HR METRICS

What are HR Metrics ?

HR Metrics is a term used to describe the measurement of human resource activities. It includes all aspects
of employee performance, including recruitment and selection, training, development, compensation,
benefits, rewards, recognition and retention.
The goal of an effective human resources management system is to ensure that employees are satisfied
with their jobs so they will be more productive and loyal to your company. This article discusses how you
can use data from various sources in order to measure the effectiveness of your human resources
department.

What Is Performance Metrics?

Performance metrics meaning:
Performance metrics refers to any type of information about the work being done by people within an
organization. These include:
 Job descriptions
 Employee evaluations
 Payroll records
 Time sheets
 Attendance logs
 Surveys
 Interviews
 Feedback forms

The purpose of using these types of measurements is to help managers make decisions about what needs
to change or improve for each individual job position. The purpose of using these types of measurements is
to help managers make decisions about what needs to change or improve for each individual job position.
The most common way to collect this kind of information is through surveys.
For example, if there’s a new manager who wants to know whether his team members like working
together, he could ask them directly on a survey. Or, if someone has been hired at the sales department
but does not have any sales experience yet, then it would be useful to have some sort of evaluation before
she starts her first day.
In both cases, the results of the survey might show that the person isn’t very good at communicating with
others, which means that he should probably get additional training. If the same situation happened again
after another month, then the manager may decide to fire him because he wasn’t able to perform well
enough during those two months. The key thing to remember when collecting performance metrics is that
every single piece of information must be accurate and reliable. Otherwise, the whole process becomes
useless.

What are Key Metrics ?

Key Metrics meaning :
Key Metrics refer to specific measures that provide insight into the overall health of a business. They’re
often referred to as “business indicators” or “indicators.” Key Metrics give executives a clear picture of
where things stand right now, allowing them to see trends over time. Some companies also use key metrics
to predict future outcomes based on current conditions.
For instance, let’s say that you own a restaurant chain called “Burger King.” You want to figure out how
many locations, you need to open next year in order to maximize profits. To find out how much money
you’ll earn per location, you’d look up historical earnings figures for similar restaurants around the country.
Then you’d compare Burger King’s numbers against other chains’ numbers to determine whether opening
more stores makes sense.
Key Metrics aren’t just limited to financial analysis; they can apply to almost any aspect of running a
business. Here are some examples of Key Metrics:
 Customer satisfaction scores (e.g., Net Promoter Score)
 Sales volume
 Product quality
 Inventory levels
 Return rates
 Number of complaints filed
 Average customer wait times
 Turnover rate
 Cost per customer acquisition
 Profit margins
 Market share
 Brand awareness
 Loyalty programs
 Retention rates
 Satisfaction ratings
 Quality control standards
 Recruiting success rates
 Staff turnover rates
 Training completion rates

1.0 12-HR Metrics to drive employee productivity in your organization

Based on an intensive literature survey, the author has identified 12 HR Metrics, directly relating to
employee productivity.

1.1 Employee Absenteeism Rate (EAR)

The Employee Absenteeism rate is the percentage of employees who are absent from work for more than
three consecutive days. It can be calculated by dividing the number of employee absences in a given period
by the total number of full-time equivalent workers employed during that same time frame. Job boards
track the offer acceptance rate and conversion rate.
The following table shows how to calculate an EAR:
Number of Employees=Full Time Equivalent Workers x Average Hours Per Week.
Absent Days / Total Absence Days Percentage of Employees with More Than 3 Consecutive Day’s Absence.
Example 1: A company has 100 FTE and they have 10% absenteeism, which means there were 90 people
working on average per week. Therefore, we multiply these two numbers together to get 180 hours
worked per week or 5400 hours worked annually. We then divide this figure by 52 weeks to find out the
number of absence days per year.
1.2 Profit Per Employee (PPE)
PPE= Total Profit/Total number of regular employees
We may calculate profit as follows :
PBT: Profit Before Tax = Total Revenue – operating cost
PAT: Profit After Tax = Total revenue – operating cost – tax
Profit per employee is an important measurement, and if it is decreasing, we must address it by taking
short term and long term measures.

1.3 Employee Task Completion Rate (ETCR)

The Employee Task Completion rate is the percentage of work that an employee completes in a given
period. It can be calculated by dividing the number of completed tasks for all employees during a specified
time frame, such as one month or quarter, by the total number of assigned tasks for those same employees
over the same timeframe.
A business development scorecard metrics is efficient in maintaining the task completion rate. The ETCR
provides insight into how well your team members are performing their jobs and whether they’re meeting
expectations. If you have high-performing teams, it may indicate that there isn’t enough work to go
around.
On the other hand, if your team has low performance levels, this could mean that some people aren’t
doing what needs to get done on a consistent basis. In either case, having a clear understanding of where
things stand will help you make better decisions about hiring new staff, training existing workers, and
managing overall productivity.

