EVALUATION OF HR

PROGRAMS AND
POLICIES
 THE SCORECARD
• Corporate scorekeeping allows organizations to make
the adjustments necessary to reach their goals.
• The scorecard, with its measures of key indicators
focuses managers’ and employees’ attention on what is
important to the organization.
• Focusing on desired results increases the ability to attain
the results.
 THE IMPORTANCE OF
EVALUATING HRM
• An article in Fortune magazine called for the abolition of
the HR function, arguing that HR managers are unable
to describe their contribution to value except in trendy,
unquantifiable, and “wanna-be” terms.
• Increasingly, the HR department is being treated like
other operational units- that is it is subject to questions
about its contribution to organizational performance.
• HRM must make a difference, if it doesn’t it will be
abolished.
• Decision makers view training as expenses and view
results as value.
THE 5C MODEL OF HRM IMPACT
• Executives, investors, customers and HR professionals
themselves make judgements in many ways about the
effectiveness of the HR function. The numerous areas
that are judged can be grouped into 5 clusters- the 5 Cs
of evaluating HRM.
 COMPLIANCE
• Senior management depends on HR expertise to ensure
that organizational practices comply with the law. Many
HR departments were started because of the need to
record compliance with employment standards, such as
hours worked and overtime payments.
• HR can make a difference by ensuring that managers
and employees comply with law, thus saving company
legal costs, fines, and damaging publicity
 CLIENT SATISFACTION
• Customer satisfaction is important. Many organizations
are tracking their success by customer satisfaction.
• These measures have been found to predict financial
performance, on a lagged basis. This means that if
employee morale drops, management can expect to see
customer satisfaction level drop in about six months.
 CULTURE MANAGEMENT
• Highly effective organizations seek to influence attitudes
through the development of appropriate that will support
optimum performance.
• The assumption underlying the culture management
model is that HR practices can have a positive on
employee attitudes, which in turn influence employee
performance.
 COST CONTROL
• Traditional organizations continue to see personnel as
an expense. The labour component of the production
process in service organizations, such as universities
and government departments is an organization’s single
largest expense.
• HR practices can reduce labour costs by reducing the
workforce while attempting to get the same volume of
work done with fewer employee.
 CONTRIBUTION
• The thesis underlying the contribution model is that HRM
practices shape the behaviour of employees within an
organization, and thus help organization achieve its
goals.
• HRM practices have a positive effect on employee
performance: they increase KSAs.
APPROACHES TO MEASURING HRM
PRACTICES
• Cost-Benefit Analysis: The relationship between the
costs of a program and its benefits.
1) Direct Costs: The hard costs that can be measured by
expenditures.
2) Indirect costs: The soft costs whose value can be
estimated but not measured easily by financial costs.
• Auditing and Benchmarking: An audit is a measurement
method that assesses progress against plan.
• Audits keep the HR department on track and are the
primary tool to assess current performance to develop
action plans and future goals.
• Benchmarking: An organized method for collecting data
that can be used to improve organizational operations,
through comparison with other operations.
• It is the tool and can be used to accomplish the
following:
1) Stimulate an objective review of processes, practices
and systems.
2) Motivate employees.
3) Provide objective, comparative data with best in class
organizations.
Benchmarking can be done by internal or external
consultants.
• Internal consultant have the advantage of knowing more
about the organization and being trusted by the staff
supplying the information.
• External auditors may be more objective, have greater
numbers of outside references or benchmarks, and are
more likely to convey bad news to manageme3nt.