KPI for HR: How, When and Where?

Key Performance Indicators (KPI) also known as KSIs which stand for Key Success Indicators are not specifically linked only to HRD, but has to do with the entire organization. Since HR is the heart of any organization usually HR is assists other department also to set and identified their KPIs, which are measurable and quantifiable in nature so as to measure the success of the organization in terms of the organization's mission and goals. Hence KPIs can be defined as measurements for an organization's success.

For example, HR Department could have Employee Turnover as one of its KPIs. The goal for setting this KPI would be to reduce employee turnover. It could be defined numerically for better definition such as to reduce employee turnover by 5% every year. This KPI could be defined as the total of the number of employees separated from the organization for reasons of resignation or termination divided by the number of employees at the beginning of the year. It could be measured on a fixed time schedule like every month or every quarter. For HR Department other KPIs can be following: Recruitment KPI, Training KPI, Health and Safety KPI, Performance KPI, HR Efficiency KPI, Working Time KPI, Compensation KPI, Labor Relation KPI, Employee Satisfaction KPI, Employee Loyalty KPI, HR Budget and Accounting KPI etc.

Sample Explanation:

Frequently used HR KPIs include:

FTE = Full Time Employees

Revenue per Employee (FTE) 

Assets per FTE 

Training Hours per FTE 

Training Costs per FTE 

HR Department Cost per FTE 

FTEs per HR Department FTE

Acceptance Rate 

Average Cost per Hire 

Absence Rate

Turnover Rate

Resignation Rate 

Human Investment Ratio 

Compensation & Benefits/Revenue 

Average Remuneration

Time taken per recruitment

Cost per recruitment

The choice of HR KPI will vary from year to year, subject to organization’s strategic planning, corporate strategies and objectives which in turn affect HR’s strategic planning, HRM strategies and objectives. Bellow, I am providing only one KPI’s in details here. If anyone needs the details of other metrics, please do email me.

Training KPIs include key performance indicators as follows:

1. Training courses

• Number of courses offered

• Number of courses implemented.

2. Training costing

• Organization training expenditure (% of salaries and wages)

3. Training certificates

• Number of employees completing sponsored education programs

4. Training hours

• Average number of training hours per employee

5. Training budget

• % of HR budget spent on training

• Average training costs per employee

6. Training satisfaction

• Employee satisfaction with training.

7. Training results

• % of employees gone through training

• Average time to competence. That is average time it takes until expected competence level is reached.

• % & employee reach competence after training.

8. Training penetration rate

It measures the percentage of employees completing a course compared to total number of employees employed.

9. E-learning training

• e-learning courses utilized

• % of e-learning pass rate

And indeed e-HRM is the key tool to measure all the metrics successfully with 0% error.

© Shaki, Ahmed R (2012), Candidate of PhD in HRM, UUM

e-HRM and Employee Satisfaction.....

Human Capital function of an organization is accountable for complying with the Human Resources needs of the organization. Along with other business functions in human capital also align their strategies, policies and practices with organization mission, vision and goal. Human Capital Management or Human Resources Management whatever we named it, improving the system each and every day. There is no point of satisfaction unless HR practitioners every day try to improve the service both for external and internal customers. Electronic Human Resources Management (e-HRM) is one of such development for HR.

In any organization employees have different perceptions about the term "e- HRM". e-HRM is basically a web-based solution that takes advantage of the latest web application technology to deliver an online  real-time  Human  Resource  Management Solution. It is comprehensive but easy to use, feature-rich yet flexible enough to be tailored to organizations specific needs. It also refers to the processing and transmission of digitized information used in HRM, including text, sound and visual images, from one computer or electronic device to another. It will be able to meet the demands of today's Human Resource Management.

Using e-HRM technology is a way of aligning and coping up with organization HR strategies, policies and practices.  The e-HRM technology supports the HR function through web-technology based channels. The e-HRM provides a portal which enables managers, employees and HR professionals to view extract or alter information which  is  necessary  for  managing  the  HR  of  the organization. HR personnel have to keep it in mind that employees’ satisfaction is must for smooth working of an organization.  Without this, peaceful running of an organization is not possible.  If some changes are done in the organization and employees are not satisfied with it then the results of those changes are not in favor of the organization. So, before implementing e-HRM within the organization as well as after implementation HR personnel have to recheck repeatedly that employees are happy with the service or not. The satisfaction factors of employees' satisfaction towards e-HRM are can be Faster Communication, Improvements, Benefits, Employee Management, Time Efficiency and Client Oriented.

Please feel free to contact with me if you have any further query about e-HRM. Thanks

© Shaki, Candidate of PhD in HRM, UUM