1.4 Overtime Hours (OTH)

We may calculate percentage over time hours as follows: The recruitment team would handle the hiring
process and payroll metrics as well .
Percentage over time hours per month = (Overtime hours per month / Regular working hours + overtime
hours ) x100.
The recruitment team would be responsible for the quality of hire and the candidate experience.
We should note the following in case of increase in percentage of overtime hours or overtime hours:
 It indicates an increase in workload.

In all such cases, you should hire more people lest the regular workers should get overworked
 Analytics and Metrics in payroll decides this aspect of employee work hours and income.
 Maybe , the employees don’t finish their job knowingly, within regular working hours.

So that they may get paid for overtime hours. Company metrics would help decide and calculate the
employee performance metrics
 Higher overtime hours is not good for any company.
 Management metrics could help understand and improvise the employee’s performance through
performance reviews.
 You may calculate it age wise, department wise, team wise or across the organization, to study the
behavior.
This may help in taking decisions to strengthen the weak spots, after identifying them.

Photographer: Carl Heyerdahl | Source: Unsplash

1.5 Employee Productivity Rate (EPR)
Employee Productivity Rate (EPR) is a metric that measures the productivity of an employee. It’s calculated
by dividing total hours worked in one week by the number of employees working during this period and
multiplying it with 100 to get the percentage. This gives you an idea about how much time your employees
are spending on their work, which can be used as a measure for evaluating performance.
The EPR helps managers understand if they need to hire more or less people to achieve desired results.
Productivity Metrics Type Description Average Daily Hours Worked Average daily hours spent at work per
day. Number Of Employees Total No. of employees who have been employed within the last 12
months. Percentage Of Full Time Workers % of full-time workers out of all employees.
Weekly Earnings Gross weekly earnings of all employees divided by no. of weeks worked. Evaluation
metrics can help understand employee performance, Data metrics and human resource metrics are there
to measure productivity rate of the employees. However, the total company revenue may also fall due to
non employee and other extraneous reasons.

1.6 Revenue Per Employee (RPE)

The Revenue per employee metrics reporting is a measure of the profitability of an organization. It
measures how much revenue each employee generates for your company, and it’s calculated by dividing
total annual revenues by the number of employees in that year. The higher this ratio, the more profitable
your business is. This metric can be used to compare different companies or even departments within one
company.

1.7 HR Expenses per employee

HR expenses for employee= Total salary and benefits of HR department / Total number of employees in the
organization.
HR expenses per employee is the total expenses incurred by the human resource (HR) department, divided
by the total number of employees working for the organization, over the same period of time. If HR
expenses per employee increase, while Hiring manager satisfaction and HR effectiveness decreases, then it
is an indication that HR efficiency has gone down. It further means that the HR department is not taking
good care of employees. In that case, employee productivity may be affected. The application of these
regression metrics will make more sense if you take a closer look at our HR certification programs and learn
the reasons from a detailed point of view.

1.8 Average time on promotion or pay increase

Average time until promotion = Date of pay increase or promotion – date of joining after selection
If the average time until promotion is more than average of 18 months to 2 years for new entrants, it may
be a motivating aspect. Talented employees may leave, if not promoted or given a pay increase in time.

1.9 Billable hours per employee

Billable hours are the amount of work time of an employee, which we charge from the clients and thus, get
money in return. This is a common HR and recruitment metrics in IT consulting and legal firms. However, if
an employee is working full time for a client, his total work time may not be booked as billable hours.
You must deduct the lunch or tea time and other breaks from the total work time. As per reference
“fitsmallbusiness.com” targets for billable hours per week should be 35. If billable hours per employee per
week are less, the reasons should be investigated and remedial action should be taken.
1.10 Health care cost per employee
Health care cost per employee = insurance costs + other health care expenses in organization / total
number of employees
Health of employees is a matter of prime concern. Organizational health programs that improve employees
health by reducing, preventing or controlling diseases can affect employee productivity.

1.11 Timesheet and scheduling match

The timesheets are the most important part of any project. They help you to keep track of your time spent
on a particular task, which is very useful for billing purposes as well as monitoring how much work has
been done in a day or week. The schedule helps you plan ahead so that you can complete all tasks before
they become due dates. It also allows you to see what needs to be completed first.

1.12 The average amount of non productive effort, employees are putting in
This is a major cause for concern as it can lead to lower productivity and increased costs. The ETCR is the
percentage of time that an employee spends on tasks which do not contribute towards their job objectives
or goals. It’s important to understand how this affects your business because if you don’t manage negative
emotions effectively then they will negatively impact your company’s performance. Negative emotions
such as anger, frustration, anxiety etc., have been proven to be detrimental to workplace.

