y Article-1: y Article-2: y y Article-3: y Article-4: y Article-5:

HR is as HR Does! HR efforts often go unnoticed, misinterpreted The value of Self-Evaluation HR Framework Strategic HR Evaluation

y Many HR professionals admit that neither the management nor the

employees feel HR adds value to the business either directly or indirectly.

y Some believes that HR function is the staff function or cost centre of

the organization.
y The main mission of HRM was seen to be improve morale, help

employees and perform routine administration. Therefore the HRM function was not evaluated.
y But today, HRM is a strategic Business Partner.

y If you cant measure activity, you cant manage it. y Use the Right Strategy y Quantify Tasks y Play several roles y Measure the impact of HR activity on overall business

objective. y Build trust through constant feedback.

y HR Evaluation is the procedures and processes that

measure, evaluate and communicate the value added of human resource management practices to the organization.

y The promotion of change by identifying strengths &

weaknesses.
y An assessment of the performance of the HR function. y Able to measure the contribution of the HR function. y functions role of HR in the achievement of organizational

goals.

 WHAT SHOULD BE EVALUATED:

y - the overall HR effectiveness or only the effectiveness of HR

function.
y - HR practices, the HR department, or HR professionals ? y - HR activities and practices, or the impact of HR policies on the

organization and employees ?

y - the level of analysis in HRM evaluation within the organization

structure ?
y - What criteria should be used to assess the effectiveness of the HR

function/departments ?

Overall HR Effectiveness Scope Narrow Evaluation HR Deptt. Focus HR Professional HR Practices HR Evaluation Strategic Linkage Reactive to Proactive

Strategic
Level of Analysis

Management Operational Outcomes Processes

Evaluation Criteria

Determine the critical success factors of the firm

Understand how HR can add value to the critical success factor

Design the appropriate HR measures to be aligned with the framework

Balance Scorecard

HR Scorecard

Benchmarking

Business Excellence Model

Customers

Successful Business Performance

Investors Employees

Steps in Using the HR Scorecard 1. Define business Strategy 2. Outline the value chain of the company

Example of an AMUL COMPANY y To be a global leader y Develop new and unique products, which requires certain employee behaviours and also requires employees who have the expertise to develop new products
y y y y y

3. Identify strategic organizational outcomes 4. Identify required workforce competencies and behaviour 5. Identify relevant HR systems and practices 6. Design HR scorecard and measurement 7. Periodically evaluate the measurement system

Development of new products Creativity and proactivity, Training to enhance workforce creativity and innovation Has morale gone up or down as a result of HR practices? Does the HR practice have desired impact on employee competencies?

1.

Identify HR practices to be benchmarked (TRAINING) Identify the team members of the benchmarking exercise Identify the benchmarking partners against whom benchmarking will be done Collect data from benchmarking partners Analyse and interpret data
repare a written report of the finding

2.

3.

4.

5.

6.

7.

Determine performance gaps Develop action plans

8.

The current performance of the firm is evaluated against these nine criteria:
y Leadership y People y Policy & Strategy y Partnership & Resources y Processes y Performance y Customers y Society y Focus on the future

The Basic framework and features of the TBEM are

y Delivering continuously improving value to customers y Improvement of overall effectiveness of the organization y Organizational and personal learning

1. y y

EVALUATING TRAINING INVESTMENT: Benefits to cost Ratio = Program Benefits/Program Costs Training ROI (%) = (Net program benefits/Program costs) * 100

EXAMPLE: Monetary Benefits from the program were estimated to be Rs. 2,500,000. The total implementation costs of the training program were Rs. 500,000. Benefits to cost ratio = 2,500,000/500,000 = 5:1 Training ROI (%) = (2,500,000 - 500,000/500,000)*100 = 400%

2. EMPLOYEE TURNOVER RATE:

ETR= (Number of employee leaving/Avg. Number of employee during the period)*100

EXAMPLE:
y

In a company, 80 persons leave in the 2nd quarter (July to Sept.). The number of employees at the start of study period(July1) was 600 and the no. of people at the end of the study period (Sept. 30) was 680.

Avg. no. of employees during the period = (600+680)/2 = 640 ETR (for the year) = (80*4)/640*100 = 50%

3. EMPLOYEE RETENTION RATE:

y

ETR= (Number of employees with one or more years of experience/Avg. Number of employee during the period)*100

EXAMPLE:
y

A company had 300 employees at the beginning of the year and 340 at the end. The number of new hires in this period was 100. During this period, 60 employees (with varying experience levels) left the organization. At the end of the year, 280 employees had one or more years of experience.

Avg. no. of employees during the period = (300+340)/2 = 320 ERR = (280/320)*100 = 87.5% ETR (for the year) = (60/320)*100 = 50%

y The HR Management Manual (By Paul Davis) y Strategic HRM (CHARLES R. GREER) y Human Resource Planning (By Monica Belcourt) y Strategic HRM (By Tanuja Agarwala) y HRM Review y HRM Capital y HR Operation (Journal) (Published by XLRI) y Management Control Systems y The theory & practice of SHRM (By Kaufman)