| Familiarity with the concept of HR KPI will | | | | indicators also help the HR department |
| help management and human resource department | | | | identify which areas an employee excels and |
| heads measure their performance in line with | | | | which areas he needs to improve at. Likewise, |
| organizational goals. Moreover, these factors | | | | these indicators can be used to determine |
| help them identify strengths and weaknesses | | | | employee disposition as with regards to their |
| of the organization's human assets. | | | | jobs. By determining this, the HR department |
| | | | could institute activities that will help |
| HR KPI is actually an acronym for the words, | | | | eliminate stress in the work place. Some of |
| human resource key performance indicators. | | | | the most common HR KPIs are revenue per |
| Human resource refers to the people who are | | | | employee, training cost per employee, |
| hired to perform certain functions for the | | | | acceptance rate, average cost per hire, |
| company. Key performance indicators, on the | | | | absence rate, turnover rate, human investment |
| other hand, are metrics or measures that are | | | | ration, resignation rate and average |
| used to quantify organizational objectives | | | | remuneration. |
| that are in line with the organization's | | | | |
| strategic performance. These figures are | | | | Some companies opt to implement an HR |
| mostly used by management to evaluate the | | | | balanced scorecard in their organizations. |
| current state of a company vis a vis its | | | | This measurement tool considers several |
| organizational goals. These are also often | | | | perspectives in measuring the productivity of |
| referenced to when deciding what course of | | | | the labor force. The perspectives considered |
| action to take. In essence, HR KPIs will | | | | in this scorecard are strategic, operational, |
| determine how the human resource of an | | | | financial and customer. The strategic |
| organization contributes to the | | | | perspective measures the ability of the |
| organization's overall performance. The | | | | organization to change organizational culture |
| identification of relevant HR KPIs is very | | | | and structure in line with the implementation |
| important as these will most likely influence | | | | of certain business strategies. The |
| how an organization performs. Moreover, these | | | | operational perspective, on the other hand, |
| may vary year to year depending on corporate | | | | focuses on the effectiveness and efficiency |
| strategies implemented, corporate objectives | | | | of HR activities such as turnover rate and |
| and strategic planning. | | | | attrition rate. The financial perspective, |
| | | | meanwhile, measures the worth of human assets |
| It is an accepted truth that the workforce of | | | | and the expenses that companies need to |
| a company is its most important asset. The | | | | shoulder in keeping them. Lastly, customer |
| productivity of each employee therefore, | | | | perspective looks at how effective the human |
| contributes to the overall performance of a | | | | resource department is from the viewpoint of |
| company. Employee productivity is usually | | | | internal customers which are the employees. |
| measured by HR departments by quantifying the | | | | |
| value of each employee. Such criteria as | | | | HR KPI may differ from organization to |
| initiative, teamwork, cooperation, quality of | | | | organization due to their inherent qualities |
| work and problem solving skills are also used | | | | like nature of operations and objectives. |
| to for this purpose. Identified HR KPIs may | | | | Nevertheless, HR managers could learn from |
| be disseminated to motivate employees to | | | | each on how to improve the overall |
| perform better and to develop necessary | | | | productivity of their departments and the |
| skills that would make them better at what | | | | employees as well. |
| they do. Aside from this purpose, these | | | | |