How Is the Effectiveness of a Human Resource Strategy Measured?

Setting specific goals for human resources performance can help you measure the effectiveness of your efforts and let you tweak and adjust them where needed to foster improvement. A proactive HR strategy covers areas such as recruiting, training and managing employees in the most cost-effective ways possible. Reviewing your specific goals for each will help you measure your anticipated benefits against your actual results.

One way to measure the effectiveness of your HR strategies is to examine the quality of the new employees you’re able to hire. Start with the creation of a detailed organizational chart that fills all of your functional needs. Create detailed job descriptions for each position and the skills and abilities needed for each one. Doing this for current employees allows you to determine if you’ve filled each position with the best worker possible. If your research finds your employees are lacking some skills and abilities, you will know you need to rethink your job descriptions, want ads, interviewing techniques or compensation packages.

Each position you fill should have a target contribution to the company. Some employees might have measurable goals, such as a production worker who you want to make X number of units per day, or a sales rep who you want to sell X dollars worth of business per month. Other positions have intangible goals, such as a receptionist or IT person. Creating detailed job descriptions for each position will help you set desired outcomes for your staff that you can review to determine if your strategies are producing the results you expected. Reviewing your training policies will help you determine if that’s an area that’s contributing to worker productivity as you expected.

The higher your staff turnover, the weaker your HR strategies may be. If you can’t keep employees, it might be due to causes such as a lack of communication or respect between management and staff, inability to deliver promises made during hiring, noncompetitive compensation or poor management and training of employees once they’re on board. Employee satisfaction surveys can help you pinpoint areas where you need to improve. Conduct exit interviews with departing workers to determine why you are losing staff and whether you need to change your retention strategies.

A key measurement for any HR strategy is cost. Conduct a budget variance analysis of your personnel costs, including those associated with recruiting, hiring, training, management, compliance and compensation. Determine if you need to outsource any of these areas to get more value for your budget. If you’re over budget, determine if that’s a case of inaccurate projections or lack of management of your HR function.