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[Music] HR basics is a series of short courses designed to highlight what you need to know about a particular human resource management topic in today's HR basics we explored human resource metrics first by identifying how to use metrics and then by understanding what metrics to use HR metrics qualify the impact and measure the success of human resource programs and processes but before we start a conversation about the use of metrics we have to address the issue of data quality the intelligence you glean from analytics will lead only as good as the data included in your metrics to help identify what metrics to use find data that meets the care criteria include only information that's consistent the data underlying the metric must be measured steadily over time accurate information should be precise with few to no errors in recording it reliable your metrics must use a dependable proxy of what you're ultimately trying to assess and efficient the cost of collecting the data must be minimal before we get too much further into metrics we have to understand that the effective use of human resource metrics requires that human resource and business professionals understand first how to use metrics strategically to solve organizational problems and second what metrics to use across the array of functional areas of human resource management let's take a look let's start with the simple truth that human resource professionals must use metrics strategically to solve organizational problems here are three important tips to use metrics strategically in your organization first understand the question first then look for metrics second recognize that metrics alone offer limited value and third ask the right questions understand the question first then look for metrics though metrics can be used to monitor performance most data scientists emphasize their use in gathering the intelligence needed to resolve an underlying issue or create a new strategy the - to get past the what and fully understand the why the benefit of using metrics is that the decisions are better informed and backed by facts rather than hunches and we have to recognize that human resource metrics alone offer limited value you can't look at metrics in isolation they have to be looked at holistically finally we need to learn to ask the right questions another trick to using metrics successfully is to be curious when you get into that habit you start to ask better questions and learn to challenge the answers use a metrics map as your guide understand the business strategy tie the strategy to HR strategy and determine the measurements that will help you address the issues at hand so let's move on to what metrics to use human resource professionals need to understand what metrics to use across the array of functional areas of human resource management human resource professionals identify a myriad of definitions of the functional areas of human resource management that's by finding common language to define our work is so important I believe that there are eight key and interrelated functions of human resource management shown in the model here for each functional area we'll look at one essential HR metric but before going any further recognize that this is just one metric in each of the eight functional areas there are hundreds of metrics that we use to manage human resource as well so let's take a look at human resource strategy and planning which identifies and manages current and future needs to achieve organizational goals a great metric here is return on investment the return on a company's monetary investment in a new program or activity or change to a current program or activity we calculate it by taking the anticipated benefits - the developmental costs over the total development cost of the program and multiply it by a hundred moving on to compliance which is doing what's asked or required by the federal state or local government in the management of people a good metric here is settlement costs and penalties these are the costs and fines and legal settlements related to HR issues for example HR related settlements and penalties could 1.2 million dollars for the first quarter talent management are the integrated processes to attract motivate and retain productive and engaged employees turnover rates a great metric that's the rate at which employees are leaving the organization in the given time period we calculate it by taking the number of separations during the time period over the average number of employees during the period and multiply it by a hundred training and development is about the betterment of people and performance through information they will use a training participation rate is a good metric to measure successful training and development initiatives it's the percentage of employees who participated in company paid training we calculate it by taking the number of participants in training over the number of eligible employees and multiplying it by a hundred performance management refers to the process to ensure the organization connects mission with the work of employees a good metric is the average performance rating which is the mean performance rating across a selected group of employees receiving a performance appraisals we calculate it by taking the total of all performance ratings dividing it by the number of employees who received a rating and multiplying that by 100 total rewards are the financial and non-financial tools used to attract motivate and retain employees there the returns for work a comparation is a good metric here which is defined as the relationship of current salaries to average salary rates so we calculate a copper ratio by taking the pay rate over a pay range average safety and health is about ensuring the safety security health and welfare of people at work accidents both total and averages are a good metric here which provide a direct measure of workplace safety and an indication of company risk of incurring high worker compensation costs we calculate it by taking the number of accidents over the number of our employees finally employee and labor relations focuses on the relationship of employees with the organization and with each other a good metric is the employee relation incidents metric which reflects the prevalence of employee relations incidents each organisation must find what's constitutes an incident before they can calculate the metric which is simply taking the number of incidents over the number of your employees there are hundreds of human resource metrics used in organizations today critical to the strategic success of human resource management is the appropriate use and application of the right metric in a given situation [Music] you