10/16/2016

What are Metrics?

Definition

A Metric is a quantifiable measure that is used to track and

assess the status of a specific business process.

Definition

Standards of measurement by which efficiency, performance, progress, or

quality of a plan, process, or product can be assessed.

Metrics are numbers that tell you important information about a process under question.
They tell you accurate measurements about how the process is functioning.
They provide base for you to suggest improvements.
Using a combination of metrics is a good strategy to measure the effectiveness of the process.
Metrics are used to drive improvements and help businesses focus their people and resources on
whats important.

Ultimately, metrics will help tell the organization:

Where it has been
Where it is heading
Whether something is going wrong
When the organization reaches its target

Minhaj Azeem Abbasi

BM-26539
Accompanied by

Sir Vijay Kumar

IBT-Gulshan Campus

Defining a metric is similar to telling a joke if you have to spend too much time explaining it then it will not work.!!!

What are Metrics?

continued.

What are Metrics?

continued.

Key Aspects

Types of Metrics

Data is consistent, cheap, and quick to collect.

You can measure results within a week.
You can replicate the process.
Drive the strategy and direction of the organization.
Provide focus for an organization, department or employee.
Help make decisions.
Make the process objective and drive performance.
Change and evolve with the organization.
Produce good internal and external public relations.

Marketing Metrics
Sales Metrics
Financial Metrics
Social Media Metrics
Performance Metrics
Metrics vs KPIs

Business metrics are used to track all areas of business.

KPIs target critical areas of performance.
Metrics can be a powerful tool for informing and guiding decision making at
all levels of an organization. They can, however, be detrimental if not
designed and implemented properly. In order for metrics to deliver value
rather than distraction, they must be clearly defined, completely
understood and broadly communicated, as well as focused on the areas that
are most important to the success of an organization.

You cant pick your data, but you must pick your metrics.

HRM Metrics
The human resources function in business generates costs but rarely generates any
revenue. This creates constant pressure on them to show their value and contribution in
organization success.

There is a difference between numbers and numbers that matter. This is what separates data from metrics.

HRM Metrics - Functions and Impact

HR metrics involve compiling and analyzing specific data and information culled from various
sources to gain a better understanding of how HR is contributing to the business side of a company.
HR metrics are powerful tools to show us areas where we could improve and better
meet the needs of our organization and its employees.
These measurements demonstrate how effective the efforts of the human
resources department are to the overall success of the organization.
Not only can the effectiveness of HR be demonstrated in quantitative terms, it must be in order to
explain its importance. Compiling and communicating metrics is a requirement for HR strategists.

For Organization

For Employees

Get a pulse on the health and stability of your workforce.

Develop clarity on what counts most in their organization.

Informed HR decisions to recruit and retain the best staff.

Use the information garnered to assess the impact of

activity and inform their decision-making.

Understand if HR initiatives are working.

Set a foundation for long-term growth.
Intelligent Investments in HR.
If you can't measure it, you can't improve it. - Peter Drucker

See organizational priorities within a wider picture to

direct and manage themselves with more awareness.

If you're not keeping score, then you're just practicing.

10/16/2016

HRM Metrics - Categories

HRM Metrics
Productivity

Performance based on Profit, Revenue and Capital Employed.

Productivity

Labor cost Analysis i.e. Salaries, wages and benefits.

Compensation

Metric Name

Description

Formula

Revenue per HC*

The number of dollars of revenue from operations

generated per HC.

Revenue/HC

Recruitment

Vacancy, Turnover with in a Year, External; Diversity and Gender Equality.

Profit per HC

The number of dollars of profit generated per HC.

(Based on pre-tax profit)

(Revenue-Operating
Cost)/Total HC

Retention

Turnover, Age group calculation, Resignation and Retirement Rate.

Absenteeism Rate

The number of work days missed due to illness per

HC.

Sick Days/HC

Labor Relations

Grievances and Union association Percentage.

Human Capital The rate of return for each dollar invested in

Return on
employee pay and benefits. (Based on pre-tax
Investment
profit)

HR Efficiency

HR Turnover, Cost, Head counts.

Learning and
Development

Investment, Cost etc. in relation to Total Payroll and Revenue.

Compensation
Metric Name

Workforce
Demographics

Promotion, Career Path, Churn over, Gender and Diversity.

Without context, metrics are just numbers.

{(Revenue - (Operating Cost Labor Cost))/Labor Cost} - 1

Description

Formula

Labor Cost per HC The average labor cost to the organization for each HC.

Labor Cost/HC

Labor Cost
The total labor costs as a percentage of organizational
Revenue Percent revenue.

Labor Costs/Revenue
*Head Count

HRM Metrics
Recruitment
Metric Name

Description
The percentage of positions being actively
recruited for at the end of the reporting period.

Vacancy Rate

External Hire Rate

People hired externally as a percentage of

headcount.

Formula
Count of Vacant Positions/HC

New Hire Total/HC

Retention
Metric Name

Description

Formula

Turnover

Employees who left the organization, either

voluntarily or involuntarily, as a percentage of HC.

(Resignation + Retirements +
Involuntary Terminations)/HC

Turnover Cost

Cost of Employees who left the organization, either

voluntarily or involuntarily, as a percentage of HC.

(Cost per hire+termination

cost+vacancy cost)/total
number of terminations

*Head Count