Evaluating HRM Effectiveness

If we’re not keeping score,

we’re just practicing!

Ankur Duggar
Vishal Jagetia
Nature & Need for HR evaluation

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 Evaluation Framework
Individual employee performance indicators
•Absenteeism
•Accidents
•Separations Organizational performance

HRM •Costs
•Quality
•Policies •Productivity
•Principles •Market Share
•Practical's •Profits
•Systems •ROI

Group performance indicators

•Interpersonal relations
•Dynamics
•Processes
•
Approaches to HR Evaluation

HRM Evaluation Approaches

 Audit Approach
Approaches:
•

Comparative
•

Outside authority
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Statistical

Compliance

MBO
 Analytical Approach
Relies on cost-benefit analysis

 Qualitative & Quantitative Approach
• Metrics :
ROI = net benefits / cost of HR interventions
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Hiring cost = total cost of hiring / no. of hires

Turnover rate = no. of employees left during a year X 100
average no. of employees

HR expense factor = cost to hr / total cost

Effectiveness of each employee = productivity / CTC

Balance Score Card
 Benchmarking Approach
• Identify HR practices to benchmark
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• Establish a core team
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• Select the benchmarking partners
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• Collect the data
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• Analyze and interpret data
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• Prepare a report
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• Implement action plans
•
 Conclusion
HR is not Cost to the organization it is Revenue generation
function to the organization

HR is the department which maintains and sustains the
consistent growth in the organisation

For HR Effectiveness, following plays a pivotal role:
•

Systems and tools

Leadership
HR Strategy
Skills
Structure
HR Design, Policy & Processes


 “Not everything that can be
counted counts and not
everything that counts can be
counted”

THANK YOU