Defining objectives, targets, KRAs, and KPIs for individuals, teams, and/or business units is one of the most widely-practiced and effective performance measurement practices today. While the objectives and KRAs guide the everyday functioning of the business, it is the KPIs that tell us how efficiently this execution was carried out.
A key component of the long-term and short-term planning processes, KPIs are, for the most part, measurable and quantifiable. Every business unit or team has its own set of KPIs ranging from those that are informal to those that are absolutely critical for the business performance, and each individual KPI of this set corresponds to either a KRA or the overall objective. KPIs also play a big part in determining the benefits, payroll hike, and bonuses.
The Human Resource Management (HRM) function of an organization is one of its most important business units and it has its own set of KPIs that determine the overall business unit’s or an individual’s performance. Here are a few of these critical KPIs that you might want to consider adopting for your own HRM function:
1. Lead time between the requisition and acquisition (recruitment) of a resource: This KPI tells you how well-equipped your HR team is when it comes to recruiting personnel. Once the requirements and budgets are set aside for this, the onus is upon the HR department to acquire the resource as soon as possible for the smooth running of businesses. Under this KPI, there can be sub-categories like number of people interviewed, number of CVs processed, interview scheduling efficiency, etc…
2. Number of grievances/complaints/issues revolved and turnaround time: Every company has employees raising issues or complaints and often these come to the HR department. This is a useful KPI that helps determine how your HR department deals with these issues and the time that was expended on each issue.
3. Attrition rate: One of the responsibilities of the HR function is to keep employees motivated and happy. Happy employees don’t look for greener pastures while employees who aren’t, do. This KPI tells you what the HR unit is doing to keep employees happy and motivated to perform their job functions.
The above are but few of the many KPIs of the HR function. Use human resource management software for understanding and implementing KPIs and appraisal and KPI templates.
If you think of any other critical KPIs, please let us know!