HUMAN RESOURCE MEASUREMENT AND BENCHMARKING

Why Measure HR?

The measurement of HR's contribution to organisational success is at the heart of the challenge it faces in demonstrating that it has the capability and capacity to play a strategic role.

Effective HR measurement reflects a number of important current trends :

• The demand of Boards for more evidence of HR's contribution to the organisation.
• The increasing need to demonstrate that human capital is being used more effectively and more efficiently managed.
• Stakeholders requiring more understanding of HR's impact on the organisation.
• The expectation of government and regulatory bodies for more reporting on human capital issues.

Dilys Robinson, Principal Research Fellow at the Institute of Employment Studies, comments in a recent report (2008) :
"Measuring the value people bring to a business can be tricky but is vital to monitoring the health of your organisation. HR plays a crucial role in making the links between things such as employee engagement, turnover and vacancy rates, and customer satisfaction, and measuring their impact."

Why Benchmark HR?

The case for benchmarking is strong :

• It provides the means to review both the effectiveness and efficiency of the HR team and its processes.
• It supports the monitoring and review of HR objectives.
• It highlights the relative strengths and weaknesses of current HR practices, in relation to perceived 'good practice'.

Who To Benchmark With?

There are a number of questions to be asked when deciding which organisations are most appropriate for benchmarking with :

• Are we going to learn best practice or see how comparable organisations tackle problems similar to ours?
• Will our own colleagues find organisation X or Y more credible than A or B? Are they going to believe a study which excludes X?
• To get a sense of how we are doing.
• As a source of ideas.
• Searching for 'excellence'.