contribution. Training individual on both technical and soft skills as per organization requirement is critical and important. HR should intelligently do so that ROI (Return on Investment) on such training programs is higher.

I would suggest you to read following blog posts which are written on various aspects of Trainings.

How to measure ROI (Return on Investment) of training programs in your organization?

How to get best out of training programs conducted in your organization?

Why do training programs fail?


Creating work culture to nurture and engage human resources

Another very critical expectation from HR is to create a work culture where human resource is fully engaged and nurtured. I should admit that it is not possible without support of top management of company. But, in companies where management would like to have a better work culture and wants to support HR, HR should take all steps to ensure that this happens. An employee will be engaged with an organization where there is transparency in policies and procedures, communication level is high, respect to individuals, managers are supportive, pay packages are as per industry norms etc. HR has to ensure all these are in place. For this, HR needs to interact with each level in organization hierarchy. Informal communication channel pay important role in same.

Have a look at following blog post which will help you to achieve a better work culture.

Do’s and Don’t while making or reviewing Company HR Policies

How to find out, What engage an employee?

8 Things every organization should do to engage employees

Please do share your inputs in form of comments if you feel that there is some other measurement criteria to identify HR effectiveness.

Leave a Reply

  1. Hello Sir,
    I do agree with this topic. I have only one thing to say that many times you said that HR should try to have informal communication with employees. I had a very bad experience i tried that & than got feedback that HR should have only professional relation with us, HR is from management side so they only form policy which are against employees

    • Dear Sarita,

      When you are in HR, you can expect many such instances in future. You need to face such questions and answer them in proper way. I would say that it is good that you come to know about it. Now you need to find why your employees have such impression of HR or only one or two has this feedback.

      Also i would like to say that not every informal communication is relevant but you need filter which is relevant and which is not.

  2. I do agree with your points.I also strongly feels that supportiveness and trust worthyness are also a measuring points for the effectiveness of HR

  3. Iam a peoples person,presently holding a masters degree in human resource mgt. As a school administrator i would have love to move into an organisation which has an Hr department where i can learn and grow proffesionally.Please help me not to worry about my desire.What are the dos and donts?

  4. I was newly appointed as the first HR officer in my organization, there is no HR working culture here, introducing some things is very difficult for me because the management are not ready, especially when it come to the benefit of the employees and the employee are not ready also to comply with the HR policies

    • Hi Sira,

      You should post your queries on how to start setting up HR department in our HR forum or any other query which might help you in getting some basic things in place without much investment from Management.

      Following is the link of HR SUCCESS TALK Forum: