Evaluating HRM: towards the future W14

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• The main purposes of evaluation are to measure the:	–efficiency of the HR function –effectiveness of HRM systems and processes –impact of these factors on their organisations.
HRM evaluation: theory and practice	• Many HR activities are difficult to quantify • Cost–benefit measures of HRM • ‘a positive relationship between the degree of strategic alignment of HRM with business strategies and a perceptual measure of firm financial performance’
Costs and benefits of HRM	• Aid overall HR planning and control • Emphasise the nature and value of people • Valid and reliable method of reporting cost and value • Assist senior and line managers to measure their own performance
Costs and benefits of measurement	• Difficult, time-consuming and expensive • Broader social context hard to capture • Generally, HRM fails to account because: –HR manager does not know how to measure –top management’s acceptance of myth –HR manager does not want to be measured –HR manager has not been able to do apply some measures.
Measures of economic consequences of employee behaviour:	–original cost –replacement cost –opportunity cost –economic value.
Indicators of HRM performance	• Employee turnover • Wastage rates • Absenteeism rates • Injury and illness records • Ethical compliance • Corporate governance • Attitude survey and exit interview responses
HR Analytics	• Quantitative measures of the costs or benefits of aspects of HR processes. • Provide measurement standards and benchmarks that demonstrate how HRM contributes to the desired orgnisational goals and outcomes. • Customised to, and consistent with, the strategic goals of particular organisations. • Important to a range of stakeholders, for different reasons • Complex task; issue of causality • Pitfalls include linkage, lack of understanding of value, overly complex and difficult to implement measures, and fragmented or dispersed databases.
Absenteeism	• Indicates state of work environment and effectiveness of HR programs • ‘any failure of an employee to report for, or to remain at, work as scheduled, regardless of the reason’
Costs of absenteeism	• Absenteeism is estimated to cost Australian industry between $24–28 billion annually. • The Australian Industry Group reported that the cost for each employee is about $528 per day of absence, including replacement and sick leave costs. • More prevalent in some industry sectors than others. • Pay and benefits of the absent employee. • Associated supervisory costs involved in counselling, writing relevant reports. • Recruiting and training replacement employees.
Reducing absenteeism	• Monitor trends in employee absence. • Isolate areas of high absenteeism. • Absence trend analysis is most effectively carried out by HR managers, using a comprehensive HRIMS. • Supervisors play a crucial role.
Employee wastage and turnover rates	• Wastage generally refers to the rate (or ratio) of employees who leave the organisation • Turnover concerns movement within the organisation • Both indicate effectiveness of HRM, health of organisation
Negative consequences of wastage for leaver	-forfeit seniority and fringe benefits -transition stress in new job -relocation costs -terminate personal and family social network -loss of valued community services -disrupt spouse's career
Positive consequences for leavers	-obtain better job elsewhere -avoid stressful former job -renewed commitment to work -pursue outside endeavours -relocate to a more desirable community -improve spouse's career
Negative consequences for organisation	-economic costs for separation, replacement and training -productivity losses -impaired service quality -loss business opportunities -increased administrative burden -demoralisation of stayers
Positive consequences for organisation	- displace poor performers and employees with job burnout -infusion of new knowledge and technology by replacements -new business ventures -labour cost savings -enhanced promotional opportunity for stayers -empowerment of stayers
Employee attitude and engagement surveys	• Qualitative method of gathering information about employee levels of satisfaction in their jobs • Information on job design, supervision and communication • Organisation-wide or workplace basis • Questionnaire or interviews • Aid employee commitment • Enhance productivity
Employee exit interviews	• Administrative issues include details of severance payments and the return of computers, mobile devices, identity cards, passes and keys. • Fact-finding strategies cover areas such as: –reasons for departure –relationships with supervisors –fairness of pay, training, career development and performance programs –working conditions –pros and cons of the job and organisation –communication issues –suggestions for improvement.
HR program evaluation	• ‘...methods and techniques intended to assist managers to make judgements about the value or worth of the design, implementation and outcomes of, for example, the strategic or structural initiatives, policies or procedural practices, programs or processes adopted by an organisation.’
The purpose of HR program evaluation	• Evaluate the effectiveness • Ensure compliance • Assure ethical standards • Promote change and creativity • Assess the financial advantages and disadvantages • Bring HR and line functions closer • Improve the quality, image and contributions • Focus HR staff on crucial issues
Corporate governance and CSR	• Structure the board to add value • Promote ethical and responsible decision making • Safeguard integrity in financial reporting • Make timely and balanced disclosure • Respect the rights of shareholders • Recognise and manage risk • Encourage and enhance performance • Remunerate fairly and responsibly • Recognise the legitimate interests of stakeholders

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Evaluating HRM: towards the future W14

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	Creado por Dilek Senturk hace más de 7 años