Module 1 Case

Viewpoint

HR metrics and workforce analytics: it is a journey, not a destination Subhashini Durai D., Krishnaveni Rudhramoorthy and Shulagna Sarkar

M etrics are numerical data that reflect some descriptive details about the given

outcomes or processes, whereas analytics is a set of strategies for converting and

combining the data elements into metrics and for examining the relationships or

changes in metrics. Understanding these combinations helps the managers to know about

the current or changing state of human capital and their performance effectiveness in an

organization. This knowledge can impact their managerial decision-making ability. In

general, to perform analytics in an organization requirement, the policy makers has to

depend on the troubles and opportunities that currently faced by its managers. This path

leads to the calculation of metrics that the organization needs in order to compute the

analytics.

Human resource measures which are universally used in organizations are the inventive

work of Dr Jac Fitz-enz and the early benchmarking effort he has done all the way through

the Saratoga Institute. Initially it was very difficult to identify a right methodology to calculate

metrics and alignment with organizational objectives. But today, due to the development of

computers with robust communications infrastructure and better access to data through the

adoption of integrated human resource information, organizations are becoming involved in

reporting more consistently and systematically. And also management decisions are

evidence based where cost and benefit analysis is equally focused.

Why HR metrics and workforce analytics?

To take an effective decision, managers need to have quantified data with numerical results

which can be obtained with the help of process-specific metrics and analytics. And now

managers needs to know what information they need and what human indicators that can

be reported using metrics. This is the fundamental problem to a manager to start with

calculation of metrics and analytics.

The main objective of the measuring metrics and analytics are to:

� create interest in measurement and analysis as a simple to calculate and report more

metrics;

� evaluate and report human resource indicators that it translates into better

organizational performance;

� generate and report HR metrics that help to measure individual, unit, or organizational

performance;

� translate information into meaningful reports that helps the managers to make different

and better choices than they would do with mere information;

Subhashini Durai D. is PhD

Research Scholar and

Krishnaveni

Rudhramoorthy is

Professor, both at the

Department of

Management Studies, PSG

Institute of Management,

Coimbatore, India.

Shulagna Sarkar is

Assistant Professor at the

Department of

Management, Institute of

Public Enterprise,

Hyderabad, India.

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� change the manager’s decision-making behavior by reporting human resources

indicators using a return on investment-based approach; and

� Focus on improving management decisions by calculating appropriate metrics and

comparing it with various standards and periodical results.

Will it support problem-solving and decision-making processes?

Metrics and analytics is a better problem-solving measure in organizations, because in any

situations decisions are made after analyzing the tactical choices. In response to specific

problems, the choices may be among alternative choice to achieve specific outcomes. The

choices could also involve trying something new, or to take no action at all. Making effective

decisions requires a better understanding of the outcomes that one is attempting to

achieve. Also one requires knowledge on how the factors influence those outcomes and

about the available choices based on the cost–benefit approach.

The goal is to use the expertise of HR professionals in human resource management

regarding their understanding of the best way to recruit, select, train, design, motivate,

develop, evaluate, and retain employees at organization to help achieve its goals more

effectively. The operational indicators of the business units like on-time delivery, units sold,

etc. can help organizations improve their operational efficiency. HR managers must first

identify what processes are most likely to achieve organizational goals and find ways to

maximize the efficiency and effectiveness of implementing these processes in the

organization.

What is the first step to generate metrics and analytics?

The first and foremost step to generate metrics and analytics strategies in an

organization is identification of existing problems faced by them. Due to the changing

environment and global requirement, the labor measurement also changes. The main

focus is on the problems faced by the organization and human resources in the working

environment. These problems should be solved by the management of the organization

as early as possible. Because the world is moving with a competitive attitude and also if

there are any delay in making appropriate decisions, these may lead the organization to

a difficult situation. To bounce back from those difficulties might take time and the

organization would feel it difficult to keep pace with the changing global requirements in

the business world. Thus the only solution to face these difficulties is to identify new

performance measurements. In this way, metrics and analytics plays a smart role in

measuring the performance of the organization and aiding decisions-making at

appropriate times. The organization should organize to strengthen R&D where the HR

professionals will experiment with new measurements and test existing assumptions

about the requirements of the current systems of the organization. This test can

encourage new approaches and allow the creation of new metrics and analytics.

Summary

The development of effective human resource metrics and workforce analytics is likely to

be seen in the future as a very important source of competitive advantage. Through the

use of human resources measures and workforce analytics, decision-makers will gain the

ability to more effectively manage and improve human resources programs and

processes. This in turn improves the effectiveness of the workforce. Using metrics and

analytics in all functions of human resources department, management decision-makers

can modify comprehensive employment systems by effectively managing the company’s

human capital.

VOL. 27 NO. 1 2019 j HUMAN RESOURCE MANAGEMENT INTERNATIONAL DIGEST j PAGE 5

HR managers must be able to express their capacity to use metrics and analytics to handle

their own operations, and others are more likely to listen to their recommendations (George,

2016). HR professionals also need to work closely with their business associates in

operational departments to help them get better their capability to achieve the preferred

results. Producing metrics and analytics from any information system will improve decision-

making by influencing the decision-makers to decide to make different and better

decisions. Finally, the use of human resource metrics and workforce analytics improves

organizational effectiveness and strategic decision-making of managers that positively

impact the organization’s performance as a whole.

Reference

George, L. (2016), “A study on the acceptance of HR analytics in organisations”, International Journal of

Innovative Research and Development, Vol. 5 No. 2.

About the authors

Subhashini Durai D. is a Research Scholar (Management Studies) at Anna University, Tamil Nadu, India. Her areas of interest are HR metrics, Predictive analytics, Performance measurement and Performance management. Subhashini Durai D. is the corresponding author and can be contacted at: [email protected]

Krishnaveni Rudhramoorthy is a Professor at PSG Institute of Management, Coimbatore, India. She is a recipient of “Outstanding Woman Researcher Award (2010)” and “Best Management Educator Award (2009)”. She is presently the head of the HR stream and Professor of HR and OB. Her current interest are in employee engagement, Analytics and performance management.

Shulagna Sarkar is an Assistant Professor and Coordinator PGDM – HRM course at Institute of Public Enterprise with both industry and academic experience. Also the Coordinator for Centre for CSR and looking after the activities of Case Research Centre at IPE. Actively involved in research and consultancy in the area of Human Resource Management (HRM) for both public and private sector organizations in India. Areas of specialization include Competency Management, Training and Development, and Corporate Social Responsibility.

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Keywords: HR metrics, Decision-making, HR analytics, HR managers, Metrics and analytics

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