People Development and HR

With such a wealth of research, proven results, and an entire industry built on staff development, Jerry Cope asks why companies do not make the same investment in people as they do in physical assets.

One reason must be the difficulty of measuring success. I think one of the problems here is that we do not spend much effort measuring the effectiveness of our HR departments. This establishes a culture whereby HR feels it is unable to justify its effectiveness, and senior managers - not least finance directors - are unwilling to invest in projects from a department which is poor at quantifying and monitoring its own success.

I strongly believe that there need to be more HR metrics in an organisation. I accept this is not easy, otherwise there would be standard approaches in place, as there are for financial metrics. But it is possible to do something, and a major international manufacturing company with whom we work has defined their key HR processes as follows:

• To provide people (at the right place at the right time with the right quality)

• To develop people performance (through performance management and personal   development)

• To manage and reward people (through pay and incentive systems, promotion systems etc.)

It is then introducing metrics around each of these three processes. For instance, on the first process it measures the percentage of succession cover available for all higher level management roles, it measures the length of time to fill a vacancy and the percentage of internal and external recruitment by grade. The board are agreeing targets for all these areas. For the second, it does 360° evaluations and is measuring overall organisational scores from these 360°s, as well as the achievement of development plans. Finally, on the third process it is measuring what it calls the retention of key talent, as well as the more traditional measures provided by sickness levels, turnover, and employee opinion surveys. In this organisation HR is now beginning to be seen as a department that looks for measured improvement just like any other, and it seeks to promote its performance through metrics.

So I hope my overall message is clear. HR (and, of course, line managers who are the key agents for HR) needs to start coming into the world of quantifiable management by agreeing some HR key metrics and demonstrating  effectiveness against agreed targets. But that is only a start. We need to start investing in tools that measure individual effectiveness, probably on an individual, then organisational basis. These tools can help managers to help themselves improve their own performance and the performance of the organisation. We can sometimes feel uncomfortable about using these tools and measures because they are so personal, but that is not a reason for not using them. Their value is proven.

Only in this way can we improve performance through people.

This is an extract taken from Improving People Performance Through Metrics, by Jerry Cope. This speech was delivered to the HRD Conference in 2007.