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Enhancing HRM: Measuring, Evaluating, Auditing Key Indicators & Satisfaction Measures

Explore how HR functions are measured, evaluated, and audited to ensure effectiveness and customer satisfaction. Learn about key indicators and measures in various HR areas such as staffing, compensation, benefits, training, and more. Discover the cost-benefit approaches and strategies for improving HR effectiveness through restructuring, outsourcing, and process redesign.

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Enhancing HRM: Measuring, Evaluating, Auditing Key Indicators & Satisfaction Measures

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  1. Activities of HR 16-2 Transformational Traditional Transactional Irwin/McGraw-Hill

  2. Customer-Oriented Perspective of the HRM Function 16-3 • Customers • Line managers • Strategic partners • employees • Technology • Staffing • Performance Management • Rewards • Training & Development • Customer Needs • committed employees • competent employees HR Function Irwin/McGraw-Hill

  3. Measuring Human Resource Effectiveness: Why Do It? 16-4 • Market the function • Provides accountability Irwin/McGraw-Hill

  4. Evaluating Human Resource Practices: Approaches 16-5 • Audit approach • reviews outcomes of HR functions • Analytic approach • determines whether program had intended effect • estimates costs / benefits of program • human resource accounting • utility analysis Irwin/McGraw-Hill

  5. Auditing Examples of Key Indicators and Customer Satisfaction Measures for HRM Functions 16-6 Key Indicators Customer Satisfaction Measures Staffing - Average days to fill position - Ratio of acceptances to offers - Ratio of minority / women to representation in labor market - Treatment of applicants - Per capita recruitment costs - Average years of education per job family - Anticipation of personnel needs - Timeliness of referring qualified candidates to supervisors - Skill in handling terminations - Adaptability to changing labor market conditions Equal Employment Opportunity - Ratio of EEO grievances to employee population - Minority representation by EEO category - Minority turnover rate - Resolution of EEO grievances - Daily assistance provided by HR department in implementing AA - Aggressive recruitment to identify qualified women/minority applicants Irwin/McGraw-Hill

  6. Auditing Examples of Key Indicators and Customer Satisfaction Measures for HRM Functions 16-7 Key Indicators Customer Satisfaction Measures Compensation - Per capita merit increases - Ratio of reclassification to total employees - Competitiveness in labor market - Percentage of overtime hours to straight time - Ratio of average salary offers to other firms in community - Fairness of existing job evaluation systems in assigning grades & pay - Relationship between pay and performance - Employee satisfaction with pay Benefits - Average unemployment compen- sation payment - Average workers’ compensation payment - Benefit cost per payroll dollar - Promptness in handling claims - Fairness in application of policies - Communication of benefits - Assistance to line managers in controlling unnecessary claims Irwin/McGraw-Hill

  7. Auditing Examples of Key Indicators and Customer Satisfaction measures for HRM Functions 16-8 Key Indicators Customer Satisfaction Measures Training - % of employees participating per job family - % receiving tuition refunds - Training dollars per employee - How well programs meet needs of employees and company - Communication about available training opportunities - Quality of orientation program Employee Appraisal and Development - Distribution of appraisal info. - Appropriate dimensions on appraisal forms - Ratio of promotions to employees - Ratio of openings filled internally to externally - Assistance in identifying potential - Organizational development activities provided by department - Number of promotions from within - Counseling provided to employees in career planning Irwin/McGraw-Hill

  8. Example of Cost-Benefit Approach for a Selection Test 16-9 Cost-Benefit Information Test Information Current employment 4,404 Number separating 618 Number selected 618 Average tenure 9.69 years Number of applicants 1,236 Testing cost per applicant $10 Total test cost $12,360 Average test score .80 SD Test validity .76 SD (per year) $10,413 Computation Quantity = Average tenure x Applicants selected = 9.69 years x 618 applicants = 5,988 person-years Quality = Average test score x test validity x SDy = .80 x .76 x $10,413 = $5,331 per year Utility = ( Quantity x quality ) - costs = (5,988 person-year x $5,331 per year) - $12,360 = $37.9 million Irwin/McGraw-Hill

  9. Improving HRM Effectiveness 16-10 • Restructuring • Outsourcing • Process Redesign Irwin/McGraw-Hill

  10. The Reengineering Process 16-11 STEP 1 Identify the process to be reengineered Irwin/McGraw-Hill

  11. The Reengineering Process 16-12 STEP 1 STEP 2 Identify the process to be reengineered - can jobs be combined? - can employees have more autonomy? - are all the steps needed? - is there redundancy? - how many exceptions are there? - are steps in proper order? - what is the desired outcome? Understand the process Irwin/McGraw-Hill

  12. The Reengineering Process 16-13 STEP 1 STEP 2 STEP 3 Identify the process to be reengineered - develop models - test models - choose prototype - integrate prototype Understand the process Redesign the process Irwin/McGraw-Hill

  13. The Reengineering Process 16-14 STEP 1 STEP 2 STEP 3 Identify the process to be reengineered Understand the process STEP 4 Redesign the process Implement the new process Irwin/McGraw-Hill

  14. The Reengineering Process 16-15 STEP 1 STEP 2 STEP 3 Identify the process to be reengineered Understand the process STEP 4 Redesign the process Implement the new process feedback Irwin/McGraw-Hill

  15. Using New Technologies to Improve HRM Effectiveness 16-16 Interactive Voice Technology Internet Networks & Client-Server Architecture Relational Databases Imaging Expert Systems Groupware Irwin/McGraw-Hill

  16. Software Applications for HRM 16-17 • Staffing • applicant recruiting & tracking • EEO & AA reports • Developing a master employee database • Human Resource Planning • succession planning • forecasting • work-force profile analysis • work-force dynamics analysis • Performance Management • Training & Career Development • Compensation & Benefits • payroll • job evaluation • salary surveys & planning • international compensation • benefits management Irwin/McGraw-Hill

  17. Improving HRM Effectiveness Through E-HRM 16-18 • E-HRM technology has freed HRM functions from transactional activities to focus on more strategic actions. • Examples include: • Recruitment and selection • Compensation and rewards • Training and development

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