Monday, December 15, 2014

Human Asset KPIs & HR Analytics

It is a strategic imperative to manage people as the human asset and capital, not just the costly resources.

People are the most invaluable asset in any organization, but often they are the weakest link to execute business strategy. What KPIs would you recommend to determine the value an employee adds to their department and how would you implement it? Further, at the digital era, how can HR analytics enable digitized performance management and talent management?
There are two aspects about human asset KPIs; first what value the individual adds to the department, and second what value the department adds to the business. Taking the second one, in a maintenance department, you'll be aware of the various measures of reliability, availability, utilization and the Turnaround KPIs like safety and cycle time. At an individual level, it might come down to the annual assessment of how he or she did against the objectives that were set, or if they had ownership of a particular section of plant or set of equipment then the failure modes, mean time between failure, overdue inspections etc come into play. For the first step, you need to review the critical success factors on balanced score cards. You need to determine what is the role to expect your employee become. After that, you can build the measuring system according to these besides warming up individual development system for a particular demand.
Traditional HR KPIs focus on measuring employees’ efficiency; such as reducing non-productive time (NPT) and improving productivity. In a traditional aspect, people have been treated as business resources. Measuring/improving efficiency and delivering value from your resource is more about having the visibility and insight into the non-productive time (NPT) and focusing on reducing that. Resources waiting on materials, permits, tools, plant lockout/availability are not efficient, and to improve management behaviors need to be proactive rather than reactive. Sticking to the plan/schedule has been shown to deliver double the work.
The analytics brings important indicators on how HR and organization should analyze, measure and invest in human capital and organization efforts on people. Data-driven talent management can leverage different variables and evaluate talent and manage performance in more transparent and systematic way. There are two analytics functions, performance, and recruitment. HR is probably more attuned to using some type of analytics in performance measures. Departmental heads provide the data and most often the analytics. In the general business function of recruiting talent, however, most HR departments are ill equipped to adopt analytics to fill positions or grow the alternative talent pipeline.
HR analytics is an ongoing capability to understand and manage talent effectively. To manage their human asset, HR related technology development and investment are necessary to improve the analytics efficiency, But, on the other hand, the management shall have plans, actions, quality, productivity, customer satisfaction and such other achievement targets with equal sincerity and responsibility. It is up to seasoned HR practitioners to understand the feedback, correlations and trends and how to influence them positively with sensible and sensitive strategies and tactics. Too often they witness poor or under-informed decisions lead the catastrophes with too-late solutions that cost a lot of time and money. So there's still a journey on transferring the value of HR analytics to organization's success because of below reasons:
1)Self-evaluating its improvement: Organizations can benefit from HR analytics maximally only when it can self-evaluate its improvement actions based on HR analytics consistently. It means that whether the organization has a mechanism on evaluating its improvements upon HR analytics periodically is critical. If not, the analytics might stay in indicators only. Or the organization is somewhat sightless on its investment/efforts on HR analytics.
2) HR analytics as an ongoing capability. Organizations should not only take HR analytics as a medicine of certain problem, consider or take it seriously only when there's problem. Or only apply it to solve the problem in the certain area. To reach 100% of the organizational goals through the efforts of all employees, the management have to create very good/congenial atmosphere with their good policies/incentives to employees and see that all employees will feel that the organization is belonging to them and the organization will treat them fairly. Then they will contribute their might to the industry fully and in turn the organization, as well as the employees will be proceeding in flourishing path always.
It is a strategic imperative to manage people as human asset and capital, not just the costly resources, the traditional performance management KPIs may too much focus on efficiency and productivity, and the more analytics-driven approach needs to be taken for employee engagement, creativity encouragement, and performance improvement.


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