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June 25, 2007
4 Ways HR Metrics Go Bad

By Sean Dean

Human resource mangers must address four important areas if they want their company to act on the data from HR metrics, said Jeremy Shapiro of Bernard Hodes Group during the Society for Human Resource Management's 59th Annual Conference and Exposition in Las Vegas Monday.

Shapiro said four ways HR metrics can go wrong are when they are poorly aligned with the audience, are not tied to outcomes, spreadsheets and stats are wrong, and trust in HR has eroded.

He said that it is important for HR to think about the audience when it creates metrics. HR should know, for example, the measurements that are important to other chief-level executives. While the HR-employee-to-total-employee ratio may be very important to the chief HR officer, other executives would find other measurements more important, he noted.

HR metrics must also be tied metrics to outcomes, Shapiro said. He said HR metrics are more than just a survey. They are supposed to allow a company to take data, tie it to outcomes, and leverage change.

Shapiro's third point about metrics was that HR must keep in mind that spreadsheets and statistics can be wrong. Therefore, HR must validate results and check for bad data. One way HR can verify data is to conduct random checks.

He said that another way HR metrics can run into trouble is when trust in HR has eroded. He noted that decision makers need to trust HR before they will act on the data. He said trust in HR in the area of metrics has eroded because:

  • Reports on the HR metrics come inconsistently.
  • Others in the organization don't think HR knows how to manage systems.
  • There is no clear method to metrics. He recommended that every formula be defined.
  • The data doesn't match the executives' intuition.

He offered a five-step process for developing metrics.

  1. Set goals
  2. Model measurements
  3. Build the metric
  4. Validate Results
  5. Care for your data (updating metrics as things change)

He also gave tips for reporting metrics.

  • Start with current data
  • Don't overwhelm users with multiple pages--keep it to a simple-to-read page.
  • Once HR starts reporting on a metrics, it should ensure that report is delivered consistently.
  • Anticipate the questions that will be asked about the data and formulas and answer them in notes.
  • Let a manager draw his or her own conclusions.

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