2.0 Conclusions
The author has listed 12 HR Metrics for driving employee productivity in your organization.
12 types of metrics Metrics to drive employee productivity in your organization
1. The number of employees who are actively engaged with their work and the company is a good
indicator of how productive an individual or team will be. Engaged workers have higher levels of job
satisfaction, which leads them to perform better at work. They also tend to stay longer within the
organization as they feel more valued by it.
2. Employees’ engagement level can be measured using surveys such as Gallup’s well-known. This
survey helps you understand what motivates people on both sides of the table: managers and
employees. It provides insights into why some teams thrive while others struggle. You can use this
information to improve performance across all areas of your business.
3. A strong culture that values transparency and honesty among its members is one of the most
important factors contributing to high employee retention rates. This means that if there is no trust
between management and staff, then there won’t be any loyalty either.
4. There’s nothing like having a clear vision and mission statement when it comes to motivating
employees. If you want to know whether your workforce feels motivated, ask yourself these
questions:
o Do my employees believe I am committed to helping them succeed?
o Am I providing opportunities for growth?
o Are we working toward common goals? Is our workplace fun and exciting?
5. When it comes to measuring employee happiness, pay attention to things like salary increases,
promotions, bonuses, training programs, etc. These types of rewards help motivate employees
because they show that you value their contributions.
6. One way to measure employee happiness is through asking about their overall experience with the
company. Ask open ended questions so that you get honest answers from your employees. For
 example, “What do you think makes us different?” Or “How would you describe our corporate
culture?”.
7. Another way to gauge employee happiness is to look at turnover statistics. Turnover costs
companies money every time someone leaves. So, if you’re looking to reduce your cost per hire,
make sure you keep track of your turnover rate.
8. According to research conducted by Harvard Business Review, happy employees are three times
less likely than unhappy ones to leave their jobs. That being said, it doesn’t mean that you should
focus only on keeping your best performers around. Instead, try to find ways to retain everyone
else too.
9. Asking your employees directly about their feelings towards their current role is another great way
to determine how satisfied they are. Find out where they see themselves going next and encourage
them to share their thoughts.
10. Finally, don’t forget to take stock of your own personal life. If you aren’t feeling fulfilled, chances
are your employees won’t be either. Make sure you spend enough quality time with family and
friends outside of work.
11. By focusing on improving each aspect of your business, you’ll create a positive environment that
encourages creativity and innovation and ultimately, that will lead to increased productivity.
12. Lastly, remember that even though you may not always agree with everything your employees say,
listening to them is still important. After all they have valuable insight into what works and what
doesn’t. Plus, with the help of our short term and long term courses listed in HR analytics advanced
certification program.
Plus, with the help of our short term and long term courses listed in HR analytics advanced certification
program.
You can understand how KPI metrics positively impacts the performance and the output of the
organization as a whole.
Continuing Professional Development (CPD) Membership offers a variety of learning opportunities for HR
professionals to sharpen their competencies in the areas of workplace proficiency, technological efficacy,
business acumen and HR domain.

Frequently asked questions :

How likely are employees to recommend your company as a good place to work?
An eNPS score is a good indication of how employees feel about the company. In order to get a better idea
of what your employees think about the organization, ask them directly. Ask open ended questions such as
“What do you like most/least about working here?” “How satisfied are you with management? Do you see
any improvements needed?” “Do you plan to stay with us?” and “Are there any changes we should make
to improve our workplace?”
What is the average amount of non-productive effort employees are putting in?
In order to grow as a business, you need to know how much time employees spend doing things that aren’t
adding value to the bottom line. You can use the employee effort rate to measure whether or not your
workforce is spending too many hours on non-value added activities.
In order to measure employee attendance accurately, it’s essential to know how many hours each person
works. Using a time clock or other method, you can determine if your employees record accurate work
hours.
What’s the Difference Between Employee Engagement and the Employee Experience?
Employee Experience is the overall experience of being employed by an organization. It captures the
entirety of an employee’s interaction with the organization including prehire experiences to post exit
interactions, as well as elements of a job related to a person’s role, workplace, wellbeing, and relationships
within the organization.

Key Metrics
1. Employee Absenteeism Rate
2. Profit Per Employee
3. Employee Task Completion Rate
4. Overtime Hours
5. Employee Productivity Rate
6. Revenue Per Employee
7. HR Expenses per employee
8. Average time on promotion or pay increase
9. Billable hours per employee
10. Health care cost per employee
11. Timesheet and scheduling match
12. The average amount of non-productive effort, employees are putting in