Question

Discuss the main criteria and methods used to evaluate the contribution of the HR function. Here, you need to consider how you can evidence HR’s contribution to success. What criteria/data can you select within the organisation that can show this? Provide a summary of a range of different types of information and explain how they would be presented and analysed, within a hypothetical report, to clearly provide this information. You could include benchmarking data, balanced scorecard, SLAs, KPIs, metrics etc.

Answer 1

Human resources department is one of the most important departments which connects all other departments and helps all focus towards achieving organisational targets. Hence the HR has to be very effective. Following are certain ways to confirm the effectiveness of HR:

1. Training programs held, time and money spent, employees trained and results achieved in the KPIs (Key performance indicators)
2. Manpower turnover
3. Survey of feedback regarding HR effectiveness from all employees
4. Company sales achieved
5. Closeness to organisational targets
6. Effectiveness of balanced scorecards
7. Leadership developed
8. HR dashboards

The two major criteria to determine the HR effectiveness internally are :- Manpower turnover and Targets achieved.

Performance appraisal:- Effective performance appraisal have several benefits such as improved employee efficiency, productivity, motivation, etc. This facilitates upward and downward communications. The appraiser conveys regarding organisation goals, and the required contribution from the appraisee. While the latter conveys if he/she requires any help or training or guidance to perform the duties. They are assessed by 3-4 KPIs ( Key Performance Indicators) in their respective KRAs (Key Result Areas).

Balanced Scorecard is a performance management tools which helps strategically analyse the activities of employees and the outcome of their work. It is focused towards organisational goals and objectives. It helps to channelize the thoughts of employees towards company's targets while achieving their own personal goals.